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TMI Blog1962 (7) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the Exchange Bank of India and Africa Ltd. This letter, it appears, inadvertently bore the assessee's address on its cover and was consequently first received by the assessee himself. The assessee on reading the contents found that it was meant for the Income-tax Officer, B-II Ward, Bombay, and accordingly passed it on to the officer concerned on the 24th March, 1953. Thereafter on the 28th of March, 1953, the Income-tax Officer issued a notice to the assessee under section 34(1)(a) for the assessment year 1944-45 and got it served by affixation on the 31st of March, 1953. On the 10th of July, 1953, the assessee stated before the Income-tax Officer that in response to the notice received by him he had already submitted a return for the assessment year 1944-45 for which his previous accounting year was S.Y. 1999. He had, however, no business in the S.Y. 1999. For the S.Y. 2000 he had maintained a note book and for the subsequent Samvat years corresponding to assessment years 1946-47 onwards, the assessee has been assessed to tax. The draft dated 23rd March, 1944, pertains to the S.Y. 2000 and action under section 34 may be taken for the assessment year 1945-46. In the meanwh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted under section 34 were bad in law. On the merits, he disputed the quantum of ₹ 56,000 assessed in the said assessment proceedings. The Appellate Assistant Commissioner took the view that the contention of the assessee, that the proceedings under section 34 were bad in law, was well-founded and supported by the decision of this court in Ranchhoddas Karsondas v. Commissioner of Income-tax [1954] 26 ITR 105. He accordingly allowed the appeal and set aside the order of assessment made by the Income-tax Officer. The department then appealed to the Income-tax Appellate Tribunal. The Tribunal also took the view that the ratio decidendi of the Supreme Court decision in Commissioner of Income-tax v. Ranchhoddas Karsondas [1959] 36 ITR 569 ; [1960] 1 SCR 114, affirming the decision of the Bombay High Court in Ranchhoddas Karsondas's case (supra), applied to the present case and the proceedings initiated under section 34(1)(a) for the assessment year 1945-46 as well as the order of assessment made in the said proceedings were bad in law. At the instance of the department, it then drew up a statement of case and referred to this court the question, which we have already stated. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax v. Ranchhoddas Karsondas3. It was held in that case that a return in answer to the general notice under section 22(1) of the Indian Income-tax Act can, under section 22(3), be filed at any time before assessment and for this there is no limit of time. It was further held : Where in respect of any year a return has been voluntarily submitted before assessment, the Income-tax Officer cannot choose to ignore the return and any notice of reassessment and consequent assessment under section 34 ignoring the return is invalid. It was urged that since there was no limit of time for making a voluntary return, the return made in the present case by the assessee was a good return, which could not be ignored and the notice of reassessment and consequent assessment made by the Income-tax Officer ignoring the said return were invalid. Now, the assessment year in that case, as in the case before us, was 1945-46. The voluntary return was filed by the assessee on the 5th of January, 1950. The notice issued by the Income-tax Officer under section 34 ignoring the said return was on the 27th of February, 1950. It was served on the assessee on the 3rd of March, 1950, and the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake an assessment order accepting the said return, because any such order made by him would have been beyond the period of four years and, therefore, barred under section 34(3) of the Act. It was, however, argued that the Supreme Court decision permits the submission that even when the voluntary return is filed beyond the period of four years, the same cannot be ignored and proceedings under section 34(1)(a) cannot be initiated because their Lordships held that a voluntary return under section 24(3) could be made at any time before assessment is made and there is no limit of time for making the same. That was what the Tribunal thought was the ratio decidendi of the Supreme Court decision. We are unable to agree with the view taken by the Tribunal and in our opinion that is not the ratio decidendi of the Supreme Court decision. Their Lordships no doubt observed that a voluntary return under section 24(3) could be made at any time and there was no limit of time for the same. The said observations were made in the context of the provisions of section 24(3) and section 24(3) was a provision which related to the normal assessment which could be made under section 23 on a notice issued u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 114, could not be extended to cases where the voluntary return was submitted after the expiry of the four years' period of limitation for making a normal assessment. After the said period of four years was over, in order to make an order of assessment, recourse had to be had to section 34(1) and such recourse could be only had on the ground that no return had been filed, i.e., no return had been filed before the assessment could be lawfully completed without recourse to section 34(1). Mr. Mehta contended that although normally an assessment order could be made within a period of four years from the end of the relevant assessment year, in certain cases the said period went beyond four years also as for instance in the three categories specified under section 34(3). It is not as if that when the four years' period is over, no assessment can be made because such assessment is capable of being made by resorting to the provisions of section 34(1)(a). If a voluntary return is made by the assessee beyond the period of four years, such a return could be deemed to have been made by him in pursuance of a proceeding initiated under section 34 and could be dealt with on that footin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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