1955 (6) TMI 13 - HC - Income Tax

Summary

Issues:
- Point of limitation regarding the computation of time for proceedings initiated under section 46(2) of the Income-tax Act.
- Interpretation of section 29 of the Income-tax Act regarding the issuance of fresh notices of demand after assessment revisions.

Analysis:
The judgment by the High Court of Calcutta involved a crucial point of limitation concerning the computation of time for proceedings initiated under section 46(2) of the Income-tax Act. The petitioner had been assessed to a certain amount of tax, and multiple notices of demand were issued as the tax amount was successively reduced through appeals. The petitioner contended that the proceedings initiated by the Income-tax Officer were time-barred, arguing that the period of one year should be computed from the first notice of demand issued on September 29, 1948. However, the court ruled that the necessity of issuing fresh notices of demand after assessment revisions was recognized by the law, and the period of limitation should be calculated from the last notice of demand issued, which was on March 31, 1952.

Regarding the interpretation of section 29 of the Income-tax Act, the court deliberated on whether the issuance of multiple notices of demand was permissible after assessment alterations in appeals. The court emphasized the language of the section, which states that a notice of demand is due in consequence of any order passed under the Act, not just an assessment order. The court reasoned that when there is tax due as a result of an order passed by an Appellate Assistant Commissioner or Tribunal, there is a clear occasion to serve a fresh notice of demand. The court highlighted the practical necessity of issuing fresh notices when assessments are altered and concluded that the contention against successive notices of demand was not tenable.

In conclusion, the High Court dismissed the petitioner's Rule, affirming that the necessity of issuing fresh notices of demand after assessment revisions was recognized by the law, and the computation of the period of limitation should be based on the last notice of demand issued. The judgment provided a comprehensive analysis of the legal provisions and practical considerations regarding the issuance of notices of demand in income tax matters.