DEBT DUTT MOODY Vs. T BELLAN
HIGH COURT OF CALCUTTA
Debt Dutt Moody
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(1.) The Appellant in this appeal is an Assessee whose Writ petition for quashing an ex parte assessment under Section 34(l)(a) has been, dismissed by Mr. Justice Sinha by a judgment, dated April 22, 1958. The facts so far as they are material for the purposes of the present appeal are as follows:
For the assessment year 1948-49 the Appellant was assessed upon a total income of Rs. 79,319 and the tax demand on this amount was duly paid by the Appellant. Subsequently, a notice under Section 34(1)(a) of the Indian Income Tax Act was ordered to be issued against the Assessee on March 27, 1957. According to the department this notice was served upon the Assessee personally on March 28, 1957 and also by registered post on April 4, 1957. As the Appellant did not comply with the notice purported to have been served on him under Section 34(1)(a), his income was re-assessed ex parte and a sum of Rs. 53,987 was added to his original income. Thereafter the Petitioner wrote several letters to the Income-tax authorities claiming that the notice under Section 34(1)(a) purported to have been served upon him was time barred and as such the re-assessment was illegal and invalid in law. The department reiterated its claim that the notice under Section 34(1)(a) had been personally served upon the Appellant on March 28, 1957 and therefore the re-assessment under Section 34 was valid. Thereafter, the Petitioner moved this Court under Article 226 of the Constitution and obtained a Rule nisi calling upon the Respondents to show cause why a Writ, in the nature of certiorari should not be issued against the Respondents, for quashing the purported notices under Section 34 of the Indian Income Tax Act and also subsequent proceedings or orders purported to have been taken or issued in pursuance of the said notices.
(2.) The only ground upon which the Appellant based his claim was that the notice under Section 34(1)(a) was served beyond the period of limitation of eight years provided for by Section 34 of the Act and consequently all the proceedings taken in pursuance of such a notice were invalid. Before Mr. Justice Sinha the Appellant denied the story of personal service of the notice upon him on March 28, 1957 and further contended that both the issue and the service of the notice must be completed within the period of eight years contemplated by the first proviso (ii) to Sub-Section 1 of Section 34. The last contention of the Appellant as indicated above is based upon a claim that the word "issue" must be equated to the word "serve". Mr. Jnstice Sinha overruled both the contentions of the Appellant and dismissed his writ petition.
(3.) In this appeal before us, Mr. Chowdhury has raised a new point which was not raised before Mr. Justice Sinha and which goes to the root of the whole matter. He has argued that the word "year" as occurring in, Section 34 means the accounting year and not the assessment year or the financial year and consequently the notice which was issued on March 27, 1957 is beyond the period of eight years as contemplated by the first proviso (ii) of Section 34(1). The assessment year in the present case is 1948-49; the accounting year therefore is 1947-48 which ended on March 31, 1948. The notice dated March 27, 1957 is certainly beyond eight years from. March 31, 1948. If therefore the first point raised by Mr. Chowdhury is found to be good, the Appellant is hound to succeed in any event. Since the question, raised is a pure question of law, we have allowed Mr. Chowdhury to raise it for the first time in appeal. In support of his contention Mr. Chowdhury has relied upon a decision of a Division Bench of the Mysore High Court in the case of H.N.S. Iyengar v. First Additional Income Tax Officer, Mysore City, 1960 AIR(Mys) 77 (S.R. Das Gupta, C.J. and A. Narayana Pai. J.) which lays down that the starting point of limitation nuder Section 34(1)(a) is the end of the accounting year, for which the return of the income has to be made under Section 22. There lordships further held that though the word ''year" might mean the assessment year in Clause (b) of Section 34(1), it cannot bear the same meaning in Clause (a). The reason for the decision, is that Section 34(2) authorises the Income Tax Officer to serve on the Assessee a notice containing all or any of the requirements which may be included in a notice under Section 22(2) and Section 22(2) requires the Assessee to furnish particulars of his total income during the "previous year". From this provision, their Lordships hold that the return which has to be furnished under Section 22 by the Assessee is the return of his income for the previous year. At p. 78 Das Gupta. C.J. observes as follows:
The return mentioned in Clause (a) of Sub-section (1) of Section 34 is the return of the income under Section 22 for any year. It seems to me, reading the said clause along with the provision of Section 22, that "any year" mentioned therein should be "previous year" and the return of the income referred to therein would be the return of the income' of the previous year.;
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