LexMESSRS CHATTURAM HORILRAM LTD. versus COMMISSIONER OF INCOME TAX, BIHAR AND ORISSA.
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1955 Aµrif 18 29G SUPREME COURT REPORTS [1955] MESSRS CHATTURAM HORILRAM LTD. v. COMMISSIONI;:R OF INCOME TAX. BIHAR AND ORISSA. [VIVIAN BOSE, JAGANNADHADAS and SINHA JJ.] Indian IHcorne Tax Act, 1922 (Act XI of 1922), s. 34--Assess- n-tcn/ set a...1:ide o·zving to Indian I·•inance Act of 1939 not being in force during the assessment year-Indian Finance Act of 1939 b,·ought into force retrospectively by Bihar Regulation IV of 1942- Fresh notice under s. 34 issued-Whether such fresh no-lice valid. The appellant in this appeal had been assessed to Income Tax which was reduced on appeal but that assessn1ent was set aside by the Income Tax Appellate Tribunal on the ground that the Indian Finance Act of 1939 was not in force during the asscssr11ent y~ar in Chota Nagpur. On a reference by the Tribunal the High Court confirmed the setting aside of this assessment. By the promulgation of Bihar Regulation IV of 1942 by the Governor of Bihar (which wa. a5'ented to by the Governor-General) the Indian Finance Act of 1939 was brought into force in Chota,·Nagpur retrospectively as from the 30th March 1939. On the 8th "February 1944 the Income l~ax Officer passed an order in pursuance of which a fresh notice was issued under s. 34 which resulted in the assessment of the ap-. p:.:llant to incon1~ tax. 1'he question for detcrn1ination in this ap·· peal. \Vas \Vhl'.ther the notice under s. 34 was validly issl1ed. Held (i) that for the purposes of s. 34 of the !\ct the income, profits or g:Jins sought to be· assessed were <.:hargcable to jncorne tax according tu the schcnc of the Act and the provisions of "'· 3 and 4 of the Act; (ii) that it was a ca~c of chargeable inco1nc escaping a~scssn11."llt within thL' 1nc<.111ing of s. 34 and was not a· case of mere non-asscss- 1ncnt of i<1comc tax because the earlier asses~ment proceedings in the present case had in 'fact been taken but failed to result in a valid assessment owing to some lacuna which \V,as not attributable to the assessing authorities. C.l. T. Bombay v. Sir Ma/wn:ed Yusuf Ismail ([1944] 12 l.T.R. 8), Fazal Dhala v. C./.T., B & 0. ([1944] 12 l.T.R. 341), Raghavalu Naidu & Sons v. C.I.T., Mddras ([1945] 13 l.T.R. 194), Raia Benoy K11mar Sahas Roy v. C.l.T.. West Bengal [(1953] 24 !.T.R. 70), Chatturam v. C.I.T., Bihar ([19471 F.C.R. 116), Whitney v. Com- missioners of hland Revem.e r[l926] AC. 37), C.l. T. Bombay & Adm; '" lOum1d1and Ramdas ([1938] 6 !.T.R. 414 Jt 428). Sir Rajendranath Mukheriee v. C.I.T., Bengal ((1934] 2 l.T.R. 71), Madan Mahan Lal v. C.l.T., P11niab ([1935] 3 !.T.R. 438), C.I.T., llmnhav v. l'irnjbai N. r:ontractnr ([19:171 5 l.T.R . .138), I<unwar 2 S.C.R. SUPREME COURT REPORTS 291 Bishwanath Singh v. C.l.T., C.P. ([1942) 10 I.T.R. 322), Raia 1955 Bahadur Kamakshya Narain Sin.gh Y· C.l.T.; B., & 0. ([1946) 14 Messrs Chatturam I.T.R. 683) and Cbatturam \". C..1.1 ., B. & 0 1.[1946] 14 I.T.R. Hori/ram Ltd. 695 ), referred to. v. Commissio11er of CIVIL APPELLATE JURISDICTION: Civil Appeal No. I11come'!f;;· Bihar 38 of 1954. alld ssa Appeal from the Judgment and Decree dated the 14th day of March 1951 of the High Court of Judica- ture at Patna in M.J.C. No. 230 of 1949. Mahabir Prasad, Advocate-Genernl for the State of Bihar (R.J. Bahadur and S. P. Varma. with him), for the appellant. C.K. Daphtary, Solicitor-General for India (Porus A. Mehta and P.G. Gokhale, with him), for the respon- dent. 1955. April 18. The Judgment of the Court was delivered ·by JAGANNADHADAS J.-This is an appeal by the assessee on leave granted under section 66-A of the Indian Income-Tax Act. The assessee by name Chatturam Horilram Ltd., who is the appellant be- fore us, is a private limited company carrying on in Chota Nagpur the business of exporting mica for sale to foreign countries. The assessment in question is for the year 1939-40 and the accounting year is the calendar year 1938. These proceedings were initiated on a notice issued to the assessee under section 34 of the Indian Income-tax Act, 1922, (Act XI of 1922) (hereinafter referred to as ·the Act). It is the apoli- cability of this section to the facts of this case that is the· sole matter for consideration in this appeal. The circumstances under which the above mentioned notice under section 34 was issued are as follows. The appellant had nreviously been assessed to tax on an income of Rs. 1.09,200 for the same year 1939-40
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