TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether valid assessments could be made on the basis of voluntary returns filed under section 22(1) of the Indian Income-tax Act, 1922, after expiry of the ordinary limitation period without resort to section 34. (ii) Whether the Tribunal could make a finding or direction against the assessee so as to attract the second proviso to section 34(3).
Issue (i): Whether valid assessments could be made on the basis of voluntary returns filed under section 22(1) of the Indian Income-tax Act, 1922, after expiry of the ordinary limitation period without resort to section 34.
Analysis: A return voluntarily filed under section 22(1) starts assessment proceedings, and those proceedings do not become void merely because four years have elapsed from the end of the assessment year. Where an assessment has to be made in consequence of, or to give effect to, a finding or direction in an appellate order, the bar of limitation under section 34(3) does not apply. In such a case, if returns are already on record, section 34 need not be invoked.
Conclusion: The assessments could validly be completed on the basis of the voluntary returns, and section 34 was not to sustain them.
Issue (ii): Whether the Tribunal could make a finding or direction against the assessee so as to attract the second proviso to section 34(3).
Analysis: The expression "any person" in the proviso is confined to a person who is intimately connected with the assessment under appeal and who would be liable for the whole or part of the income involved in that assessment. The assessee's income had been included in the assessment of the Hindu undivided family, and once that assessment was set aside on the basis of partition, the component units became assessable in consequence of the appellate finding. The direction was also relevant to the assessment years under appeal.
Conclusion: The Tribunal was competent to give the finding and direction, and the assessee fell within the scope of the proviso.
Final Conclusion: The legal effect of the decision is that assessments of the separated unit were upheld as time-barred objections did not survive once the appellate finding operated to remove the limitation bar; the reference was answered in favour of the department.
Dissenting Opinion: H. N. Seth J. held that the proviso did not enlarge jurisdiction, that the assessee was not a person covered by the appellate finding in the requisite sense, and that no provision authorised the assessments for the years in question after expiry of limitation.
Ratio Decidendi: Where a voluntary return is already pending, assessment may be completed without a section 34 notice if the case falls within the second proviso to section 34(3), because the appellate finding or direction lifts the limitation bar for a person intimately connected with the assessment under appeal.
TaxTMI 
