Valid return after proper notice bars reopening on escaped income where original assessment proceedings remain unfinished.

Where a valid notice had already been served on the court receiver and returns were filed and acted upon, the Income-tax Officer could not invoke section 34 on the footing that income had escaped assessment. The joint family property was in the receiver's control, so service of the section 22(2) notice on the receiver was proper, and the department had received the returns and issued a further notice in the receiver's name. Because the original assessment proceedings had not been completed, the matter could not be treated as a case of no return or escaped income. Proceedings under section 34 were therefore without jurisdiction and invalidly initiated.

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Issues: Whether proceedings under section 34 of the Indian Income-tax Act, 1922 were validly initiated against the assessee for the assessment year 1956-57 when a notice under section 22(2) had already been served on the court receiver and returns had been filed in response, and whether the assessment completed thereunder was within time.

Analysis: The notice under section 22(2) was rightly served on the court receiver because the joint family property was in the receiver's control. The returns submitted in response to that notice were received by the Income-tax Officer, who then issued a notice under section 23(2) in the name of the court receiver, but did not take the matter to completion. In these circumstances, the case could not be treated as one where no return had been filed or where income had escaped assessment. Even if the returns were assumed to be defective or invalid, that by itself would not justify resort to section 34 when the assessment proceedings pursuant to the original notice had not been disposed of.

Conclusion: Proceedings under section 34 were without jurisdiction and were not validly initiated against the assessee.

Ratio Decidendi: Where a valid notice under section 22(2) has been served and returns have been filed and acted upon by the department, incomplete or irregular returns do not permit the Income-tax Officer to invoke section 34 on the footing that income has escaped assessment.

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