COMMISSIONER OF INCOME TAX Vs. KANCHANBAI LADY

JUDGEMENT

(1.) UNDER Section 66(1) of the Income-tax Act, 1922, the Income-tax Appellate Tribunal, Delhi, has referred the following questions of law for the opinion of this Court :

(2.) THE facts of the case giving rise to the two. questions under reference are not in dispute. THE petitioner is a private limited company carrying on the business of mining coal at Birsinghpur in district Shahadol, which formed a part of the erstwhile State of Vindhya Pradesh. Since the Company's income for the assessment year 1943-44 (account year 1942 43) had escaped assessment, a notice under Section 34, of the Income-tax Act (hereinafter referred to as the Act) was served on the petitioner on 15 March 1952, that is, a few days before the expiry of eight years from the close of the assessment year 1943-44. Subsequently, notices under Section 22(4) and 23(2) of the Act were also issued to the petitioner and the date notified to him for compliance was 9 October 1952, which was, at the petitioner's request, subsequently changed to 8 December 1952.

(3.) ON behalf of the Department, it is contended that since the original assessment was cancelled and a fresh assessment was made under the provisions of Section 27 of the Act, the second proviso to Sub-section (3) of Section 34 was attracted. That the Income-tax Officer purported to make a fresh assessment under section 27 ibid is obvious; The point is whether, in the circumstances of the case, he could validly do so. In our opinion, a fresh assessment under Section 27 must follow the cancellation of a valid original assessment.