TMI Blog1954 (3) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... the return he showed his assessable income as ₹ 1,935. He added a footnote to his return to the following effect: My wife has sold her old ornaments and deposited the sum of ₹ 59,026 in the firm of Assar Syndicate in which I am partner. On the 27th of February, 1950, the Income-tax Officer issued a notice upon the assessee under Section 34 and he made an assessment order on the 26th of February, 1951, holding that the sum of ₹ 59,026 constituted the income of the assessee and assessing him to tax on that income. Now, it is this assessment order that was challenged before the Tribunal by the assessee and the Tribunal upheld that order. Now, the order is challenged firstly on the ground that the proceedings whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee the Department can proceed under Section 34, or if a return is made and the return results in an assessment and it is found that certain income has escaped assessment or has been under-assessed, then proceedings can be taken Section 34. But it is clear on a plain reading of Section 34 that action cannot be taken under Section 34 once a return has been made. Then the Department must proceed to assess the assessee on the return made by him. Mr. Joshi contends that in this case the return was made by the assessee on the 5th of January, 1950, and within the period of limitation laid down under Section 34(3) the assessment had to be made by the 31st of March, 1950. It seems that the Department was not in a position to complete the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rstand why the Department could not have proceeded under Section 23 and why it should have resorted Section to Section 34. Even assuming that it took the view that the sum of ₹ 59,026 was the income of the assessee, it was open to the Department to assess him to that income under Section 23, but, as we pointed out earlier, the sole reason, it seems, for the Department to proceed under Section 34 was to extend the period of limitation. Now, it is not open to the Taxing Department by availing itself of a wrong procedure to extend the period of limitation laid down in a statute. Now, Mr. Joshi's further contention is that the return which the assessee made was not a return at all under sub-section (3) of Section 22. Mr. Joshi says ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w, sub-section (3) of Section 22 provides as the terminus of the period of limitation the making of the assessment, and we do not understand why an assessment could not be made in this case which would have prevented the assessee from making a return under sub-section (3) of Section 22. As already pointed out, if the assessee did not make a return within the time limit prescribed by sub-section (1) of Section 22, it was open to the Department to initiate proceedings under Section 34 on the ground that no return was made. But it does not choose to initiate proceedings under Section 34 and only resorts to those proceedings under Section 34 after a return has been made under sub-section (3). That the law does not permit. Now there is a deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act], is yet having regard to its contents capable of being treated as a return under the one or the other section. In my opinion the return in the present case is not so capable. It is difficult to understand if it is open to a person to file a return which shows an income below the assessable limit under what other section would such a return be made except under Section 22(3); and it must also be said that this opinion of the learned Judge is obiter because in that particular case after a notice under Section 24(1) was issued there was also a notice under Section 24(2) [corresponding to our Section 22(2)]. Notice under Section 24(2) was held bad, but the view taken by the learned Judge was that although notice under Section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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