TMI Blog1975 (6) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... rty income that had escaped assessment? " The statement of the case relates to the assessment years 1959-60 and 1960-61. The assessees' income from house property was determined at Rs. 1,243 and Rs. 1,159, respectively, in these two assessment years by the previous tax officer and with regard to the assessees' income from business, in view of the profit-sharing agreement between the assessees and their employees, it was determined at Rs. 8,139 for the assessment year 1959-60 and out of Rs. 25,045 it was determined at Rs. 12,522 for the assessment year 1960-61. Subsequently, and before the expiry of 4 years, another tax officer came to know that the assessees had a house at Chandernagore and its income had escaped assessment. Accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the reasons of the Appellate Assistant Commissioner including the facts found by him. The submissions of Mr. Sen, the learned counsel for the revenue, before us are as follows: The original assessments were automatically set aside by the issuance of those notices for reassessment ; reassessment is a fresh assessment and, therefore, the subsequent tax officer is entitled to reassess the business income for these two years ; and the jurisdiction of the tax officer under section 147(b) of the Act is not confined to the grounds stated in the notice, under section 148 of the Act. In support of his above submissions Mr. Sen cited the decision of the Supreme Court in the the case of V. Jaganmohan Rao v. Commissioner of Income-tax [1970] 75 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t ...... It was stated on behalf of the appellant that in any case the Income-tax Officer could have legitimately assessed one-third share of the income which was due to the assessee according to the judgment of the Madras High Court, and there was escape only to the extent of two-thirds share of the income. This argument is not of much avail to the appellant because once proceedings under section 34 are taken to be validly initiated with regard to two-thirds share of the income, the jurisdiction of the Income-tax Officer cannot be confined only to that portion of the income. Section 34 in terms states that once the Income-tax Officer decides to reopen the assessment he could do so within the period prescribed by serving on the person liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doubt, the point has been left open in the later decision cited by Dr. Pal, but the above observations of the Supreme Court in the case of V. Jaganmohan Rao v. Commissioner of Income-tax [1970] 75 ITR 373 (SC) are binding on us. It has been submitted by Dr. Pal that though the tax officer acting under section 147 of the Act can tax the entire income that has escaped assessment, yet he has no power to recompute the business income de novo. In support of this contention he cited the case of AL. VR. ST. Veerappa Chettiar v. Commissioner of Income-tax [1973] 91 ITR 116 (Mad), but in that case no such general proposition has been laid down by the Madras High Court and, on the other hand, it has been held that the tax officer must tax the escaped ..... X X X X Extracts X X X X X X X X Extracts X X X X
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