LexCOMMISSIONER OF INCOME-TAX, MADRAS versus S. RAMAN CHETTIAR
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• A B c D E F G COMMISSIONER OF INCOME·TAX, MADRAS v. S. RAMAN CHETTIAR October 27, 1964 (K. SUBBA RAo, J. c. SHAH AND s. M. Snoo JI.) Indian Income-tax Act (11 of 1922), ss. 22(3) and 34-Invalid notice under s. 34--Return submitted-Subsequent proceedings under s. 34-If can be taken ignoring return. Jn response to a notice dated 3rd April 1948, under s. 34 of the Indian Income-tax Act, 1922, the assessee submitted returns for the assessment years 19-14-45 and l 9~5-46. The Income-tax Officer dropped proceedings [or the former year and determined the net taxable income for the latter year. The assessee appealed first to the Appellate Assistant Commissioner ar.d then to the Appellate Tribunal. The Tribunal allowed the appeal in part, held that a portion of the profit determined was assessable in the assessment y~ar 1944-J5 and observed, that the Income-tax Officer was at liberty to take appropriate action. The InCome-tax Officer again issued a notice under s. 34 after obtaining the sanction of the Commissioner, as required by the Amending Act 48 of 1948 (passed on 8th September 1948, but !!1'•.le retrospective from 30th March 1948), in respect of the assess· ment year 1944-45. He brought to tax, the amount determined by the Tribunal as the profit of the year. The assessee's appeals to the Appellate Assistant Commissioner and the Appellate Tribunal were unsuccessful. The High Court, on a reference, held in favour of the assessee holding tha<thc reassessment under s. 34 for the year 1944-45 was not valid. The Commis- sioner appealed to the Supreme Court. HELD : The first return submitted by the assessce was a \'lllid return under s. 22(3). The Department could not therefore, ignore it and issue nolice under s. 34 on the assumption that there had been an omission or failure on the part of the assessce to make a return under s. 22. [884 B-C; 887 CJ Section 22(3) permits an assessee to furnish a return at any time before the assessment is made, that is, before the time mentioned in s. 34(3). It need not be a voluntary return in the sense that it must be. suo motu. If the first notice under s. 34 was held to be bad because the Commissioner's sanction was not obtained as required by the amendment of 1948, it did not follow that a return made in pursuance of it must also be treated .. bad. If a return otherwise valid is filed by an assessee before the receipt of a valid notice under s. 34, it has to be treated as a valid return within s. 22(3). [886 F-H; 889 C-D, Fl Commiss!oner of Income-tax) Bihar and Orissa v. Mahara}a Pratap Singh Bahadur of Gidhaur, (1961) 411.T.R. 421, distinguished. Commissioner of Income-tax, Bombay City. v. Ranchodda.v Karsondas, (1959) 36 l.T.R. 569, referred to. ;. R. K. Das & Co. v. Commissioner of Income-tax, West Bengal, ( 1956) 30 l.T.R. 439. overruled. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1096 of H 1963. Appeal by special leave from the judgment dated January 3, 1961 of the Madras High Court in Caso Referred No. 114 of 1956. L2Sup/6S-13 . l 884 SUPREMI! COURT REPORTS [ 1965] I S.C.R. K. N. Rajagopala Sa.<tri, R. Ii. Dhebar and R. N. Sachthry, for A the appellant. S. Swaminathan and R. Gopalakrishnan, for the respondent. 'r The Judgment of the Court was delivered by Sikri J. This is an appeal by special leave directed against n the judgment of the Madras High Court answering the question "whether the reassessment under s. 34 (of the Indian Income Tax Act, I 922) completed on 30th June, 1953 for the year I 944-45 is valid' in the negative. The relevant facts are as follows : The respondent, hereinafter referred to as the assessee is a Hindu undivided family. For the assessment years 1944-45 and 1945-46, the assessee filed no returns under s. 22 of the Indian Income Tax Act, hereinafter referred to as the Act, nor were any notices issued under s. 22(2) of the Act. On April 3, 1948. the Income Tax Officer issued notices under s. 34 for both the assess- c uu:nt years. At that lime it was not necessary to obtain sanction 0 of the Commissioner of Income Tax and none was obtained. The asscssee filed a return for the assessment year 1944-45 on Septem- hcr 4, 1948, showing an income of Rs. 4,053 which was below the HUf' taxable limit of Rs. 7.200. The assessee also filed a return for the assessment yeaf 1945-46. It appears that the Income Tax Officer dropped proceedings for 1944-45 as infructu- E
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