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TMI Blog1991 (6) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... e Foreign Exchange Regulation Act and the Gold (Control) Act, they were found guilty and fined and on a revision, the sentence was enhanced to rigorous imprisonment for six months for the commission of offences under the Customs Act and the Gold (Control) Act and the sentences were also directed to run concurrently The assessee had not been assessed to income-tax previously. Coming to know of the seizure of gold bars, etc., from the assessee, on December 19, 1969, the Income-tax Officer issued notice to the assessee under section 139(2) read with section 175 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), requiring the assessee to file a return of his income within seven days of the date of receipt of that notice. The notice so issued was served on the assessee on December 24, 1969. The notice mentioned the assessment year as 1970-71 at the top and, in the body, it was stated that the assessee was required to furnish the income of the previous year relevant to the assessment year mentioned therein. On December 24, 1969, the assessee filed an application praying for extension of time for filing the return till January 26, 1970 and, on January 19, 1970, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. Aggrieved by this, the assessee preferred an appeal before the Appellate Assistant Commissioner and the order of assessment was affirmed and the appeal was dismissed. On further appeal to the Tribunal by the assessee contending that section 69A of the Act could not be invoked and that the loss suffered by the assessee by reason of the confiscation of the gold should be allowed as a deduction and further that the notice issued to the assessee on December 19, 1969, under section 139(2) read with section 175 of the Act was valid and the return filed in response to that was also valid and not having processed the return so filed, it was not open to the Income-tax Officer to consider the income for the period from April 1, 1969, to January 19, 1970, in the assessment made for the assessment year 1970-71, the Tribunal found that section 69A of the Act was rightly invoked for including the value of the gold bars, as the assessee had not explained his possession of such gold bars, and that the confiscation of the gold and the resulting loss could not be allowed as the confiscation of the gold was not made during the relevant previous year. Adverting to the validity of the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch a notice, filed a return and such return, whether filed in consequence of a valid or invalid notice, is a good return and, without giving a disposal to that, the Income-tax Officer cannot resort to section 147(a) of the Act with reference to the assessment year 1970-71 and the issue of such a notice had been resorted to only for the purpose of gaining time, as the return ought to have been looked into and orders passed thereon before March 31, 1973, but nothing had been done till March 30, 1973. The assessee had not been previously assessed and it is the interception of the assessee by the officers of the Customs Department on November 23, 1969, that marked the commencement of the proceedings against the assessee by the Revenue. Apparently, the Revenue was under the impression that the assessee might have earned income liable to assessment during the period April 1, 1969, to December 19, 1969, and that necessitated the issue of a notice under section 139(2) read with section 175 of the Act on December 19, 1969. In the normal and usual course, if the assessee had earned income during the period aforesaid, it could be brought to tax in the assessment to be made in the year 1970- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year 1970-71, would nevertheless be a return which deserved attention and disposal at the hands of the Income-tax Officer, which, it is not disputed, had not been dealt with at all by the Income-tax Officer. In other words, the assessee had already filed a return in respect of the assessment year 1970-71, which the assessee had been called upon by a notice to file, but the return so filed, though incomplete and partial, was nevertheless a return which should have been dealt with by the Income-tax Officer. We may observe that in CIT v. Ranchhoddas Karsondas [1959] 36 ITR 569, the Supreme Court pointed out that where, in response to general notice, a return had been submitted before assessment, the Income-tax Officer cannot choose to ignore the return and any notice of reassessment and consequent assessment under section 34 of the Indian Income-tax Act, 1922, ignoring the return, is invalid. Again, in CIT v. S. Raman Chettiar [1965] 55 ITR 630, the Supreme Court pointed out that although the notice under section 34 of the Indian Income-tax Act, 1922, was an invalid notice, the return submitted pursuant to that notice was a return which the Income-tax Officer could not ignore or di ..... 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