9911796707
TMI Blog1951 (5) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... vi daughter of R.B. Lala Jai Kishen Das, who had died in June 1922 and devised his property by a will in equal shares to the two partners. Some time in the year 1937 differences arose between the brother and the sister, with the result that the latter went to Bombay where she filed in the High Court of Bombay a suit for partition against her brother. The litigation resulted in a preliminary decree in May 1937 and a final decree in May 1938. When the case for assessment for the year 1937-38 came up before the Income-tax Officer he was informed by Lala Lal Chand Khosla that the firm s property had been partitioned and that the firm no longer existed. On this the Income-tax Officer recorded the following order on the assessment file of the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r recording this preliminary order the Income-tax Officer on 21st September, 1938, proceeded to assess the income of Lala Lal Chand Khosla, both from the firm and other sources) for the years of assessment 1936-37 and 1937-38. The matter rested there until in March 1941, on some information received, the successor of the Income-tax Officer who had recorded the order of 21st September, 1938, re-opened the matter by issuing a notice under section 23 (2) to Lala Lal Chand Khosla and Shrimati Gurdevi. The notice was issued on 24th March and was returnable for 31st March, 1941. When the notice was taken for service to the house of Lala Lal Chand Khosla it was found that he was in Bombay. The notice was, therefore, affixed to his residence on 27t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter four years from the last day of the year of assessment 1936-37, in which the income was assessable. The Tribunal, however, rejected this objection remarking that Section 34 had no application to the case as what had been done by the Appellate Assistant Commissioner was not assessment of income that had escaped assessment but merely calculation and determination of the tax on income already assessed. On the assessee s application the Tribunal has formulated the following questions for determination by this Court:- (1) Whether the assessment made on the first is invalidated by reason of the fact that notices under sections 22(2) and 23(2) were issued in different names ? (2) Whether a notice under section of the Income-tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other, and that neither any joint property nor any firm existed on the date of assessment. He was, therefore, quite competent to proceed under section 23(5)(b) and deal with the matter as though the firm was a registered one. The statement of the case does not show whether the facts, which empowered the Income-tax Officer to tax an unregistered firm as a registered firm, existed or not. But that is immaterial because whether clause (b) of sub-section (5) of Section 23 applied or not, the Income-tax Officer had finally determined the matter and filed the papers so far as the assessment of the firm for the years 1936-37 and 1937-38 was concerned. Lala Lal Chand Khosla, as one of the partners in the firm, could be made liable to pay income- t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34. The effect of that order was to include in the income of Lala Lal Chand Khosla, Shrimati Gurdevi s share in the income of the firm and to make him liable to pay tax on it. From the statement of the case it does not appear whether the result of splitting the income of the firm in two equal shares and adding one share of it to the income of Lala Lal Chand Khoala from other sources resulted in the application of a higher or a lower rate of tax, but there can hardly be any doubt that when the Income-tax Officer brought only Lala Lal Chand Khosla s share in the income of the firm to his income from other sources, he allowed the other portion of the income from the firm to escape from assessment qua Lala Lal Chand Khosla. If the firm had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of another person. Qua the person who is subsequently sought to be made liable for it, income must be held to have escaped assessment when the Income-tax Officer decides not to include it in his income. The other case relied on by the learned counsel for the Commissioner appears at first sight to be similar to the present case but the difference between the two, and it is a fundamental difference, is that in the former after the issuing of a notice under Section 22(2) the In come-tax Officer transferred the file of Burn Company to another Income-tax Officer who amalgamated the income of that company with the income of another company, which amalgamation was set aside by a superior competent authority, with the result that the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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