TMI Blog1966 (9) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... , nor was any notice issued under section 22(2) of the Act by the Income-tax Officer for the relevant assessment year. During the course of assessment proceedings for the assessment year 1958-59, the Income-tax Officer considered that some income had escaped assessment. He, therefore, as required by law, applied to the Commissioner of Income-tax for approval to take action under section 34(1)(a) of the Act. The approval having been obtained, the notice under section 34 of the Act was served upon the assessee on the 12th September, 1959. More than two months before the notice under section 34 of the Act was served on the assessee, the assessee had filed voluntary returns on 3rd of July, 1959, inter alia, for the relevant assessment year. Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as placed on the decision of the Supreme Court in Commissioner of Income-tax v. Ranchhoddas Karsondas. This contention was repelled by the Appellate Assistant Commissioner on the ground that: "From the records, however, it appears that the proceedings in connection with section 34 were initiated by the Income-tax Officer for all these years on June 20, 1959, i.e., before the returns for all these years were filed by the assessee. Since in order to start the proceedings under section 34 it was statutory for the Income-tax Officer to take the approval of the Commissioner of Income-tax and since the approval of the Commissioner of Income-tax was sought on June 20, 1959, the proceedings under section 34 are held to have been validly initiated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has been attempted to be distinguished on two different lines of reasoning. According to the Appellate Assistant Commissioner the proceedings under section 34 had commenced not with the issue of the notice under section 34, but with the obtaining of sanction from the Commissioner of Income-tax. If the initiation of proceedings could be said to commence with the application by the Income-tax Officer for sanction of the Commissioner of Income-tax, then section 34 proceedings might be said to have been taken prior to the filing of the voluntary returns by the assessee. No authority, however, was cited by the learned counsel for the department in support thereof. There cannot be much doubt on a question such as this that, proceedings under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional period of one year provided under section 34 of the Act. The Supreme Court in Y. Narayana Chetty v. Income-tax Officer, Nellore, held that: "If no notice is issued or if the notice issued is shown to be invalid then the validity of the proceedings taken by the Income-tax Officer without a notice or in pursuance of an invalid notice would be illegal and void. " The notice under section 34 was undoubtedly an illegal notice as a voluntary return was already in existence. The subsequent proceedings under that section and culminating in the assessment cannot be anything else but illegal and void. For the reasons given above, we would answer the question referred in the negative and against the department. The department will pay the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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