9911796707
TMI Blog1968 (8) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... cer, therefore, after obtaining the approval of the Commissioner of Income-tax issued a notice dated March 27, 1956, under section 34(1)(a) of the Income-tax Act, 1922 (hereinafter referred to as " the old Act "). The notice could not be served personally, and, therefore, was served by affixing on a conspicuous part of the respondent's house. The respondent objected to the service of the notice and did not file a return stating that there had been no valid service. When the Income-tax Officer threatened to proceed as parte a return was filed under protest on January 16, 1957, and in that return the respondent showed the same amount of income which was determined in the original assessment. Despite the objection of the respondent that there was no proper service of notice under section 34(1)(a), the Income-tax Officer proceeded to assess the income of the respondent for the assessment year 1947-48 and made an order dated March 29, 1957, determining the total income of the respondent at Rs. 89,000 by including the profit alleged to have been earned by Natwarlal Manilal Pandit. The respondent preferred an appeal to the Appellate Assistant Commissioner who allowed the appeal and set as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this stage to set out the relevant provisions of the two statutes. Section 34 of the Income-tax Act, 1922 (it of 1922), as it stood immediately prior to its amendment by the Finance Act, 1956, is in the following terms: " 34. (1) If-- (a) the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income-tax have escaped assessment for that year, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive relief under the Act or excessive loss or depreciation allowance has been computed, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income-tax have escaped assessment for any year, or have been under-assessed, or assessed at too low a rate, or, have been made the subject of excessive r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and any other year or years after which or after each of which eight years have elapsed, not being a year or years ending before the 31st day of March, 1941; (iii) for any year, unless he has recorded his reasons for doing so, and, in any case falling under clause (ii), unless the Central Board of Revenue, and, in any other case, the Commissioner, is satisfied on such reasons recorded that it is a fit case for the issue of such notice; ... " The Income-tax Act, 1961 (43 of 1961), came into force from 1st April, 1962. Sub-section (1) of section 297 of the new Act repealed the old Act and by sub-section (2) of that section the new Act enacted certain saving provisions consequent upon the repeal of the old Act. The material provision is set out in clause (d) : " 297. Repeals and Savings.--(1) ... (2) Notwithstanding the repeal of the Indian Income-tax Act, 1922 (11 of 1922) (hereinafter referred to as the repealed Act),--...... (d) where in respect of any assessment year after the year ending on the 31 st day of March, 1940, (i) a notice under section 34 of the repealed Act had been issued before the commencement of this Act, the proceedings in pursuance of such notice may be co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeding under the Act by way of appeal, reference or revision and provided that in such cases there should be no time limit and notice under section 148 may be issued at any time unless of course the case fell within sub-section (2) of section 150. Section 151 made it a condition precedent to the issue of the notice under section 148 that the Income-tax Officer should obtain the previous sanction of the Central Board of Revenue or the Commissioner of income-tax according as the notice is proposed to be issued after the expiry of 8 years from the end of the relevant assessment year or after the expiry of 4 years from the end of the relevant assessment year. On behalf of the appellants Mr. Narasaraju stressed the argument that the High Court was in error in holding that the provisions of the new Act of 1961, were not applicable in cases where the time limit fixed in the old Act had expired before the coming into force of the new Act. It was contended that section 297(2)(d)(ii) of the new Act was wide in its sweep and it took in all assessment years after the year ending on 31st March, 1940, irrespective of the question whether the right to reopen the assessment in respect of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary implication that there was a revival of the right of the Income-tax Officer to reopen an assessment which was already barred under the old Act. This view is borne out by the decision of his court in S. S. Gadgil v. Lai & Co. In that case, a notice was issued against the assessee as an agent of a non-resident on 27th March, 1957, and that notice related to the assessment year 1954-55. Under clause (iii) of the proviso to section 34(1), as it stood prior to its amendment by the Finance Act, 1956, a notice of assessment or reassessment could not be issued against a person deemed to be an agent of a non-resident after the expiry of one year from the end of the year of assessment. The right to commence a proceeding for assessment against the assessee as agent of a nonresident for the assessment year 1954-55, therefore, ended on 31st March, 1956, under the new Act before its amendment in 1956. This provision was, however, amended by the Finance Act, 1956, and under the amended provision the period of limitation was extended to two years from the end of the assessment year. The amendment was made on 8th September, 1958, but was given effect to from 1st April, 1956. Since the time wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
