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Issues Involved:
1. Validity of the return filed on April 2, 1964, under section 139(1) of the Income-tax Act. 2. Whether the reassessment proceedings initiated under section 147 for the assessment year 1962-63 are valid in law. Detailed Analysis: 1. Validity of the Return Filed on April 2, 1964: The primary issue was whether the return filed by the trustees on April 2, 1964, along with the refund application, could be considered a valid return under section 139(1) of the Income-tax Act. The Department argued that the return filed with the refund application could not be treated as a return under section 139(1) or (2). However, the counsel for the assessee contended that since sub-rule (2) of rule 41 requires filing a return in the form prescribed under section 139, the return should be treated as valid. The court held that the return filed along with the refund application under sub-rule (2) of rule 41 is indeed a valid return under section 139. The court reasoned that the particulars required in both returns (for assessment and refund) are the same. Section 237 of the Act mandates that the assessee is entitled to a refund if the tax paid exceeds the amount properly chargeable. Therefore, the return filed for refund purposes must be treated as a valid return under section 139 for assessment purposes. 2. Validity of the Reassessment Proceedings: The second issue was whether the reassessment proceedings initiated under section 147 were valid, given that the original return filed on April 2, 1964, was not disposed of. The Income-tax Officer (ITO) had issued a notice under section 148 requiring the trustees to file a return for the assessment year 1962-63. The return was filed, and the assessment was completed on July 3, 1970. The assessee argued that since the original return was still pending, the reassessment proceedings were invalid. The court examined whether the note dated November 10, 1965, recorded by the ITO could be considered as disposing of the refund application. The court found that the note constituted a final order disposing of the refund application. The note stated, "Hence no credit for tax deducted at source is to be allowed here." This was deemed a conclusive order terminating the assessment proceedings. The court concluded that since the refund application was disposed of by the ITO's note dated November 10, 1965, there was no bar to the reassessment proceedings for the same year. Thus, the reassessment proceedings initiated under section 147 were valid. Conclusion: The court held that the return filed by the assessee on April 2, 1964, was a valid return under section 139 of the Income-tax Act. Additionally, since the refund application was disposed of by the ITO's order dated November 10, 1965, the reassessment proceedings for the same year were valid. The court answered the question referred to it in the affirmative, in favor of the Revenue and against the assessee. The request for oral leave to appeal to the Supreme Court was refused as the case did not involve any substantial question of law of general importance.
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