9911796707
|
Home
Issues Involved:
1. Waiver of notice under Section 34 by voluntarily submitting a return under Section 22(3). 2. Applicability of Section 34(1)(a) or Section 34(1)(b) when no return under Section 22(1) was filed in due time. Issue-wise Detailed Analysis: 1. Waiver of Notice under Section 34 by Voluntarily Submitting a Return under Section 22(3): The court examined whether the assessee, by voluntarily submitting a return under Section 22(3) before the completion of the assessments, could be considered to have waived the issue of the notice under Section 34. The assessee filed returns for the assessment years 1948-49 and 1949-50 on September 24, 1953, showing income from business. The Income-tax Officer treated these returns as filed under Section 22(3) and started assessment proceedings under Section 23 without issuing a notice under Section 34(1). The Tribunal held that the assessee, by filing the returns voluntarily, must be deemed to have waived compliance with the notice requirement under Section 34(1). However, the court noted that the issue of a notice under Section 34(1) is a jurisdictional step and a condition precedent to the exercise of jurisdiction. Jurisdiction cannot be conferred by consent or acquiescence, and thus, the assessee could not waive the requirement of a notice. The court referenced several cases, including the Supreme Court's decision in Narayana Chetty v. Income-tax Officer, which affirmed that the issue of a notice is a condition precedent to the exercise of jurisdiction. Conclusion: The court answered the first question in the negative, stating that the assessee could not be considered to have waived the issue of the notice under Section 34 by voluntarily submitting a return under Section 22(3). 2. Applicability of Section 34(1)(a) or Section 34(1)(b) when No Return under Section 22(1) was Filed in Due Time: The court analyzed the true interpretation of the provisions of Section 34, particularly whether clause (a) or clause (b) of sub-section (1) would be attracted in a case where no return under Section 22(1) was filed by the assessee in due time. The court noted that Section 34(1)(a) applies when an Income-tax Officer has reason to believe that income has escaped assessment due to the omission or failure of the assessee to make a return under Section 22 or to disclose fully and truly all material facts necessary for the assessment. In such a case, the officer can serve a notice within eight years and assess the income. If no return is filed within the time prescribed in the general notice issued under Section 22(1), Section 34(1)(a) would be attracted if no return was filed before the expiry of four years or if a return was filed before the expiry of four years and an assessment order was passed on it, and it was later found that income had escaped assessment due to the assessee not disclosing true and full facts. Section 34(1)(b) would be attracted only if a return was filed before the expiry of four years and was found to be true and complete, and an assessment order was passed upon it, but on account of information subsequently coming into the possession of the Income-tax Officer, it was found that income had escaped assessment. Conclusion: The court answered the second question by stating that if no return is filed within the time prescribed in the general notice issued under Section 22(1): - Section 34(1)(a) would be attracted if: - No return was filed before the expiry of four years. - A return was filed before the expiry of four years, an assessment order was passed on it, and it was later found that income had escaped assessment due to the assessee not disclosing true and full facts. - Section 34(1)(b) would be attracted only if a return was filed before the expiry of four years, was found to be true and complete, an assessment order was passed upon it, but on account of information subsequently coming into the possession of the Income-tax Officer, it was found that income had escaped assessment.
|
