TaxTMI 
TaxTMI 
1962 (12) TMI 54
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....1963] 49 I. T. R. (S. C.) 1 (Civil Appeal No. 705 of 1957) in which judgment has been delivered today, the second proviso to subsection (3) of section 34 does not revive a remedy which became barred before April 1, 1952, when the amended proviso came into force. Next, the appellant relied on section 31 of the Amending Act of 1953. I agree with my learned brother, Kapur J., that the question of law which was referred to the High Court does not take in the point now sought to be urged before us. Secondly, for reasons given by me in S. C. Prashar, Income-tax Officer, Market Ward, Bombay v. Vasantsen Dwarkadas [1964] Vol. 1 S.C.R. 29, I do not think that section 31 saves the assessment. I would accordingly dismiss the appeals with costs ; one hearing fee. KAPUR J.-These are two appeals pursuant to a certificate granted by the High Court of Patna against the judgment and order of that court in which the following question referred by the Income-tax Appellate Tribunal was answered in the negative and against the appellant : " Whether having regard to the return dated the 7th March, 1951, by Sardar Lakhmir Singh in his individual capacity and to the provisions of section 34(3), the as....
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.... 15, 1952, above referred to. On November 27, 1953, the Income-tax Officer made an assessment upon the respondent, S. Lakhmir Singh, in his individual capacity. An appeal was taken against that assessment order to the Appellate Assistant Commissioner and the contention raised was that the order of assessment was barred under the provisions of the unamended section 34(3) of the Act. This contention was rejected and an appeal taken to the Appellate Tribunal was dismissed on September 6, 1955. The Tribunal held that under the amended proviso to section 34(3) the Incometax Officer was entitled to assess the income of the respondent even though he was not the appellant before the Appellate Assistant Commissioner and there is no limitation for such an assessment. At the instance of the respondent the question quoted above was stated to the High Court. The High Court held that the Amending Act of 1953 does not apply to the facts of the present case and the order of assessment of the Income-tax Officer dated November 27, 1953, was barred under the provisions of the unamended section 34(3) of the Act ; that was because on April 1, 1952, when the Amending Act of 1953 came into force the pow....
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....ments. In the first place no such question was raised before the High Court. It had only to answer the question which was referred to it as it was acting in its advisory jurisdiction ; and it could not answer any other question. But it was submitted that the form of the question itself is such that it takes in the applicability of section 31 of the Amending Act of 1953. As we have said above this question was not referred to either in the High Court or in the grounds of appeal when the certificate was applied for nor in the appellant's statement of case. The form of the question also does not take in the applicability of section 31 of the Amending Act, 1953. The question refers firstly to the return filed by the respondent, S. Lakhmir Singh, dated March 7, 1951, and then to the provisions of section 34(3). It has no reference to the validity of the proceedings because of the commencement of the proceedings after September 8, 1948. The commencement of the proceedings in regard to the assessment year 1946-47 has not been shown to be after September 8, 1948. No doubt the return was filed on March 15, 1951, but there is nothing to show what the date of the commencement of the proceedin....
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..... On March 15, 1951, the Income-tax Officer amalgamated the incomes of the assessee and his father, assessable in the year 1946-47, and assessed them on the total income as the income of a Hindu undivided family. He, however, did not make any protective assessment this time as he had done for the year 1945-46. The assessee's father as the karta of the Hindu undivided family appealed from the order of March 15, 1961. On October 15, 1952, the Income-tax Appellate Tribunal allowed the assessee's appeal against assessment as a Hindu undivided family for the year 1945-46 and observed : " We, therefore, conclude that notwithstanding the erroneous description given by the appellant to himself in his returns before 1943-44 as Hindu undivided family, in which status he was accordingly assessed in the past on the income from property and business, etc., which belonged either to him or to him and his partner and elder son, Lakhmir Singh, the assessment made for the year 1945-46, in the status of a Hindu undivided family cannot be sustained. The assessment is, therefore, set aside and the Income-tax Officer is directed to make a fresh assessment according to law as from the return stage upon ....
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....er order of the Tribunal in respect of the year 1947-48. The High Court answered the questions against the revenue authorities who have, therefore, come up in appeal against the decision of the High Court. That is why there are two appeals. The assessee contends that the orders of assessment were not within the time prescribed in section 34(3) of the Act. Under the substantive part of sub-section (3) the orders of the assessment should have been made within four years of the years 1946-47 and 1947-48, that is, by March 31 of 1951 and 1952 respectively but they were made on November 27, 1953. It is, therefore, not in dispute that if they were not protected by the second proviso to sub-section (3) of section 34 as amended by the Amending Act, 1953, earlier mentioned, then the orders were not valid. The question is, were they so protected ? The second proviso is in these terms : " Provided further that nothing contained in this section limiting the time within which any action may be taken or any order, assessment or reassessment may be made, shall apply to a reassessment made under section 27 or to an assessment or reassessment made on the assessee or any person in consequence of o....
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.... object of the Act, namely, prevention of evasion of tax and collection of tax that was due but had not been paid. But the proviso puts in a class not only the assessee but other persons, namely, those against whom an order of assessment comes to be made in consequence of an order under section 31 made in the assessment case of another person, that is, the assessee mentioned in the proviso. These persons obviously are persons against whom the Appellate Assistant Commissioner making the order under section 31 in an appeal arising out of the assessment case of another person, entertains a view that they have evaded payment of tax. Such another person was not a party to any proceeding under section 31 ; he had no opportunity to show to the Appellate Assistant Commissioner that the view that he had entertained about him was unwarranted. The question then arises, whether such other person can be put in a class as contrasted with other evaders of tax ? It is not suggested and it cannot be suggested, that there are no other evaders of tax except those who have been found to be such in proceedings under section 31 and the other sections mentioned in the second proviso. I find no intellig....