Refund-based assessment and tax concession protection barred reassessment of income already taxed under State law.

Acceptance of the assessee's return and refund under the Mysore Income-tax Act, 1923 was treated as an assessment in substance, even without a formal assessment order. On that basis, clause 5(1) of the Part B States (Taxation Concessions) Order, 1950 was construed to protect the whole of the income already brought to tax for that year, not merely a source-wise portion. The expression "such income" was held incapable of split treatment across separate enactments, so reassessment under the Indian Income-tax Act, 1922 was barred for the same assessment year.

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Issues: (i) Whether the grant of refund on the assessee's return under the Mysore Income-tax Act, 1923 amounted to an assessment for the relevant accounting year; (ii) whether clause 5(1) of the Part B States (Taxation Concessions) Order, 1950 protected the assessee's entire income for that year from reassessment under section 34 of the Indian Income-tax Act, 1922.

Issue (i): Whether the grant of refund on the assessee's return under the Mysore Income-tax Act, 1923 amounted to an assessment for the relevant accounting year.

Analysis: The return filed by the assessee had been accepted by the Income-tax Officer, and the refund was granted on the basis of that acceptance. The absence of a formal assessment order was held to be immaterial, because the officer's treatment of the return showed that the income had already been dealt with for tax purposes. The reasoning followed the principle that acceptance of the return and consequential refund can amount to assessment in substance.

Conclusion: Yes. The refund granted under section 48 of the Mysore Income-tax Act, 1923 amounted to an assessment.

Issue (ii): Whether clause 5(1) of the Part B States (Taxation Concessions) Order, 1950 protected the assessee's entire income for that year from reassessment under section 34 of the Indian Income-tax Act, 1922.

Analysis: The phrase "such income" in clause 5(1) was construed as referring to the entire income of the assessee relating to the assessment year already brought to tax under the State law, and not merely to a source-wise fragment of that income. A contrary construction would permit splitting one assessee's income for the same year into separate assessments under different enactments, which was held to be inconsistent with the scheme of the income-tax law and productive of anomalous results.

Conclusion: Yes. Clause 5(1) barred reassessment of the entire income already assessed under the Mysore Act, and the interpretation adopted by the Tribunal was rejected.

Final Conclusion: The departmental challenge to the reassessment failed, and the assessee was held protected from further assessment for the same year under the Indian Income-tax Act, 1922.

Ratio Decidendi: Where income for a previous year has already been assessed under the State law, clause 5(1) of the Taxation Concessions Order excludes the whole of that income for that year from reassessment under the Indian Income-tax Act, 1922; the expression "such income" is not to be split source-wise.

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