PT DEO SHARMA Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE question for consideration in this writ petition is the true scope of sub -section (6) of section 35, Income -tax Act (hereinafter referred to as the 'Act'). Deo Sharma is the petitioner. He had two separate sources of income. Firstly, he had income from his share in the firm, M/s. L. N. Gadodia & Company, Kanpur, to the extent of 0 -4 -0 in the rupee. Secondly, he received by way of renumeration one -fourth share in the net profits of a certain retail shop at Kanpur for managing that shop. Initially, income -tax was assessed on the footing that the petitioners one -fourth share in the net profits of the retail shop constituted income from business, and he was subjected to excess profits tax under the Excess Profits Tax Act, 1940. On that basis, an order was passed on February 22, 1947, assessing the petitioner to income -tax for three separate assessment years, 1944 -45, 1945 -46 and 1946 -47. The petitioner contested his liability to pay excess profits tax. That matter was referred to this court under section 66(1) of the Act. That reference was answered by this court in favour of the petitioner. In view of that decision, that Income -tax Appellate Tribunal excluded that income from excess profits tax assessments for those years. As a consequence of that proceeding, the Income -tax Officer, Kanpur, passed three separate orders on May 18, 1956, for assessment of income -tax for those three years. The order dated dated May 18, 1956, resulted in enhancement of the income -tax. The petitioner filed an objection protesting against the alleged rectification of the assessment. That objection was rejected by the Income -tax Officer. An appeal filed by the petitioner was dismissed by the Appellate Assistant Commissioner. A revision filed by the petitioner was also dismissed by the Commissioner of Income -tax. This writ petition is directed against these orders of the Income -tax Officer, Kanpur, and the Income -tax Commissioner, Lucknow.

(2.) RESPONDENT No. 1 took action in the matter under sub -section (6) of section 35 of the Act. Section 35(6) of the Act is in these terms :

(3.) SUB -section (5), (6) and (7) were inserted in section 35 of the Income -tax Act by the Indian Income -tax (Amendment) Act, 1953 (No. XXV of 1953). It was provided in the Amendment Act that the amendment would have effect from April 1, 1952. Mr. R. L. Gulati appearing for the petitioner contended that, considering that the amendment took effect from April 1, 1952, only, no action is permissible for revising an assessment made prior to that date.