Voluntary returns keep assessments alive, and "any person" can include a closely connected taxpayer under limitation proviso.

A voluntary return filed under section 22(1) of the Indian Income-tax Act, 1922 kept the assessment proceedings alive, so expiry of the ordinary limitation period did not invalidate completion of the assessments. The Tribunal's direction under the second proviso to section 34(3) was also upheld because "any person" includes a person whose tax liability is intimately and necessarily connected with the appeal subject-matter. On the facts, the smaller Hindu undivided family's liability depended on whether the larger family had disrupted and on the ownership of the income, so the direction lawfully extended to it.

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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 the expiry of the ordinary limitation period; (ii) Whether the Tribunal could lawfully give a direction affecting the smaller Hindu undivided family as "any person" within the second proviso to section 34(3) of the Indian Income-tax Act, 1922.

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 the expiry of the ordinary limitation period.

Analysis: A voluntary return filed under section 22(1) sets the assessment machinery in motion and the proceedings remain pending until completed. The fact that four years have elapsed from the end of the relevant assessment year does not render the return ineffective or extinguish the pending proceedings. Where the Tribunal, in the connected proceedings, has made a finding and direction lifting the limitation bar under section 34(3), the assessments may be completed on the basis of the pending voluntary returns.

Conclusion: The assessments on the basis of the voluntary returns were valid.

Issue (ii): Whether the Tribunal could lawfully give a direction affecting the smaller Hindu undivided family as "any person" within the second proviso to section 34(3) of the Indian Income-tax Act, 1922.

Analysis: The expression "any person" is confined to a person who is intimately connected with the assessment under appeal and who would be liable to be assessed for the whole or part of the income that formed the subject of that appeal. The smaller Hindu undivided family was not a stranger to the controversy: its taxability depended directly on whether the bigger family stood disrupted and whether the income belonged to one or the other. The Tribunal's finding on the status of the larger family was therefore necessarily linked to the liability of the smaller family, and the direction was within the statutory power.

Conclusion: The smaller Hindu undivided family fell within "any person" and the Tribunal's direction was valid.

Final Conclusion: The assessments were upheld because the voluntary returns remained operative and the Tribunal's direction under the second proviso to section 34(3) validly supported assessment of the smaller Hindu undivided family.

Ratio Decidendi: Under the Indian Income-tax Act, 1922, a voluntary return keeps assessment proceedings alive, and the phrase "any person" in the second proviso to section 34(3) extends to a person whose tax liability is intimately and necessarily connected with the subject-matter of the appeal and the Tribunal's finding.

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