9911796707
TMI Blog1971 (9) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... y P. JAGANMOHAN REDDY J.--- The High Court of Mysore in a reference under section 66(1) of the Indian Income-tax Act, 1922 (hereinafter called " the Act "), had held against the revenue on the question : (1) whether, in the circumstances of the case, the refund granted by the Income-tax Officer under section 48 of the Mysore Income-tax Act, 1923 (hereinafter called " the Mysore Act "), amounted to an assessment ; and (2) whether the interpretation placed by the Income-tax Tribunal on the words " such income, profits and gains " in paragraph 5(1) of the Part B States (Taxation Concessions) Order, 1950 (hereinafter called " the Order "), is correct ? On the first question its answer was in the affirmative and on the second in the ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such the Income-tax Officer has made an assessment under the Mysore Act ; and that according to paragraph 5 of the Order an assessment under the Act would be possible only if, before the appointed date, namely, on April 1, 1950, the assessee had not been assessed under the Mysore Act. The Income-tax Officer rejected these contentions on the ground that the assessment made on the firm could not be regarded as an assessment made on the assessee individually and completed the assessment for the years 1950-51 on March 6, 1955, on a total income of Rs. 3,21,821. The assessee appealed to the Income-tax Appellate Assistant Commissioner and raised similar contentions to those raised before the Income-tax Officer. The Income-tax Officer on the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion, that order of refund amounted to an assessment on the assessee. On the second question as to the meaning to be given to the word " such income, profits and gains " occurring in paragraph 5 of the Order the Bench rejected the reasoning of the Tribunal and accepted that of the Appellate Assistant Commissioner, for, as Hedge J., as he then was, observed : " Otherwise, what would happen is that there would be two assessments in respect of the income of an assessee during one assessment year." The contentions of the learned advocate for the revenue follow much on the same lines as were the contentions before the High Court of Mysore, namely, that as the assessee did not disclose his personal income except that of the income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the State law, they shall be assessed under the Act for the year ending on the 31st day of March, 1951, and the tax payable thereon shall be determined as hereunder.... (3) In this paragraph, the State assessment year 1949-50 means the assessment year which commences on any date between the 1st April, 1949, and the 31st December, 1949." Section 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.... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year 1950-51. It is in respect of that notice that a return was filed by the assessee to which we have made a reference showing that there was no assessable income. For the next assessment year 1951-52 the assessee filed a return and in the course of these assessment proceedings account books were produced by them which disclosed an opening cash credit balance of Rs. 1,37,000 as on 1st July, 1949. When the Income-tax Officer called for the books of the earlier year the books were not produced by the assessee. In the circumstances, a sum of Rs. 1,37,000 out of the opening balance as on July 1, 1949, was treated as income from undisclosed sources for the year 1951-52. But on appeal the Appellate Assistant Commissioner held that the financi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sub-paragraph (1) of paragraph 5 of the Order which makes the Act inapplicable to such assessments. It is also provided in sub-paragraph (2) of paragraph 5 that where income, profits and gains have not been assessed under the State law they shall be assessed under the Act for the year ending March 31, 1951, which is the assessment year 1950-51 in respect of which the tax payable has been specified therein. There can be no doubt that for the assessment year 1950-51, for which the accounting year is the previous year 1st April, 1949, to 31st March 1950, the Act applies and assessments would be made thereunder. This would be a hardship because under any of the tax laws of Part B States an assessee in that State may have been taxed already. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
