- (1.) This appeal on a certificate of fitness granted by the High Court of Judicature at Bombay has been filed by the Commissioner of Income-tax, Bombay against Ranchoddas Karsondas of Bombay (hereinafter referred to, as the assessee) under S. 66A of the Indian Income-tax Act
(2.) The facts leading up to this appeal are as follows: For the assessment year 1945-46, a public notice under S. 22 (1) of the Income-tax Act (hereinafter called the Act) was issued, requiring every person whose total income during the previous year exceeded the maximum amount which was not chargeable to income-tax to furnish, within such period not being less than sixty days as might be specified in the notice, a return of his income in the prescribed form and verified in the prescribed manner. This notice was published on or about 1-5-1945. The assessee did not make a return of his income. The Income-tax Officer, while examining the books of account of a partnership called the "Assar Syndicate" of which the assessee was a partner, found that in the account year corresponding to the assessment year 1945-l946, there were six cash credits aggregating to Rs. 59,026 in the name of the assessee's wife. Before, however, the Income-tax Officer could take any action, the assessee submitted a "voluntary" return on 5-1-1950 of his income for the accounting year 1944-1945 (assessment year 1945-1946) showing a total net income of Rs. 1,935. He added a footnote to the return to the following effect: "My wife has sold her old ornaments and deposited the sum of Rs. 59026 in the firm of Assar Syndicate in which I am a partner." The Income-tax Officer did not act on this return, but on 27-2-1950 he issued a notice purporting to be under S. 34 of the Act calling upon the assessee to submit his return. This notice was served on the assessee on 3-3-1950, and in answer thereto, the assessee submitted a similar return on 14-3-1950 showing the same income and adding the same footnote. The Income-tax Officer then issued and served upon the assesses notices under Ss. 22 (4) and 23 (2) of the Act asking him to produce his books of account and to tender any evidence he cared to lead. It appears from the record that these notices were complied with, but on 26-2-1951 the Income-tax Officer included the sum of Rs. 59,026 in the total income of the assessee and assessed him on it for the assessment year 1945-l946.
(3.) The assessee appealed, in turn, to the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal. His contentions were three, viz., that the amount of Rs. 59,026 could not and should not have been included in his income, that the amended S.24 of the Act had no retrospective effect, and that the assessment completed on 26-2-1951 was invalid, inasmuch as it was completed four years after the end of the relevant assessment year. Both the Appellate Assistant Commissioner as well as the Tribunal rejected his contentions, but the Tribunal on being moved by him, raised and referred two questions of law under S. 66 (1) of the Act to the High Court of Judicature, Bombay, for its decision. These questions were: "(1) Whether the notice issued under S. 34 of the Act by the Income-tax Officer on 27-2-1950 after the assessee had filed a voluntary return was valid in law (2) Whether the assessment made on 26-2-1951 is valid in law ;