COMMISSIONER OF INCOME-TAX, BANGALORE versus C. M. JAFFAR KHAN (DECEASED) REPRESENTED BY HIS WIDOW RAHAMATHUNNISA BEGUM

Citation: [1972] 1 S.C.R. 908 · Decided: 24-09-1971 · Supreme Court of India · Bench: C.A. VAIDYIALINGAM · Disposal: Dismissed

Judgment (excerpt)

908 
COMMISSIONER OF INCOME-TAX, BANGALORE 
v. 
C. M. JAFFAR KHAi~ (DECEASED) REPRESENTED BY HIS 
WIDOW RAHAMATHUNNISA BEGUM 
September 24, 1971 
(C. A. VAIDIALINGAM AND P. JAGANMOHAN REDDY, JJ.] 
Mysore IncomNax Act 1923, s. 48-Refund granted by Income-tax 
Officer under section is an 'assessment'-Jnco1ne 
profits and 
gains for 
previous year ending 31st March 1949 asses1ed under Mysort Act not 
liable to be assessed under IndiGn Income-tax Act 1922 by virtue of Pan B 
States (Taxation Concession) Order 1950, Paragraph 5 ( l )-Section 34 
of Indian Aco has no applicability to income covered by said paragraph--
Words 'such income profits and gains' in pc.ragraph, interpretation of. 
The assessee was a partner in a registered firm. 
The firm filed its 
income-tax return for the period ending 30-6-1949 under the 
Mysore 
Income-tax Act 1923 and an assessment was made thereunder. 
On 
15-3-1950 the as!e.,ee filed his return in respect of his individual income 
including his share of income from the aforesaid firm for the accounting 
year ending J0-6-1949. This return was also made under the Mysore Act. 
By an order dated 20-3-1950 the Income-tax Officer directed a refund 
of Rs. 641-3-0 to the assessee due to the difference in .the rate of tax 
applicable to him and the maximum rate. 
In the course of proceedings 
for the assessment years 1951-52 and 1952-53 the Income-tax Officer was 
of the opinion that the asscssee's income had escaped ass~sment in the 
accounting yei!r ending 30-6-1949 and he therefore issued a notice to 
hil)l under s. 34 of the Act. 
The a"essee objected to the reopening of 
the assessment on the ground that he had already been a"e"ed for the 
said period under the Mysore Act and that according to paragraph 5 ( l) 
of the Part· B States (Taxation Conce5Sion) Order 1950 an assessment 
under ·the Indian Income-tax Act 1922 would be possible only if, before 
the appointed day namely on 1-4-1950 the ass .. see had not been assessed 
under the Mysore Act. 
Since the refund order had been i'5ued to him 
he claimed to have been assessed under the Mysore Act. 
The Income-
tax Officer rejected this contention and made an assessment under s. 34 
of the Indian Act on 6-3-1955. 
The Appellate Assistant Commissioner 
held that the assessment under •· 34 was not valid. 
The Appellate Tri· 
bunal was of the view that the refund granted by the income-tax Officer 
under s. 18 of the Mysore Act was not an assessment as contemplated 
under s. 23 of the Indian Act, and that the \.Vords 'such income profits 
and gain•' used in paragraph 5 ( 1) of the Part B States (Taxation Con-
cession) Ofder 1950 referred to identity of income or sources and that 
it is only in cases wherein income has been as·M:Med under the Mysore 
Act that the Income-tax Officer is prohibited from taking any further 
action thereon. 
On this view the Tribunal restored the order of the 
Income-tax Officer. 
In reference the High Court held that the refund 
order which was made on assessee's return was an order of asse·ssment. 
On appeal by the Revenue in this Court, 
HELD : (i) The refund order given by the Income-tax Ollicer on 
the return filed bv the assessee was an as.e.,ment within the meaning of 
paragraph 5 of the Order. The asse.,ment of both the firm as well as 
the individual had been made under the Mysore Act for the year ending 
30th June 1949 in respect of income of that year. As such it clearly fell 
B 
c 
D 
E 
F 
G 
H 
A 
B 
c 
D 
E 
F 
G 
C.l.T. v. JAFFAR KHAN (Jaganmohan Reddy, J.) 
909 
within the provisions of sub-paragraph ( !) of paragraph 5 of the Order 
which makes the Act applicable to such assessments. [913 A-B; 914 Bl 
Esthuri Aswathiah v. Income Tax Officer, Mysore State, 41 l.T.R. 539, 
relied on. 
It is also provided in sub-paragraph (2) of paragraph 5 that where 
income profits and gains have not been assessed under the State law 
they shall be assessed under the Indian Act for the year ending 31-3-1951 
which is the assessment year 1950-51 in respect of which the tax pay-
able has been specified therein. 
Thelre can be no doubt that for the 
assessment year 1950-51 for which the accounting year is the previous 
year I st April 1949 to 3 !st March 1950, the Act applies and asoessments 
would be made thereunder. This would be a hardship because under the 
concerned tax law of a Part B State an as"essee in that State may have 
been taxed already. 
It is in cirder to remove this hardship that the 
Order was i5'ued unde

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