TaxTMI 
TaxTMI 
1957 (7) TMI 34
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the assessee have been made up to a date within the said twelve months in respect of a year ending on any date other than the said 31st day of March, then, at the option of the assessee, the year ending on the date to which his accounts have been so made up. " In respect of the assessment concluded as aforesaid, the petitioner had exercised his option and declared his accounting year as beginning from 1st May of every year and ending on 30th April next year. According to this, the assessment year 1945-46 would correspond to the accounting year of the assessee from May 1, 1943, to April 30, 1944. The petitioner was a director and shareholder of the Amalgamated Jambad Syndicate Ltd. On 28th February, 1945, it was resolved that a sum of Rs. 60,395 was available in the shape of pre-incorporation assets purchased by the company, against which there was no liability. This amount was distributed among the shareholders including the petitioner at the rate of Rs. 230 per share. According to the petitioner, this is neither dividend nor income but capital assets, and he did not disclose it in his income-tax return. On or about 12th March, 1954, Mr. S. N. Sen, the then Income-tax Offic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is does not appear at all. Be that as it may, it is now evident that in the assessment order, the accounting period is the year ending March 31,1945, for the alleged income from the Amalgamated Jambad Syndicate, and the year ending April 30, 1944, for other income. I have already stated that the amount of Rs. 17,675 which was received by the petitioner was received on or about 28th of February, 1945. If the accounting year is calculated according to the special accounting year as declared by the assessee, then this item will not come within the scope of the assessment for the year 1945-46. On the other hand, if it is calculated according to the ordinary financial year, then in that case it has been rightly included. What has been argued on behalf of the petitioner is as follows : It is conceded that so far as the return for the relevant year is concerned, no mention whatever has been made about any income having been derived from the Amalgamated Jambad Syndicate Ltd. One of the sources of income mentioned in the return was " other sources ". Since the petitioner had declared that his year of calculation was 1st of May in the year to 30th of April of the following year, it is argued....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee had exercised his option under section 2(11)and, therefore, the authorities were bound to assess it according to the ordinary financial year. In my opinion the undisclosed source in this case cannot be said to belong to any definite source of income in respect of which the petitioner had exercised his option. On the other hand, it is a source which has now been fixed and is not wholly untraced. In my opinion, therefore, the only possible way in which it could have been assessed was to assess it according to the ordinary financial year, and that the calculation made by the Income-tax Officer is perfectly correct. With regard to ground (d) it is first of all said that the assessment has been reopened under section 34(1)(b) and, therefore, the time bar was four years. It is quite plain to me that the assessment was reopened under section 34(1)(a) and, therefore, the time bar is 8 years. In this case, the notice under section 34 was issued on 24th March, 1954, and the assessment order was made on 31st January, 1955. Reliance is placed on the provision of section 34(3) which runs as follows :- "No order of assessment under section 23 to which clause (c) of sub-section (1) of se....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... words " assessment " or " re-assessment " in the proviso, mean no more than an order of assessment or re-assessment. I am fortified in this view by a decision of the Bombay High Court in Commissioner of Income-tax v.D. V. Ghurye (1957) 31 I. T. R. 683 at 687. Chagla, C. J., says as follows :- " . . . . . even so, as already pointed out, the question of the application of the proviso only arises when an assessment order is made. Before a valid assessment order can be made, the initial and preliminary stage is to consider the validity of the notice. As the notice itself is invalid, nothing further survives for consideration. It is only when the notice is validly served that, in order to decide whether an assessment order is valid we have to consider whether the assessment order was made within the period of one year from the date of the service and whether the notice was issued within the time mentioned in sub-section (1). " It is true that in the Bombay case the particular point we are considering was not raised or discussed. But it is to be noted that the learned Chief Justice was reading the words " assessment " or " re-assessment " as the same as an assessment order. In my....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d from the balance, under section 29. In my opinion there is nothing in this point. I have nowhere found, nor has any authority been placed before me to the effect that demand notices are to be progressively served if the assessee goes on paying sums in part payment. Incidentally, in respect of section 46(5A) I might also mention a point that was urged, although the rule had not been issued on thispoint, namely, that it was not open to the authorities to lump up two demands and give a notice under section 46(5A). In this particular case the demand is against the same assessee for two assessment years, and I cannot see anything in the Income-tax Act which precludes the giving of any such compound notice under section 46(5A). The third application, namely, Matter No. 190 of 1956 deals with a purported amendment of the assessment order that was made by the Income-tax Officer, after the issue of the original rule under section 35of the Income-tax Act. As I have pointed out above, the assessment order was kept blank and it is stated that thereafter the Income-tax Officer who succeeded Mr. Sen has made the necessary corrections. It is urged that under section 35 of the Income-tax Act,....