TaxTMI 
TaxTMI 
1973 (3) TMI 3
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....e facts and the circumstances of the case, the assessments made on the firms for each of the assessment years 1954-55, 1955-56 and 1956-57 are valid in law ? " Now, we shall set out the material facts as could be gathered from the case stated by the Tribunal. Up to and including the assessment year 1953-54, business with which we are concerned in this case, was carried on by Vadde Pullaiah. He was assessed as an " individual ". On March 20, 1953, he entered into a partnership consisting of himself and three others. That partnership was known as " M/s. Vadde Pullaiah & Co. ". In that partnership Pullaiah had 8as. share and out of the remaining three partners two had 3as. share each and one had 2as. share. For the assessment years 1954-55, ....
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....m. " But, in the body of his order he specifically held that the business in question was carried on by the firm and not by Pullaiah. After this order was made, the Income-tax Officer proceeded to assess the firm in respect of the income earned by that firm during the assessment years 1953-54, 1954-55 and 1955-56. When the Income-tax Officer initiated proceedings against the firm for the purpose of assessment, the firm resisted the same taking the plea that the proceedings in question were barred by limitation under section 34(3) of the Act. He rejected that contention. Aggrieved by that order the firm went up in appeal to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner upheld the contention of the assessee an....
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....on 23 to which clause (c) of sub-section (1) of section 28 applies or an order of assessment or reassessment in cases falling within clause (a) of sub-section (1) or sub-section (1A) of this section shall be made after the expiry of four years from the end of the year in which the income, profits or gains were first assessable. The first proviso is not relevant for our present purposes. Hence, we shall proceed to quote the second proviso to sub-section (3) of section 34. That proviso says : " Provided farther 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 reassess....
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....e up before this court for consideration in Income-tax Officer, A-ward, Sitapur v. Murlidhar Bhagwan Das. This is what this court observed in that case : " The expression 'finding or direction', the argument proceeds, is wide enough to take in at any rate a finding that is necessary to dispose of the appeal or direction which Appellate Assistant Commissioners have in practice been issuing in respect of assessments of the years other than those before them in appeal. What does the expression 'finding' in proviso to subsection (3) of section 34 of the Act mean ? 'Finding' has not been defined in the Income-tax Act. Order XX, rule 5, of the Code of Civil Procedure reads : 'In suits in which issues hive been framed, the court shall state it....
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....ion under section 34 of the Indian Income-tax Act, 1922, against initiation of proceedings for assessment for another year. A finding within the second proviso to section 34(3) must be a finding for giving relief in respect of the assessment for the year in question. A finding may only be that which was necessary for the disposal of an appeal in respect of an assessment of a particular year. The law on the question was elaborately examined by this court again in Daffadar Bhagat Singh and Sons v. Income-tax Officer, A-Ward, Ferozepure. Therein this court reiterated that a finding which can be considered as relevant under the second proviso to section 34(3) must be one which was necessary for deciding the appeal before the authority. Having....
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....stant case Pullaiah was the dominant partner of the firm as found by the Tribunal. He had 8as. share in the firm. He was the original owner of the firm. He was not only interested in his own assessment, he was also interested in the assessment of the firm. The partners of Pullaiah were intimately connected with him. Hence, we are clearly of the opinion that they are " persons " coming within the scope of the second proviso to section 34(3). It may be noted that the Appellate Assistant Commissioner had to deal with the cases of Pullaiah as well as that of the firm. In our opinion the High Court erred in coming to the conclusion that the finding given by the Appellate Assistant Commissioner, in the appeals filed by Pullaiah as well as by th....