Law: Income Tax Act, 1922

Section: 34(1)(a)

Income-tax-Reassessment-Income escaping assessment owing to allowance of excessive loss-Reopening of assessment-Whether assessee entitled to insist on fresh assessment of profits or on rectification of errors and mistakes committed by assessee-Indian Income-tax Act, 1922, S. 34(1)(a). In reassessment proceedings initiated under section 34(1)(a) of the Income-tax Act, 1922, on the ground -that loss had been over-estimated in the original assessment, the Income-tax Officer has no jurisdiction to reopen the entire assessment, originally made, and determine afresh the assessable profits or to correct errors and omissions made by the, assessee in the matter of computation of total income. The power conferred upon the Income-tax Officer in respect of loss is to "recompute the loss" and when the legislation speaks of recomputing the loss it means only the loss and not the income, profits or gains; section 34(1)(a) does not empower a general recomputation of the income, profits or gains. Further, recomputation under section 34(1)(a) can only take place with a view to garnering in the income escaping assessment under the first clause. It is clear from the provisions of section 34 itself that it was not intended for the benefit of the assessee but only for the benefit of the revenue. Commissioner of Income-tax v. Shahzada Nand & Sons (1966) 60 I T R 392 (S C); Commissioner of Income-tax v. A. D. Shroff (1957) 31I T R 284; Inder Singh Gill (S.) v. Commissioner of Income-tax (1963) 47 I T R 284; Madhavjee Damodar v. Commis sioner of Income-tax (1935) 3 I T R 457 and Seth Kasinath Bagla v. Commissioner of Income-tax (1930) 4 I T C 472 ref. JUDGMENT KOTVAL, C. J.-The following question has been referred for our decision under section 66(1) of the Indian Income-tax Act: "Whether, in the course of reassessment proceeding: properly initiated under the provisions of clause (a) of section 34(1) of the Act, the assessee can claim the revision of the loss of Rs. 4,49,650 that was determined in the original assessment which had otherwise become final and conclusive so far as he was concerned?" The assessee is the karta of a Hindu undivided family and in the…