KOPPURAVARI VENKATESWARLU Vs. INCOME TAX OFFICER SECOND

JUDGEMENT

(1.) THIS is a petition under article 226 of the Constitution of India seeking the issue of a writ of prohibition restraining the II Additional Income-tax Officer from taking action against the petitioner under section 34 of the Indian Income-tax Act The facts are as follows : One of the sources of the petitioner's income is his share as partner of a registered firm Sri Lakshmi Narayana Shelling and Oil Mill Company, Siripuram. When the petitioner was assessed to income-tax for the assessment year 1951-52, on 22nd January, 1952, his income from that share was "provisionally taken at Rs. 8, 831-0-0" and the assessment order contained this remark.

(2.) ON that basis, he was assessed to tax for that year and it is not disputed that the tax so determined was duly paid. The assessment of the aforesaid firm itself for that year was completed on 31st March, 1955, and from that assessment it was clear that the petitioner's income for that year from his share was nearly Rs. 24, 000. Thereupon, with the previous consent of the Commissioner of Income-tax, Hyderabad, the Income-tax Officer served a notice upon the petitioner on 28th March, 1956, under section 22(2) read with section 34(1)(b) of the Indian Income-tax Act and he was directed to make a fresh return before a specified date. The petitioner objected to any action being taken against him under section 34(1)(b). The Income-tax Officer, however, overruled, the petitioner's objection by an order dated 23rd November, 1956. The petitioner, therefore, seeks the aid of this Court to prohibit the Income-tax Officer from taking action in pursuance of the notices issued by him.

(3.) IN Debi Prasad Malviya v. Commissioner of INcome-tax, United Provinces, Lucknow, the learned Judges of the Allahabad High Court held that it was not open to an INcome-tax Officer to make assessments piecemeal and in a case where he has proceeded to assess one part of the income and has decided to assess the rest of the income on a later date, he could not rely on the provisions of section 34 for the purpose of reopening the assessment. IN the case before them, however, they were dealing with section 34 as it stood unamended by the Act XLVIII of 1948. The INcome-tax Officer could only take action under the section as it then stood, if he "discovered" that income, profits or gains chargeable to income-tax had escaped assessment in any year, or had been under-assessed, or had been assessed at too low a rate, or had been the subject of excessive relief under the Act in consequence of definite information which came into his possession. The present section 34 was substituted for the original section by section 8 of the Amendment Act and so far as it is relevant for our purposes, it runs as follows"34. (1) If-