But the appellant Company gave out that the sales of shares were casual transactions of change of investments.
The appellant Company has number appealed on a certificate under Art.
The assessment orders were made on the basis that the petitioner did number carry on any business dealings in shares.
A companyy of the said letter dated the 18th August, 1944, as also the relevant portion of the numbere sheet are included in the schedule hereto annexed and marked A .
The companypany thereafter filed a second appeal before the In.
226 of the Constitution of appropriate writs or orders directing the Income tax Officer number to proceed to assess it on the basis of these numberices.
The companypany filed appeals before the Appellate Assistant Commissioner, which were rejected in September 1950, and the assessments were companyfirmed.
These assessments were,made under s. 23 3 of the Indian Income tax Act upon returns filed by it accompanied by statements of account.
I find from the numberes made by me in the order sheet of the assessment year 1944 45 and my order dated the 7th July, 1944 that Mr. Smith of M s. Lovelock Lewes attended before me and stated that the profits of the companypany arising out of dealings in shares were number taxable as the companypany was number a dealer in shares and securities.
Appeal from the Judgment and Order dated the 25th March, 1953, of the Calcutta High Court in Appeal from Original Order No.
5,48,002/ on sale of shares and securities escaped assessment altogether.
At the time of the original assessment the then I.T.O. merely accepted the companypanys version that the sales of shares were casual transactions and were in the nature of mere change of investments.
The Company has preferred the present appeal on the strength of a certificate issued by the High Court under Art.
The appellant Companys income, profits and gains for the assessment years, 1942 43, 1943 44 and 1944 45, were duly assessed and taxed.
Sachin Chaudhury, Sukumar Mitter, S. N. Mukherjee and D. N. Ghosh, for the appellant.
The assessment order dated the 15th February, 1945, was made by Shri Kali Das Banerjee number Income Tax Officer Companies District in II and the other two assessment orders were made by Mr. L. D. Razario who is number in the employment of M s. Lovelock Lewis.
The assessment orders were made on the basis that the petitioner did number carry on any business dealing in shares.
54 of 1953.
The first two assessments were made by Mr. L. Rozario the then Income tax Officer and the last one by Mr. K. D. Banerjee.
turns in companypliance with the numberices but on September 18, 1951, applied to the High Court of Calcutta for issue under Art.
The clause provided an extended period for sending a numberice calling for a return for the purpose of assessing or reassessing income, profits and gains which had escaped assessment or had been under assessed for any year within eight years, if 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 , the income, profits or gains chargeable to income tax have escaped assessment etc.
Shri K. D. Banerjee was accordingly led to believe that the dealings in shares were casual transactions and were in the nature of mere change in investments and the profits resulting therefrom were number taxable.
The Income tax Officer reported the matter to the Commissioner, and stated as follows Profits of Rs.
Sri K. D. Banerjee was accordingly led to believe that the dealings in shares were casual transactions and were in the nature of mere change in investments and the profits resulting therefrom were number taxable.
I find from the numberes made by me in the order sheet of the assessment year 1944 45 and my order dated the 7th July, 1944, that Mr. Smith of Messrs. Lovelock Lewis attended before me and stated that the profits of the companypany arising out of dealings in shares were number taxable as the companypany was number a dealer in shares and securities.
The first ground on which this prayer was based was mentioned in the petition in these terms The said pretended numberice was issued without the existence of the necessary companyditions precedent which companyfers jurisdiction under section 34 aforementioned, whether before or after the amendment in 1948 .
DAS GUPTA J. This appeal is against an appellate decision of a Bench of the Calcutta High Court by which in reversal of the order made by the Trial Judge the Bench rejected the present appellants application under Art.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The appellant companypany furnished re.
The taxes assessed were duly paid up.
The point involved in the case is a very short one, and the answer, as it appears to me, equally so.
The Judgment of S. K. Das, K. C. Das Gupta and N. Rajagopala Ayyangar, JJ.,
The appellant is a private limited companypany incorporated under the Indian Companys Act and has its registered office in Calcutta.
On March 28, 1951, three numberices purporting to be under s. 34 of the Indian Income tax Act, 1922, were issued by the income tax Officer calling upon the companypany to submit fresh returns of its total income and the total world income assessable for the three accounting years relating to the three assessment years, 1942 43 1943 44 and 1944 45.
Subsequently on the 18th August 1944, M s. Lovelock Lewes wrote a letter to me setting out the companytentions of their clients and inter alia stated that throughout the whole history the companypany bought numbershares what so.
N. Rajagopal Sastri and D. Gupta, for the respondents.
was delivered by K. Das Gupta, J. M. Hidayatullah, J. and J. C. Shah, J., delivered separate Judgments.
It was assessed to income tax for the assessment years, 1942 43, 1943 44 and 1944 45 by three separate orders dated January 26, 1944, February 12, 1944, and February 15, 1945, respectively.
The companypany filed appeals before the Appellate Assistant Commissioner which were rejected in September, 1950, and the assessments were companyfirmed.
Since this action was taken after more than four years, the matter fell to be governed by s. 34 1 a of the Indian Income tax Act, as amended in 1948.
226 of the Constitution.
197 of 1954.
This statement was accepted, though it was found that in later years the Company was dealing in stocks and shares as a business venture, and its statement which was accepted, was number perhaps true.
Accordingly he made an order prohibiting the Income tax Officer from companytinuing the assessment proceedings on the basis of the impugned numberices.
The other ground urged was that the amendment to s. 34 of the Income tax Act in 1948 was number retrospective and that the assessment for the years 1942 43, 1943 44 and 1944 45 became barred long before March 1951.
On March 28, 1951, three numberices under s. 34 of the Indian Income tax Act were issued calling upon the appellant Company to submit fresh returns in respect of the previous years relative to each of the assessment years above mentioned.
The orders were respectively passed on January 26, 1944, February 12, 1944, and February 15, 1945.
They held however that in companysequence of the amendment of s. 34 in 1948 the objection on the ground of limitation must also fail.
Subsequently on the 18th August, 1944, Messrs. Lovelock Lewis wrote a letter to me setting out the companytentions of their clients and inter alia stated that throughout the whole of its history the companypany bought numbershares whatsoever.
The learned Judges who heard the appeal agreed with the Trial Judge that the first ground had number been made out.
The assessment order dated the 15th February, 1945, was made by Sri Kali Das Banerjee number Income tax Officer Companies District II and the other two assessment orders were made by L. D. Rozario who is number in the employment of M s Lovelock Lewes.
Para 6 In the assessments for 1945 46, and 1946 47 which were companypleted in April, 1950, the profits on sale of shares were included in the total assessable income of the companypany it having been then discovered that the petitioner was in fact carrying on business in shares companytrary to its representation that it was number.
A companyy of the said letter dated the 18th August, 1944, as also the relevant portion of the numbere sheet are included in the schedule hereto annexed and marked In the assessments for 1945 46 and 1946 47, which were companypleted in April 1950, the profits on sale of shares were included in the total assessable income of the companypany it having been then discovered that the petitioner was in fact carrying on business in shares companytrary to its representation that it was number.
In the present case, the appellant Company, which is an investment Company, had produced in the back years a list of the shares sold by it, the statements of profit and loss account, and, I am prepared to assume, also the Memorandum and Articles of Association.
The appellant Company applied to the Calcutta High Court for a writ Under Art.
