Provisional assessment cannot extend to unadmitted income; tax must be confined to the return and statutory allowances.

Provisional assessment under section 20(1) of the Mysore Agricultural Income-tax Act, 1957 is confined to a summary computation on the basis of the return and accompanying accounts, after allowing the statutory deductions and carried-forward loss. Construed in line with section 141 of the Income-tax Act, 1961, it does not permit the assessing authority to investigate the correctness of the returned figures or to assess income not admitted by the assessee at that stage. On that basis, a provisional assessment extending to unadmitted income was without jurisdiction and the demand and recovery proceedings were quashed.

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Issues: Whether the assessing authority, while making a provisional assessment under section 20(1) of the Mysore Agricultural Income-tax Act, 1957, could assess tax on income not admitted by the assessee.

Analysis: The provision empowering provisional assessment permits the assessing authority to proceed in a summary manner only on the basis of the return and the accompanying accounts and documents, after giving effect to the specified statutory allowances and carried-forward loss. The provision was treated as in pari materia with section 141 of the Income-tax Act, 1961, under which the provisional levy is confined to the income admitted by the assessee and does not authorise an enquiry into the correctness of the returned income or the admissibility of deductions at that stage. On that construction, the assessing authority could not enlarge the provisional assessment by proceeding on income not admitted in the return.

Conclusion: The provisional assessment made on income not admitted was without jurisdiction and was quashed along with the demand and recovery proceedings.

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