TMI Blog1975 (10) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer, "C" Ward, Jabalpur, under section 156 of the Income-tax Act, 1961, by which he raised a demand on the petitioner for payment of Rs. 1,345.98, Rs. 7,384.49 and Rs. 18,388.48 towards its two annas share income from the firm, M/s. Rambilas Murlidhar and Balaram Toluram of Tumsar, for the assessment years 1956-57, 1957-58 and 1958-59. The validity of the impugned notices of demand is challenged before us on two grounds, namely : (i) The Income-tax Officer acted illegally and without jurisdiction in issuing the notices of demand under section 156 of the Income-tax Act, 1961, without any orders of rectification under section 35(5) of the Indian Income-tax Act, 1922. (ii) The notices of demand were also invalid inasmuch as the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment years in question, the firm, M/s. Rambilas Murlidhar and Balaram Toluram of Tumsar, also filed returns, claiming the status of a firm and showing the assessee to be a partner having a two annas share. The Income-tax Officer, " A" Ward, Jabalpur, vide assessment orders dated January 19, 1957, and January 21, 1958, for the assessment years 1956-57 and 1957-58, and the Income-tax Officer, " C " Ward, Jabalpur, vide assessment order dated February 23, 1959, for the assessment year 1958-59, consequently assessed the assessee, i.e., the Hindu undivided family styled M/s. Jainarayan Mulchand, Nainpur, under section 23(5) of the Indian Income-tax Act, 1922, with the following note added : The assessee has not accounted for any profit or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ands for the assessment years in question and these sums were, therefore, added to the income of the petitioner as detailed below : Assessment year 1956-57 ------------------------------------------------------------------------------------------------------------------------------------------------ Income as per ITO's As per AAC's As per ITO's original order u/s 23(3) order dated order u/s 350 23(3) dated 19.1.57 18.6.57 dated 9.3.64 ------------------------------------------------------------------------------------------------------------------------------------------------ (1) Total income assessed. Rs. 25,020 Rs. 23,949 Rs.27,220 Share income from the firm, Nil. Note Nil Rs. 3,271 M/s. Rambilas Murlidhar and giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 64 28-2-59 ------------------------------------------------------------------------------------------------------------------------------------------------ Rs. Rs. (1) Total income assessed 13,839 52,364 (2) Share income from the firm, M/s. Rambilas Nil. Note given 38,625 Murlidhar and Balaram Toluram, Tumsar, for addition included in the total income u/s 35(3) Demand raised 757 17,631 ------------------------------------------------------------------------------------------------------------------------------------------------ The contention that the Income-tax Officer issued the impugned notices of demand without any prior orders of rectification passed by him under section 35(5) of the Indian Income-tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand Sd. ITO ------------------------------------------------------------------------------------------------------------------------------------------------ For the assessment year 1958-59, a notice for rectification was issued to the petitioner on February 17, 1964. In response to the notice, the petitioner made an application dated February 24, 1964, praying that the demand be kept in abeyance till the decision of his appeal, but the Income-tax Officer declined to accede to its request, and on March 9, 1964, he passed an order of rectification under section 35(5), as is clear from the order sheet which reads : ------------------------------------------------------------------------------------------------------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pply thereto accordingly, the period of four years referred to in that sub-section being computed from the date of the final order passed in the case of the firm." The requirements of the section were clearly fulfilled in the present case. On a perusal of the relevant order sheets, it is amply clear that the Income-tax Officer had passed the necessary orders for rectification, for inclusion of the petitioner's two annas share income in its assessment for the assessment years in question. The first point, therefore, fails. The second point regarding want of notice is based on the first proviso to section 35(1) of the Indian Income-tax Act 1922, which reads : " Provided that no such rectification shall be made, having the effect of e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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