Law: Income Tax Act, 1922

Section: 46(7)

Section 222, read with section 9 of the Income-tax Act, 1961 [Corresponding to section 46(7), read with section 42(1) of the Indian Income-tax Act, 1922] - Collection and recovery - Certificate proceedings - Assessment year 1943-44 - Whether extension of 1922 Act to new area, Travancore - Cochin State, would not entitle Income-tax authorities to take action for recovery of tax from properties, situate in new area, after expiry of one year from last day of financial year in which demand was raised - Held, yes - Whether proviso to section 42(1) referred to in section 46(7) would not apply in instant case, as same applied only to assets which came within taxable territories and did not contemplate a case of expansion of taxable territories - Held, yes FACTS The question involved was whether the appellant was entitled to proceed under section 46 against the assets of the first respondent in new area, that is travancore-cochin, to which, Indian Income-tax Act, 1922 was extended for tax assessed on him for the year of assessment 1943-44. On appeal : HELD Section 46(1) provides that action should be taken within a year of the last date of the financial year in which the demand was made. The demand was made in the year 1943-44 and, hence, action should have been taken before 31-3-1945. Proceedings, however, were started only in 1950. The proviso to section 42(1) had no application, in instant case. The proviso deals with a case of the assets which are, or which may at any time, come within the taxable territories. The proviso does not contemplate a case of an expansion of the taxable territories. That is what happened here by the extension of the Act to the Travancore-Cochin area as well. In such cases, the section or the proviso was…

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