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1961 (7) TMI 87 - HC - Income Tax

Issues:
1. Validity of notice issued under section 34 of the Indian Income-tax Act.
2. Jurisdiction of the Appellate Assistant Commissioner to refer to the liability of the appellants to be reassessed for a previous assessment year.

Issue 1: Validity of notice under section 34:
The judgment involves a case where the Income-tax Officer assessed a partnership firm for the year 1947-48 under section 23(3) read with section 34(1)(a) of the Indian Income-tax Act. The firm appealed, arguing that the income in question should have been assessed for the previous year, 1946-47. The appellate authority accepted this contention, leading to the exclusion of the amount from the 1947-48 assessment. Subsequently, a notice was issued under section 34 for the year ending March 31, 1947. The High Court dismissed a petition challenging the validity of this notice, ruling that it was issued within the time limit prescribed by law, as it was in consequence of the finding made by the appellate authority regarding the correct assessment year for the income in question.

Issue 2: Jurisdiction of the Appellate Assistant Commissioner:
The second issue pertains to the jurisdiction of the Appellate Assistant Commissioner to refer to the liability of the appellants to be reassessed for the previous assessment year, 1946-47. The appellants contended that the Appellate Assistant Commissioner could only make findings for the year under appeal, i.e., 1947-48, and not for any previous year. However, the court held that the finding made by the Appellate Assistant Commissioner regarding the correct assessment year for the income of the appellants was within his jurisdiction. The court cited previous cases to support the view that such findings are necessary to decide the question raised by the appellants themselves. Therefore, the notice issued under section 34 was considered valid as it was in consequence of a finding contained in an order made under section 31, falling within the second proviso to sub-section (3) of section 34.

In conclusion, the High Court upheld the validity of the notice issued under section 34 and dismissed the appeal, emphasizing that the finding made by the Appellate Assistant Commissioner regarding the correct assessment year for the income in question was within his jurisdiction. The court's decision was based on the interpretation of relevant provisions of the Income-tax Act and previous judicial precedents.

 

 

 

 

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