TMI Blog1961 (2) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... ents for 1946-47 and 1947-48 were without recourse to section 34. The assessment for 1946-47 was completed under section 23(3) on March 5, 1955. The assessment for 1947-48, which was under section 23(4), was completed on March 26, 1956. Against these assessment orders the petitioner preferred appeals successively to the Appellate Assistant Commissioner and to the Tribunal. The main plea of the petitioner in those appeals was that the remittances from Ceylon in the relevant years which stood in his name did not represent his monies. The plea was rejected. The quantum of tax imposed by the Department was, however, reduced to some extent by the Tribunal. Not satisfied with that, the petitioner asked for a reference under section 66(1). Those applications were rejected by the Tribunal. The petitions filed by the petitioner under section 66(2) of the Act are still pending disposal in this court. In due course the Income-tax Officer issued certificates under section 46(2) of the Act to the Collector to recover the arrears of the assessed tax not only for these three years but also for the assessment year 1951-52. The total shown in these certificates was ₹ 1,01,081. The Colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ratively limited, and we shall confine ourselves to the points specifically pressed for adjudication during the arguments at the final hearing. The learned counsel for the Department urged that the validity of the assessments should not be investigated in these proceedings under article 226 of the constitution. He pointed out that the petitioner had availed himself of the remedies open to him under the Income-tax Act, and the proceedings under section 66(2) were pending disposal even now in this court itself. It was common ground that the plea of limitation, which is now the main basis for the challenge to the validity of the assessments made by the Income-tax Officer, was never put forward at any stage of the assessment proceedings and that there was no adjudication of that question by the Tribunal. The learned counsel submitted that even if a reference was ordered under section 66(2) the question of limitation could not arise as a question of law on the orders of the Tribunal. The further submission was that the failure of the petitioner to take this plea in the statutory proceedings open to him and availed of by him disabled him from seeking adjudication of that issue in thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of eight years allowed by section 34(3), was not barred by limitation. The contention of the petitioner was that the initiation of proceedings under section 34(1) was not valid, and that, therefore, only the four year period of limitation applied. It should be taken as well settled now that where an assessee has filed his return before the completion of assessment within the period of limitation allowed by law, proceedings cannot be commenced by the assessing authority under section 34 of the Act--see Muthiah Thevar v. Commissioner of Income-tax [1960] 39 I.T.R. 107, where the law laid down by the Supreme Court in Commissioner of Income-tax v. Ranchhoddas Karsondas [1959] 36 I.T.R. 569. was applied. Section 22(3), it should be remembered, permits a return to be filed at any time before the assessment is made, even if no return was filed in response either to the general notice under section 22(1), or any individual notice under section 22(2). The learned counsel for the Department urged that section 22(3) carried its own limitation. In our opinion his submission was correct, that what section 22(3) permitted the assessee was to file his return at any time before the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 34 and it was not a case of assessment or reassessment under section 34. The learned counsel for the Department urged that the Income-tax Officer would have been entitled to treat the return filed by the petitioner on March 20, 1954, as non est in law and to issue a notice under section 34(1)(a) on the ground, that the petitioner had not filed any valid return for the assessment year 1946-47. His further submission was that the satisfied the requirement of section 34(3), and that it was a case falling within section 34(1)(a) as that expression has been under section 34(3), though factually the provisions of section 34(1)(a) were never applied and the prescribed notices were never issued. In our opinion the statutory expression an order of assessment in case falling under section 34(1)(a) cannot be construed to mean an order of assessment in a case which could have been dealt with under section 34(1)(a) but which was not so dealt with. It is well settled that the issue of the prescribed notice is a condition precedent to the assumption of jurisdiction vested by section 34(1), and where such notice was never issued, it cannot be viewed as a case falling within section 34(1)(a), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mselves be completed only after the assessment has been finalised. The normal practice also is not to rush into an order under section 28(1)(c) on the completion of the proceedings of assessment by the Income-tax Officer himself, but after the issue of notice under section 28(1)(c) to wait until the assessment becomes final after the appeal, if any. If, as in this case, there was an express finding, that there was concealment of income, that would appear to satisfy the requirements of section 34(3) that it is a case of assessment under section 23 to which section 28(1)(c) would apply. As we said, in this case was the additional factor, that a notice under section 28(1)(c) was issued to the petitioner antecedent to the completion of the assessment proceedings by the Income-tax Officer. The learned counsel for the petitioner urged that the mere issue of a notice was not enough, and that the requirement of section 28(3) should be satisfied before section 34(3) was brought into play. We are unable to accept this contention. Section 28(3) comes into play where an order of penalty has to be passed under section 28(1). That stage is yet to come. We have already pointed out that section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider the question whether apart from the validity of the assessment orders, the recovery proceedings were in any way vitiated, and whether on that ground alone the petitioner is entitled to a writ of prohibition in W.P. No. 1011 of 1958. We have already pointed out that while the amount of arrear actually due was only ₹ 64,994, proceedings were taken by the Collector under the Revenue Recovery Act to recover a sum of ₹ 1,01,081 by the sale of the petitioner's lands. No doubt the certificates issued under section 46(2) showed ₹ 1,01,081 as due. The fact that subsequently the arrears were reduced below that figure did not vitiate the certificates themselves. But obviously the Collector has jurisdiction even on the basis of these certificates to recover only the amount actually due. That was the view taken by one of us in George v. Income-tax Officer [1958] 33 I.T.R. 22. Section 27 of the Revenue Recovery Act (2 of 1864) requires that the notice of attachment should specify the arrears due. That is what gives jurisdiction to the Collector to bring the attached property subsequently to sale under section 36. If the attachment was vitiated, the subsequent s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elf was one passed without jurisdiction. On the short ground that a higher sum was sought to be recovered under the Revenue Recovery Act than what was lawfully due, the petitioner would be entitled to a writ of prohibition restraining the Revenue authorities from continuing the recovery proceedings under the Revenue Recovery Act. The learned counsel for the petitioner urged that the certificates issued under section 46(2) had become inoperative, and that without the issue of fresh certificates under section 46(2) the Collector would have no jurisdiction to recover anything from the assessee. It is not really for us to express any concluded opinion of ours on the question. We have already pointed out that in George v. Income-tax Officer [1958] 33 I.T.R. 22. one of us has taken a different view. The learned counsel for the petitioner relied on Seghu Buchiah Setty v. Income-tax Officer [1960] 38 I.T.R. 204., where the learned judges relied upon Metropolitan Structural Works Ltd. v. Union of India [1955] 28 I.T.R. 432. It is not necessary for us to express our dissent from the view taken by the learned judges of the Mysore High Court in Seghu Buchiah Setty v. Income-tax Officer, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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