Completed assessment cannot be reopened except under escaped-income reassessment provisions after statutory compliance.

Once an Income-tax Officer has finally completed an assessment and separated part of the income for other treatment, he becomes functus officio for that assessment. Any later attempt to tax the omitted income is a reassessment and can proceed only under the escaped-income machinery of section 34 of the Income-tax Act, 1922. The earlier completed assessment cannot be reopened as a mere continuation of the original proceedings, and validity depends on proper statutory compliance and notice. The omitted partner's share was treated as income escaping assessment or under-assessment, so the reopening could not stand outside section 34.

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Issues: Whether the Income-tax Officer could lawfully reopen and continue assessment proceedings after having finally disposed of them, and whether the later proceedings were invalid for want of proper notice and for being outside the scope of section 34 of the Income-tax Act, 1922.

Analysis: The assessment made on 21st September, 1938 was treated as a final disposal of the matter for the relevant assessment years. Once the Income-tax Officer had computed the income, apportioned the firm's income, and sent the other partner's file away for separate treatment, he became functus officio in relation to that assessment. Any later attempt to include the omitted share and recover tax could only be justified, if at all, under section 34. The later proceedings therefore had the character of reassessment proceedings. Since the Department itself could not displace the statutory bar, the reopening was not sustainable as an ordinary continuation of the earlier assessment. The omission of the other share from the assessee's assessment amounted to income escaping assessment or under-assessment in relation to him.

Conclusion: The reopening of the completed assessment was governed by section 34, and in the absence of valid compliance with that provision the later assessment could not stand. The answer to the principal question was in favour of the assessee.

Ratio Decidendi: Where an Income-tax Officer has finally completed an assessment and excluded part of income from the assessee's charge, any later attempt to bring that income to tax is a reassessment that can be made only under the statutory provision authorising escaped-income proceedings.

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