Law:

Section:

Section 147 of the Income-tax Act, 1961 (Corresponding to section 34 of the Indian Income-tax Act, 1922) - Income escaping assessment - Position prior to 1-4-1989 - Assessment year 1948-49 - Whether words 'for any year' in section 34(1)(a) of 1922 Act mean for any assessment year and not for any accounting year because assessment is for assessment year although of income which accrued in previous year - Held, yes Words and phrases : 'Any year' and 'that year' as occurring in section 34(1)(a) of the Indian Income-tax Act, 1922 FACTS A notice was issued to the assessee under section 34(1)(a ) of 1922 Act calling upon him to make a return. The assessee raised objection that no notice under section 34 of the 1922 Act could be issued to him because of the lapse of eight years from the end of the accounting year. The said objection was, however, overruled. On petition, the High Court held on a construction of section 34 of the 1922 Act, that the words 'any year' as used in section 34(1)(a) of 1922 Act mean not the assessment year but the accounting year. On appeal to the Supreme Court : HELD According to the Indian Finance Act, 1948 assessment was to be made for the year ending 31-3-1949, at rates specified for the year beginning 1-4-1948. A return has to be made for the year of assessment in regard to the total income during the previous year which is the accounting year ; in other words income-tax is assessed for the assessment year on total income of the previous year. When under section 34(1)(a ) of 1922 Act a return is required the return has to be made under section 22 of 1922 Act for any year, and when the reference is to omission to make a return of the income under section 22 of 1922 Act for any year, the year is the assessment year, although the income which is declared relates to the previous year. The reference to section 22(1)(a ) of 1922 Act, therefore, makes the meaning of the phrase 'for any year' referable to an assessment year. The clause makes it clear that an assessee can be called upon to make a full and true disclosure of all materials necessary for his assessment of that year which necessarily must mean an assessment year and it is, erroneous…

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