RATNASWAMI K S Vs. ADDITIONAL INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner is a citizen of Ceylon. It came to the notice of the department that during the account year relevant to the assessment year 1957-58, he had constructed a cinema theatre at Orathanad. He had submitted no returns at any time. In October, 1957, the Income-tax Officer issued a notice under section 22(2) of the Act calling for the submission of the return for the assessment year 1957-58. THE petitioner of this notice and purported to file returns for all the assessment years from 1950-51 to 1957-58 on 12th March, 1959.

(2.) IN respect of the assessment years 1950-51 and 1951-52, proceedings under section 34 were taken and a notice issued on 13th March, 1959. Pursuant to the direction calling upon him to submit returns, the assessee wrote to the INcome-tax Officer stating that the returns filed by him on 12th March, 1959, might be treated as returns which he was called upon to file under section 34 of the Act. An assessment in respect of these two years was in due course made on 18th September, 1959.

(3.) THE returns relevant to these two years were admittedly filed beyond the period of four years from the close of the relevant assessment years. Under section 34(3) of the Act, no assessment shall be made after the expiry of four years from the end of the year in which the income, profits or gains were first assessable. It is not open to the department to make an assessment without calling for the submission of a return under section 22 of the Act or under section 34 of the Act, as the case may be. If a return had been called for by the special notice under section 22(2) of the Act, the department could proceed to make an assessment, even a best of judgment assessment, if the return was not filed. Such assessment could be made within four years from the close of the assessment year. It is also a well accepted position that it is open to the assessee to submit a return at any time before the assessment is actually made. This is permitted under section 22(3) of the Act. Reading this provision along with section 34(3) of the Act, it follows that, if the assessee files a return on any date before the expiry of the four years before an assessment has been made by the department, that return would be a valid return. If such a return is accordingly before the department, if would not be open to the department to start proceedings under section 34 of the Act on the ground that no return had been filed. It would therefore be seen that a return, if it is to operate so as to exclude the application of section 34 of the Act, should be one that is filed before an assessment could be validly made, that is to say, such a return should be filed before the expiry of the four years period referred to. A return filed after the expiry of the four years period is not a return which can be properly within the scope of section 22(3) of the Act. THE department would appear therefore to be entitled to ignore such returns and take proceedings under section 34 of the Act.