1960 (10) TMI 6 - SC - Income Tax

Supreme Court affirms assessment validity for Hindu undivided family despite quantum dispute

The Supreme Court upheld the legality of proceedings under section 34 of the Income-tax Act for reopening assessments for a Hindu undivided family for the ... Whether in the circumstances of the case the assessment of a sum of ₹ 28,000 to income-tax in the hands of the assessee is legally valid under section 34 of the Income-tax Act ? Held that:- Learned counsel for the appellant has made a futile attempt to show that the appellant contested the quantum of assessment also and in the High Court the validity of assessment even with regard to its quantum was challenged. The record of the High Court settles the question conclusively ; and neither in the application for leave to appeal to this court, nor in the statement of the case filed here on behalf of the appellant, was it stated that learned counsel did not make the concession as recorded in the judgment of the High Court or that he disputed the quantum of assessment for any of the three years in question. Appeals dismissed. Issues:1. Validity of proceedings under section 34 of the Income-tax Act for reopening assessments.2. Assessment of escaped income for the years in question.3. Contention regarding the quantum of assessment and materials supporting it.Analysis:1. The judgment addresses the validity of proceedings under section 34 of the Income-tax Act for reopening assessments. The appellant, a Hindu undivided family, was assessed to income tax for the years 1944-45, 1945-46, and 1946-47. The Income-tax Officer initiated proceedings under section 34 based on information indicating undisclosed business transactions. The appellant contended that the transactions were financed from 'zamindari' income and not recorded in account books. Despite challenges to the validity of the proceedings, the Tribunal and High Court upheld their legality, leading to the dismissal of the appeals by the Supreme Court.2. The assessment of escaped income for the years in question was a significant issue in the judgment. The appellant disputed the quantum of escaped income determined by the tax authorities, arguing it was based on guesswork without supporting materials. However, the High Court found that the appellant did not challenge the quantum of assessment during proceedings. The Supreme Court held that the appellant could not raise this contention at a later stage after specifically giving it up in the High Court, thereby dismissing the appeals.3. The contention regarding the quantum of assessment and the materials supporting it was thoroughly examined. The appellant's attempt to challenge the assessment quantum was deemed futile by the Supreme Court, as the record indicated that the appellant's counsel did not dispute the assessment during the High Court proceedings. The Court emphasized that the appellant cannot belatedly contest the quantum of assessment after explicitly conceding it earlier. Consequently, the appeals were dismissed, affirming the High Court's decision on the assessment of escaped income and the legality of the proceedings under section 34 of the Income-tax Act.