9911796707
TMI Blog1972 (10) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... is referred for determination is : "Whether proceedings under section 34 for the assessment year 1956-57 were validly initiated against the assessee, Hindu undivided family, and the assessment completed against it within the time-limit applicable to it?" The case relates to the assessment year 1956-57 for which the relevant previous year is from May 9, 1954, to May 31, 1955. The assessee is a Hindu undivided family, namely, Messrs. Hargovindsing Narainsing. For the assessment year 1956-57 on May 3, 1956, the Income-tax Officer issued a notice under section 22(2) of the Act, in the name of " Shri Hargovindsing Narainsing, C/o. Court Receiver, High Court, Bombay ". This notice was served upon the court receiver on May 7, 1956. In response ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment by his order passed on March 29, 1961. On appeal by the assessee to the Appellate Assistant Commissioner, he also rejected the contention of the assessee that the assessment was invalid in law as the proceedings were wrongly initiated under section 34 of the Act. This contention was rejected by the Appellate Assistant Commissioner and he took the view that as the Income-tax Officer did not take any action on the return filed by the court receiver, he was entitled to issue notice under section 34 of the Act and based his assessment on the return submitted by the Hindu undivided family. In appeal by the assessee before the Income-tax Tribunal, it was also contended that the initiation of the proceedings under section 34 of the Act was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted, that in fact this section has no application in the present case, because this is not a case where it can be said that income has escaped assessment, until the returns filed by the court receiver pursuant to a notice under section 22(2) of the Act were scrutinized and considered and order passed thereon. On behalf of the revenue, Mr. Hajarnavis stated that the Income-tax Officer was entitled to initiate proceedings under section 34 of the Act because there was no valid notice served upon the Hindu undivided family under section 22(2) of the Act as it was served upon the court receiver. Secondly, he submitted that in any event the three returns filed by the court receiver pursuant to this notice were invalid in law and that permitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n assuming that the returns are invalid in law, that does not permit an Income-tax Officer to initiate proceedings under section 34 of the Act. Even if it is assumed that the three returns filed by the court receiver for the accounting period are invalid in law, it is well-settled that merely because the return filed is invalid that does not authorise an Income-tax Officer to initiate proceedings under section 34 of the Act. In Commissioner of Income-tax v. A. J. Zaveri, it was held by the Income-tax Officer that there was no legal and valid return filed by the assessee for the first year of assessment, viz., 1951-52, because the return purported to be filed by the assessee for the said year was invalid inasmuch as it was not signed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to the source. Three years later, the Income-tax Officer issued a notice under section 34(1)(a) treating the return submitted by the assessee as a nullity. Pursuant to that notice, he also made an assessment. With regard to the same assessee the Income-tax Officer had not only entertained similar returns for the assessment years 1949-50 to 1951-52, but also made assessments on the basis of those returns under section 23(3). On this fact, the Punjab High Court took the view that as the Income-tax Officer had not only entertained the return, but acted on it by issuing a notice under section 23(2) and had not at that stage raised an objection on the ground that the return was invalid, and he could have by resort to section 23(3) removed an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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