JAWAHAR LAL MANI RAM Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under section 66(1) of the Income-tax Act. The question which has been referred for the opinion of the court is :

(2.) IT appears that the question as framed and referred to us is incorrect. The four years period of limitation provided in section 34(3) for completing an assessment or reassessment under that sub-section is from the end of the assessment year in question and not from the date of filing of a return by the assessee. Acordingly, we reframe the question to bring out the point which has been referred to us for opinion in the following manner :

(3.) IN pursuance of this direction the INcome-tax Officer took the sanction of the Commissioner of INcome-tax for initiating proceeding under section 34 against the smaller units. The sanction was accorded and thereupon on March 4, 1955, notices were issued by the INcome-tax Officer to the smaller unit, namely, Jawaharlal Maniram (the applicant before us) and in pursuance of the notice returns were filed on July 6, 1955, and assessments completed on September 8, 1955. Against the assessment orders the applicant went up in appeal to the Appellate Assistant Commissioner and raised the point that proceedings under section 34(1)(b) were invalid, as returns filed by it on November 18, 1950, under section 22(3) were pending and valid assessments under section 23 could have been made on those returns. The Appellate Assistant Commissioner rejected the contention on a two-fold ground. The first ground was that, as the claim to partition had not been recognised by the INcome-tax Officer under section 25A, the INcome-tax Officer was bound to make the assessment against the bigger family and as such he returns filed by the smaller family, namely, the applicant, could not be acted upon. The other ground on which the Appellate Assistant Commissioner rejected the contention was that, as no returns has admittedly been filed by the applicant in pursuance of the notice under section 22(1), a default had been incurred by it and its case came under section 34(1)(a). The period of limitation for Completion of proceedings under that sub-section is eight years and as such the assessments completed against the applicant on September 8, 1955, being within eight years of the end of the four assessments years in question were within time and, therefore, valid.