BHAGWAN DAS SITA RAM versus COMMISSIONER OF INCOME-TAX

Citation: [1984] 3 S.C.R. 100 · Decided: 05-03-1984 · Supreme Court of India · Bench: V.D. TULZAPURKAR · Disposal: Dismissed

Judgment (excerpt)

1!)0 
.BHAGWAN DAS SITA RAM 
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v. 
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o COMMISSIONER OF INCOME-TAX 
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March15, 1984 
t. . . [V.:0. TuLZAPURKAR AND SABYASACHl MUKHARJI, JJ.) 
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~)- IncOme-taX Act, '1922..:._s. 22 and s. 23 read with second provi'so to s~S. 
:c: · 
(6) cf S. 34....--/nterpretation of-When assessnient can be made after a period of 
four years from asstssmen.t >;ear-Assessment proceedings commenc~ by.filing of. 
voluntary return-.On expiry -'of four years proceedings are suspended but procee-
dings~an4 {e,turrts do not become invalid. Bar of limitation lifts in case of direction 
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Trib~izQ/~When· Ond on whom Tribunal can issue direction. 
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Words and Phrases-"any·person" in ~econd proviso to sub-s. (3) ofs. 34-
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Scope of must be a Person wl:zo would be liable lo be assessed for whole or part of 
income that went into assessment of the year under appeal. 
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G 
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A bigger Hindu undivided family (HUF) had flied income-tax returns for the 
assessment years 1946-47 to 1949-50. When the assessment was being done the 
bigger (HtTF) made a claim under s. 25A of the Income Tax Act, 1922, that 
the said HUF. was paititioned on 19.5.1945. While this claim was pending, the 
appe11ant along with a smailer HUF (hereinafter re;ferred to as the assessee) 
which had come into being on pa.rtition of the bigger HUF, filed voluntary 
returns on 18.\l.1950for the assessment years 1946-47 to 1949-50unders. 22(1) 
of the Act. The bigger HUF's claim partition, Which was rejected by the Income 
Tax Officer arid the Appellate Assistant Commissioner, was accepted by the 
Appellate Tri~unal ori 31,8.1954. While disposing of the. appeals of the bigger 
HUF against the assessment orders, the Tribunal gave a direction on· 28.10.1954 
that asscssriullts be made on the bigger HUF after accepting partition. 'After 
·thC claim of partition ·was accepted the Income-tax Officer sent notices to the 
assesseei fOr initiating proceedings against him under s. 34(1) (b).- Jn response to 
·the notices the assi!.see filed fresh ·returns on 12.4.1955-
Rejecting the conten-
tion of the assessee that the time for making assessment under s. 34 had expiied, 
the Income-tax· Officer· completed asseSsments·under s. 2~(3) read with s. 34 on 
~ .8.9.1955. The assessee's appeal was rejected by the Appellate Assistant Commis-
sioner and the Appellate Tribunal. The assessee filed a writ petition in the High 
Court_ which was allowed and the assessment orders were quashed on 30.3.1960. · 
The High Court observed that as voluntary returns ·filed by the assessee 
were pending no proceeding could be taken und~r s. 34. Thereafter the Revenue 
attempted to assess the assessee on the basis of voluntary returns originaJly 
filed on 18.11.1950 by relying upon the order of the Tribunal dated 23.10.1954 in 
the bigger HUF's case and invoking second proviso to s. 34(3). The assessee filed 
a writ petition and that was dismissed. The Income-tax Officer completed assess· 
m~t undeu, ~3) 9!' ~p, 19\it In appeal the ·Appellate ~ista)lt <;:omllli'' 
, 
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BHAGWAN DAS v. c.fr. (S. Mukhrji, j.) 
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sioner held that no valid assessment could be made on 31..S:.1962 and this viey.:· 
w:is confirm~d by the Appellate Tribunal. A ref.:rence was made to the· High 
Court all the questioll whether on the facts and -cfrculnstanCes of the case, valid · 
· asse~srnent'.could be made" on 31.5.1962 for the assfi'isment ye3.rs 1948-49 and,-. 
1949 50 on· the basis· of voluntary return.s of income filed under s. 22(1) of the 
Act. The assessee contended that-since 3. return exhausted itself ~fter expiry of 
four years from the end of the asseSsment year to \\·hich it reIJ.ted, no assessmCnt 
· could ~ made ·an th~ ba~ of voluntary return, ,it,"could be done under s. 34 
only if :2nd prOviso to sub-s. (3) of s. 34 applied. By majority a full Bench of 
the High Court answered the question in the affirmativ.! in favour of the reve .. 
nue. Hence. these appeals. -The two questioi:is which arose" Were! (I) whether the 
assessment could be made under s. '23(3) on the basis of ·voluntary returns filed 
or actioil should have been taken under!. 34 with the help of the seCond proviso 
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to· Sub-s~ (3) of s. 34; and (2) ·whether ihe Tribunal cOuld give a finding or 
dir~ctioi:i in respect of the as~essee.. 
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. -Dismissing tt:e_ appeals; 
HEW:·· 
.f!n Quest~oit·No. (I) 
- The High Court was right . in taking the vie~ ~hat asses~ments could be 
m<idi! on the basis of voIU"

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