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Validity of applying section 34 for assessment year 1942-43. Analysis: The judgment pertains to a case where the question of the validity of invoking section 34 of the Income-tax Act for the assessment year 1942-43 was raised. The assessee, an undivided Hindu joint family, had business income in foreign territories occupied by enemy forces at the end of the accounting year, hindering the submission of accurate income details. The Income-tax Officer initially completed the assessment without considering income from these territories due to lack of information. After the war ended, a revised return was submitted, and the foreign income was assessed. The central issue was whether section 34 was appropriately applied. The Tribunal considered the circumstances extraordinary, justifying the delayed assessment under section 34. The Tribunal's decision was based on the premise that the circumstances surrounding the foreign income were exceptional and not within the control of the assessee or the Income-tax Officer during the original assessment. The Tribunal rejected the argument of piecemeal assessment, citing previous cases where deferred assessments were not considered as escaped assessments under section 34. However, the Court distinguished this case from previous judgments where the source of income and liability were known but deferred for administrative convenience. In this case, the lack of information due to wartime conditions and communication disruptions justified the delayed assessment under section 34. The Court emphasized that the requirement for invoking section 34 was met in this case, as there was definite information post-war leading to the discovery of unassessed income. The principle against piecemeal assessment was deemed inapplicable due to the unique circumstances preventing the assessment of foreign income during the original proceedings. The Court held that the delayed assessment under section 34 was valid and ruled in favor of the department. The assessee was directed to bear the costs of the reference, including counsel fees. In conclusion, the judgment clarifies the application of section 34 in cases of delayed assessments due to extraordinary circumstances beyond the control of the assessee and the tax authorities. The Court's decision underscores the importance of meeting the statutory requirements for invoking section 34 and highlights the distinction between deferred assessments based on known sources of income and assessments hindered by external factors like wartime disruptions.
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