Mandatory escaped-income notice required before post-year assessment; invalid individual notice could not validate the proceedings.

A belated return filed after the assessment year was treated as a return under Section 24(2) of the Bengal Agricultural Income-tax Act, 1944, because it was filed in direct response to the individual notice and was neither a voluntary return under Section 24(1) nor a return under Section 24(3). The Court held that a general notice under Section 24(1) did not by itself commence assessment proceedings against a particular assessee, and where no return had been filed during the assessment year, a notice under Section 38(1) was a condition precedent to valid jurisdiction. As no such notice was served, the assessment and penalty could not be sustained, and best judgment assessment did not arise.

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Issues: (i) Whether the return filed after expiry of the assessment year was a return under Section 24(1), Section 24(3), or Section 24(2) of the Bengal Agricultural Income-tax Act, 1944. (ii) Whether the assessment for the year 1944-45 was valid without service of notice under Section 38(1) of the Bengal Agricultural Income-tax Act, 1944. (iii) Whether the assessment could be sustained as a best judgment assessment.

Issue (i): Whether the return filed after expiry of the assessment year was a return under Section 24(1), Section 24(3), or Section 24(2) of the Bengal Agricultural Income-tax Act, 1944.

Analysis: A return under Section 24(1) had to be filed in response to the general notice within the time fixed, and the belated return filed only after receipt of the individual notice could not be treated as a voluntary return under Section 24(1) or as a return under Section 24(3). The return was filed in direct response to the notice under Section 24(2), and its contents also showed that it was not one offering assessable income under Section 24(1).

Conclusion: The return was not under Section 24(1) or Section 24(3) but was a return under Section 24(2), and it was not a nullity.

Issue (ii): Whether the assessment for the year 1944-45 was valid without service of notice under Section 38(1) of the Bengal Agricultural Income-tax Act, 1944.

Analysis: A general notice under Section 24(1) did not itself start assessment proceedings against any particular assessee. Where no return had been filed during the assessment year, proceedings after that year could be initiated only by the statutory escaped-income notice under Section 38(1). The absence of that notice was a failure to comply with a condition precedent to valid jurisdiction, and the filing of a return in response to an invalid Section 24(2) notice did not cure the defect. There was no voluntary waiver by the assessee.

Conclusion: The assessment was invalid without notice under Section 38(1).

Issue (iii): Whether the assessment could be sustained as a best judgment assessment.

Analysis: The provision authorising best judgment assessment was attracted only by the specified defaults under the Act, and non-filing under Section 24(1) by itself was not enough. Since the assessment itself was invalid for want of the requisite notice under Section 38(1), the question of validating it as a best judgment assessment did not arise.

Conclusion: The best judgment assessment could not be sustained, and the question did not arise once the assessment was held invalid.

Final Conclusion: The reference was answered in favour of the assessee, and the assessment and penalty did not survive for want of the mandatory statutory notice and because the return could not be treated as one under Section 24(1) or Section 24(3).

Ratio Decidendi: Where the statute makes a notice under the escaped-income provision a condition precedent to assessment after the assessment year has expired, a return filed only in response to an invalid individual notice does not validate the proceedings, and a general public notice by itself does not commence assessment proceedings against a specific assessee.

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