EKAMBARAPPA Vs. ADDITIONAL INCOME TAX OFFICER

JUDGEMENT

(1.) THESE petitions raise one common question of law and that is that the impugned notices were issued long after the period fixed under section 35(5) of the Indian Income-tax Act, 1922 (to be referred to as the Act hereinafter), and, therefore, they are invalid. The petitioners are the partners of a firm known as "Guduthur Thimmappa & Brothers". On September 8, 1960, they were served with notices under section 35(5). The petitioners challenge the validity of those notices.

(2.) THE facts material for our present purpose are as follows : THE petitioners in these three petitions were partners of a firm known as Guduthur Thimmappa & Brothers; that firm was dissolved on October 16, 1944. For the assessment year 1945-46, the firm in question was assessed to income-tax on January 31, 1948. After the firm was assessed, the partners were also assessed to income-tax in respect of their share of the income. Later on, it was found out that a portion of the firm's income had "escaped assessment". THErefore, a notice under section 34 was issued to the firm on March 30, 1954. On March 29, 1955, the firm was again assessed in respect of its "escaped income". THE firm filed an appeal against that order and that appeal was dismissed on November 21, 1958. THEreafter, on September 8, 1950 the Income-tax Officer issued to the partners notices under section 35(5) as mentioned earlier. On these facts, the question for decision is whether the aforesaid notices under section 35(5) were issued after the period of limitation mentioned in that section. Section 35(5) says :

(3.) FROM this decision it is clear that the principle of merger of the order of the lower Tribunal in the order of Appellate Tribunals is a principle of general application, the cases under the Income-tax Act being no exceptions.