TMI Blog1977 (7) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... amounting to Rs. 25,01,660 (net) deemed to have been distributed to the said non-resident assessee, as a result of the application of section 23A on M/s. Turner Morrison Co. Ltd. The reassessment was assailed before the Tribunal on the ground that the notice under section 34 was issued after the expiry of the period of limitation prescribed by law. The Tribunal held that the assessment could be reopened in the present case only under section 34(1)(b) and the assessee having been assessed as an agent of a non-resident principal, the second proviso to section applied and the limitation for reopening the assessment in such a case was only two years from the end of the year of assessment. In the present case, the Tribunal found that the notice under section 34(1) having been issued on 9th June, 1956, long after the expiry of the prescribed period of limitation, was illegal and the Income-tax Officer had no jurisdiction to reopen the assessment for the year under reference. The order of the Tribunal is a short one and may be conveniently set out : "IN THE INCOME-TAX APPELLATE TRIBUNAL 'A' BENCH, CALCUTTA. (Before Shri T. P. Mukherjee and Shri H. M. Jhala) I.T.A. No. 10710 of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appears that this reference had come up for hearing before this court some time in 1967, and the court directed the Tribunal to submit a further statement of case under section 66(4) on the following points : "(a) Whether Messrs. Turner Morrison Co. Ltd. was deemed to be an agent of Messrs. Hungerford Investment Trust Ltd. under section 43 ? (b) Whether the question that Messrs. Turner Morrison Co. Ltd. was not deemed to be an agent by the Income-tax Officer under section 43 was ever canvassed before the Tribunal ?" In the further statement of case submitted by the Tribunal, the Tribunal has recorded in paragraphs 3, 4, 6, 7, 8, 9, 10 and 11 the facts which are material for the purpose of this reference and the said paragraphs may be set out : "3. Notice under section 34(1)(b) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act), was issued on the 9th June to Messrs. Turner Morrison Co. Ltd. as agents of Hungerford Investment Trust Ltd. for the purpose of bringing to assessment dividend amounting to Rs. 25,01,360 deemed to have been distributed to Hungerford Investment Trust as a result of the application of section 23A of the Act to Messrs. Turner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. It is his submission that Turner Morrison Co. Ltd. should be considered to be agents under section 40(2) of the Act. He has argued that as Turner Morrison Co. Ltd. could not possibly be the deemed agent under section 43, as no notice as required under the said section has been served on them and as there is power and jurisdiction to issue such notice on agents under section 40(2) of the Act, the Tribunal erred in coming to the conclusion that the second proviso to section 34(1) of the Act applied. It is his submission that as the other section, namely, section 40(2) was there and Turner Morrison Co. Ltd. could be agents under the said section, the second proviso to section 34(1) of the Income-tax Act fixing the period of limitation to two years cannot be held to be applicable, because Turner Morrison Co. Ltd. can never be considered to be deemed agents within the meaning of section 43 in the absence of service of the statutory notice to them. Mr. Pal has referred to the decision of the Bombay High Court in the case of Jadavji Narshidas Co. v. Commissioner of Income-tax [1957] 31 ITR 1 (Bom). Mr. Pal has also referred to the decision of the Supreme Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs for the failure of the partners of the firm constituted in the year of account relevant to the assessment year 1948-49 was never investigated. The question raised by the Tribunal is in terms sufficiently comprehensive to embrace an enquiry whether partners of the firm in existence on July 30, 1954, were liable to be assessed to penalty as successors-in-interest of the partners of the original firm in existence in the year of account relating to the assessment year 1948-49. But in a reference under section 66 of the Indian Income-tax Act, 1922, only the question which was either raised or argued before the Tribunal may be answered, even if the language of the question framed by the Tribunal may apparently include an enquiry into other matters which could have been, but were not, raised or argued." Dr. Pal has submitted that as the entire case of the department had proceeded on the basis that Turner Morrison Co. Ltd. were deemed agents within the meaning of section 43 of the Act, the Tribunal was perfectly justified in holding that the second proviso to section 34(1)(b) of the Act applies and the notices were clearly barred. In the facts and circumstances of this case, we a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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