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1979 (11) TMI 3

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..... , on a total income of Rs. 53,548. In proceedings started on December 21, 1961, under s. 34(1) of the Indian I.T. Act, 1922, the ITO found certain property income and income to the extent of one lakh from potato transactions put through in the name of benami persons by the assessee had escaped assessment and, therefore, by his order dated December 22, 1965, he brought them to tax. The said order of the ITO was annulled by the AAC in appeal on May 10, 1967, on the ground that the initiation of reassessment proceedings was not justified. The department allowed the matter to rest there and the AAC's order became final. On July 14, 1967, the ITO issued a notice under s. 148 of the I.T. Act, 1961, in respect of the self-same assessment year afte .....

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..... f the 1922 Act and not with their legality. It must in fairness be stated that none of these decisions on the proper construction of s. 297(2)(d)(ii) had been rendered by this court when the Allahabad High Court decided the matter. In S. B. Jain, ITO v. Mahendra [1972] 83 ITR 104 (SC), the ITO had issued notice to the respondent-assessee on January 5, 1962, under s. 34(1)(a) of the 1922 Act to reopen his assessment for the assessment year 1946-47. The High Court quashed the notice by its order dated March 6, 1963, on the ground that the notice was barred by limitation. In the meantime the 1961 Act came into force on April 1, 1962, whereafter the ITO again issued a notice on March 26, 1963, under s. 148 of the 1961 Act. This court held that .....

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..... . 34 on the relevant date, and not their legality as being material for purposes of s. 297(2)(d)(ii) of the 1961 Act. In the case before us admittedly proceedings under s.34(1) of the 1922 Act in respect of the item of Rs. 1,00,000 (which was said to have escaped assessment) were factually pending on April 1, 1962, and, therefore, the notice under s. 148 of the 1961 Act would be incompetent. An attempt was made by counsel for the revenue to distinguish the aforesaid decisions on the ground that in the instant case the earlier proceedings under s. 34 of the 1922 Act being without jurisdiction, must be regarded as non est inasmuch as the AAC had annulled the revised assessment made by the ITO on the ground that the initiation of the proceedi .....

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