COMMISSIONER OF INCOME TAX, WEST BENGAL versus BALKRISHAN MALHOTRA

Citation: [1971] SUPP. 1 S.C.R. 951 · Decided: 28-07-1971 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Dismissed

Judgment (excerpt)

951 
COMMISSIONER OF INCOME TAX, WEST BENGAl. 
A, 
v. 
BALKRISHAN MALHOTRA 
July 28, 1971 
[K. S. HEGDE AND A. N. GROVER, JJ.J 
Income-tax Act, 1922, s. 34(3)-.Assessment' meaning of-Whether 
assessment completed on day of computation of income by Income-tu 
Officer or when the tax due is computed. 
The original assessment of the assessee for the assessment year 1944-
45 was made sometime before March 13, 1953. 
Subsequently after ob-
taining the sanction of the Commissioner of Income-tax, the Income-tax 
Officer reopened the assessment nnder s. 34(l)(a) of the Income-tax Act, 
1922. On March 13, 1953 he issued a notice to the assessee under s. 34 read 
with s. :.'!2(2) of the Act. After considering .the objection of the assessee, the 
Incon1e-tax Officer made an assessment order under s. 34 read with s. 23 
(4) of the Act on March 8, 1954 in which he computed the income of the 
assessee. But on that day he' did not determine the tax due from the 
assessee. He determined the tax and issued a notice under s. 28(3) in Form 
30 only on March 31. 1954. The assessee contended that the assessment 
was barred under s. 34(3). The contention was rejected by the authorities 
under the Act incluping the appellate tribunal but the High Court gave ils 
advisory opinion in favour of the assessee. In appeal to this Court by the 
Revenue the main question for consideration was whether the assessment 
was complete on the date when the income was assessed by the Income-tax 
Officer or on the date when the tax was computed. 
HELD: The appeal must fail. 
As long back as September 24, 1953 the High Court of Madras in 
Vishwanathan Chettiar's case came to the conclusion that the word 'assess-
ments' in the proviso to s. 34(3) means not merely the computation of the 
income of the assessee but also the determination of the tax payable by 
c 
D 
E 
him. No other High Court has taken a different view. The Revenue must 
p 
have in all these years acted on the basis of that decision of the Madras 
High Court. 
Interpretation of a provision in a taxing statute rendered 
years back and accepted and acted upon by the department sh~uld not be 
easily departed from. The corresponding provisions of the 1961 Act are 
materially different fro111 the provisions of the 1922 Act. 
Under these 
circumstances this Court would not be justified in departing from the inter-
pretation placed by the High Court in Viswanathan Chettiar's case though 
a different view of the law may be reasonably possible. 
[954F-H] 
G 
RM.P .R.. Viswanathan Chettiar v. Commissioner of Income-tax, Mad-
ras, 25 I.T.R. 79, affirmed. 
CIVIL APPELLATE JURISDICTION : 
Civil Appeal No. 1391 of 
1967. 
Appeal from the judgment and order dated May 31, 1963 
of the Calcutta High Court in Income-tax Reference No. 4 of 
1%0. 
H 
912 
SUPREME COOllT ltEPOitTS 
[1971] SUPP. s.c.R. 
A 
Jagadish Swarup Solicitor-Oeneral, B. 
D. Ahuja and B. D. 
B 
c 
D 
E 
1! 
G 
B 
Sharma, for the appellant. 
. Sukumar Mitra, and Rameshwar Nath, for the respondent. 
The Judgment of the Court was delivered by 
Hegde, J.-This appeal by certificate by the Revenue is direc-
ted against the order made by the High Court of Calcutta in a 
reference under s. 66(1) of the Indian Income Tax Act, 1922 
(to be hereinafter referred to as the Act). 
At the instance of the assessee, the Income-tax Appellate 
Tribunal 'A' Bench, Ca)cutta referred to the High Court for its 
opinion two questions of law viz. : 
"(I) Whether the assessment is complete on the date 
when the income is assessed by the Income-tax Officer 
or on the date when the tax is computed by him and 
the challan demanding the tax is issued ? 
(2) Whether on the facts admitted or found in this 
case, the assessment was time barred under the first pro-
viso to section 34(3) of the Indian Income-tax Act ?" 
The original assessment of the assessee for the assessment 
year 1944-45 was made sometime before March 13, 1953. Sub-
sequently after obtaining the sanction of the Commissioner of 
Income-tax, the Income-tax Officer re-opened the assessment 
under s. 34(1) (a) of the Act. 
On March 13, 1953 he issued 
a notice to the assessee under s. 34 read with s. 22(2) of the 
Act. After considering the objection of the assessee, the Income-
tax Officer computed the income of the assessee under s. 34 read 
with s. 23(4) on March 8, 1954 at Rs. 60,000. The note made 
by the Income-tax Officer on that day in the order sheet reads : 
"Assessed as per assessment order on a tot

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