9911796707
TMI Blog1960 (12) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... for reassessment of the income of the appellants for the year 1950-51 was, in our judgment, properly issued and the High Court was right in dismissing the petition for a writ to quash the notice. Appeal dismissed. - - - - - Dated:- 5-12-1960 - Judge(s) : J. L. KAPUR., M. HIDAYATULLAH., J. C. SHAH JUDGMENT The judgment of the court was delivered by SHAH, J.--This appeal with certificate of fitness granted by the High Court of Judicature of Mysore is from an order rejecting the petition of the appellant for a writ to quash a notice of reassessment under section 34 of the Indian Income-tax Act. The appellants are a Hindu undivided family carrying on business in groundnuts and other commodities at Goribidnur, Kolar District ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellants to produce their books of account of previous years, but the books were not produced on the plea that the same were lost. In assessing the income of the appellants for the year of account 1949-50, the Income-tax Officer held that Rs. 1,37,000 out of the opening balance in the books of account dated July 1, 1949, represented income from an undisclosed source. In appeal, the Appellate Assistant Commissioner observed that the appellants not having exercised their option under section 2(11) of the Indian Income-tax Act, and in the absence " of any system of accounting adopted " by them, the only course open to the Income-tax Officer was to take the financial year ending March 31, 1950, as the previous year for the income from an u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear, income, profits or gains chargeable to income-tax have escaped assessment for that year, or ...... (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income-tax have escaped assessment for any year,...... he may in cases falling under clause (a) at any time within eight years and in cases falling under clause (b) at any time within four years of the end of that year, serve on the assessee, . . . . . . . a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 22 and ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer, if he is satisfied that the return made by an assessee under section 22 is correct, to assess the income and to determine the sum payable by the assessee on the basis of the return without requiring the presence of the assessee or production by him of any evidence. The appellants had in their return dated September 8, 1952, submitted that they had no assessable income for the year in question and on this return, the Income-tax Officer had passed the order " no proceeding ". Such an order in the circumstances of the case meant that the Income-tax Officer accepted the return and assessed the income as " nil ". If thereafter the Income-tax Officer had reason to believe that the appellants had failed to disclose fully and truly all mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1st day of March, 1951, or for any subsequent year. " By virtue of section 13(1), the Mysore Income-tax Act ceased to be in operation as from April 1, 1950, except for the purposes of levy, assessment and collection of income-tax and super-tax in respect of any period which was not included in the previous year for the purposes of assessment under the Indian Income-tax Act for the assessment year 1950-51. The appellants had been assessed for the period July 1, 1948, to June 30, 1949, under the Mysore Income-tax Act. It is manifest that for any account year which was the previous year in relation to the assessment year 1950-51, the appellants were liable to be assessed under the Indian Income-tax Act and not under the repealed Act. The ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellants for that year was assessable under the Indian Income-tax Act. The notice under section 34 was also not issued after the expiry of the period prescribed in that behalf. The notice was issued by the Income-tax Officer because he had reason to believe that by reason of failure on the part of the appellants to disclose fully and truly all material facts necessary for the assessment for the year 1950-51, income had escaped assessment. Such a notice fell manifestly within section 34(1)(a) and could be issued within eight years from the end of the year of assessment. The impugned notice under section 34 for reassessment of the income of the appellants for the year 1950-51 was, in our judgment, properly issued and the High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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