1954 (2) TMI 23

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rder (under Section 23/3 of the I. T. Act) for 1942-43 is dated 24-5-1944 and that for 1946-47 is dated 18-9-1946. 2. In May/June 1948, notice under Section 22(2) read with Section 34, Income Tax Act was served upon the assessee, for re-opening the assessment for the year 1946-47. The reason given for this was that the assessee had not disclosed the fact that he had received a sum of Rs. 12,246/10/0 as bonus from the Government of India. The re-assessment was made on 29-6-1948. 3. On 26-3-1951, notice was issued upon the petitioner under Section 34, I. T. Act as amended in 1948, for re-opening the assessment for 1942-43. This was served at the colliery upon Kishorilal Goenka, brother of the petitioner. The ground was that the petition....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....hat the amount represented acquisitions for many years of moneys received from ancestors. The income tax officer was not satisfied that this was a true explanation or borne out by the books disclosed. He has therefore treated it as undisclosed income for the year 1946-47. 6. The reason given for re-opening the assessment for 1946-47 is that it was discovered that the assessee had made huge investments in a certain limited company and upon a consideration of the books the Income Tax officer was satisfied that the amount of Rs. 19,93,999/12/- was income received but undisclosed, out of which the investments were made. 7. On behalf of the petitioner it is alleged that the sum of Rs. 19,93,999/12/- is the adjusted balance of Rs. 20,00,000....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... Dr. Pal has conceded that points Nos. (1) and (3) are dependant upon facts which are disputed and that they cannot be investigated here. They will be investigated in the appeal which is pending. As regards point (2) it is covered by the appeal Court decision -- 'Income-tax Officer v. Calcutta Discount Co., Ltd.', [1953]23ITR471(Cal) (A). Dr. Pal concedes that this is binding upon me, but he points out that the decision itself is subject to an appeal pending before the Supreme Court, and he does not wish the point to be taken as abandoned. As regards point (5), he concedes that he cannot press it in this application inasmuch as the matter has now passed from the hands of the Income Tax officer and the certificate officer is no....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... It is somewhat surprising that although this situation must have frequently arisen, there is no authoritative decision, so that it is a matter of first impression. Plausible however as the argument of Dr. Pal sounds, I do not think it will bear a close analysis. Confining ourselves to the case of under-assessment, what does that really signify? The word 'assessment' is not to be taken in too narrow a sense, and does not mean merely the order of assessment but the whole process culminating in the order. 'Rajendra Nath v. Income-tax Commissioner'. Now, why does a case of under-assessment arise? It is either because the assessee has not disclosed his proper income or because the Income Tax officer has fallen into an error in ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... officer had left out an item of a lakh of rupees. There has certainly been an under-assessment, but also this sum has escaped assessment. I do not think that the assessee can get away with this sum. And in all such cases, the assessment would be at too low a rate because the total world income of the assessee was previously calculated to be less than what it actually was. 16. It is clear therefore that it is not possible to lay down water-tight frontiers between the several grounds upon which the Income Tax officer can act, nor between the act of assessment and re-assessment. Assessment means the computation of the assessee's income (gain or profits) upon which attaches the incidence of taxation and includes the whole process which ....