TMI Blog1961 (1) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... consequence of such transactions. Apparently, the notice under section 34 issued in relation to the assessment year 1944-45 was not pursued further as the whole amount was brought to tax in 1945-46. An appeal was carried in due course to the Income-tax Appellate Tribunal, which came to the conclusion that the transactions in landed properties constituted ventures in the nature of trade, profits from which were undoubtedly assessable. It may be mentioned that as against the sum of ₹ 88,760 determined as profits from the sale of lands, the Appellate Assistant Commissioner in the appeal before him excluded a sum of ₹ 6,000 for certain reasons which are not now relevant, and the Tribunal itself deducted a further sum, thereby reducing the amount of profit to ₹ 79,760. The Tribunal further held that the transactions leading to the profit in question covered both the assessment years, and that only a sum of ₹ 33,000 was profit assessable in the assessment year 1945-46. In coming to this conclusion, the Tribunal computed the quantum of profits attributable to the earlier assessment year 1944-45, which it fixed at ₹ 46,760. In so far as the appeal, which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly with the assessment year 1944-45 in this reference. The assessment that was made by the Income-tax Officer in October 27, 1950, related to the assessment year 1945-46, and in the view that he took that the entire quantum of profits arising from the sale of lands was assessable for this later year, he took no further proceedings in respect of the assessment year 1944-45. Reference was made to this in the order of the Appellate Assistant Commissioner, wherein he observed: .... finding that further proceedings would be infructuous, the Income-tax Officer appears to have dropped the proceedings. The remarks dated February 9, 1953, on the order sheet for the assessment year 1944-45 are as under: 'Please see 1945-46 file. As per Income-tax Officer's orders that this would be infructuous, further proceedings were not taken.' It, however, appears that it was in consequence of the finding of the Tribunal in the appeal relating to the assessment year 1945-46 that a further notice under section 34 was issued on February 27, 1953, for the assessment year 1944-45. The first question that we have to determine is, what was the scope of the proceedings under section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) enables an assessee who has filed a return either under sub-section (1) or sub-section (2) to file a revised return in case he discovers any omission or wrong statement in the return already filed. This sub-section also enables an assessee to file his return notwithstanding that the return is not filed within the time fixed either under the general notice under section 22(1) or the special notice under section 22(2) at any time before the assessment is made; that is to say, even if an assessee is late in filing his return, so long as he files it before the assessment is actually made upon him, that return has to be dealt with by the Income-tax Officer. Coming to the assessment, section 23(4) of the Act enables the Income-tax Officer to make the assessment to the best of his judgment if the assessee fails to make the return required by any notice given under sub-section (2) of section 22 or has not made a return under sub-section (3) of that section. Action under section 23(4) is competent only when by the time the Income-tax Officer takes up the case for assessment, no return has been filed. But if a return, however belated it may be having regard to section 22(1) and section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g section 34(1) observed at page 573: It would appear from this that if the return filed on January 5, 1950, was a return of income, there was no failure or omission on the part of the assessee, so as to bring the matter within section 34(1)(a) of the Act and sub-section (3) of section 34 would then apply to the case limiting the period to four years. In that event, the assessment should have been completed on or before March 31, 1950. But if the return made by the assessee was no return at all, then the conditions under section the first sub-section 34 obtained, and the assessment could be completed within one year of the date of service of the notice (March 3, 1950), i.e., on or before March 2, 1951... Dealing with section 22 of the Act, they proceeded to notice: It will be seen from this, that, as the Bombay High Court correctly pointed out, there is a time limit provided in sub-sections (1) and (2) and the failure or omission occurs when that period passes, but sub- section (3) allows a locus poenitentiae before the assessment is actually made. There is no dispute that a return could be filed in this case, late though it was. The controversy centres round the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lained in R.K. Das and Co. v. Commissioner of Income-tax [1956] 30 I.T.R. 439. It is not necessary to examine the facts and the reasoning upon which those decisions proceeded. It would be sufficient to indicate that in Commissioner of Income-tax v. Ranchhoddas Karsondas [1959] 36 I.T.R. 569 those decisions were examined by their Lordships of the Supreme Court. Though the question that was therein considered related to the submission of a return which showed an income below the taxable limit, still the point was whether such a return would be a return in law. The Supreme Court observed: It is a little difficult to understand how the existence of a return can be ignored once it has been filed. They proceeded to deal with the matter where the return showed an income below the taxable limit, and held that a person may legitimately consider himself intitled to certain deductions and allowances yielding a non-taxable income and yet may file a return to be on the safe side. But, nevertheless, it is a return such as the assessee considers represents his true income. The ratio of this decision appears to us to be that a return filed under circumstances as in the present case canno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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