Final gift-tax assessment fixed the previous year and triggered continuation for later years under the statutory rule.

Under the Gift-tax Act, 1958, an assessment order that finally determines tax for an assessment year is a final assessment where the Act contains no provision for provisional assessment. On that basis, the Gift-tax Officer's treatment of financial year 1959-60 as the previous year for assessment year 1960-61 was ative, and an office note could not convert the completed assessment into a provisional one. The second proviso to section 2(xx) therefore applied, so the previous year already adopted continued to govern subsequent assessment years unless varied with the Gift-tax Officer's consent. The issue was answered in favour of the assessee.

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Issues: Whether the assessment for assessment year 1960-61 under the Gift-tax Act, 1958 was only provisional or was a final assessment for the purpose of the second proviso to section 2(xx), and whether the previous year fixed for that assessment continued to govern subsequent assessment years.

Analysis: The charging scheme under section 3 of the Gift-tax Act, 1958 operates on gifts made during the previous year, and the second proviso to section 2(xx) provides that once an assessment has been made for an assessment year in respect of gifts made during a particular previous year, that previous year continues for subsequent years unless varied with the Gift-tax Officer's consent. The assessment order for assessment year 1960-61 showed that the Gift-tax Officer treated the financial year 1959-60 as the previous year and finally assessed the gift under section 14(3). The Act contained no provision for a provisional assessment, so the office note could not convert an otherwise complete assessment order into a provisional one.

Conclusion: The assessment for assessment year 1960-61 was a final assessment, not a provisional one, and it attracted the second proviso to section 2(xx); the question was answered in favour of the assessee.

Ratio Decidendi: Where the Gift-tax Act contains no provision for provisional assessment, an assessment order that finally determines the tax for a given assessment year is a final assessment for the purpose of the statutory rule that the previously adopted previous year continues to apply in later years.

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