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TMI Blog1964 (4) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... business earned by him in that year as procurement agent for the Government. Accordingly, he issued a notice under section 34 of the Act on March 22, 1957. The assessee in response thereto sent his return on April 30, 1957, showing as before his status as the Hindu undivided family. But the Income-tax Officer did not proceed with the assessment on the basis thereof. Instead, a few months later, on February 12, 1958, he issued a fresh notice purporting to be under section 34. The assessee submitted a second return with enclosures to the same effect as before. Then the Income-tax Officer proceeded to assess and ultimately made his order of assessment on August 16, 1958. He included in the assessment a sum of ₹ 60,000 as the income escaping from the original assessment. The assessee went in appeal to the Appellate Assistant Commissioner disputing this addition of ₹ 60,000. He questioned the validity of the proceedings taken under section 34 of the Act. Such a plea was not taken before the Income-tax Officer nor was it included in the grounds of appeal. Yet, being a pure question of law, the Appellate Assistant Commissioner permitted it to be raised and eventually accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpetent for the Income-tax Officer to ignore the return and notice and issue a fresh notice and proceed thereunder. For this proposition, he relied strongly on the dictum of a Division Bench of this court in Parimisetti Seetharamamma v. Commissioner of Income-tax [1963] 50 I.T.R. 450, which has been approved of in Pulavarthi Viswanadham v. Commissioner of Income-tax [1963] 50 I.T.R. 463. Reliance was also placed on Commissioner of Income-tax v. Ranchhoddas Karsondas [1959] 36 I.T.R. 569; [1960] 1 S.C.R. 114 and a few other cases. On the other hand, it has been urged on behalf of the department that, since the return made was not a voluntary return for original assessment made under section 22(3) of the Act, which the Income-tax Officer could not possibly ignore, no invalidity did attach to the assessment made under the second notice. It was also urged that the principle enunciated in the above cited rulings had no application to the facts of the present case. That also seems to be the line of argument adopted by the Income-tax Appellate Tribunal in its order dated November 2, 1961. We have therefore to examine the correct position in the light of the statutory provisions. Of course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary for his assessment for that year, income, profits or gains chargeable to income-tax have escaped assessment for that year, or have been underassessed, 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 relief under this Act, or that excessive loss or depreciation allowance has been computed, he may, in cases falling under clause (a) at any time and in cases falling under clause (b) at any time within four years of the end of that year, serve on the assessee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 22 and may pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lows therefore that when a notice under section 34 has been issued and the return is filed in compliance with the terms of the notice, issue of a second notice under the same section 34(1) will not be proper because with the return already filed it cannot be said that there has been an omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment for the year in question. In this view also it was not competent for the Income-tax Officer to ignore the return and initiate fresh proceedings under section 34(1)(a) by issuing a notice dated February 12, 1958. Thus, even though the above authorities cited including Raman Chettiar v. Commissioner of Income-tax [1961] 42 I.T.R. 700, Santosha Nadar v. First Additional Income-tax Officer [1961] 42 I.T.R. 715, K.S. Ratnaswami v. Additional Income-tax Officer [1963] 48 I.T.R. 568 and R.P. Kandaswami v. Commissioner of Income-tax [1963] 49 I.T.R. 344, were cases which dealt with voluntary original returns made within four years, the principle enunciated having regard to the clear provisions of section 34 so far as may be shall apply, inasmuch as the notice given under section 34 shal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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