TaxTMI 
TaxTMI 
1962 (9) TMI 59
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....R.C. No. 14 of 1961 relates to the assessment year 1945-46 while R.C. No. 13 of 1961 pertains to the year ended March 31, 1948. The assessee, who is an individual, claimed to be a partner in the firm of Messrs. J.V. Subba Rao and B. Satyanarayana Murthy, Guntur. He included his one-fourth share of income from the firm in his return for the year 1945-46. However, the Income-tax Officer excluded this income from the assessee's assessment under the impression that it belonged to the estate of late J.V. Subba Rao and the assessment was finalised on that basis. Later on, in an appeal filed on behalf of the estate of J.V. Subba Rao against the order of assessment bringing to tax the one-fourth share of the income above referred to, the Income....
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....earned counsel for the assessee, that it was not competent for the department to reassess this item as the notice issued under section 34(1)(b) was barred, the notice having been issued only on March 11, 1954, while the original assessment was completed on March 2, 1948. To understand the issue arising in this controversy, it is necessary to read the relevant statutory provisions. Section 34 says: "34. (1) If-- (a) the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income-tax hav....
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....e as regards part of the income, profits or gains chargeable to income-tax by the assessee, he is entitled to issue a notice either under clause (a) or (b), as the case may be, under section 22(2) of the Income- tax Act. Section 22(2) is in these terms: "22. (2) In the case of any person whose total income is, in the Income- tax Officer's opinion, of such an amount as to render such person liable to income-tax, the Income-tax Officer may serve a notice upon him requiring him to furnish, within such period, not being less than thirty days, as may be specified in the notice, a return in the prescribed form and verified in the prescribed manner setting ....
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....; "...when once an assessment is reopened under section 34, the Income- tax Officer proceeds de novo under the relevant sections of the Income-tax Act, i.e., he issues notice under section 22(2) and proceeds to assess the assessee. He has to follow the same procedure as in the case of the first assessment as is clear from the clause in section 34 and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section. The proceedings under section 34 must be deemed to relate to proceedings which commence with publication of notice under section 22(1)." The principle enunciated in the passage extracted above applied with full vigour to the instant case. Any d....