TMI Blog1993 (3) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... N REDDY J. - Civil Appeals Nos. 1453 and 1454 of 1980: These appeals are preferred against the judgment of the Patna High Court dismissing the writ petitions filed by the two assessees herein, Chhathu Ram and Darshan Ram. The assessment year concerned is 1942-43. Both of them were assessed in the status of individuals under section 23(3) of the Indian Income-tax Act, 1922, by an order dated March 14, 1945. Chhathu Ram was assessed on a total income of Rs. 4,54,431 which included a sum of Rs. 1,92,000 being the cash credit in his personal account in the books of Messrs. Chhathu Ram Horilram Ltd. Darshan Ram was assessed on a total income of Rs. 4,12,576 which included a sum of Rs. 1,52,000 being the cash credit in his personal account in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned cash credits in their income ) were dismissed by the Appellate Assistant Commissioner. (It is not necessary to notice the reasons for his orders for the purpose of these appeals The assessees had also filed appeals under the Excess Profits Tax Act. They were allowed by the Appellate Assistant Commissioner on October 20, 1967. The Revenue filed appeals before the Tribunal against the orders of the Appellate Assistant Commissioner under the Excess Profits Tax Act. They were dismissed on November 30, 1970. The Tribunal's orders became final. In the light of these orders and purporting to give effect to them, the Income-tax Officer passed orders rectifying the assessment orders made under the Income-tax Act, relating to the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he period of four years referred to in that sub-section being computed from the date of the order making or modifying the assessment of such excess profits tax or business profits tax. Explanation. - For the purposes of sub-section (6), where the assessee is a firm, the provisions of sub-section (5) shall also apply as they apply to the rectification of the assessment of the partners of the firm. " It was, accordingly, held that the orders of the Appellate Assistant Commissioner were without jurisdiction. The assessees filed writ petitions in the Patna High Court against the orders of the Tribunal but they withdrew them with a view to move the Tribunal under section 256(1) of the Income-tax Act, 1961. They filed their applications acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of rectification. The bar contained in section 34(1D) of the 1922 Act was conclusive only in respect of the matters to which the settlement extended. The amount, or the issue which is the subject-matter of the rectification proceedings, was never the subject-matter of settlement. We are of the opinion that the High Court was right in holding that the settlement order did not preclude the Income-tax Officer from passing the aforesaid order of rectification. Sub-section (1D) of section 34 declares that any settlement arrived at under the said section " shall be conclusive as to the matters stated therein ". It further declare that " no person whose assessments have been so settled shall be entitled to reopen in any proceeding for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing all or any of the requirements which may be included in a notice under sub-section (2) of section 22, and may proceed to assess or reassess the income, profits or gains of the assessee for all or any of the years referred to in clause (1), and thereupon the provisions of this Act (excepting those contained in clauses (i) and (iii) of the proviso to sub-section (1) and in sub-sections (2) and (3) of this section) shall, so far as may be, apply accordingly : Provided that the Income-tax Officer shall not issue a notice under this sub-section unless he has recorded his reasons for doing so, and the Central Board of Revenue is satisfied on such reasons recorded that it is a fit case for the issue of such notice: Provided further that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtue of which no excess profits tax was payable by the assessees. We are unable to see how the bar contained in sub-section (1D) of section 34 comes into play in the above circumstances. Once the liability of the assessees under the Excess Profits Tax Act was held to be nil, the deduction given earlier had to be withdrawn and it was, accordingly, withdrawn under section 35(6) of the Act. In this view of the matter, it is not necessary to consider any other question in these appeals. The appeals, accordingly, fail and are dismissed. No costs. Civil Appeals Nos. 3928 and 3929 of 1991: The facts in these appeals are identical to those in the above appeals. Only the assessee and the assessment years are different. Both counsel for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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