COMMISSIONER OF INCOME-TAX, BOMBAY versus ROBERT J. SAS

Citation: [1963] SUPP. 2 S.C.R. 209 · Decided: 16-11-1962 · Supreme Court of India · Bench: S.K. DAS · Disposal: Dismissed

Judgment (excerpt)

2 S.C.R. SUPREME COURT REPORTS 
209 
Cadre' and the 'Provincialised Cadre' in the matter 
of promotion to the higher scale must be regarded as 
invalid. The appeal must therefore fail. 
BY COURT : In view of the opinion of the 
majority, the appeal ,is allowed and the order of the 
High Court striking down r. 2(d) and (e) and r. 3 
in so far as it relates to promotions is set aside. 
There will 'be no order as to costs in this appeal. 
COMMISSIONER OF· INCOME-TAX, BOMBAY 
v. 
ROBERT J. SAS 
(S. K. DAS, J. L. KAPUR, A. K. SARKAR; 
M. HIDAYATULLAH and RAOHUBAR DAYAL, JJ.) 
Inwme 
Tax-Notico of ·as•umaent-Limitalicm for-
Income deemed lo be distributed as dfoidtnd-Indian I~z 
Act, 1922 (11of1922), 88. 23 A(l), 34, 
The asscssccs were the three sharcholden of a private 
company. The company made profits in the calendar year 
194 7, but did not declare any dividend at the shareholders 
mreting· held on December 4, 1948. 
The 
Income-tax 
Officer passed an 01 der under s. 23 A (I) of the Income· tax Act 
whereby the income of the company was dccrncd to have been 
divided amongst the· three shareholders. He issued notices to 
the as'ICSSCCS which were served on them on April 1, 1954. The 
asscssecs contended that the notices were served beyond the 
period of four }can allowed by s. 34 (1) (b), 
Held, that the notices served under s. 34 (1) of the Act 
were beyond time . and the Income-tax Officer had no jurisdic-
tion to assess the asses.secs. 
Under s. 23A ( 1) the dividend was 
to be d~med to, have been. distnbuted not on June 30, 1949, 
by which date the company should have distributed 
the 
dividend, but on the date of the general meeting i.e., December, 
4, 1948 within the accounting year 1948 and asscssmeut year 
J!ln 
SIMI of hl}ob 
' 'v. 
l•ri"'" SilltA 
··-
SW,I. 
1961 
N-"', 16, 
210 SUPREME COURT REPORTS[l963]SUPP. 
1949-50. The notice wa• not served within four years from the 
end ofthc t•sessment·year. It ~de no· difl'erence that under 
s. 23 A (I) an order could- be passed at any time. 
CIVU, APPELLATE jURISl>ICTICN : Civil Appeals 
NPl!. 136 to 138 of 1962. 
· 
Appeals hy special leave from the judgment 
and order dated March 19, 1958, of the Bombay 
High Court in Income·tax Reference No. 74 of 1957. 
Gopal Singh and R. N. Sachthey, for the 
appellant. 
R. J. Kolah, J. B. Dadachanji, 0. O. Mathur 
and Ravinder Narain, for the respondents. 
R. Gopalakrishnan, for the Intervener. 
1962. November 16. The Judgment of the 
Court was delivered by 
KAPUR, J.-These three appeals by special 
leave are brought against the judgment and order of 
the High Court of Bombay. The appellant in all 
the three appeals is the Commissioner of Income-tax 
but in each of the appeals the respondent is different 
i. e., one of the three shareholders of a private 
limited company A.C.E.C. Private (India) Limited 
which was carrying on business in India. and made 
profits during the calendar year 194 7. The account' 
ing year is the calendar year ending December 31, 
l 948, and the relevant asse<!Sment year 1949-50. 
Although the company had earned large profits during 
the year 194 7 it did not declare any dividend at the 
shareholders' meeting held on December 4, 1948. On 
March 29, 1954, the Income-tax Officer passed an 
order under s. 23A(l) of the Income-tax Act, herein-
after termed the "Act", whereby the income of the 
company was in accordance with that provision, 
deemed to have been divided amongst the share-
holrlP.rs. By that order the following dividends were 
2 S.C.R. SUPREME COURT REPORTS 
211 
deemed to have been distributed amongst the three 
shareholders, each a respondent in one of the appeals. 
Mr. Paul Rouffart 
: Rs. l,09,859/~ 
Mr. Paul Victor H'.ennans 
Mr. Rol:>ert J. Sas 
: Rs. 1,00,189/-
: Rs. 1,09,859/-
The Income-tax Officer issued notices under s.. 34 of 
the Act and the notices were served on the respective 
respondents on April 1, 1954. Thereafter the return 
of the income was submitted and the assessment was 
completed in regard to the shareholders. Appeals 
were taken first to the Appellate Assistant Commiss-
im1er and then to the Income tax Appellate Tribunal. 
One of the points taken before the Tribunal was that 
the Income-tax Officer had no jurisdiction to take 
proceedings as the notices were served on the assessee 
respondents beyond the period of four years allowed 
under s. 34(1 )(b) of the Act. This plea was accept-
ed 'by the Tribunal and at the iniltance of the Commi-
ssioner of Income-tax a

Excerpt shown. Read the full judgment & AI analysis in Lexace.