TMI Blog1951 (3) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... the year 1939-40 in the absence of a notification under Section 92(1) of the Government of India Act by the Governor extending the Finance Act of 1939 to the excluded area? On 30th September, 1943, the High Court answered the question in the negative. 3. After the decision of the Appellate Tribunal but before the date of the judgment of the High Court the Governor of Bihar enacted Bihar Regulation IV of 1942 to which the Governor-General gave assent on 30th June, 1942. The notification was published in the Bihar Gazette on 7th July, 1942. As result, the Indian Finance Act of 1939 was brought into force in Chota Nagpur Division and the Santal Parganas District with retrospective effect from 30th March, 1939. 4 On 8th July, 1941, the Income-tax Officer had issued notice to the assessee under Section 34 of the Income-tax Act. At the instance of the assessee, the proceedings were stayed for some time but on 8th February, 1944, the Income-tax Officer made the following order :- Due to recent judgment of the High Court the assessment under Section 23(3) stands cancelled and with it the notice under Section 34 issued in this case becomes ineffective and is withdrawn. Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion IV had not been promulgated. But as observed in the judgment of the Appellate Tribunal there can hardly be any doubt that the fresh notice dated 42th February, 1944, was issued on the strength of Regulation IV of 1942. The circumstance that the Income-tax Officer came to know that Regulation IV of 1942 has been promulgated constitutes in my opinion definite information , in consequence of which the Income-tax Officer discovered that the income which was chargeable is 1939-40 had escaped assessment. No universal meaning can be given to the meaning of the phrase definite information for it is obvious that the application of Section 34 must depend upon the particular circumstances of each case. It is not, however, necessary that the definite information should relate to a pure question of fact. Even definite information with respect to the state of the law will bring the section into operation. The section cannot be invoked merely because the Income-tax Officer changed his mind about the interpretation of the law but the section will doubtless operate if the Income-tax Officer is informed that a case has been overruled or that a statute or a regulation had been passed which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber, 1930, on their income as returned in 1928. It was held by the Judicial Committee that the assessment made under Section 23(1) on Burn Co. on 8th November, 1930, was a legal assessment. Lord Macmillan who pronounced the opinion of the Judicial Committee observed that the income of Burn Co. did not escape assessment within the meaning of Section 34 of the Income-tax Act ; that income which has been duly returned for assessment cannot be said to have escaped assessment within Section 34 though it has not been taxed within the assessment year. At page 77 he observed :- The fact that Section 34 requires a notice to be served calling for a return of income which has escaped assessment strongly suggests that income which has already been duly returned for assessment cannot be said to have 'escaped' assessment within the statutory meaning. Their Lordships find themselves in agreement with the view expressed in Lachhiram Basantlal v. Commissioner of Income Tax, Bengal [1931] 5 ITC 114 ; 58 Cal. 909, by the learned Chief Justice (Rankin) at page 118: 'income has not escaped assessment if there are pending at the time proceedings for the assessment of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power to make. The Judicial Committee held that it was a debatable question whether the circumstances in the case were such as to bring it within the provisions of Section 34 ; but the case clearly would have fallen within the provisions of Section 35 had the Income-tax Officer exercised his power under the section within one year from the date on which earlier demand was served upon the respondents. The facts of the present case are manifestly different, for the assessment made by the Income-tax Officer was illegal since the Indian Finance Act of 1939 was not in force in Chota Nagpur on the material date and the principle of the Privy Council case cannot therefore be applied. On behalf of the Commissioner of Income-tax Mr. Dutt relied upon Kunwar Bishwanath Singh v. Commissioner of Income-tax [1942] 10 ITR 322 in which the facts are almost parallel to those of the present case. The assessee, the late Maharaja of Benares, was a non-resident and he was assessed to income-tax for the assessment year 1936-37 without appointing an agent under Section 43 of the Act. The High Court, therefore, set aside the assessment on 14th February, 1938. Nine days later the Income-tax Officer made an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal referred only some of them and refused to refer the others on the ground that they did not arise. The assessee thereupon filed an application in the Original Side of the High Court under Section 45 of the Specific Relief Act for a writ of mandamus requiring the Tribunal to refer the other questions. The application was rejected by the High Court and it was held that no mandamus could be issued for the reason that Section 66 was self-contained and did provide for the contingency when the statement of the case was incomplete as well as when no reference had been made at all. The principle finds support in the following observations of Lord Macmillan when delivering judgment of the Board in Commissioner of Income-tax, Bihar and Orissa v. Maharajadhiraja of Darbhanga [1933] 60 IA 146 at p. 160 ; 1 ITR 94 , at p. 107 : The Commissioner unfortunately omitted to formulate any question of law arising out of this transaction. The duty of the High Court under Section 66, sub-section (5), is 'to decide the questions of law raised' by the case referred to them by the Commissioner, and it is for the Commissioner to state formally the questions which arise. Here the High Court itse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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