1972 (12) TMI 4

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....: " Whether the Appellate Assistant Commissioner in dealing with the appeals of the association of persons consisting of all the heirs of Zahur Bux could give a direction under section 34(3) to take action against the assessee ? " The High Court answered that question in the negative and in favour of the assessee. The material facts lie within a narrow compass. Two persons by name Allah Bux and Zaliur Bux were carrying on business at various places, including tobacco business at Mauranipur and they were assessed in the status of an association of persons. In 1938 Allah Bux died leaving his widow, Begum Zaidi, as his only heir. The said Begum transferred her interest in favour of Zahur Bux. Thereafter Zahur Bux became the sole owner....

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.... to whom they arose, bearing in mind the provisions of the second proviso to sub-section (3) of section 34 of the Indian Income-tax Act. Thereafter, the Income-tax Officer issued notices to the respondents under section 34(1)(a) of the Act. The question for decision is whether those notices are barred by time. It is urged on behalf of the revenue that, in view of the second proviso to section 34(3) of the Act, the notices were not barred. The High Court has rejected that contention. The first question that calls for decision is : " Whether the Appellate Assistant Commissioner had given any finding as contemplated by the proviso to section 34(3) ? " And the second question that arises for decision is " Whether the Appellate Assis....

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....tant Commissioner that the association of persons, consisting of all the heirs of Zahur Bux, is not liable in respect of the Mauranipur business, is an essential finding ; a finding which was absolutely necessary for the disposal of the case. The further finding that the business had been gifted to Mohd. Shakoor and Mohd. Bashir in the year 1942 is only an incidental finding and not a finding necessary for the disposal of the appeal. Further, from that conclusion of the Appellate Assistant Commissioner it does not follow that Mohd. Shakoor and Mohd. Bashir continued to be the owners of the Mauranipur business during the relevant assessment years. Hence, we agree with the High Court that the Appellate Assistant Commissioner did not find nor ....