LexICE & GENERAL MILLS versus INCOME TAX OFFICER, CENTRAL CIRCLE II, MEERUT
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A
236
ICE & GENERAL MI.LLs
v.
!"<COME TAX OFFICER, CENTRAL CIRCLE II, MEERUT
·November 20, 1979
B
D
E
F
G
II
[V. D. '{'uLZAPURKAR AND E. S. VENKATARAMIAII, JJ.]
Escaped income-Reopening of Gssessment under section 147 of lite 1961
A.ct not permissible when in respect of the self-same escaped income, proceti-
il:;I under section 34tl) of the 1922 Act had been .u'ndertak~n o.nd were pend-
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ing 011 April 1, 1962 i.e. the date of coming into force of the 1961 A.ct- /
,.
lncon1e Tux Act, 1961, Section 297(2) (d) (ii) refers to factual per.ding of a
proceeding u11dcr section 34(1) of 1922 Act .
. The appclloot·assessee is a firm carrying on business of manufacturing ico
and preservation of potatoes in its cold storage. By an assessment order dated
July 5, 1961 it was assessed to income tax for the .assessment year 1961-62 oo a
total income of Rs. 53,548/-. The Income Tax Officer, in his
proceedin~
started on Dcceraber 21, 1961 under section 34(1) of the 1922 Act,
found
certain property
income and income to the -extent of one la·kh from potato
tramaction put through in the name of benami persons by the assesseo bad
escaped assessment and therefore, by his order dated December 22, 1965 be
brought them to tax:. The said order of the Income Tax Officer was annulled
in arp¢al, on May 10, 1967 on the ground that the initiation of reassessment wa_,
not justified. This order became final as the department did not take furt.h.:r
steps. On July 14, 1967 the Income Tax Officer issued a notice under sectio11.
148 of the IncoI;ne Tax Act, 1961 in respect of the self same assessment year
after obtaining the sanction of the Com.missioner of Income Tax.. Pursuant to
the notice the appellant filed a return under protest on August 14, 1967. The
appellant challenged the said notice by filing a writ petition in the Allahabad
High Court, inter alia on the ground that under section 297(2)(d)(ii) of tho ~~
1961 Act no reassessment pr.oceedings could be undertaken under section 147 of.
the 1961 Act inasmuch as in respect of the self-same escaped income, proceed-
ings under s. 34{ 1) of the 1922 Act had been undertaken and were Pending on
April 1; 1962 when the 1961 Act came into force. The High Court rejected
the contention oii the ground that in order that S. 297(2)(d)(ii) should apply,
proceedings under section 34 of the 1922 Act must be legal proceedings with
jurisdiction.
. Allowing the appeal by certificate, the Court
HELD : The factual pendency of the proceedings under Section 34 of the
1922 Act on the relevant date, and not their legality is material for purposes of __.._.... _
S. 297(2)(d)(ii) of the 1961 Act.
[238 D-E] ·
In the instant case: (ai) admittedly proceedings under s. 34(1) of the 1922
Act ·in respect of the item of Rupees one lakh (which was said to have escaped
.. assessment) v:ere factually pending on April 1, 1962-and therefore, the notice
under s. 148 of the 1961 Act would be incompete1't, and
[239 C-DJ
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ICE & GENERAL MILLS v. H.O. (Tulzapurkar, !.)
237
(b) The initiation of the proceedings under section 34 by the Income Tax;
A
Officer cannot be regarded as being without jurisdiction and hence non est.
Tho
reassessment order rllade by the Income Tax Officer on December 22, 1965 clearly
shows that he had initiated the proceedings (in respect of property income)
under section· 34(1) (b) i.e., in consequence of information gathered by him
from Assistant Appellate Commissioner's order for earlier year and not undet"
•ection ~4(1)(a). [239 F-HJ
S. B. Jain v. Mahcm/ra, 83 I.T.R. 104 (SC) and Gujar Mal Modi v. Commis-
si•1'er of Income Tax, 84 I.T.R. 261; applied~
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2015 of 1972.
From the Judgment and Order dated 18-1-1971 of the Allahabul
High Court in Civil Misc.
Writ Petition No. 4632/70.
S. T. Desai, B. R. Agrawala and P. C. Gokhale for the Appellant.
V. S. Desai, Miss. A. Subhashini, J. Ramamurthy
Vaigai for the Respondent.
The Judgment of the Court was delivered by
and Miss R.
TULZAPURKAR, J.
The point raised in this appeal by certificat~
seems to be covered by two decisions of this Court in favour of the
assessee and hence we propose to dispose of the appeal by a short
Judgment.
The appellant, a firm, carries on business of manufacturing iee an<l
preservation of potatoes in its cold storage. It was assessed to income·
tu for the assessment year 1961-62 by an assessment order dated
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