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Issues Involved:
1. Whether the undisclosed income from the Amalgamated Jambad Syndicate Ltd. falls within the special accounting year declared by the petitioner. 2. Whether the reopening of the assessment under Section 34(1)(a) or 34(1)(b) is time-barred. 3. Whether the assessment order and subsequent notice under Section 29 were valid. 4. Whether the amendment of the assessment order under Section 35 by a successor Income-tax Officer is permissible. 5. Whether the respondents were guilty of contempt. 6. Whether the Income-tax Officer should have granted a stay pending the appeal. Detailed Analysis: Issue 1: Undisclosed Income and Special Accounting Year The petitioner argued that the undisclosed income from the Amalgamated Jambad Syndicate Ltd. should fall within the special accounting year he declared (1st May to 30th April). The court found this argument untenable, stating, "The words used in section 2(11) are 'separate source' of income." The petitioner had not exercised his option for the undisclosed income, which was not mentioned in any return. Therefore, the court concluded, "the only possible way in which it could have been assessed was to assess it according to the ordinary financial year," validating the Income-tax Officer's calculation. Issue 2: Reopening of Assessment - Time Bar The petitioner contended that the assessment was reopened under Section 34(1)(b), which has a four-year time bar. The court clarified, "It is quite plain to me that the assessment was reopened under section 34(1)(a) and, therefore, the time bar is 8 years." The assessment order was made within the permissible period, and the court found no merit in the argument that the notice of demand must also be within this period, distinguishing between "assessment" and "order of assessment." Issue 3: Validity of Assessment Order and Notice The petitioner argued that the assessment order was not valid as the computation was not signed. The court dismissed this, noting, "the original computation, which is in the form known as I. T. 30, requires the signature of the Income-tax Officer and in this case it was duly signed." The court found that the assessment order was made in accordance with law, and the notice under Section 29 was valid. Issue 4: Amendment of Assessment Order The petitioner argued that only the original assessing officer could amend the assessment order under Section 35. The court found no merit in this, stating, "I do not find anything in section 35 to that effect." The successor Income-tax Officer had the authority to make the amendment as long as it complied with Section 35. Issue 5: Contempt Applications The court found no basis for the contempt applications, stating, "I do not see anything which justified these applications, which appear to be misconceived." The respondents were not guilty of any contumacious conduct. Issue 6: Stay Pending Appeal The petitioner argued that the Income-tax Officer should have stayed the proceedings pending the appeal. The court referenced prior judgments, noting that staying proceedings was a matter of discretion and not obligatory. The court stated, "if the discretion was not properly exercised by the Income-tax Officer the petitioner ought to have asked for the order to be quashed." Since there was no such prayer, the court could not order a stay. Conclusion: All applications were dismissed, and the rules were discharged. The petitioner was ordered to pay the costs for the two contempt applications, with no order as to costs for the three rules. The judgment emphasized the proper exercise of discretion and the adherence to statutory provisions in tax assessments and amendments.
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