Law: Income Tax Act, 1961

Section: 104,147

Law: Income Tax Act, 1922

Section: 23A,34

Section 147, read with section 104 of the Income-tax, Act 1961 [Corresponding to section 34, read with section 23A of Indian Income-tax Act, 1922] - Income escaping assessment - Position prior to 1-4-1989 - Appellant-assessee was residing at Lahore during relevant assessment year and was assessed to tax - After partition, he started residing in Delhi - Assessee held shares in a company which had its office at Calcutta - An order under section 23A of 1922 Act was passed in respect of said company-Pursuant to said order, certain amount was included in assessee's income -Thereupon, ITO, Delhi, issued notice to assessee under section 34 of 1922 Act seeking to reopen assessment for relevant assessment year - Said notice was challenged by assessee contending that proceeding under section 34 of 1922 Act was continuation of original assessment, and therefore, ITO Lahore, could only proceed against him and not ITO, Delhi - Whether, since section 23A of 1922 Act does not provide for any assessment being made and it talks of fictional income being included in total income of shareholder for purpose of assessing his total income, assessment, therefore had to be made under other provisions of Act including section 34 of 1922 Act authorising assessment - Held, yes - Whether, therefore, assessment could have been properly made by Income-tax Officer Delhi under provisions of section 34 of 1922 Act - Held, yes FACTS During the assessment year in question, the appellant-assessee was a resident of Lahore and was accordingly assessed to Income-tax. However after partition the appellant shifted to Delhi and was residing there at all material times. The appellant had held certain shares in company at Calcutta. Pursuant to order under section 23A of 1922 Act passed by ITO Calcutta, certain amount of undistributed profit was included in his income. Thereupon the Income-tax Officer, Delhi, issued a notice under section 34 of the 1922 Act to the appellant then residing in Delhi, requiring him to file a revised return. The appellant submitted a revised return under protest and included in it the amount that came to his share pursuant to order passed under section 23A of 1922 Act in case…

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