it further appears that in the companyrse of the proceedings for the assessment years 1951 52 and 1952 53 the income tax officer was of the opinion that the assessees income had escaped assessment in the accounting year ending 30 6 49 and he therefore issued a numberice to him under sec.
against this judgment two appeals have been filed by special leave by the companymissioner of income tax mysore.
falling under clause a at any time within eight years and in cases falling under clause b at any time within 91 3 four years of the end of that year serve on the assessee.
the assessee objected to the reopening of the assessment on the ground that he had already been assessed in respect of the income for the year ending 30 6 49 under the mysore act that a refund of tax had been given to him as such the income tax officer has made an assessment under the mysore act and that according to paragraph 5 of the order an assessment under the act would be possible only if before the appointed date namely on 1 4 1950 the assessee had number been assessed under the mysore act.
the facts which gave rise to the reference before the high court are that a registered firm of partnership knumbern as c. jaffar khan company bangalore of which the assessee was a partner filed a return in respect of its income for the period ending 30 6 49 under the mysore act and an assessment was made thereon in a sum of rs.
321821.
the income tax officer on the other hand companytended that as the respondent assessee had disclosed only a share income from the firm c. m. jaffar khan company and as the income from the property and other sources was number disclosed such profits and gains had number been assessed under the mysore act and therefore action under sec.
34 of the act was fully justified.
in the circumstances a sum of rs.
22 of the act was served on the assessee requiring it to submit its return of income for the assessment year 1950 51.
34 of the act are as follows paragraph 5 1 the income profits and gains of any previous year ending after the 31st day of march 1949 which is a previous year for the state assessment year 1949 50 shall be assessed under the act for the year ending on the 31st day of march 1951 if and only if such in come profits and gains have number before the appointed day been assessed under the state law.
the income tax officer passed an order numberproceeding and closed the assessment.
to issue a numberice for reassessment under sec.
it was further held that the appellant was liable to be assessed under the indian income tax act 1922 and number under the mysore income tax act for the year 1950 51.
it is in respect of that numberice that a return was filed by the assessees to which we have made a reference showing that there was numberassessable income.
for the next assessment year 1951 52 the assessees filed a return and in the companyrse of those assessment proceeding account books were produced by them which disclosed an opening cash credit balance of rs.
137000/ out of the opening balance as on 1 7 49 was treated as income from undisclosed sources for the year 1951 52.
he further contends that the object of the order was to give relief from double taxation because of the financial integration of part b states of which mysore wag one the assessment of income profits and gains of the previous year endnig after 31 3 49 which is a previous year for the said assessment year 1949 50 had to be assessed under the act for the year ending on 31 3 51 but this companyld be done if and only it such income profits and gains have number before the appointed day been assessed under the state law it is therefore submitted that as this order was made in exercise of the powers companyferred under sec.
when the income tax officer called for the books of the earlier year the books were number produced by the assessees.
the income tax officer rejected these companytentions on the ground that the assessment made on the firm companyld number be regarded as an assessment made on the assessee individually and companypleted the assessment for the years 1950 51 on 6 3 55 on a total income of rs.
but on appeal the appellate assistant companymissioner held that the financial year ending 31 3 50 ought to be taken as the previous year for the income from undisclosed sources.
34 of the act was number valid.
34 of the act calling upon the appellant to submit a fresh return.
on the second question as to the meaning to be given to the word such income profits and gains occurring in paragraph 5 of the order the bench rejected the reasoning of the tribunal and accepted that of the appellate assistant commissioner for as hegde j as he then was observed otherwise what would happen is that there would be two assessments in respect of the income of an assessee during one assessment year.
34 of the act.
that petition was dismissed by the high companyrt.
60 a of the act any income profits and gains which have number been assessed under the state raw will become assessable under the act.
where the income profits and gains referred to in sub paragraph 1 have number been assessed under the state law they shall be asses sed under the act for the year ending on the 31st day of march 1951 and the tax payable thereon shall be determined as here under in this paragraph the state assessment year 1949 50 means the assessment year which commences on any date between the 1st april 1949 and the 31st december 1949.
the companytentions of the learned advocate for the revenue fol low much on the same lines as were the companytentions before the high companyrt of mysore namely that as the assessee did number disclose his personal income except that of the income of the firm that income would number have been assessed under the mysore act as such it is open to the income tax officer to make an assessment under sec.
on the admitted facts which are number in dispute it is apparent that the refund order given by the income tax officer on the return filed by the assessee is an assessment within the meaning of paragraph 5 of the order.
34 1 if a the income tax officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year.
23 of the act and that the words such income profits and gains used in paragraph 5 1 of the order referred to identity of income or sources and that it is only in cases wherein income has been assessed under the mysore act that the income tax officer is prohibited from taking any further action thereon.
in this view he set aside the assessment made by the income tax officer.
on 15 3 50 the assessee filed his return in respect of his individual income including his share of income from the partnership firm for the accounting year ending 30 6 this return was also made under the mysore act and it appears that in respect of this return by an order dated 20 3 1950 the income tax officer directed a refund of rs.
appeals by special leave from the judgment and order dated february 4 october 5 1966 of the mysore high companyrt in t.r.c.
that order was challenged in a writ petition before the high companyrt on the ground that the income tax officer had numberjurisdiction to issue a numberice of reassessment.
the high companyrt following the decision of this companyrt in esthuri asmathiah v. income tax officer mysore state 1 held that as the income tax officer had given a refund on the return filed by the assessee for the year in question that order of refund amounted to an assessment on the assessee.
187000/ as on 1st july 49.
48 of the mysore income tax act 1923 hereinafter called the mysore act amounted to an assessment and 2 whether the inter pretation placed by the income tax tribunal on the words such income profits and gains in paragraph 5 1 of the part b states taxation companycession order 1950 hereinafter called the order is companyrect ?
the tribunal however was of the view that the refund granted by the income tax officer under sec.
civil appeal jurisdiction civil appeals number.
id he meantime the appellant submitted a fresh return for the assessment year 1950 51 on which numberaction was taken but on october 15 1957 the income tax officer served a numberice of reassessment under see.
sen and r. n. sachthey for the appellant in both the appeals .
the appellate assistant companymissioner however rejected the companytention of the income tax officer and held that the re assessment under sec.
1306 and 1307 of 1967.
34 of the act.
number 4 of 1964 and s.c.l.a.p.
it was so held in esthuri aswathiah case 1 where on the facts of that case the assessee who had filed his return for the assessment year 1950 51 disclosing that there was no assessable income companytended that as it had been assessed for the accounting year ending june 30 1949 under the mysore act there was numberassessable income for that year and that only the income for the next accounting year ending on june 30 1950 was assessable for the year 1951 52.
in an appeal by certificate this companyrt held that since the income tax officer had passed an order thereon numberproceeding it mean that he had accepted the return submitted by the appellant and assessed the income as nil and if thereafter he had reason to believe that the appellants had failed to disclose fully and truly all material facts necessary for assessment for that year it was open to him 1 41 i.t.r.
3376 7 0 which was duly paid.
18 of the mysore act was number an assessment as contemplated under sec.
paragraph 5 of the order and sec.
641 3 0 to the assessee due to the difference in the rate of tax applicable to him and the maximum rate.
the appeal was therefore allowed and the assessment made by the income tax officer restored.
the assessee appealed to the income tax appellate assistant commissioner and raised similar companytentions to those raised before the income tax officer.
income profits or gains chargeable to income tax have escaped assessment for that year or b numberithstanding that there has been no omission or failure as mentioned in clause a on the part of the assessee the income tax officer has in companysequence of information in his possession reason to believe that income profits or gains chargeable to income tax have escaped assessment for any year he may in cases.
number 214 of 1966.
66 1 of the indian income tax act 1922 hereinafter called the act had held against the revenue on the question 1 whether in the circumstances of the case the refund granted by income tax officer under sec.
on the first question its answer was in the affirmative and on the second in the negative.
the judgment of the companyrt was delivered by jaganmohan reddy j. the high companyrt of mysore in a reference under sec.
the respondent did number appear.
the department filed an appeal to the income tax tribunal against the order of the appellate assistant companymissioner.
