TMI Blog1959 (3) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... On 8th September, 1952, the petitioner filed a return. It is not clear as to what the said return contained. No copy of the return so filed has been produced by the petitioner. But it appears from the affidavit, which has been filed in support of this petition by the petitioner, that his case was that his income for the year ending with 30th June, 1949, was assessed under the Mysore Income-tax Act for the assessment year 1949-50 and since his income for the year ending with 30th June, 1950, was assessable under the Indian Income-tax Act for the assessment year 1951-52, he had no income assessable for the assessment year 1950-51, as in respect of his sources of income there was no previous year for the assessment year 1950-51. It also appears from the said affidavit that the income-tax authorities wrote on the order sheet No proceedings for the assessment year 1950-51. Thereafter on 26th February, 1957, before the present notice under section 34 was served upon the petitioner, the petitioner voluntarily filed another return under section 22(3). In this return, the petitioner disclosed certain other income which was not disclosed in the return which he had originally filed on 8th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Act and a return under that section had been filed. Besides, it was urged a return under section 22(3) had also been filed and that being the position the assessment had to be completed under section 23 of the Income-tax Act before any notice under section 34 can be issued. In this case, although the said return had been filed for the assessment year 1950-51, the assessment in question has not been made under any of the sub-sections of section 23 of the Income-tax Act. That being so, no notice under section 34 can be issued. In support of that contention, he relied on a decision of the Bombay High Court in Ranchhoddas Karsondas v. Commissioner of Income-tax [1954] 26 ITR 105. In that case, it was laid down that once a return under section 22(1) or under section 22(3) has been filed, the assessment must be completed before any notice under section 34 can be issued upon an assessee. I shall at this stage refer to the material provisions of section 22 and section 23 of the Income-tax Act. Section 22(1) provides that the Income-tax Officer shall, on or before the first day of May in each year, give notice, by publication in the prescribed manner, requiring every person whose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Officer to make best judgment assessment if the assessee fails to make the return required by any notice given under sub-section (2) of section 22 or a revised return under sub-section (3) of the same section or fails to comply with all the terms of a notice issued under sub-section (4) of the same section or having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 23. The only other section, to which I need refer for the present, is section 34 of the Income-tax Act. That section, as it stood before it was amended in the year 1956, enabled the Income-tax Officer where he has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income-tax have escaped assessment for that year, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed, to give notice at any time wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the said return. It seems to me that on the facts of this case, it should be held that assessment of the income of the assessee was made under sub-section (1) of section 23 of the Income-tax Act. I have already mentioned that after the petitioner had filed a return, in which it appears to have been stated that since his income for the year ending June 30, 1949, was assessed under the Mysore Income-tax Act for the assessment year ended June 30, 1950, was assessable under the Indian Income-tax Act for the assessment year 1951-52, he had no income assessable for the assessment year 1950-51. On that return the Income-tax authorities wrote No proceedings and it appears that the matter was thereafter closed. The learned advocate for the petitioner contended before us that it is not enough to merely write No proceedings to close the matter. The Income-tax authorities had to pass an order stating that there was no income which is assessable for income-tax or, in other words, it had to be stated that the Income-tax authorities had computed the income of the petitioner as nil. In my opinion, it is a mere technicality on which the petitioner is resting his case. On the return, filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary for the Income-tax Officer to state that the income of the petitioner had been computed as nil. If the effect of what the Income-tax Officer has done is that he has determined the income of the assessee, as disclosed in his return, as not liable to income-tax then such an act in my opinion amounts to holding that the income of the petitioner for the purpose of assessment is nil. The contention to the contrary, in my opinion, is not tenable. The next contention urged by the learned advocate for the petitioner rests on the provisions of section 13(1) of the Finance Act, 1950. It reads as follows: 13. (1) If immediately before the 1st day of April 1950, there is in force in any Part B State other than Jammu and Kashmir or Manipur, Tripura or Vindhya Pradesh or in the merged territory of Cooch-Behar any law relating to income-tax or super-tax or tax on profits of business, that law shall cease to have effect except for the purposes of the levy, assessment, and collection of income-tax and super-tax in respect of any period not included in the previous year for the purposes of assessment under the Indian Income-tax Act, 1922 (XI of 1922), for the year ending on the 31s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessment year ending with 31st March, 1951, the Mysore Income-tax Act would be operative. The plain words of the section negative such a contention. The learned advocate for the petitioner contended before us that unless that was so there would be difficulty in making any assessment in respect of an accounting year, if that accounting year be for the period commencing from 1st of July, 1948, and ending on 30th June, 1949, as it is in this case. In such a case, he contended, it would be difficult to hold that the Indian Income-tax Act would be operative and it is also not clear whether in such a case the Mysore Act would be operative. On the view, which I have taken as to the effect of the said section, the learned advocate contended, the income for that year would not be included for assessment under the Indian Income-tax Act for the year ending on 31st March, 1951, and would not therefore be liable to tax either under the Mysore Income-tax Act or under the Indian Income-tax Act. It appears that this difficulty was envisaged by the authorities concerned and an order was promulgated, being the Part B States (Taxation Concessions) Order, 1950, which has removed it. Paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 enables the authorities to complete the assessment at any time after the notice is given. Therefore, for the purposes of the present case, the only change brought about by the amendment was that the Income-tax authorities can, after giving notice within the period of eight years mentioned in the said section, complete the assessment at any time thereafter. In this case, the eight years' time had not elapsed and the notice in question which was given was in time. The only question, therefore, is whether or not the assessment in question can be made at any time after the notice was given which was within the prescribed period of eight years. I do not see any reason why that cannot be done. The section itself empowers it to be done. It does not say that the power to make the said assessment at any time after the notice is restricted only to cases where the original assessment has to be made after 1956-57. I could have understood if the period within which the Income-tax authorities could serve a notice under section 34 had already expired and as a result thereof the petitioner had acquired a valuable right. In such a case, as was held in the Calcutta decision, to which I have ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
