Law: Income Tax Act, 1922

Section: 23A

Section 143 read with sections 104, 250 153 of the Income-tax Act, 1961 [Corresponding to section 23, read with sections 23A, 31 and 34(3) of the Indian Income-tax Act, 1922] - Assessment - General - Assessment years 1940-41 to 1942-43 - Consequent upon AAC's order setting aside original assessments and directing him to make fresh assessments, ITO also included dividends deemed to have been received by assessee by virtue of section 23A orders which had been made during pendency of assessee's appeal - Whether ITO, in making fresh assessment in compliance with directions is bound by those directions, but subject to them, he has same power in fresh assessment as he had originally when making assessment under section 23 and he is not bound or restricted by anything that had happened either when he made original assessment or when appeal was heard and not even bound by his own findings arrived at in original assessment nor he is confined to those materials which existed on date of original assessment and he is free to take into consideration any relevant material that came into existence for first time after making of original assessment - Held, yes - Whether, therefore, ITO while making fresh assessment could include dividend income deemed to have been received by assessee in pursuance of order under section 23A which could not be included in total income at time of original assessment - Held, yes - Whether, further, in view of fact that fresh assessment was made in pursuance of direction of AAC, second proviso to section 34(3) applied and, thus, fresh assessment could be made more than four years after end of relevant assessment years - Held, yes FACTS The assessee-company owned certain ordinary shares in another company which declared dividends in the assessment years 1940-41 to 1942-43 at a certain percentage of its profits on certain dates, on which the annual general meeting of the company was held and the ITO passed orders under section 23A on certain dates by which the assessee was to be deemed to have received larger dividends in those years. The assessee in its returns had shown the income from the dividends of the company as declared in the meetings of…

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