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TMI Blog1979 (7) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... ped assessment. The persons who were served with these notices made an application under art. 226 of the Constitution on Febuary 18. 1957, challenging the legality of the proceedings proposed to be initiated under s. 34(1A) of the Act on the ground that these notices had not been served upon all the legal representatives of the deceased. They obtained a rule nisi from this court in Civil Rule No. 609 of 1957. The rule was disposed of by Mr. Justice Bachawat by his Lordship's judgment delivered on the 9th June, 1959. The rule was made absolute to the extent that the ITO was directed to forbear from proceeding to assess or reassess the deceased's income for the relevant years without serving notices on the other legal representatives of the deceased in accordance with law. Mr. Justice Bachawat made it clear that it would be open to the ITO to proceed to assess or reassess the income, profits or gains in accordance with s. 34(1A) of the Act, after two of the deceased's representatives, namely, Hakima Khatoon and Gulabi Bibi, had been served in accordance with law. The two notices on Hakima Khatoon and Gulabi Bibi were not served. But the ITO, Central Circle XV, the appellant No. 2 her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come on the basis of the return under s. 34(1A) of the Act, it was not open to the respondents to assess the income on the basis that such income had escaped assessment. Therefore, unless the assessment was made on the basis of the return filed under s. 34(1A), the question of any income having escaped assessment, could not arise. Mr. Justice B. C. Mitra has held that the appellants cannot ignore the return filed under s. 34(1A) of the Act and then proceed to issue a notice under s. 34(1)(a) of the Act on the ground that income had escaped assessment . Merely because it has become impossible to serve a notice under s. 34(1A) the appellants cannot claim the right to proceed against the assessee under s. 34(1)(a) and initiate a fresh proceeding at a time when there is already a return filed on behalf of the deceased under s. 34(1A). The learned trial judge was of the view that the earlier proceedings under s. 34(1A) had neither been terminated by an order of assessment nor cancelled on the ground that it had become abortive and infructuous. The revenue authorities were not justified in those circumstances in keeping the earlier proceeding on record as a subsisting proceeding and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of May in each year, give notice, by publication in the press and by publication in the prescribed manner, requiring every person whose total income during the previous year exceeded the maximum amount which is not chargeable to income-tax to furnish, within such period not being less than sixty days as may be specified in the notice, a return, in the prescribed form and verified in the prescribed manner, setting forth (along with such other particulars as may be required by the notice) his total income and total world income during that year : Provided that the Income-tax Officer may in his discretion extend the date for the delivery of the return in the case of any person or class of persons. (2) In the case of any person whose total income is, in the Income-tax Officer's opinion, of such an amount as to render such person liable to income-tax, the Income-tax Officer may serve a notice upon him requiring him to furnish, within such period, not being less than thirty days, as may be specified in the notice, a return in the prescribed form and verified in the prescribed manner setting forth (along with such other particulars as may be provided for in the notice) his total inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profession or vocation, require him to furnish particulars of the location and style of the principal place wherein he carries on the business, profession or vocation and of any branches thereof, the names and addresses of his partners, if any, in such business, profession or vocation and the extent of the share of the assessee and the shares of all such partners in the profits of the business, profession or vocation and any branches thereof. " We see, therefore, that under s. 22 of the Act, the ITO calls for returns from the assessees. And when returns are filed under any of the sub-sections of s. 22 of the Act, the ITO may require him to produce or cause to be produced various accounts or documents as he may require for the purpose of assessment of income. Section 22, therefore, contains elaborate provisions for calling for the returns, submission of returns and production of documents and accounts in support of the returns. We then come to the relevant portions of s. 34(1)(a). These are as follows : " 34. (1) If-- (a) the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 22, and may proceed to assess or reassess the income, profits or gains of the assessee for all or any of the years referred to in clause (i), and thereupon the provisions of this Act (excepting those contained in clauses (i) and (iii) of the proviso to sub-section (1) and in sub-sections (2) and (3) of this section) shall, so far as may be, apply accordingly : ...... Provided further that no such notice shall be issued after the 31st day of March, 1956. " Section 34(1A) was originally inserted by Ordinance No.VIII of 1954, which took effect from July 17, 1954. Sub-section (1B) of s. 34 was also inserted by the same Ordinance. These two sub-sections were later substituted by s. 2 of the Indian I.T. (Amend.) Act, 1954 (XXXIII of 1954). It is apparent that sub-s. (1A) of s. 34 was enacted to rope in the income, profits or gains of the war years when action under s. 34(1)(a) was barred by limitation. Later on, the legislature amended s. 34(1)(a) and changed " within eight years " into " at any time ". Secondly, in enact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. In view of our conclusion that a return under s. 34(1A) is not a return under s. 22 and does not create a bar to the issue of a notice under s. 34(1)(a), it is unnecessary for us to go into this question. Mr. Bhattacharjee submitted that the other legal representatives could be brought on record. But then the tax authorities would have been faced with satisfying the court that the other representatives accepted the return already filed either expressly or impliedly and the assessment was binding on each and every one of them. As we are not expressing any opinion on this question in this appeal, we do not propose to enter into these complications. In the result, this appeal is allowed. The judgment and order under appeal are set aside. The rule is discharged. Interim orders, if any, are vacated. We make no order as to costs. There will be a stay of operation of the order for two weeks but the oral application of Mr. Sanjay Bhattacharjee for leave to appeal to the Supreme Court is refused on the ground that there is no substantial question of law of general importance in this case as no notice can be issued under s. 34(1A) of the Indian I.T. Act, 1922, after the 31st day of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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