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TMI Blog1976 (5) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... tice under section 34 of the Kerala Agricultural Income-tax Act, 1950, to the respondent, which was served on her on March 15, 1963, proposing to revise suo motu the assessment for the said two years on the ground that the deductions allowed were excessive and without any proper basis as a result of which Rs. 16,800 for the year 1959-60, and Rs. 25,800 for 1960-61 had "escaped assessment". The respondent was asked to file objections, if any, within fifteen days of the receipt of the notice. The respondent in her objection contended that the proposed revision of her husband's income which was said to have "escaped assessment" was outside the scope of section 34. On this objection another notice was served on her on September 26, 1966, stating that the expression "escaped assessment" used in the earlier notice was inadvertent and asking the respondent to file further objections, if she liked, after this clarification. The respondent filed further objections on October 12, 1966, which the Commissioner rejected by his order dated August 23, 1967, and remanded the cases to the Agricultural Income-tax Officer for fresh disposal. The relevant part of this order is as follows : " In thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Agricultural Income-tax Officer a return stating his total agricultural income in that year and the expenditure incurred by him out of that income. Section 18 deals with the powers of the Agricultural Income-tax Officer to assess the total agricultural income of the assessee and determine the sum payable by him. Section 19 authorises the Agricultural Income-tax Officer to cancel the assessment in certain cases at the instance of the assessee and to make a fresh assessment in accordance with the provisions of secton 18. Section 31 provides an appeal to the Assistant Commissioner against any order of assessment with which the assessee is dissatisfied. Sub-section (7) of the section requires the Assistant Commissioner to communicate the orders passed by him disposing of the appeal to the assessee and the Commissioner. Under section 32 an assessee objecting to an order passed by an Assistant Commissioner may appeal to the Appellate Tribunal. Sub-section (2) of the section permits the Commissioner, if he objects to any order passed by the Assistant Commissioner under section 31, to direct the Agricultural Income-tax Officer to appeal to the Appellate Tribunal against such order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (1) of this section shall be made after the expiry of three years from the end of the year in which the agricultural income was first assessable : Provided that where a notice under sub-section (1) has been issued within the time therein limited, the assessment or reassessment to be made in pursuance of such notice may be made before the expiry of one year from the date of the service of the notice even if at the time of the assessment or reassessment the three years aforesaid have already elapsed : Provided further that nothing contained in this section limiting the time within which any action may be taken or any order, assessment or reassessment may be made shall apply to a reassessment made under section 19 or to an assessment or reassessment made in consequence of, or to give effect to, any finding or direction contained in, an order under section 31, section 32, section 34 or section 60. (3) In computing the period of limitation for the purposes of this section, any period during which the assessment proceeding-is stayed by an order or injunction of any court or other competent authority shall be excluded. " Section 35 as it originally stood contained only the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that the power of revision is exercisable "subject to the provisions of this Act". It was pointed out in the majority judgment that section 35 contains a specific provision for reassessment of income that had escaped assessment and it was held that revisional powers under section 34 could be availed of to reopen cases of escaped assessment only within the time limit and in accordance with the procedure prescribed by section 35. Before us, Mr. Patel, learned counsel for the respondent, reiterated the same contention. Mr. Krishnamurthy Iyer appearing for the appellant challenged the decision of the High Court on two grounds : (1) the income sought to be reassessed was not income that had "escaped" assessment and, as such, the provisions of section 35 are not relevant for the present purpose ; and (2) assuming this was a case of income escaping assessment, even then the second proviso to sub-section (2) of section 35 removes the bar of time for any assessment or reassessment made to give effect to a direction under section 34. On the first question the High Court found, relying on the decision of this court in Maharajadhiraj Sir Kameshwar Singh v. State of Bihar that this was a case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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