LexTHE COMMISSIONER OF INCOME-TAX, BOMBAY versus RANCHHODDAS KARSONDAS, BOMBAY
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r959
.\fay 8.
114
SUPREME COURT REPORTS [1960(1)]
THE COM:HISSIOXJ<JR OF INCOME-TAX, BOMBAY
1),
H.ANCHHODDAS KARSONDAS, BOMBAY
(S. R. DAS, C .. J., N. H. BHAGWATT, and
M. HIDAYATULLAH, JJ.)
I11comc-tax-I?eturn shozrii-ng inco1ne belou1 minimum taxable-
Tl'hcther a good return-Inco111e-tax Oj}ictr ignoring such return
and issu.ing ,notice to assessee to fi.lt return-Assessment 1nade within
one ~year of notice bnt be:yond four years of the end of th.e asscss1nent
ycar--Validity of-Indian Income-tax Act, 1922 (XI of r922),
ss. 22 and 34.
A public notice under s. 22(1) of the· Income-tax Act, 1922
was published on May r, 1945, requiring every person whose total
income exce'eded the niaximum amount \vhich \\'as not charge-
able to inco1ne-tax to file returns for the assr!ismcnt year 1945-46.
On January 5, 1950, the assessee submitted a voluntary return
,shOY\ting an inco1ne of Rs .. 1,935 for the :issessmcnt year 1945-46
and adde<l a footnote to the return that his wife ha<l sold her old
ornaments and deposited a sum of Rs. 59,026 with the Assar
Syndicate in \Yhich he \Vas a partner. The Income-tax Officer,
\vho had discovered these credits \Vhi1e exan1ining the accounts of
the J\ssar Syndicate, ignored the voluntary return, and, on
F'cbruary 27, 1950, issued a notice under s. 34(1) of the Act
calling upon the assessec to submit his return. On lllarch J4,
I950, the assessce submitted an identical return. The Income-tax
Officer ina<lc the assessment on February 26, 1951, and included
the su1n of l{s. 59,026 in the total incon1c of the asscssee.
The
asscssee contcndtd that the assessment \Yas,
1invalid as it \\'as
cotnpletcd n1orc than four years after the end of the assessment
year in violation ·of s. 34(r)(b). The appellant contended that
the voluntary return \\'as no return as it clid not disclose any
taxable income and tlic assesstnent \\'as valic.1 under the proviso
to s. 3-1-(J) of the 1\ct, ha\'ing been rnacle \Vithin one year of the
notice issued under s. 34(1).
lle/d, that the assess111cnt
\Vas invalid. 'fhe voluntary
return filcU Uy t:ltc a~scssec, even though it. dicl not disclose any
taxable inco1nc, 'ras a good return and could not be ignored. 1\s
such no question arose und('r s. 34(r) of income escaping assess-
ment and the Incotne-tax Officer \\·as not justified i11 issuing the
notice under s. 34(1).
Tlw proviso to s. 34(3) was applicable only
"·hen there ,\\'as a proper notice issued unlk·r s. 34(1) and the
appellant could not take advantage of the time allowed by this
proviso.
'fhc as~essn1ent \\-'as clearly made bPyond four years of -
the end of the asscss1nent year I~J--l-.)-4() and \Vas tin1c harrcrl.
llaraltchand l1.fakanji & C'o. v. c:(JJntnissioni:r of Income-tax.
(1948) .IIJ I.T.R Il9; All India Groundnut Syndicate Ltd, v.
S.C.R.
SUPREME COURT REPORTS
115
Commissioner of Incame-tax, (1953) 25 I.T.R. 90 and P. S.
Rama !~·er v. Commissioner of Jncom,;-fa.i;, (1957) 33 1.T.l<. 451',
approved.
Commissioner of Agricultural I11comi:-tax v. Sultan Ali Gharami
(1951) 20 l.T.R. 432; B. K. Das <~ Co. v. Commissioner of lllcom.:-
tax, (1956) 30 l.T.R. 439 and Commissioner of Income-lax v.
Govindlal Dutta (1957) 33 I T.R. 630, disapproved.
CIYTL APPELLA'l'E Jt"RISDIC'TION: Civil
281of1955.
Appral No.
Appeal from the jwlgment and or<ler datPd :\larch 18,
1954, of the Bombay lfigh C'ourt in Income-tax
Reference No. 35 of 19'3~.
K. N. Rajagopal Sa8tri and n. Oupta, for the
appellant.
R. J. Kolah and. Ram Ditta. Jlal, for the re1'!pondrnt.
1959. May 8.
The Judgment of the Court was
delivered by
1959
The Co1nmissioner
of Jncm1u-tax
Jlnmbay
v.
R11,11r-hhoddas
l\a,·somlas, Bombay
HIDAYATULLAH J.-This appeal on a certificate of Hidayatullah J.
fitness granted by the High Court of Judicature at
Bombay has been filed by the CommisRioner of Income-
tax, Bombay against Ranchhoddas Karsondas. of
Bombay (hereinafter referred to, as the assessce) under
s. 66A of the Indian Income-tax Act.
The facts leading up to this appeal are as follows :
For the assessment year 194.5-46, a public notice under
s. 22(1) of the Income-tax Act (hereinafter called the
Act) was issued, requiring every person ·who8e total in-
come during the previous year exceeded the maximum
amount which was not chargeable to income-tax to
furnish, within such period not being less than sixty
days as might be specified in the notice, a return of
his income in the prescribed Excerpt shown. Read the full judgment & AI analysis in Lexace.