Voluntary return and service of notice: assessee cannot object after admitting liability and submitting to assessment.

A voluntary return filed by an assessee admitting liability as agent of a non-resident dispenses with an objection based on service of notice under Section 43 of the Income-tax Act, 1922, because the assessee has already submitted to assessment on that footing. Assessment proceedings commence with public notice under Section 22(1), and where a return is voluntarily furnished, Section 34 is not attracted merely because no individual notice under Section 22(2) was served. The absence of further notice did not invalidate the assessment, which was upheld.

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Issues: (i) Whether the assessee, having filed a return on the footing that it was an agent of a non-resident assessee, could object to the absence of notice under Section 43 of the Income-tax Act, 1922 for the relevant assessment year; (ii) Whether, after the assessment proceedings had commenced by public notice and the assessee had voluntarily filed a return, a further notice under Section 34 of the Income-tax Act, 1922 was .

Issue (i): Whether the assessee, having filed a return on the footing that it was an agent of a non-resident assessee, could object to the absence of notice under Section 43 of the Income-tax Act, 1922 for the relevant assessment year.

Analysis: The assessment year was treated as self-contained, and ordinarily the service of notice on an agent would be relevant for each year. However, the assessee itself filed a return admitting its status as agent and submitted to assessment on that basis. Once such admission was made, service of notice became unnecessary and superfluous, and the objection based on non-service of notice could not be sustained.

Conclusion: The objection to assessment on the ground of service of notice under Section 43 of the Income-tax Act, 1922 failed.

Issue (ii): Whether, after the assessment proceedings had commenced by public notice and the assessee had voluntarily filed a return, a further notice under Section 34 of the Income-tax Act, 1922 was necessary.

Analysis: Assessment proceedings commence with the public notice under Section 22(1) of the Income-tax Act, 1922, and the making of a voluntary return by the assessee removes any question of escaped assessment. Section 34 was held to be inapplicable where the assessee had itself furnished a return without being compelled to do so under an individual notice. The failure to serve an individual notice under Section 22(2) did not assist the assessee once the return had been filed voluntarily.

Conclusion: No notice under Section 34 of the Income-tax Act, 1922 was required in the circumstances.

Final Conclusion: The reference was answered against the assessee, and the assessment was upheld on the return filed voluntarily.

Ratio Decidendi: A voluntary return filed by an assessee acknowledging its liability dispenses with objection to want of notice, and once assessment proceedings have commenced by public notice, Section 34 is not attracted merely because no individual notice was served.

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