TMI Blog1974 (11) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the assessee under section 17(1) in respect of the assessment year 1958-59, was operative in relation to the reassessments in respect of the previous year ending on December 31, 1954, December 31, 1955, and December 31, 1956, corresponding to the assessment years 1955-56, 1956-57 and 1957-58 ?" The assessee during the relevant period was studying abroad. He derived income during that period by way of dividend on shares and interest from deposits. The original assessments for the relevant years were completed on January 31, 1956, December 27, 1956, and February 28, 1958. The residential status adopted in those years was "resident and ordinarily resident person". Income-tax and super-tax were calculated at the rates applicable on the total income. In the course of the assessment proceedings for the assessment year 1958-59, corresponding to the year ending on December 31, 1957, the assessee filed a declaration under section 17(1) of the Act on March 24, 1959, claiming to be assessed at rates appropriate to the total world income. This assessment was completed on March 23, 1960, in the status of a "non-resident" The application under section 17(1) was rejected. As the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter provided sufficient cause was shown for not filing the declaration earlier. The assessee further submitted that the assessment as non-resident was made for the first time in respect of the assessment year 1958-59 and as section 34 proceedings were fresh proceedings the declaration made in 1958-59 ought to be accepted. The Appellate Assistant Commissioner held that the Income-tax Officer's reasoning for not accepting the declaration under section 17(1) was not correct. In this connection the Appellate Assistant Commissioner referred to his order in the appeal by the assessee for the assessment year 1958-59, wherein he had held that the assessee had sufficient cause for not filing the declaration under section 17(1) when the assessee became first assessable. It was also held that the failure to file the declaration had not resulted in a reduction of tax liability. The declaration filed on March 24, 1959, by the assessee, in the opinion of the Appellate Assistant Commissioner, could be availed of for the assessments for the three years in question as the assessment orders consequent upon the reopening of assessments were being made subsequent to that date. The department went u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declaration) and all assessments thereafter". The words of the second proviso to section 17(1) reproduced above make it clear that the declaration would be operative not only for the assessment for the year in which the declaration is made if such assessment had not been completed before such declaration, but also for all assessments to be made thereafter. The words "all assessments thereafter", in our opinion, signify not only assessments for the subsequent years but would also cover assessments for the earlier years in case the assessments for those earlier years are being made subsequent to the filing of the declaration. The words "all assessments thereafter" have a wide amplitude and we see no cogent reason for not giving them their natural meaning or for restricting their scope. Those words would include within their ambit all assessments made subsequent to the filing of the declaration and it would be wrong to so construe them as if the legislature had used the words "all assessments for the subsequent years". We are unable to subscribe to the view taken by the High Court that the assessments referred to in the words reproduced above mean only the original assessments and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poses of Income-Tax for the City of London v. Gibbs, Lord Simon has pointed out that the word 'assessment' is used in the English Income-Tax Code in more than one sense ; and sometimes within the bounds of the same section, two separate meanings of the word may be found. One meaning is the fixing of the sum taken to represent the actual profit and the other the actual sum in tax which the taxpayer is liable to pay. It has been contended before us that the Finance Act and the Income-tax Act should be read together as forming one code, and so read the word 'assessment' and 'reassessment' acquire definite and distinct connotations. We are unable to agree, for the reasons which we have already given, that even if we read the Finance Act along with the Income-tax Act the word 'assessment' can be given a restricted meaning. To repeat those reasons : the Income-tax Code itself uses the word 'assessment' in different senses, and in the context and collocation of the words of the Finance Act, the word 'assessment ' is capable of bearing a comprehensive meaning only." In the context of section 17(1) of the Act the word "assessment" must necessarily include reassessment under section 34 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the legislature has used the word "assessments" and not "reassessments" in the second proviso to section 17(1) of the Act would not exclude the applicability of that proviso to cases of reassessments subsequent to the filing of the declaration. The matter may also be looked at from another angle. Proceedings under section 34 of the Act can be initiated if the Income-tax Officer has reason to believe that income, profits or gains chargeable to income-tax have escaped assessment for any year or have been under-assessed or assessed at too low a rate or have been made the subject of excessive relief under the Act or excessive loss or depreciation allowance has been computed. The first of the above five contingencies deals with income, profits or gains chargeable to income-tax escaping assessment. In such an event the Income-tax Officer would, after initiating proceedings under section 34 make assessment of such income, profit or gain. In the other four contingencies, the order made by the Income-tax Officer would be for reassessing such income, profit or gain or recomputing the loss or depreciation allowance. If the view propounded on behalf of the revenue were to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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