TMI Blog1958 (4) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... to be charged under the Indian Income-tax Act. The decision of the Patna High Court was pronounced on the 15th February, 1954. In spite of this ruling the Income-tax Officer imposed tax on the amount of interest but ordered that the realisation of the tax will be stayed till the decision of the Privy Council where the matter was pending in appeal. The assessee preferred an appeal to the Appellate Assistant Commissioner who set aside the order of the Income-tax Officer with respect to the amount of ₹ 93,704 and held that this amount should be excluded from assessment according to the ruling of the Patna High Court. The decision of the Privy Council was pronounced on the 6th of July, 1948, and the view taken by the Privy Council was th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Assistant Commissioner cancelling the assessment with respect to the sum of ₹ 93,704 has become final since the Income-tax authorities did not go up in appeal or revision against that order. The argument of Mr. Dutt is that the only recourse of the department was to go up in appeal or revision from the order of the Appellate Assistant Commissioner and the failure of the Income-tax department to take any such action rendered the decision of the Appellate Assistant Commissioner final and it was not open to the Income-tax department to take recourse to the provisions of section 34 of the Act. To put it in other words, the contention advanced by Mr. Dutt is that the order of the Appellate Assistant Commissioner in the previous asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 34. It was suggested by the learned counsel that the original assessment should have been kept alive by preferring an appeal or revision from the order of the Appellate Assistant Commissioner. But there is nothing in the language of section 34 or in the context in which this section is placed to suggest that any such limitation should be read into that section. It is clear, on the other hand, that if the conditions expressly mentioned in the section are satisfied, the Income-tax Officer has jurisdiction to take action under section 34 to reopen the assessment already made. We see no reason in principle why any limitation other than that expressly mentioned in section 34 should be read into that section. Take a case, for instance, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by the section are satisfied. In truth, section 34 provides an alternative method by which the Income-tax authorities may take proceeding for assessment of income which had escaped assessment in the original proceeding and the circumstances that the Income-tax department had failed to prefer an appeal or revision against the order of the Appellate Assistant Commissioner and kept the original proceedings alive cannot be a circumstance which should disable them from taking recourse to the provisions of section 34. This view as to the interpretation of section 34 is completely borne out by the decision of this Court in Chatturan Horilram Ltd. [1951] 19 ITR 600 where the material facts are almost parallel. In that case the assessee who was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the proceeding under section 34 has not been validly started in this case. Mr. Dutt did not cite any authority which directly supported his argument. Counsel however referred to two cases, Rajendranath Mukherji v. Commissioner of Income-tax, Bengal [1934] 2 ITR 71 and Maharaja Bikram Kishore v. Province of Assam [1949] 17 ITR 22. In the first case there is an observation of Lord Macmillan to the effect that income which had already been duly returned for assessment could not be said to have escaped assessment within the statutory meaning of section 34. But this observation is in the nature of an obiter dictum for the decision is mainly based upon the ground that the assessment proceeding in question was not completed and since there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly applied. There is a decision to a similar effect in In re, Messrs. P.C. Mallick and D.C. Aich [1940] 8 ITR 236. In that case the Income-tax authorities had allowed as a deduction a sum of ₹ 39,492 which was paid to the beneficiaries under the will. Later on the Income-tax authorities came to the conclusion that the sum was improperly allowed and assessed it under section 34 of the Income-tax Act on the ground that it had escaped assessment in the year in question. On reference to the High Court it was held that the proceeding under section 34 was validly instituted. The same view has been expressed by other High Courts (see, for example, Commissioner of Income-tax v. Rajah of Parlakimedi [1926] 2 I.T.C. 104, decided by the Madras ..... X X X X Extracts X X X X X X X X Extracts X X X X
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