Reassessment jurisdiction fails where a voluntary return was filed and no escapement of income existed to trigger reopening.

Section 34(1)(b) could not be used to reopen an assessment where the assessee had already filed a valid voluntary return for the relevant year and no assessment had been made on that return. On those facts, there was no escapement of income or assessment justifying reassessment, so the Income-tax Officer lacked jurisdiction to issue the notice. The fact that the return had not been acted on earlier did not cure the jurisdictional defect, and the limitation point did not change the result. The notice was therefore invalid and the answer to the referred question was against the revenue and in favour of the assessee.

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Issues: Whether the action taken by the Income-tax Officer under section 34(1)(b) by issue of the notice dated 1 August 1960 for the assessment year 1947-48 was without jurisdiction.

Analysis: The assessee had filed a voluntary return for the relevant assessment year, and no assessment had been made on that return. The governing principle applied was that where an assessee has voluntarily submitted a return, there is no escapement of assessment so as to attract section 34. The fact that the Income-tax Officer did not act on the return and later sought to reopen the matter under section 34 did not confer jurisdiction to issue a reassessment notice. The distinction suggested on the basis of limitation did not alter the legal position, because the controlling point was the absence of jurisdiction to invoke section 34 at all.

Conclusion: The notice under section 34(1)(b) was without jurisdiction, and the answer to the referred question was against the revenue and in favour of the assessee.

Ratio Decidendi: Section 34 cannot be invoked where a valid voluntary return for the relevant year has already been filed and no assessment has been made on it, because there is then no escapement of income justifying reassessment.

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