SEN., J. - (1.) THE following question of law has been referred to this Court by the Tribunal under S. 256(2) of the IT Act, 1961 ('the Act'): " Whether, on the facts and in the circumstances of the case and on proper interpretation of S. 170 (2) of the IT Act, 1961, the Tribunal was correct in holding that the ITO had no jurisdiction to raise an assessment in the hands of Tecalemit (India) Ltd. in respect of the income of Tecalemit (India) Ltd. earned by it during the period 1st August, 1963 to 31st March, 1964?"
(2.) THE assessment year involved in this reference is the asst. yr. 1964-65 for which the corresponding period of account is year ending 31st March, 1964. The facts of the case as stated by the Tribunal are as under: The assessee is Tecalemit (India) Ltd. which was a non-resident company. It had been carrying on business in India and was following as its accounting year, the year ending on 31st July. By an agreement dt. 9th Oct., 1964, the business of the assessee in India was taken over by Tecalemit (Hind) Ltd. w.e.f. 1st April, 1964. The assessee filed its return of income for the asst. yr. 1964-65 corresponding to the previous year ending on 31st July, 1963. Thereafter the assessee wrote to the ITO requesting for his approval to the change of the subsequent accounting year to the year ending 31st July to the year ending 31st March. It was stated that the request was made in view of the fact that parent company in UK had also changed its accounting year from year ending 31st March and the parent company required that the subsidiary company should also follow the same accounting year. It was also mentioned that the business of the assessee-company would be closed as on 31st March, 1964 and that the assessee would like its accounting year to be changed to 31st March, 1964. Thereafter on 1st Oct., 1964 the assessee filed a return stated to be also for the asst. yr. 1964-65 in respect of the accounting period from 1st Aug., 1963 to 31st March, 1964, disclosing a total income of Rs. 1,721,200. This was accompanied by a balance-sheet and profit and loss account as on 31st March, 1964. On receipt of this return the ITO made a provisional assessment under S. 141 of the Act raising a total demand of Rs. 11,285,85. The demand raised was paid by the assessee in two instalments on 6th March, 1966 and 23rd March, 1966, respectively. Thereafter on 26th March, 1969 another return of income stated to be a revised return was filed, as stated in the return, in respect of the previous year ending on 31st July, 1964. The return was accompanied by the same profit and loss account and the balance-sheet for the period ending on 31st March, 1964 as in the case of the original return. The revised return showed a total income of Rs. 1,70,360. The return was verified by one Shri K. Mukherjee who described himself as the Secretary of the assessee-company and was signed by him as "For Tecalemit (India) Ltd., Tecalemit (Hind) Ltd. Sd/-1-K. Mukherjee, Secretary".
(3.) THE ITO made an assessment under S. 144 of the Act on the basis of the revised return and this was cancelled under S. 146 of the Act and a fresh assessment was made under S. 143(3) computing the total income of the assessee for the period 1st Aug., 1963 to 31st March, 1964 on a total income of Rs. 3,07,439. Both, in the original assessment and in the subsequent fresh assessment the assessee was described as Tecalemit (India) Ltd. (through Successor-Tecalemit (Hind) Ltd.). It may be mentioned that when the original assessment was made, objection was raised on behalf of the Indian company as to the validity or the correctness of the proceedings taken by the ITO and in fact the notices were issued by the ITO which were duly complied with.;