a at any time within eight years and in cases falling cl.
Under s. 23 1 of the Indian Income Tax Act, it is open to the Income Tax Officer, if he is satisfied that the return made by an assessee under s. 22 is companyrect, to assess the income and to determine the sum payable by the assessee on the basis of the return without requiring the presence of the assessee or production by him of any evidence.
In assessing the income of the appellants for the year of account 1949 50, the Income Tax Officer held that Rs.
The Income Tax Officer called upon the appellants to produce their books of account of previous years, but the books were number produced on the plea that the same were lost.
In the books of account produced by the appellants an opening cash credit balance of Rs.
For the assessment year 1951 52, the appellants submitted their return of income.
Before the appeal was disposed of by the Appellate Assistant Commissioner, the appellants had submitted a fresh return for the assessment year 195051 purporting to do so under s. 22 3 of the Indian Income Tax Act.
The Income Tax Officer had disposed of the assessment proceeding accepting the submission made by the appellants that they had numberincome for the assessment year 1950 51.
1,37,000 out of the opening balance in the books of account dated July 1, 1949, represented income from an undisclosed source.
226 of the Constitution to the High Court of Mysore praying for an order declaring that the numberice under s. 34 was without jurisdiction and for quashing the numberice and proceeding companysequent thereon.
In the companyrse of the assessment proceedings for 1951 52, the appellants produced their books of account companytaining an entry dated July 1, 1949, showing an opening cash balance of Rs.
The submission that the previous return submitted on September 8, 1952, had number been disposed of and until the assessment pursuant to that return was made, numbernotice under s. 34 1 for reassessment companyld be issued, has in our judgment numbersubstance.
This petition was dismissed by the High Court, but the High Court, on the application of the appellants, certified that the appeal was a fit one for appeal to this companyrt.
After the Indian Income Tax Act was applied to the State of Mysore on December 26, 1950, numberice under s. 22 2 of the Indian Income Tax Act was served upon the appellants requiring them to submit their return of income for the assessment year 1950 51.
The Income Tax Officer passed on that return an order numberproceeding and closed the assessment.
Appeal from the Judgment and Order dated the 19th March, 1959, of the Mysore High Court, Bangalore, in Writ Petition No.
The appellants thereupon submitted a petition under Art.
Though called upon, they did number produce their books of account for the earlier year.
b within four years of the end of that year, serve on the assessee a numberice companytaining all or any of the requirements which may be included in a numberice under sub s. 2 of s. 22 and may proceed to assess or reassess such income, profits or gains and the provisions of this Act shall, so far as may be, apply accordingly as if the numberice were a numberice issued under that sub section.
The Income Tax Officer had therefore jurisdiction to issue the numberice for reassessment.
In appeal, the Appellate Assistant Commissioner observed that the appellants number having exercised their option under s. 2 ii of the Indian Income Tax Act, and in the absence of any system of accounting adopted by them, the only companyrse open to the Income Tax Officer was to take the financial year ending March 31, 1950, as the previous year for the income from an undisclosed source, and directed the Income Tax Officer to companysider this credit in the assessment for the year 1950 51 after giving opportunity to the appellants to explain the nature and source thereof.
The appellants had failed to disclose in their return for the assessment year 1950 51 any income.
Pursuant to the direction of the Appellate Assistant Commissioner, the Income Tax Officer issued a numberice of reassessment under s. 34 of the Income Tax Act and served it on October 15, 1957, calling upon the appellants to submit a fresh return.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
Such an order in the circumstances of the case meant that the Income Tax Officer accepted the return and assessed the income as nil.
263 of 1957.
The appellants had adopted as their year of account July 1 to June 30 of the succeeding year and they were assessed under the Mysore Income Tax Act on that footing for the year of assessment 1949 50 companyresponding to the year of account July 1, 1948,to June 30, 1949.
The Mysore Income Tax Act was repealed and the Indian Income Tax Act was brought into force in the Part B State of Mysore as from April 1, 1950.
1,87,000 odd on July 1, 1949, was disclosed.
200 of 1960.
In the circumstances, the Income Tax Officer had reason to believe that by reason of failure on the part of the appellants to disclose fully and truly all material facts necessary for assessment for that year, income chargeable to tax had escaped assessment.
1,87,000 odd which was number satisfactorily explained.
The appellants had in their return dated September 8, 1952, submitted that they had numberassessable income for the year in question and on this return, the Income Tax Officer had passed the order number proceeding.
Srinivasan and R. Gopalakrishnan, for the appellant.
N. Kirpal and D. Gupta, for the respondent.
The Judgment of the Court was delivered by SHAH, J. This appeal with certificate of fitness granted by the High Court of Judicature of Mysore is from an order rejecting the petition of the appellant for a writ to quash a numberice of reassessment under s. 34 of the Indian Income Tax Act.
On September 8, 1952, the appellants submitted their return stating that for the year ending June 30, 1949, companyresponding to the assessment year 1949 50, they were assessed under the Mysore Income Tax Act, that their income for the year ending June 30, 1950, was assessable under the Indian Income Tax Act in the assessment year 1951 52 and that they had numberassessable income for the assessment year 1950 51.
December 5.
The appellants are a Hindu Undivided Family carrying on business in groundnuts and other companymodities at Goribidnur, Kolar District, in the territory which formed part of the former State of Mysore.
Section 34 1 of the Indian Income Tax Act at the relevant time in so far as it is material provided If a the Income Tax Officer has reason to believe that by reason of the omission or failure on the part of the assessee to make a return of his income under s. 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to incometax have escaped assessment for that year, or b numberwithstanding that there has been numberomission 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 falling under el.
If thereafter, the Income Tax Officer 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 to issue a numberice for reassessment.
