TMI Blog1978 (5) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... preferred a further appeal to the Tribunal. It was contended before the Tribunal for the first time that the reassessment proceedings under s. 34 of the Indian I.T. Act, 1922, had become time-barred on the 31st March, 1962, in the instant case and could not have been validly initiated thereafter. This contention was sought to be supported by the decision of the Supreme Court in J. P. Jani, ITO v. Induprasad Devshankar Bhatt [1969] 72 ITR 595. It was contended on behalf of the revenue on the other hand that the decision in J. P. Jani was on the basis of a concession by the revenue to the effect that the right of the ITO to reopen the assessment under the Indian I.T. Act, 1922, had become time-barred. There was no such concession in the instant case. It was submitted that even if the earlier Act of 1922 had not been replaced by the I.T. Act, 1961, the ITO could have validly initiated proceedings under s. 34(1)(a) of the earlier Act. The Tribunal, however, on the basis of J. P. Jani [1969] 72 ITR 595 (SC) came to the conclusion that under the later Act of 1961 a notice under s. 148 for reopening an assessment could not be issued where such right to reopen had already become barred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts or gains chargeable to income-tax which have escaped assessment ... ... ... amount to, or are likely to amount to, one lakh of rupees or more in the aggregate, either for that year, or for that year and any other year or years after which or after each of which eight years have elapsed, not being a year or years ending before the 31st day of March, 1941 ; (iii) for any year, unless he has recorded his reasons for doing so, and, in any case falling under clause (ii), unless the Central Board of Revenue, and, in any other case, the Commissioner is satisfied on such reasons recorded that it is a fit case for the issue of such notice:... (4) A notice under clause (a) of sub-section (1) may be issued at any time notwithstanding that at the time of the issue of the notice the period of eight years specified in that sub-section before its amendment by clause (a) of section 18 of the Finance Act, 1956 (18 of 1956), had expired in respect of the year to which the notice relates." Mr. Pal next drew our attention to the facts in J. P. Jani [1969] 72 ITR 595 (SC), where the assessee had been assessed to income-tax in the assessment year 1947-48. The assessment order was passed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f s. 34. The sub-section clearly indicated that the notice under s. 34(1)(a) of the earlier Act could have been validly issued up to the time when the new Act came into force. Mr. Sanjoy Bhattacharya, as "amicus curiae", has drawn our attention to several amendments introduced in s. 34 of the Indian I.T. Act, 1922, from time to time. Prior to the Finance Act, 1956, the said section read, inter alia, as follows : "34. Income escaping assessment.-(1) If- (a) the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully or truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income-tax has escaped assessment for that year, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed, or ...... he may in cases falling under clause (a) at any time within eight years ...... of the end of that year, serve on the assessee...... a notice containing all or any of the requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years specified in that sub-section before its amendment by clause (a) of section 18 of the Finance Act, 1956 (18 of 1956), had expired in respect of the year to which the notice relates." By s. 4 of the said Act of 1959, notices, assessments, etc., in certain cases already issued were sought to be saved from being time-barred. The said section read as follows : "Saving of notices, assessments, etc., in certain cases.-No notice issued under clause (a) of sub-section (1) of section 34 of the principal Act at any time before the commencement of this Act and no assessment, reassessment or settlement made or other proceedings taken in consequence of such notice shall be called in question in any court, tribunal or other authority merely on the ground that at the time the notice was issued or at the time the assessment or reassessment was made, the time within which such notice should have been issued or the assessment or reassessment should have been made under that section as in force before its amendment by clause (a) of section 18 of the Finance Act, 1956 (18 of 1956), had expired." Section 292(2)(d)(ii) of the Act of 1961 reads, inter alia, as follows: "(2) Notwithstanding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otices in respect of assessment years prior to March 31, 1956. The relevant observations in the judgment of Das J. are as follows: "It is manifest that sub-section (4) of section 34 does not help the appellants. That sub-section is clearly prospective and is intended to authorise action after the coming into force of the 1959 amendment." By reason of the language of sub-s. (4) of s. 34 as it stood at the relevant time and in view of the majority judgment in S. C. Prashar, reopening of the assessment in the instant case under s. 147 of the I.T. Act, 1961, in our opinion, must be held to be valid. On the day the I.T. Act, 1961, came into force, that is, on 1st April, 1962, it cannot be said that the right of the ITO to reopen the assessment in the instant case had become time-barred as up to 31st March, 1962, the ITO concerned could have issued a notice under sub-s. (4) of s. 34. In that view of the matter s. 297(2)(d)(ii) of the later Act applies to the facts of this case. The relevant assessment year 1947-48 is an assessment year after the year ending on the 31st March, 1940. The reassessment has proceeded on the basis that in this assessment year an income chargeable to tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
