Voluntary loss returns before assessment count under section 22(3), barring reassessment where earlier assessments were cancelled.

A voluntary return filed before assessment, including a loss return, was treated as a return under section 22(3) of the Income-tax Act, 1922; section 22(2A) affected only carry-forward of loss under section 24(2) and did not prevent section 22(3) from applying. Because the earlier assessments had been cancelled by the Tribunal and had ceased to exist, the returns were regarded as filed before assessment, so the preconditions for recourse to section 34(1)(a) were not met. The preliminary objection to maintainability was rejected as a nonjoinder point, and the writ petition was competent.

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Issues: (i) Whether the writ petition was incompetent because it was filed in the name of a dissolved firm through only one ex-partner. (ii) Whether loss returns filed before the assessment, after cancellation of the earlier assessments, could be treated as returns under section 22(3) of the Income-tax Act, 1922, so as to exclude action under section 34(1)(a).

Issue (i): Whether the writ petition was incompetent because it was filed in the name of a dissolved firm through only one ex-partner.

Analysis: The challenge was to the maintainability of the petition on the ground that, after dissolution of the firm, all former partners ought to have joined. The notice under section 34 had been served on the petitioner through whom the petition was presented. In these circumstances, the objection was treated as one of nonjoinder and was not regarded as fatal to the petition.

Conclusion: The preliminary objection was rejected and the petitioner was held competent to maintain the writ petition.

Issue (ii): Whether loss returns filed before the assessment, after cancellation of the earlier assessments, could be treated as returns under section 22(3) of the Income-tax Act, 1922, so as to exclude action under section 34(1)(a).

Analysis: A return voluntarily filed before assessment, even if it is a loss return and even if it may not answer section 22(1) or section 22(2), was treated as a return under section 22(3). Section 22(2A) was held only to affect the availability of carry-forward of loss under section 24(2), and not to exclude a voluntary return from section 22(3). Once the earlier assessments had been cancelled by the Tribunal, they ceased to exist, with the result that the returns stood as returns filed before assessment. On that footing, the conditions for resort to section 34 were not satisfied.

Conclusion: The notices under section 34(1)(a) were held invalid.

Final Conclusion: The writ petition succeeded, the reassessment notices were quashed, and costs were awarded to the petitioner.

Ratio Decidendi: A voluntary return filed before assessment, including a loss return, is a return under section 22(3) of the Income-tax Act, 1922, and if an earlier assessment has been cancelled so that it is treated as non-existent, recourse to section 34(1)(a) is not available.

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