9911796707
TMI Blog1964 (10) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax Act, 1922) completed on 30th June, 1953, for the year 1944-45 is valid " in the negative. The relevant facts are as follows. The respondent, hereinafter referred to as the assessee, is a Hindu undivided family. For the assessment years 1944-45 and 1945-46, the assessee filed no returns under section 22 of the Indian Income-tax Act, hereinafter referred to as the Act, nor were any notices issued under section 22(2) of the Act. On April 3, 1948, the Income-tax Officer issued notices under section 34 for both the assessment years. At that time it was not necessary to obtain the sanction of the Commissioner of Income-tax and none was obtained. The assessee filed a return for the assessment year 1944-45 on September 4, 1948, showing an income of Rs. 4,053 which was below the Hindu undivided family taxable limit of Rs. 7,200. The assessee also filed a return for the assessment year 1945-46. It appears that the Income-tax Officer dropped proceedings for 1944-45 as infructuous, but for the assessment year 1945-46, he passed an order on October 27, 1950, determining the net taxable income as Rs. 1,20,603. The assessee appealed to the Appellate Assistant Commissioner and then app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned the present case. Mr. Rajagopala Sastri, the learned counsel for the appellant, submits that the return was not voluntary and, as it was made in pursuance of an invalid notice, must also be treated as invalid. He says that no assessment could be made on its basis. He further says that the case of Ranchhoddas Karsondas is distinguishable. The learned counsel for the assessee raises an objection to this new point being urged at this stage. He points out that in the statement of the case filed in this court on behalf of the appellant, one proposition of law is put thus : " The notice issued on 3rd April, 1948, and return filed on 4th September, 1948, being valid, the proceedings thus initiated came to an end on 27th October, 1950, and there were no proceeding pending when the second notice was issued on 27th February, 1953. " This proposition, he says, admits that the return was valid. On the merits he has supported the reasoning of the High Court and added that in this case assessment could have been made by the Income-tax Officer till March 31, 1949, under section 23, treating the return as one made under section 22. In our opinion the appellant is not raising any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponse to a notice under section 22(1) or section 22(2) as voluntary, and then say that a return made in response to a notice under section 34 is not voluntary just because it warns the assessee that some income has escaped assessment. In our opinion, both types of returns are under section 22(3) of the Act. In the first type of cases it is directly under section 22(3). In the case of a notice under section 34, it is deemed to be a notice under section 22(2) and the return deemed to be a return under section 22(3). From the language of section 22(3), we are unable to say that the return dated September 4, 1948, was not a return within section 22(3). Mr. Sastri, however, says that this court proceeded on a contrary view in Commissioner of Income-tax v. Maharaja Pratapsingh Bahadur of Gidhaur. Let us then see what was decided by this court. Shortly stated, the facts in that case were that the Maharaja had agricultural income and interest received by him on arrears of rent for the four assessment years 1944-45 to 1947-48. The income-tax authorities did not include in his assessable income interest received by him on arrears of rent on the ground that it was agricultural income. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above decision, after holding that the notices were invalid, observed : " Indeed there was time enough for fresh notices to have been issued, and we fail to see why the old notices were not recalled and fresh ones issued. " These observations certainly show that this court assumed that fresh notices could have been issued in that case. Mr. Sastri says that the department has done exactly what the Supreme Court indicated in that case should be done. But, apart from the fact that there is no discussion on the question of the validity of the return, it is possible to say that on the facts in that case fresh notices could have been issued. In Maharaja Pratap Singh's case, the Maharaja had filed returns for four assessment years 1944-45 to 1947-48 under section 22, and assessments had been made but the income of the assessee with regard to interest on arrears of rent was not included. His returns in pursuance to a notice under section 34 could not be treated as a return under section 22(3) because he had already filed returns and was not purporting to revise his previous returns. But in the present case the assessee had never filed a return under section 22. The first return ..... X X X X Extracts X X X X X X X X Extracts X X X X
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