TaxTMI 
TaxTMI 
1967 (4) TMI 1
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....e submitted a return in response to a notice sent to him. The Income-tax Officer computed his total income as Rs. 2,429 only which was below the taxable limit and so the assessee was declared not liable to pay income-tax. Subsequent to the assessment, the Income-tax Officer had information that the assessee had done some business as procurement agent for the Government and in this business he had earned large profits which had escaped assessment. Accordingly, he issued a notice under section 34 of the Income-tax Act, 1922 (hereinafter called the "Act ") on March 22, 1957. In response to the notice the assessee made a return on April 30, 1957. Prior to the issue of the above notice the Income-tax Officer had taken the view in the assessme....
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.... the " previous year " as distinct from the " assessment year ". The Appellate Assistant Commissioner accepted the contention raised by the assessee and held that the proceeding was invalid. The Income-tax Officer took the matter in appeal before the Income-tax Appellate Tribunal and claimed that the period of limitation for starting proceedings under section 34 was to be counted from the end of the " assessment year " and not from the end of the " previous year ". The Tribunal accepted his contention and overruled the view of the Appellate Assistant Commissioner on this point. The assessee also contended that the assessment proceedings started by the second notice dated February 12, 1958, was bad in law as he had already made a return on A....
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....ted for determination in this appeal is whether it was competent for the Income-tax Officer to issue the second notice dated February 12, 1958, and continue proceedings thereon ignoring the return already filed by the assessee in pursuance of the first notice under the same section. It was pointed out by Mr. S. T. Desai on behalf of the assessee that both the notices under section 34 of the Act were in identical terms and were addressed to the assessee in his name and the issue of the second notice made no difference in its contents to the knowledge of the assessee. It was also contended that the assessee filed his return in the status of " Hindu undivided family " in response to the first notice and the Income-tax Officer ought not to have....
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....ner for instituting proceedings under section 34(1)(a) of the Act against the assessee to make an assessment in the status of an of " individual " with regard to the procurement agency business. Sanction of the Commissioner was given to the proposal of the Income-tax Officer and thereafter the first notice under section 34 of the Act was issued on March 22, 1957. In this state of facts we are of opinion that the proceeding taken under the first notice under section 34 of the Act was invalid and ultra vires. The correct status of the assessee was that of " Hindu undivided family " as was held by the Appellate Assistant Commissioner in the assessment for the year 1954-55 and since the first notice under section 34 was issued to the assessee a....