Court validates income tax reassessment under section 147, deems sum from liquidator as assessable income.

The court upheld the validity of reassessment under section 147 of the Income-tax Act, 1961, finding it lawful. Additionally, the court determined that the sum received by the assessee from the liquidator should be assessed as income for the relevant year of assessment 1962-63, rather than the previous year. The decision favored the Revenue, resulting in no costs being awarded to the assessee.

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Issues:
1. Validity of reassessment under section 147 of the Income-tax Act, 1961.
2. Assessment of sum received by the assessee from the liquidator in terms of section 46(2) of the Income-tax Act for the assessment year 1962-63.

Analysis:

Issue 1: Validity of reassessment under section 147

The court referred to a previous decision where the assessee challenged a notice under section 147 proposing to reopen the assessment on grounds of jurisdiction and limitation. The court had already dealt with and rejected these contentions. The current question regarding the limitation for reassessment cannot be raised again at this stage, as per the opinion of the Tribunal, which the court agreed with. Therefore, the reassessment made by the Income-tax Officer under section 147 was considered valid in law.

Issue 2: Assessment of sum received from the liquidator

The second question revolved around whether a sum of Rs. 50,000 received by the assessee from the liquidator should be treated as income for the assessment year 1962-63 or 1961-62. The assessee argued that since the amount was not entered in its business account books, it should be considered as income for the previous year relevant to the assessment year 1961-62. However, the court examined the definition of "previous year" under section 3 of the Income-tax Act, which allows an assessee to opt for a different previous year. In this case, the assessee had been following the calendar year as the previous year and did not specify a different previous year for this income. Therefore, the assessing authority was justified in treating the calendar year as the previous year for this income as well. The court held that the income must be treated as received in the previous year relevant to the assessment year 1962-63. Consequently, the Tribunal's decision to assess the sum as income for the assessment year 1962-63 was upheld.

In conclusion, the court answered both questions in favor of the Revenue and against the assessee, with no costs awarded.

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