Escaped assessment under agricultural income tax can include wrongly granted rebates during original assessment.

Section 35 of the Kerala Agricultural Income-tax Act, 1950 is explained as permitting reassessment where agricultural income has escaped assessment or been assessed too low. The expression "any reason" is stated to be of wide import, and escapement is not confined to income omitted from the return; it also covers income left out of charge because a rebate or allowance was wrongly granted during the original assessment. On that reasoning, an improper allowance of rebate of insurance premium is treated as falling within income escaping assessment, making section 35 available to revoke the mistaken allowance.

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Issues: Whether an improper allowance of rebate of insurance premium can be revoked by resort to section 35 of the Kerala Agricultural Income-tax Act, 1950.

Analysis: Section 35 authorises reassessment where agricultural income chargeable to tax has escaped assessment or has been assessed at too low a rate. The expression "any reason" is of wide import, and the concept of escapement is not confined to cases where income was omitted from the return. It also extends to cases where, during the assessment process, income was left out of charge because a rebate or allowance was mistakenly granted. A wrongly allowed rebate therefore results in income chargeable to tax escaping assessment within the meaning of section 35.

Conclusion: The question is answered in favour of the revenue. Section 35 can be invoked to revoke an improper allowance of rebate of insurance premium.

Final Conclusion: The reassessment power under section 35 was held applicable to cases where income escaped charge because a rebate was wrongly allowed at the original assessment stage.

Ratio Decidendi: The expression "income escaping assessment" in section 35 is wide enough to include income omitted from charge because a rebate or allowance was erroneously granted during the original assessment.

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