ESTHURI ASW ATHIAH versus THE INCOME-TAX OFFICER, MYSORE STATE

Citation: [1961] 2 S.C.R. 911 · Decided: 05-12-1960 · Supreme Court of India · Bench: J.L. KAPUR · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

2 S.C.R. SUPREME COURT REPORTS 
911 
ESTHURI ASW ATHIAH 
v. 
THE INCOME-TAX OI!'FICER, MYSORE STATE 
(J. L. KAPUR, M. HIDAYA.TULLAH and J.C. SHAH, JJ.) 
Income Tax-Reassessment-Notice issued by Income-tax Offi-
cer-if without jurisdiction-Indian Income-tax Act, rg22 (II of 
rg22), ss. 34(r)(a), 23(r), 22(3)-Finance Act, rg50 (XXV of rg50), 
s. rJ(I)-Part B States (Taxation Concessions) Order, r950, cl. 5(r). 
The appellants, a Hindu undivided family, carrying on 
business in the former State of Mysore, were assessed under the 
Mysore Income-tax Act for the year of assessment 1949-50 
corresponding to the year of account July l, 1948, to June 30, 
1949. The Indian Income-tax Act came into force in that area 
in April 1, 1950, and on December 26, 1950, notice under s. 22(2) 
of that Act was served upon the appellants to submit their 
return for the assessment year 1950-51. On September 8, 1952, 
the appellants submitted their return stating that they had no 
assessable income for that year. The Income Tax Officer passed 
on that return an order, "no proceeding", and closed the assess-
ment. When the appellants submitted their return for the next 
assessment year, their books of account disclosed an.opening 
cash credit balance of Rs. 1,87,000 and odd on July 1, 1949. They 
failed to produce the books of account of the previous years, 
and the Income-tax Officer held that Rs. 1,37,000 out of the said 
opening balance represented income from an undisclosed source. 
The appellants submitted a fresh return for the assessment year 
1950-5 I purporting to do so under s. 22(3) of the Indian Income-
tax Act. Pursuant to the direction of the Appellate Assistant 
Commissioner, the Income Tax Officer on October 15, 1957, 
served on the appellants a notice under s. 34 of the Act and 
thereupon the appellants moved the High Court under Art. 226 
for an order quashing the said notice and the proceeding as with-
out jurisdiction. The High Court dismissed the petition. 
Held, that it was not correct to say that the issue of the 
notice for reassessment w_as without jurisdiction as the assess-
ment was yet pending. 
Under s. 23(1) of the Indian Income-tax Act, it is open to 
the Income-tax Officer, if he is satisfied as to correctness of the 
return filed by the assessee, to assess the income and determine 
the sum payable on the basis of the return without requiring 
the assessee either to be present or to produce evidence. The 
order 'no proceeding' recorded on the return must, therefore, 
mean that the Income Tax Officer had accepted the previous 
return and assessed the income as nil. 
A revised return under s. 22(3) filed by the assessee may be 
Decomber 5. 
912 
SUPREME COURT REPORTS . 
[1961] 
r960 
entertained only before the order of assessment and not there-
1 -,. 
-
after. Lodging of such a return after the assessment is no bar 
Esthu•i Aswathiah to reassessment under s. 34(1) of the Act. 
v. 
It could not be said, .having regard to the provisions of 
The Income-tax s. 13(1) of the Finance Act (XXV of 1950) and cl. 5(1) of Part B 
Officer. Mysore States (Taxation Concessions) Order 1950, issued by the Central 
Stal• 
Government under s. 6oA of the Indian Income-tax Act, that 
for the assessment year 1950-51 the appellants were assessable 
under the Mysore Income-tax Act and not under the Indian 
Income-tax Act. 
Sha!>]. 
UIVIL APPELLATE JURISDICTION: Civil Appeal No. 
200of1960. 
Appeal from the Judgment and Order dated the 
19th March, 1959, of the Mysore High Court, Banga-
lore, in Writ Petition No. 263 of 1957. 
K. Srinivasan and R. Gopalakrishnan, for the appel-
lant. 
A. N. Kirpal and D. Gupta, for the respondent. 
1960. December 5. The Judgment of the Court 
w11s delivered by 
SHAH, J.-This appeal with certificate of fitness 
granted by the High Court of Judicature of Mysore is 
from an order rejecting the petition of the appellant 
for a writ to quash a notice of reassessment under 
s. 34 of the Indian Income Tax Act. 
The appellants are a Hindu Undivided Family 
carrying on business in groundnuts and other commo-
dities at Goribidnur, Kolar District, in the territory 
which formed part of the former State of Mysore. The 
Mysore Income Tax Act was repealed and the Indian 
Income Tax Act was brought into force in the Part-B 
State of Mysore as from April 1, 1950. The appel-
lants had adopted as their year of account July I to 
June 30 of the succeeding year and they were assess-
ed under the Mysore Income Tax Act on th

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