The estimates of the assessee were accepted by the Income tax Officer who companypleted the assessment for ,the two years on February 20, 1950.
The respondent applied to the High Court for quashing the said order.
90,000/ was added to the income of the firm liable to be brought to tax.
The respondents challenged the validity of those proceedings in the High Court of Judicature at Madras in writ petitions 1229 1233 of 1961 on its file.
The assessment of the other firm for 1947 48 was companypleted on June 30, 1.951 again for a smaller sum than that estimated by the assessee.
Appeals by special leave from the judgment and order dated March 27, 1963 of the Madras High Court in Writ Petitions Nos.
In the last of these, decisions, a doubt had been cast as to the companyrectness of the two earlier decisions but the High Court felt that the decision in Second Addl.
The facts in Civil Appeal No.
in question was assessed to tax on 22 1 46.
Hence these appeals.
8,265/ .
In the proceedings that followed the assessment of the firm was substantially enhanced on 30 5 Thereafter, the proceedings against the respondents were initiated under s. 35 5 read with s. 35 1 as per the numberices dated 24 7 59.
The Income tax Officer started rectification proceedings on May 4, 1953 and ultimately passed an order for rectification on March 27, 1954 after taking into account the share of the losses as companyputed in the assessment of the two firms.
On September 11, 1952, the ITO issued numberice to the firm under s. 34 of the Act requiring the firm to show cause why its assessment for the assessment year 1943 44 should number be re opened and enhanced for the reasons mentioned in that numberice.
The assessment of the respondent as individual was companypleted on January 24, 1946 wherein was included his income from the partnership just numbered.
In The Income tax Officer, Madras v. S. K. Habibullah 1 the facts were as follows.
The Indian Income Tax Act 1922, to be hereinafter referred to as the Act, was amended by Act 25 of 1953.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
The rectification was ultimately ordered to be made on August 31, 1959.
The appeals involve the interpretation of s. 35 5 of the Income tax, Act, 1922.
The numberice under s. 34 was issued on September 11, 1952 and the reassessment of the firm took place on May 30, 1959.
was delivered by MITTER, J. HEGDE, J. delivered a dissenting Opinion.
K. Aiyar and R. N. Sachthey, for the appellant in all the ,appeals A. Ramachandran, for the respondents in all the appeals , The Judgment of WANCHOO, C.J., BACHAWAT, RAMASWAMI and MITTER, JJ.
Hegde, J. The respondents in these appeals were the partners, of a registered firm carrying on business in gunnies.
For the assessment year 1943 44, i.e., the assessment year ending March 31, 1944, the firm.
2154 to 2158 of 1966.
1229 to 1233 of 1961.
In those proceedings the assessment of the respondents for the assessment year 1943 44 was enhanced.
On July 24, 1959 numberice under s. 35 5 of the Act was served on the respondent for rectification of his assessment as an individual.
The respondent along with his four brothers were partners of a registered firm carrying on business in gunnies.
226 of the Constitution of the High Court of Judicature at Madras.
Income tax Officer v. Atmala Nagaraj 1 being the second decision of this Court in point of time, was fully aplicable to the cases before it and in that view of the matter the order of rectification was quashed.
Mitter, J. This group of five appeals by special leave arises out of a companymon order made under Art.
2154 of 1966 relevant for the disposal of the appeal, taken by way of sample, are as follows.
The assessment of one of the firms for the same years was companypleted on October 31, 1950 but the proportionate share of the assessee for the losses was companyputed at much smaller figures.
When the matter came to be heard by the High Court of Madras, there were already three reported decisions of this Court bearing on the interpretation of s. 35 5 of the Act.
The assessment of the firm for the year 1943 44 was companypleted on January 22, 1946 and the share income of each partner was determined at Rs.
Subsequently, the assessment of the firm was re opened by proceedings under s. 34 1 a, of the Act and a sum of Rs.
The High Court following the decisions of this Court in Income Tax Officer, Madras v. S. K. Habibullah 1 and Second Additional Income Tax Officer, Guntur v. Atmala Nagaraj and others 2 , allowed those writ petitions and quashed 1 119621 Supp.
One Mohiuddin who was a partner in two registered firms submitted returns of his income incorporating therein the estimated share of losses in the two firms for the assessment years 1946 47 and 1947 48.
