1925 (6) TMI 1

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....ax and super-tax to a sum of over Rs. 18,000. That was under the Act of 1918. Under the provisions then in force the assessment was in all cases a provisional one based on the previous year's income but liable to adjustment when the actual income for the year in question came to be known. It so happened that the income for that year 1921-1922 had been provisionally assessed at a sum very much, larger than the actual income turned out. In fact the actual income for 1921-1922 produced a tax and super-tax amounting together to only Rs. 3,898. There was, therefore, a balance due to the assessee on adjustment of over Rs. 14,000. That balance was ascertained after taking into, consideration the return made by the assessee of his actual income....

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....have not been, taken into account in making the previous assessment. The section provides in effect that in such a case where income has escaped assessment or has been assessed at too low a rate for any year the Income Tax Officer may, at any time within one year of the end of that year, serve on the person liable to pay tax a notice containing the requirement which may be included in a notice under Sub Section (2) of Section 22 and may proceed to assess or re-assess such income. If that were the real state of affairs and no assessment had in fact been made for the year 1922-1923 then no doubt Section 34 would apply and the notice which was issued under that section, on the 26th January 1924, would be a notice issued within the time prescri....

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....e payable by an assessee under Section 23, or when an order has been passed under Sub-section (2) of Section 25 or Section 28 for the payment of a penalty, the Income Tax Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum set payable." The first thing to be observed is that no period within which such a notice demanding Income Tax is to be issued is prescribed in the Act and, therefore, prima facie a notice issued about 14 months after the expiration of the year of assessment would not necessarily be too late, The assessee, however, relies upon the form under which the demand referred to under Section 29 is to be made. That form is headed "Notice of demand under Section 29 of the Income Tax Act,....

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....akes place, evidence may be demanded of him and much time may be expended in carrying on the enquiry, and it is quite possible that such enquiry would not terminate until after the year of assessment and I do not think it can be suggested that because the ordinary form prescribed for such a demand contemplates that it will be issued during the current year of assessment, it is tantamount to an enactment that it cannot be issued afterwards. If any part of the form should not be applicable to the particular facts of the case then I presume it can be altered in the ordinary course before the form is sent out, but the mere fact that forms are prescribed under the Act does not seem to me to carry with it the result that unless everything is done....