Voluntary returns filed before assessment can validly support assessments without invoking escaped-assessment reassessment procedure.

Voluntary returns filed after expiry of the original filing period could still be accepted before assessment under section 16(3), because that provision allowed a return or revised return to be furnished at any time before assessment was completed. Section 35 applied only where income had escaped assessment or been under-assessed, requiring reassessment machinery. Where the assessee filed returns voluntarily before completion of assessment, the matter did not fall within escaped assessment and section 35 was unnecessary. The assessments based on those voluntary returns were therefore valid, and the contrary view taken by the Tribunal was incorrect.

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Issues: Whether the assessing authority could complete the assessments on the basis of voluntary returns filed after the expiry of the time prescribed for filing the original return, without resorting to the escaped-assessment procedure under section 35.

Analysis: Section 16(1) required a return to be filed within the prescribed time, section 16(2) enabled a notice calling for a return, and section 16(3) expressly permitted a return or revised return to be furnished at any time before assessment was made. Section 35 applied where income had escaped assessment or had been under-assessed, in which event a notice under section 16(2) could be issued for reassessment. Where the assessee had voluntarily filed returns before assessment was completed, the case fell within section 16(3) and did not involve escaped assessment so as to attract section 35. The reassessment authorities and the Tribunal decisions relied upon by the assessee did not support the contrary view.

Conclusion: The Tribunal was wrong in holding that the assessments could not be made without recourse to section 35. The assessments made on the basis of the voluntary returns were valid.

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