Law: Income Tax Act, 1922

Section: 25(4)(5),48(4),25A,26A

(a) Income Tax Act (XI of 1922), Ss. 25 (4) (5), 48 (4)-­Claim for refund-Not made before expiry of one year from succession to business-Barred-General provisions of S. 48 inapplicable. During the assessment proceedings for the year 1942-43,, the assessee made a claim under section 25-A of the Act alleging that the family property had been partitioned on 31st March 1941 and that the cloth business had been taken over on the date of disruption by the severed members of the family as partners of a firm. By his order, dated the 21st July 1942, the Income-tax Officer recognized the partition and the succeeding firm was registered under section 26-A of the Act. On 12th June 1944, the assessee made an application pur­porting to be one under section 25 (4) and section 35 of the Income-­tax Act, claiming a refund on the income for the period 1st April 1940 to 31st March 1941. The ground of the - claim was thus stated. " (4) That when the ownership in the cloth business changed in favour of the firm on 31st March 1941, there was succession. Section 25 (4) and section 25 f 3), therefore, came into action. This is patent from the record. (5) That under sections 25 (4) and 25 (3), as amplified by 1943 Income-tax Reports, 247 no tax on the cloth business for the period 1st April 1940 to 31st March 1941 was to be assessed and the tax so recovered was to be refunded under section 35, read with section 48 and section 25 (4) and 25 (3)." Held; A claim for refund of the tax wrongly levied on the income of the period between the close of the previous year and the date of succession is a "claim to the relief afforded under subsection 4 " within the meaning of subsection (5) and will be barred under the latter subsection if it is not made before the expiry of one year from the date on which the succession to business took place: The Income-tax Act is a complete Code on the law of income tax. It not only exhaustively defines the liability of the subject -but also provides the machinery by which the liability may be imposed and enforced and wrong or illegal impositions, rectified. Therefore, a person who complains of a wrong or improper levy and seeks relief from such levy has to…

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