Law:

Section:

Section 147, read with section 143 of the Income-tax Act, 1961 [Corresponding to section 34, read with section 23 of Indian Income-tax Act, 1922] - Income escaping assessment - General - Assessment year 1944-45 - Whether when a return has been filed but no assessment has been made, it cannot be said that income has escaped assessment so as to confer jurisdiction on ITO to invoke aid of section 34 of 1922 Act - Held, yes FACTS The assessee was a member of joint Hindu family. He filed his return before one territorial ITO as an individual on 19-10-1944. However, no assessment was made on said return and the territorial ITO sent the aforesaid return to ITO, Special Circle as the larger joint family of which the assessee was a member was being assessed by the ITO, Special Circle, and as by that time the partition between the members of the family had not been accepted by the department. Later on, as a result of certain proceedings which came to the High Court, the department accepted the case that there had been a partition between the members of the joint family with effect from 9-11-1942. Thereafter, the ITO, Special Circle, by his letter dated 19-1-1949 informed the territorial ITO, that the assessee had become separate and was carrying on business as an individual from 9-11-1942. The territorial ITO, therefore, issued a notice under section 34 of the 1922 Act, asked him to file a fresh return in compliance with the said notice but the assessee did not file any such return. The territorial ITO held that the assessee had failed to comply with the notice under section 22(4) of the 1922 Act and so he proceeded to make an assessment under section 23(4) of 1922 Act. On appeal, the AAC cancelled the order of the ITO, and remanded the matter to him to make a fresh assessment on the ground that the assessee was under a bona fide mistake in regard to the compliance of the said notices, and the assessee was, therefore, prevented by sufficient cause from submitting a return. The ITO rejected the contention of assessee that the proceedings under section 34 of the 1922 Act were barred by time and, therefore, made an assessment under section 23(3) on the 1922 Act of the total…

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