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TMI Blog1970 (3) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... o years that certain interest received by the assessee's wife were included in the assessee's total income under section 16(3) of the old Act and/or section 64 of the new Act. There is also an observation in the assessment order for 1961-62 that during the accounting year the assessee had made a gift of Rs. 1,00,000 to his wife out of his income. Three notices purported to be under section 148 of the 1961 Act, all dated the 6th January, 1968, were served on the assessee by the respondent-Income-tax Officer, "B" Ward, District 1(2), Calcutta, to whom the assessee's file had in the meantime been transferred. As the assessee's protest to the Income-tax Officer as to the propriety of the aforesaid notices went unheeded this rule was obtained from this court on the 21st May, 1968, requiring the respondent-Income-tax Officer, the respondent-Commissioner of Income-tax, West Bengal-III, and the respondent-Union of India, to show cause why proper writs should not be issued to quash the aforesaid notices purported to have been issued under section 148, and why a direction prohibiting the respondents from taking any further action thereon should not be given. In showing cause the respondent-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of persons from assets transferred otherwise than for adequate consideration to the person or association of persons by such individual, to the extent to which the income from such assets is for the immediate or deferred benefit of his or her spouse or minor child or both. After the introduction of the tax on capital gains the heads of income .chargeable to tax were enlarged from 5 to 6 by the inclusion of capital gains. It is now settled by the decision of the Supreme Court in Sevantilal Maeklal Sheth v. Commissioner of Income-tax that on the inclusion of cc capital gains " in the definition of income, the term "income" as used in Section 16(3) must be construed to include capital gains and that there was nothing in the context or in the language of section 16(3) to suggest that capital gains was excluded from its scope, It is, therefore, clear that if any capital gains had arisen to the petitioner's wife from the transfer of any assets gifted by the petitioner to his wife, such capital gains would' be included in the total income of the petitioner either under section 16(3) of the, 1922 Act or section 64 of the 1961 Act, and if no such capital gains have been so included ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d minor child were shown in Part III of the return, but the share income of the wife and the minor child was not included in the assessee's total income in the return. On the Income-tax Officer issuing a notice for reassessment under section 34(1)(a), the Supreme Court held that section 16(3) of the Act imposed an obligation upon the Income-tax Officer to compute the total income of an individual for the purposes. of assessment by including the items of income set out in clauses (i) to (iv), but thereby no obligation was imposed upon the taxpayer to disclose the income liable to be included in his assessment under section 16(3). For failing or omitting to disclose that income proceedings for reassessment, could not be commenced under section 34(1)(a). Certain passages in the judgment of the court are quoted below in order to meet certain arguments advanced by the learned counsel for the respondents: " Section 23 dealt with the assessment. It conferred power upon the Income-tax Officer to assess the total income of the assessee and to determine the sum payable by him on the basis of such return submitted by him. Rule 19 framed under section 59 of the Income-tax Act, 1922, required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , section 139 requires every person whose total income exceeds the maximum exempted from tax to file a return of his income within the time specified in the section in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed. There is also a provision in this section similar to section 22(2) enabling the Income-tax Officer to serve a notice on any person who in the opinion of the Income-tax Officer has a total income taxable under the Act to file a return also in the prescribed manner and setting forth such other particulars as may be prescribed. Mr. Mitter pointed out that under the old Act it was only those particulars that were asked for in the notice that were required to be furnished in the return while under the new Act the particulars as prescribed must be furnished in the return. Mr. Mitter also pointed out that it was the duty of every person, if his total income or the total income of any other person in respect of which he is assessable (under the 1961 Act) to tax exceeded the maximum amount exempted from tax to file the return in respect of such income. This is a new provision introduced in the 1961 Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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