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TMI Blog1971 (8) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... e supplementary statement of the case may be recapitulated. M/s. Gurbux Rai Harbux Rai, hereinafter referred to as the " assessee ", is a registered firm carrying on business in piece-goods. During the chargeable accounting period July 4, 1943, to June 21, 1944, and June 22, 1944, to July 10, 1945, Gurbux Rai and Harbux Rai (each representing his joint family) were the two partners of the assessee with equal shares. In the proceedings for assessment of tax under the Act for the above two chargeable accounting periods the assessee informed the Tax Officer that the joint family of Gurbux Rai had been partitioned and there had been a reconstitution of the business of partnership with effect from July 4, 1943. According to the assessee the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The income-tax assessments were consequently modifed for the two assessment years 1944-45 and 1945-46. The Excess Profits Tax Officer also started proceedings under section 10A of the Act by serving a notice dated February 3, 1951, on the assessee. The notice required the assessee to show cause why proper adjustment should not be made on the footing that the main purpose of the partial partition of the family of Gurbux Rai was the avoidance of the excess profits tax liability. By an order dated February 21, 1951, passed under section 15 of the Act, the Excess Profits Tax Officer modified the original assessment for both the chargeable accounting periods. In the revised assessment he included the income of the branch shop at Farrukhabad i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see submitted a written reply objecting to the applicability of section 10A. The Excess Profits Tax Officer obtained approval of the Inspecting Assistant Commissioner and passed an order under section 10A on February 21, 1951. According to the Tribunal the proceedings under section 15 were pending for both the chargeable accounting periods when the proceedings under section 10A of the Act were started by the Excess Profits Tax Officer. It has been added that the notices under section 15 and under section 10 were issued on the same date, namely February 3, 1951, but from the order-sheet it was clear that notice under section 15 was issued first and the notice under section 10A was issued thereafter. It is abundantly clear from the annexure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore any action can be taken or an order made under section 10A there should be a proceeding which should be pending for assessment or reassessment of excess profits tax. In other words, in the present case, before the provisions of section 10A could be applied, the tax officer was bound to initiate proceedings under section 15. According to what the Tribunal has said in the supplementary statement of the case the proceedings under section 15 had been commenced before action was taken under section 10A. We have already referred to the orders which were made on February 3, 1951. It is true that the orders to issue notices under section 15 and section 10A were made at the same time but the notice under section 15 was ordered to be issued fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to initiate proceedings under section 34(1)(b) of the Income-tax Act, 1922, which is in pari materia with section 15 of the Act if he acted on information received from the decision of the superior authorities or the court even in the assessment proceedings. (See R. S. Bansilal Abirchand Firm v. Commissioner of Income-tax and Assistant Controller of Estate Duty, Hyderabad v. Nawab Sir Osman Ali Khan Bahadur, Hyderabad ). It has next been urged that the alleged object of having a partial partition, namely, of reducing the liability to excess profits tax had never been examined by the Appellate Assistant Commissioner in the income-tax proceedings, and, therefore, it could not be said that there had been escapement of income as a result of inf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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