TMI Blog1970 (4) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 1946-47, the year of account being from April 14, 1945, to April 13, 1946, the Income-tax Officer determined the total income of the assessee at Rs. 35,741 accruing from the business and other sources such as sale proceeds of forest produce, fisheries, etc. Following demonetisation of high denomination notes in January, 1946, the assessee encashed such notes of the value of Rs. 19,000. The five members of the family named below also encashed notes of the value shown against each of them, the total value of the notes so encashed being Rs. 1,10,000 : Rs. 1. Hem Chandra Kar 26,000 2. Jatindra Nath Kar 24,000 3. Atul Chandra Kar 23,000 4. Narendra Nath Kar 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 34 was valid. The Tribunal called for a report from the Appellate Assistant Commissioner on merits. In his report the Assistant Commissioner agreed with the view of the Income-tax Officer. The Tribunal was finally satisfied that the amounts of the high denomination notes which had been encashed in the names of the five members individually belonged to the Hindu undivided family. The following questions of law were referred by the Tribunal for the decision of the High Court : " (1) Whether, on the facts and in the circumstances of the case, the assessment made upon the assessee Hindu undivided family pursuant to a notice under section 34 of the Indian Income-tax Act issued on the 2nd February, 1955, was in accordance with law ? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the point. Section 34 of the Act has been amended from time to time. In the present case this section, as amended in 1948, would be applicable by reason of section 31 of the Income-tax (Amendment) Act, 1953. We are concerned with section 34(1)(a). If the present case could be brought under that provision the second notice which was issued in February, 1955, would not be barred by time. But if action could not be taken under it there could be no manner of doubt that the notices which were issued and the reassessment which was made would be beyond the period prescribed. Section 34(1)(a) is in the following terms : " 34. Income escaping assessment.--(1) If-- (a) the Income-tax Officer has reason to believe that by reason of the omi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing all the primary facts lies on the assessee. The primary facts were admittedly within the knowledge of the Income-tax Officer at the time when he completed the first reassessment under section 34. This is clear from the order of the Appellate Assistant Commissioner to whom the Income-tax Officer reported that in the course of reassessment under section 34 in respect of individual members it became apparent that " they acted as merely name-lenders of the Hindu undivided family " and that the total sum of Rs. 1,10,000 encashed by them actually belonged to the Hindu undivided family. When the Income-tax Officer was in possession of all these facts and he proceeded to make the reassessment of the individual members by including the amounts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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