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Issues Involved:
1. Competency of the Income-tax Officer to include the sum of Rs. 64,000 in the total income of the family during reassessment. 2. Powers of the Appellate Assistant Commissioner to direct fresh enquiries and reassessment concerning sums not appealed against. Issue-wise Detailed Analysis: 1. Competency of the Income-tax Officer to include the sum of Rs. 64,000 in the total income of the family during reassessment: The primary question referred to the High Court was whether the Income-tax Officer was competent to include the sum of Rs. 64,000 in the total income of the family during reassessment, in pursuance of the order of the Appellate Assistant Commissioner dated June 27, 1950. The High Court clarified that the real issue was whether the Appellate Assistant Commissioner had the authority to direct fresh enquiries regarding the sum against which no appeal had been taken. The Court held that the competency of the Income-tax Officer to include any amounts he thought proper in the assessable income of the assessee family during fresh assessment could not be doubted. 2. Powers of the Appellate Assistant Commissioner to direct fresh enquiries and reassessment concerning sums not appealed against: The Court examined whether the Appellate Assistant Commissioner had the authority to order fresh assessment by including sums not appealed against. It was noted that section 31 of the Indian Income-tax Act conferred broad powers on the Appellate Assistant Commissioner, including the authority to set aside the assessment and remand the case for fresh assessment. The Court emphasized that the Appellate Assistant Commissioner possessed unfettered power to direct the Income-tax Officer to make fresh assessments and include any sum chargeable to tax, independent of whether that sum was the subject matter of the appeal. The Court referenced the case of Motor Union Insurance Co., Ltd. v. Commissioner of Income-tax, Bombay, which dealt with the powers of the Appellate Tribunal, and highlighted that the powers of the Appellate Assistant Commissioner under section 31 were much wider. The Court also referred to the case of Sri Gajalakshmi Ginning Factory Ltd. v. Commissioner of Income-tax, Madras, which supported the view that the Appellate Assistant Commissioner could deal with the entire assessment order and enhance the assessment even if no appeal was preferred by the Commissioner concerning portions of the order adverse to the Department. The Court concluded that the Appellate Assistant Commissioner had the authority to direct the Income-tax Officer to make a fresh assessment, including the sum of Rs. 64,000, which was not involved in the original appeal. This authority was deemed legal and valid, and the question was answered in favor of the Income-tax Department and against the assessee. Conclusion: The High Court upheld the broad powers of the Appellate Assistant Commissioner under section 31 of the Indian Income-tax Act to direct fresh assessments and include sums not originally appealed against. The reassessment by the Income-tax Officer, including the sum of Rs. 64,000, was deemed competent and valid. The judgment favored the Income-tax Department, with costs awarded to them.
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