AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
1964 (10) TMI 18
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....t years 1944-45 and 1945-46, the assessee filed no returns under section 22 of the Indian Income-tax Act, hereinafter referred to as the Act, nor were any notices issued under section 22(2) of the Act. On April 3, 1948, the Income-tax Officer issued notices under section 34 for both the assessment years. At that time it was not necessary to obtain the sanction of the Commissioner of Income-tax and none was obtained. The assessee filed a return for the assessment year 1944-45 on September 4, 1948, showing an income of Rs. 4,053 which was below the Hindu undivided family taxable limit of Rs. 7,200. The assessee also filed a return for the assessment year 1945-46. It appears that the Income-tax Officer dropped proceedings for 1944-45 as infruc....
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....tion 34, as amended by Amendment Act of 1953, was applicable and, consequently, the time-limit specified in section 34 would not be applicable. The Appellate Tribunal, without going into the question whether section 34(1)(a) could be invoked by the revenue, affirmed the assessment on the ground that the second proviso to section 34(3) of the Act, as amended, applied. At the instance of the assessee, the Appellate Tribunal referred the question set out in the beginning of the judgment. The High Court, as already stated, answered the question in the negative. It held that notwithstanding that the return filed by the assessee on September 4, 1948, was the result of an invalid notice, the return itself could not be ignored or disregarded by t....
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....2. In our opinion the appellant is not raising any new point. It is true that in the above cited proposition the appellant says that the return is valid but this follows the assertion that the notice issued on April 3, 1948, is valid. In another part of the statement of the case, however, the appellant states that " the return was not a voluntary return and, therefore, could not be regarded as a return on which a valid assessment could be made ; the case was one where no return had been filed and was also one where income had escaped assessment. Clause (a) of section 34(1) was therefore applicable and the second notice under section 34 was given within the period allowed by law. " The short question which arises in this case is whether ....
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....turn is made in response to notices under section 22(1) and section 22(2), the Act attaches certain penalties. In our view, it is not correct first to describe a return made under section 22(3) in response to a notice under section 22(1) or section 22(2) as voluntary, and then say that a return made in response to a notice under section 34 is not voluntary just because it warns the assessee that some income has escaped assessment. In our opinion, both types of returns are under section 22(3) of the Act. In the first type of cases it is directly under section 22(3). In the case of a notice under section 34, it is deemed to be a notice under section 22(2) and the return deemed to be a return under section 22(3). From the language of section 2....
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....me into force with retrospective effect on March 30, 1948, the application of section 6 of the General Clauses Act was excluded. As the notices were all issued on August 8, 1948, at a time when on the statute book must be deemed to be existing a provision enjoining a duty upon the Income-tax Officer to record his reasons and submit them for the approval of the Commissioner before issuing notice under section 34, unless that approval was obtained the notices could not be issued. The notices issued by the Income-tax Officer without complying with the conditions laid down in the proviso to section 34(1) as re-enacted were invalid, and the entire proceedings for reassessment were illegal. ". In view of the question referred to the High Court,....
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....iled returns for four assessment years 1944-45 to 1947-48 under section 22, and assessments had been made but the income of the assessee with regard to interest on arrears of rent was not included. His returns in pursuance to a notice under section 34 could not be treated as a return under section 22(3) because he had already filed returns and was not purporting to revise his previous returns. But in the present case the assessee had never filed a return under section 22. The first return be filed was in response to a notice under section 34, but he could have filed this return even without a notice under section 34, for the four years prescribed by section 34(3) had not expired. This court in Commissioner of Income-tax v. Ranchhoddas Kar....