TMI Blog1961 (12) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... e would be income relevant for the assessment year 1942-43 and not 1943-44. The Appellate Assistant Commissioner by his order dated 25th February, 1959, held that it was income, but such income accrued in course of the assessment year 1942-43 and not 1943-44 as held by the Income-tax Officer. The Appellate Assistant Commissioner in making his order gave the following direction: I therefore delete the addition for the assessment year under appeal and direct that Income-tax Officer should take necessary action to assess the same amount for 1942-43 assessment year. Thereafter, by a notice dated 19th January, 1960, issued under section 34 of the Indian Income-tax Act which was served on the appellant on the 21st January, 1960, the Income-tax Officer called upon the appellant to file a return of the income for the assessment year 1942-43. The relevant portion of the notice may be set out hereunder: To Sri Brindaban Chandra Basak, 20/10, Brindaban Basak Street,19.1.60 Calcutta. Whereas, I have reason to believe that your income assessable to income-tax for the assessment year 1942-43 has (a) escaped assessment, (b) been under-assessed .... I hereby require you to del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he year to which the notice relates. In dealing with the first contention, the learned judge has referred to the fact that there is a divergence of view between the Madras High Court and. the Allahabad High Court on the point whether an Appellate Assistant Commissioner has any jurisdiction at all to direct the Income-tax Officer to take steps for assessment of a particular income accruing in an assessment year which is other than one, which is the subject-matter of appeal before him, but has held that apart from that, the second proviso of section 34(3) as amended in 1953 and which came into operation from 1st April, 1952, cannot apply to the facts of the present case and so the point had become irrelevant. With regard to the second contention the learned judge has found in favour of the income-tax department and has held that sub-section (4) of section 34 as introduced by the amendment made in 1959 takes the matter outside the bar of limitation. The correctness of these findings has been challenged before us. On behalf of the respondent it has been argued that the proviso to subsection (3) of section 34 as amended in 1953 applies to the facts of the case and saves the notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee that he was unable to make the adjustment and the assessee made an application under article 226 of the Constitution for a writ of mandamus to enforce the order of the Tribunal, it was held that no writ could be issued inasmuch as the order passed by the Tribunal or the direction given by the Tribunal was without jurisdiction. The division bench of the Allahabad High Court presided over by Mootham C.J. and Bhargava J. held that the powers of the Appellate Tribunal under section 33(4) of the Income-tax Act are limited to the passing of such order as it thinks fit to make in the proceeding which is then before it on appeal. It has no power under that sub-section to pass an order or give directions with reference to the proceedings of an earlier year which are concluded. In the case of Pt. Hazarilal v. Income-tax Officer, Kanpur [1960] 39 ITR 265 , which is another decision of a division bench of the Allahabad High Court where the question in appeal before the Appellate Assistant Commissioner of Income-tax was whether a certain sum of money was or was not income relevant to the assessment year 1947-48, it was held that for the purpose of applying the proviso to sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said the Income-tax Officer issued a notice dated the 6th February, 1957 under section 34 of the Act calling upon the petitioner to submit a return for the assessment year 1945-46. The question of limitation having been raised by the assessee the income-tax department relied on the second proviso to section 34(3) of the Act. It was held that the finding or direction of the Appellate Assistant Commissioner fell within the second proviso to section 34(3) of the Act and therefore when action was taken by the Income-tax Officer he; could take action at any time. It was pointed out in this case that the effect of this proviso was to abrogate or do away with the period of limitation prescribed in the section, in those cases where the Income-tax Officer takes action in consequence of a finding or direction given in an order made under the various sections specified in subsection (3) of section 34, but subject to the general rule that he cannot take proceeding where before the proviso became law the remedy of the income-tax department had already become barred. It appears to me that there is good deal to be said in favour of the view taken by the Allahabad High Court. The expression fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the notice then such a notice will be an invalid notice and a notice issued without jurisdiction by reason of the provisions of sub-clause (ii) of the proviso to sub-section (1) of section 34 of the Act, because that sub-clause expressly enjoins that the amount which is made the subject of assessment or reassessment is rupees one lakh or is likely to be rupees one lakh or more no notice can be issued by the Income-tax Officer if a period of eight years as prescribed has elapsed. But if subsection (4) of section 34 is construed to mean that notwithstanding what is provided in sub-clause (ii) of the proviso to sub-section (1) of section 34, the Income-tax Officer can at any time re-open an assessment under section 34 in respect of an income the amount of which is below rupees one lakh then an inconsistency and conflict will be created between sub-section (4) and sub-clause (ii) of the proviso to subsection (1) of section 34 which could not certainly be the intention of the Legislature which framed those two provisions and intended them to exist side by side in the same section, i.e., section 34. In my view this contention of the appellant cannot be accepted as sound. The provis ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
