Law: Income-tax Act (IX of 1922)

Section:

Income-tax Act (XI of 1922)-----   --- Ss. 33 (6), 34 (1) (a)-Re-assess ment-Assessment of interest income and forest income-Appeal to Appellate Tribunal contesting only inclusion of forest income-Appel late Tribunal holding notice invalid as regards forest income but setting aside entire re-assessment by mistake-No application for rectification or reference-Fresh re-assessment whether permissible to tax interest income.   From a re-assessment for the assessment year 1942-43 made on July 12, 1945, bringing to tax certain interest income and forest income, the assessee appealed to the Appellate Tribunal contesting only the inclusion of forest income. The Appellate Tribunal held that it could not be said that the Income-tax Officer had come in possession of definite information within the meaning of section 34 of the Income-tax Act, 1922 (before it was amended in 1948), in respect of the forest income. But by mistake instead of setting aside the assessment only in regard to the forest income, when passing the final order the Tribunal set aside the assessment of interest income as well and restored the original assessment order. No application for rectification of the mistake was made nor was any reference to the High Court sought from the appellate order of the High Court.   The Income-tax Officer made a fresh re-assessment on Sep tember 25, 1950, under section 34(1)(a) to bring to tax the interest income :   Held, (i) that the result of the appellate order of the Appellate Tribunal was not that the assessment proceedings taken in 1945 were invalid and the tribunal committed an error in restoring the original assessment under section 23. The Appellate Tribunal did not hold that the interest income was wrongly assessed. The remedy of the department against the order restoring the original assessment under section 23 was an application for rectification under section 35. The appellate order of the Tribunal was final by virtue of section 33 (6) as regards interest income and the department could not take fresh re-assessment proceedings under section 34.   (ii) That the amendment of section 34 of the Indian Income -tax Act, 1922, in 1948 in…