9911796707
|
Home
Issues:
1. Question of limitation regarding notices served by the Income-tax Officer under section 22(2) of the Act read with section 34. 2. Determining the period of limitation for assessment under section 34(1)(a) or section 34(1)(b). 3. Interpretation of "omission" and "failure" under section 34. 4. Whether a public notice under section 22(1) binds the assessee to make a return. 5. Application of constructive notice under section 22(1) to non-residents. 6. Comparison of actual notice and constructive notice in serving notices to foreigners. 7. Jurisdiction of Indian Legislature to tax non-residents and issue binding notices. Detailed Analysis: 1. The primary issue in this case is the question of limitation regarding notices served by the Income-tax Officer under section 22(2) of the Act read with section 34. The contention raised was that the notices were out of time, rendering the subsequent assessment invalid. 2. The two rival contentions revolve around determining the period of limitation for assessment under section 34(1)(a) or section 34(1)(b). The Department argued for an eight-year limitation, while the assessee contended for a four-year limitation. 3. The interpretation of "omission" and "failure" under section 34 is crucial in determining the applicability of the limitation period. Section 34(1)(a) applies in cases of omission or failure by the assessee to make a return under section 22, while section 34(1)(b) applies in other scenarios. 4. The debate centered on whether a public notice under section 22(1) binds the assessee to make a return. The argument was based on the obligation of the assessee in response to the public notice and whether it constitutes an omission or failure under section 34(1)(a). 5. The application of constructive notice under section 22(1) to non-residents was a key point of contention. It was argued that a notice given in the prescribed manner under section 22(1) constitutes constructive notice, regardless of whether the individual had actual knowledge of the notice. 6. A comparison between actual notice and constructive notice in serving notices to foreigners was drawn, citing the judgment of the House of Lords in Whitney v. Commissioners of Inland Revenue [1926] 10 Tax Cas. 28. The judgment highlighted that both forms of notice could have the same legal effect. 7. The jurisdiction of the Indian Legislature to tax non-residents and issue binding notices was affirmed, dismissing the argument that the provision with regard to section 22 does not apply to non-residents. The competence of the legislature to tax non-residents was upheld, allowing for the issuance of notices that bind non-residents. In conclusion, the High Court of Bombay held that the case fell under section 34(1)(a), establishing an eight-year limitation period. The notices served were deemed valid and binding, leading to a dismissal of the contention regarding the limitation period. The judgment emphasized the application of constructive notice, the obligation of the assessee in response to public notices, and the jurisdiction of the Indian Legislature to tax non-residents.
|
