Law: Income Tax Act, 1922

Section: 34(1)(a)

Income-tax-Reassessment-Assessee partner in .firm-Officer treating share income as that of Hindu undivided--family-Assessee not including income in individual return-Assessment not completed --Statement that as same was taxed in hands of Hindu undivided family it was not included---Family contesting inclusion-Appellate Assistant Commissioner holding that income was not of the family but of the assessee-Reopening of assess went-- Whether valid-Indian Income tax Act, 1922, S. 34(1)(a). The Income-tax Officer treated the share income of the assessee from a firm in which he was a partner as the income of the Hindu undivided family in which the assessee was a member, in spite of the objections b the assessee. This position continued from 1929-30. For the assessment years 1947-48 to 1951-52 the assessee filed his return of income stating therein that he was not including his share income from the firm, as :he same was being assessed in the hands of the family. No orders of assessment on these returns were made but the proceedings were adjourned sine die. The family, in whose hands the share income was assessed, appealed against such inclusion for the assessment years 1949-50 and 1950-51. Meanwhile, in the course of the assessment proceedings of the family for 1951-52, the officer accepted the claim of the family that the assessee was separate from the family and hence the' share income from the firm was assessed in the assessee's individual assessment. Consequent on this, the appeals for 1949-50 and 1950-51 were allowed by the Appellate Assistant Commissioner. The officer thereafter issued notices under section 34(1)(a) of the Income-tax Act, 1922, for 1949-1950 and 1950-51 and assessed him in respect of the share income from the firm. The appeals to the Appellate Assistant Commissioner and the Tribunal were dismissed. On a reference to the High Court: Held, (1) the assessee having made it clear in his return that he was the holder of the share and not having said that he was not liable to tax in respect of it, the officer should have investiga ted the true position and not adjourned the proceedings sine die ; (2) as the conditions for invoking section…