TMI Blog1954 (9) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... ng upon the assessee to submit its return by 25th March, 1949. This notice was served on the assessee on 19th March, 1949. A copy of this notice is annexure ' A ' and forms part of the case. In compliance with this notice the assessee filed a return dated 25th March, 1949, on 30th March, 1949. The original return for this assessment year was filed on 12th September, 1945. The income returned according to both these returns is ₹ 5,127 under the head ' Business, profession or vocation. ' The return filed under section 34 was accompanied by a letter dated 30th March, 1949, the relevant portion of which reads as follows : Sir, We are hereby submitting the return under section 34 on behalf of our client Mr. Ramsukh Motilal G. I. No. 225 R. for the assessment year 1944-45, which we hope you will find in order. Thanking you, Yours faithfully, S. G. Bajaj Co. Before the Income-tax Officer the assessee agitated that the business done in the name of Laxminarayan Sitaram really belonged to him (Mr. Laxminarayan Sitaram) and the payment of ₹ 1,16,746 shown to have been paid in cash to him was genuinely paid to him. This version of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assistant Commissioner's order dated 4th August, 1952, is annexure 'B' and forms part of the case. 4. In second appeal before the Tribunal the assessee again reiterated its objections regarding the invalidity of the notice on the two ground (1) that there was no new information in possession of the Income-tax Officer as required under section 34(1)(b), and (2) that the notice is bad as it gave only 6 days' time for the assessee to make the return. These objections of the assessee are dealt with in paragraphs 2 and 3 of the Tribunal's order. The Tribunal held (1) that the record showed that the Income-tax Officer got some information subsequent to the original assessment and, therefore, the notice under section 34 was rightly issued: (2) that the notice issued under section 34 is bad in law and the proceedings that were initiated are ab initio void in law. The Tribunal held that on the correct interpretation of the wordings of section 34 read with section 22(2) of the Indian Income-tax Act it is incumbent on the Income-tax Officer to grant a period of not less than 30 days. The Tribunal considered the following provisions of section 34 of the Indian Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Income-tax Act and also as to whether if such a notice is invalid it could be waived. The very few facts that are necessary to understand this contention are that the assessment year of the assessee is 1944-45 and that he was assessed on the 4th December, 1948, on an income of ₹ 6,484. The Income-tax Officer was then satisfied that some income had escaped assessment and he therefore issued a notice under section 34 on the 19th March, 1949. The notice required the assessee to make a return by the 25th March, 1949. The assessee made a return and he was assessed. He then appealed to the Appellate Assistant Commissioner and before the Appellate Assistant Commissioner for the first time he raised the contention that the notice issued under section 34 was invalid and therefore the assessment must be set aside. The Appellate Assistant Commissioner rejected his contention. He then went in appeal to the Tribunal and the tribunal upheld his contention. The Commissioner has now come on a reference to us. Now, turning to section 34, it deals with two cases of escaped assessment which fall under (a) and (b). The first case is where there is an omission or failure on the part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he requirement is not merely to make a return or to verify or to give particulars. The requirement is in each case that the return must be made, the verification must be made, or the particulars must be given, within a period of not less than 30 days. Therefore it is clear that if a notice under section 34 embodies any of the requirements under section 22(2) it must at the same time permit the assessee to comply with that requirement within a period which is not less than 30 days. If the period is shorter than 30 days, then the requirement is not the requirement as set out in section 22(2). In this case the notice gave only six days to the assessee to make a return under section 34. Therefore the requirement was different from the requirement under section 22(2) and the notice was clearly bad. But Mr. Joshi's contention is that even if the notice is bad, it has been waived by the assessee, first, by his making a return pursuant to that notice, and, secondly, by his appearing before the Income-tax Officer, allowing the assessment order to be made, and not objecting to the assessment till he went in appeal to the Appellate Assistant Commissioner. That raises a very important q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turam Others v. Commissioner of Income-tax, Bihar ([1947] 15 I. T. R. 302), to which Mr. Justice Kania, as he then was, was a party, and in fact the judgment of the Federal Court is delivered by the learned Judge himself. In that case a certain notification was issued by the Governor of Bihar on the 26th May, 1940, retrospectively applying the provisions of the Indian Income-tax Act to a certain Division known as the Chotanagpur Division which was a partially excluded area and a notice had been issued under section 22(2) prior to the date when this notification was issued. The assessment was challenged on various grounds and one challenge was that the notice was bad inasmuch as it was issued before the notification came into force and the assessee could not be assessed under the provisions of the notification. This argument was dealt with by Mr. Justice Kania and the learned Judge held that the issue or receipt of a notice is not the foundation of the jurisdiction of the Income-tax Officer to make the assessment or of the liability of the assessee to pay the tax, and further held that the jurisdiction to assess and the liability to pay the tax are not conditional on the validity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from section 22(2). As we have already pointed out, the very scheme of that section is that the Incometax Officer has no jurisdiction to assess under section 34 without giving the notice referred to in that section. Therefore, whereas it will be perfectly true to say, as the Federal Court said, that section 22(2) is a procedural section and the failure to give notice or a defect in a notice is a procedural defect, in the case of section 34 it is not a procedural defect but it is a failure to comply with a condition precedent to the assumption of jurisdiction. It is true that the observations of the Federal Court, with respect, are rather wide and it may seem as if they apply to all notices under the Income-tax Act. But the decision is given in respect of section 22(2) and again, with respect, the decision must be confined to the facts of that case. It is clear that Mr. Justice Kania was thinking of the special incidents of the notice given under section 22(2) because it is pointed out at page 308(1) by the learned Judge: Suppose a person, even before a notice is published in the papers under section 22(1), or before he receives a notice under section 22(2) of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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