Law: Income Tax Act, 1922

Section: 34

Section 147 of the Income-tax Act, 1961 [Corresponding to section 34 of the Indian Income-tax Act, 1922] read with section 11A of the C.P. Berar Sales Tax Act, 1947 - Income escaping assessment - General - Assessment year 1949-50 - Whether assessment proceedings under Sales Tax Act must be held to be pending from time said proceedings were initiated until they were terminated by a final order of assessment - Held, yes - Whether before final order of assessment, it could not be said that entire turnover or a part thereof of a dealer had escaped assessment, for assessment was not completed and, if completed, it might be that entire turnover would be caught in net - Held, yes FACTS The assessee-firm was carrying on the business in bidis and was a registered dealer. Every dealer under the Act was required to furnish quarterly returns of his turnover within one month from the end of the quarter. For the year 1949-50, i.e., for the period from 22-10-1949 to 9-11-1950 he submitted a return of his turnover on 5-10-1950, for one quarter only and made a default in respect of the other quarters. The Assistant Commissioner of Sales-tax issued a notice to the appellant in Form No. XI under section 11(1) and (2) of the Act in respect of the turnover of the firm for the said period. The appellant thereafter filed the returns for the three quarters in respects of which he had made default, but in that assessment proceedings he contended, inter alia that the Assistant Commissioner of Sales-tax could not assess his escaped turnover as he could only do so within three years from the expiry of the period in respect where of his turn over had escaped assessment. The Commissioner rejected the said contention, proceeded with the assessment and determined the tax liability. On writ, it was held that as the notices were issued beyond three years from the expiry of the relevant periods, the Commissioner had no jurisdiction to make the assessments. On appeal, the Division Bench held that section 11A of the act could apply only to a case where there was a final assessment and that in the instant cases the first assessment proceedings were pending and, therefore, the said section had no…

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