# CommiuiONr of lneom1-1ax, Modrtir v. J ,nbh2 Muliammad H11sr .;., .,Varhiar .1Jtm111l Sa1kar, /

- **Citation:** [1964] 1 S.C.R. 148
- **Court:** Supreme Court of India
- **Decided:** 1964
- **Case number:** C:ivil Appeals Nos. 214 & 215 of 1958
- **Bench:** S. K. Das, J. L. Kapur, A. K. Sarkar, M. HIDAYATULLAJI an:! RAGHUBAR DAYAL
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/commiuionr-of-lneom1-1ax-modrtir-v-j-nbh2-muliammad-h11sr-varhiar-1jtm111l-2879
- **Pages:** 15

## Headnote

lncom<!·lax-Limitntion-A•aeumenl
made
after /OW'
year.•-IJ barred-Provi.1ion aat-ing assessment in rup<<ll of
aome persons-If di..criminatory-lndian lncom<!0 ta:r A<ll, 1922
(11 of 1922), 1. 31, 34(3)-lndi.an lncome-ta:r (A>nendment)
Act, 1953 (25 of 1953), ••· 18, 31-Conatitution of India,
Art. 14.
The asscssee and hi• father filed separate returns for the
year 1946.47 and the father al'° filed a return as Karta of the
Hindu undivided family in which the income was declared as
...
nil on the ground that the Hindu undivided family had ceased
1,
to exist. On March 15, 19jl, the Income-tax Officer amalgamated the incomes of the assessee and his father and assessed
them on the total income as the income of a Hindu undivided
family but he did not make any asscs1ment of the assessee as
an
individual.
On appeal by the
father
the
Appellate Assistant Commissioner, on March 20, l9j3, held that
there v.'a'J no Hindu undivided family, set aside that assessment
and directed a
rea~sessrnent of the assessee and his father as
individuals.
Thcreuoon the
Income-tax Officer, by order
dJted ~ >vember 27, 1953, assessed the assessee as an individual.
' \
1 s.c.R. - SUPREME COURT REPORTS -149
The assessee contended that the assessm_ent not having been
made within four years of the year 1946-47 i.e. by March 31,
· 1951, was barred by s. 34(3} -of the Ineome-tax Act, 1922,
The Appellate Tribunal held that the assessment was not
. barred, but, at. the instance' of the assessee, it referred to the
High Court the question whether the assessment -was validly
made. _The High Court answered the reference in favour of
the assessee. The appellant contended that the assessment was
within time as it· was saved by the second proviso to s. 34(3}
as amended by the Amending Act, 1953 and that the assess-
-ment was validated by s. 31 of the Amending Act, 1953.
Held (per Das, Kapur and Sarkar, JJ., Hidayatullah and
Dayal, JJ., di8'enting) that the assessment not having been
made within the time prescribed bys. 34(3), was barred.
8. 0. Prcuhar, Incomo-tax Officer v. Va1antsen Dwarkadcu,
[1964] Vol. I S. C. R. 29, relied on.
_ - -
-. _ 0
•
_
_
Per Das and Kapur,JJ.-The second proviso to s. 34(3) _
which came into force on April- 1, 1952, did not revive the
power to assess which had become barred. Further, the appellant could not rely upon s. 31 of the Amending Act of 1953,
· as this question was not covered by the question referred
to the High Court.
Per Sarkar,J.-The second proviso to s. 34(3} as amended
In 1953, In so far as it affected persons other than assessees was
- void as violating Art. -14 of the Constitution. The proviso
_ sought to save assessments in respect of assessees and those
against whom assessments were made in consequence of orders
made under s. 31 in the assessment : cases of those assessees but -
not those of other tax evaders. The classification made was
without any intelligible dilferentia having a rational connection
with the object of the statute.
Per Hidayatullah- and Dayal, JJ.-The assessm'ents were
valid and were saved by the second proviso to s. 34(3} as
amended in 1953 and bys. 31 of the Amending Act of 1953.
· The Court was bound to take notice of s. 31 of the Amending
Act of 1953 even though it was not mentioned in the order of
_ reference and in the judgment of the High Court Section 31 of
the Amending Act was clearly applicable to the case as admittedly the proceedings commenced after September 8, 1948.
Further the second proviso to s. 34(3) as amended in 1953
was not discriminatory and did not offend Art. 14 of the Constitution. A law relating -to tax evasion cannot lay down a
I
1952 -
Commissimur qf
lne"1U·lu
v •
Sardar IAIJunw
Sitrzh
...
•
1961
CqmmUsiontr of
lncM'111·ta:c
v.
Sar..U,, I. aJJmU'
s; .. 1h
150 SUPREME COURT REPORTS [1964] VOL.
uniform system applicable to all kinds of defaulters. The class
which falls within this provi>o for which there is no limit of
time within which the assessment is to be made and the class
wh

## Text

1962
CommiuiONr of
lneom1-1ax, Modrtir
Y.
J..,nbh2 Muliammad
H11sr .;., .,Varhiar
.1Jtm111l
Sa1kar, /,
1962
Dr(tmber, 12,
148 · SUPREME COURT REPORTS [1964] VOL.
[For the Judgment
of Hidayatullah
and
Raghubar Dayal, JJ., see S. 0. Prashar, Jnwme.tax
Officer v. Vasantsen Dv.:arkadas, ante p. 29.]
BY CouRT : In accordance with the opinion of
the Omajority, the appeal is allowed. The appellant
will pay the costs of the respondent as was agreed to
by the parties.
..4. ppeal allowed.
COMMISSIONER OF INCOME-TAX
"·
SARDAR LAKHMIR SINGH
(S. K. DAS, J. L. KAPUR, A. K.
SARKAR,
M. HIDAYATULLAJI an:! RAGHUBAR DAYAL, JJ.)
lncom<!·lax-Limitntion-A•aeumenl
made
after /OW'
year.•-IJ barred-Provi.1ion aat-ing assessment in rup<<ll of
aome persons-If di..criminatory-lndian lncom<!0 ta:r A<ll, 1922
(11 of 1922), 1. 31, 34(3)-lndi.an lncome-ta:r (A>nendment)
Act, 1953 (25 of 1953), ••· 18, 31-Conatitution of India,
Art. 14.
The asscssee and hi• father filed separate returns for the
year 1946.47 and the father al'° filed a return as Karta of the
Hindu undivided family in which the income was declared as
...
nil on the ground that the Hindu undivided family had ceased
1,
to exist. On March 15, 19jl, the Income-tax Officer amalgamated the incomes of the assessee and his father and assessed
them on the total income as the income of a Hindu undivided
family but he did not make any asscs1ment of the assessee as
an
individual.
On appeal by the
father
the
Appellate Assistant Commissioner, on March 20, l9j3, held that
there v.'a'J no Hindu undivided family, set aside that assessment
and directed a
rea~sessrnent of the assessee and his father as
individuals.
Thcreuoon the
Income-tax Officer, by order
dJted ~ >vember 27, 1953, assessed the assessee as an individual.
' \
1 s.c.R. - SUPREME COURT REPORTS -149
The assessee contended that the assessm_ent not having been
made within four years of the year 1946-47 i.e. by March 31,
· 1951, was barred by s. 34(3} -of the Ineome-tax Act, 1922,
The Appellate Tribunal held that the assessment was not
. barred, but, at. the instance' of the assessee, it referred to the
High Court the question whether the assessment -was validly
made. _The High Court answered the reference in favour of
the assessee. The appellant contended that the assessment was
within time as it· was saved by the second proviso to s. 34(3}
as amended by the Amending Act, 1953 and that the assess-
-ment was validated by s. 31 of the Amending Act, 1953.
Held (per Das, Kapur and Sarkar, JJ., Hidayatullah and
Dayal, JJ., di8'enting) that the assessment not having been
made within the time prescribed bys. 34(3), was barred.
8. 0. Prcuhar, Incomo-tax Officer v. Va1antsen Dwarkadcu,
[1964] Vol. I S. C. R. 29, relied on.
_ - -
-. _ 0
•
_
_
Per Das and Kapur,JJ.-The second proviso to s. 34(3) _
which came into force on April- 1, 1952, did not revive the
power to assess which had become barred. Further, the appellant could not rely upon s. 31 of the Amending Act of 1953,
· as this question was not covered by the question referred
to the High Court.
Per Sarkar,J.-The second proviso to s. 34(3} as amended
In 1953, In so far as it affected persons other than assessees was
- void as violating Art. -14 of the Constitution. The proviso
_ sought to save assessments in respect of assessees and those
against whom assessments were made in consequence of orders
made under s. 31 in the assessment : cases of those assessees but -
not those of other tax evaders. The classification made was
without any intelligible dilferentia having a rational connection
with the object of the statute.
Per Hidayatullah- and Dayal, JJ.-The assessm'ents were
valid and were saved by the second proviso to s. 34(3} as
amended in 1953 and bys. 31 of the Amending Act of 1953.
· The Court was bound to take notice of s. 31 of the Amending
Act of 1953 even though it was not mentioned in the order of
_ reference and in the judgment of the High Court Section 31 of
the Amending Act was clearly applicable to the case as admittedly the proceedings commenced after September 8, 1948.
Further the second proviso to s. 34(3) as amended in 1953
was not discriminatory and did not offend Art. 14 of the Constitution. A law relating -to tax evasion cannot lay down a
I
1952 -
Commissimur qf
lne"1U·lu
v •
Sardar IAIJunw
Sitrzh
...
•
1961
CqmmUsiontr of
lncM'111·ta:c
v.
Sar..U,, I. aJJmU'
s; .. 1h
150 SUPREME COURT REPORTS [1964] VOL.
uniform system applicable to all kinds of defaulters. The class
which falls within this provi>o for which there is no limit of
time within which the assessment is to be made and the class
which falls outside the proviso for which there is a limit of
4 years or 8 year<, are two distinct
cla~. The ditl'erent
treatment arises under different circumstances.
CIVIL APPELLATE juRISDICTION : C:ivil Appeals
Nos. 214 & 215 of 1958.
Appeals from the judgment and decree dated
?vlay 7, 1957 of the Patna High Court in M. J. C.
No. 263 of 1956.
K. N. Rujagopal Sastri and P. D. •tenon, for
the Appellants.
S. P. Varma, for the Respondents.
1962. December 12. The following judgments
were delivered.
S. K. Diu, J., J. L. Kapur, J., and
A. K. Sarkar, J., delivered
separate judgmenl3.
The Judgment of M. Hidayatullah and Raghubar
Dayal, JJ., was delivered by Hidayatullah, J.
Du, /.
S. K. DAS, J.-The facts out of which these
two appeals have ari~en have been stated in the
judgment of my learned brother Kapur, J., and as
I am in full agreement with the conclusion reached
by him, I need not re-state the facts.
The relevant assessment years were 1946-194 7
and 1947-194!l.
The assessment orders were made
on Novemb<'r 27, 1953. It is obvious that the assessments were not made within the time prescribed by
sub·s. (3) of s. 34, the period being four years in this
case.
The Tribunal relied on the second proviso to
sub-s. (3) of s. 34 as amended by the Amending Act
of 1953 which came into force on April l, 1952. For
reasons which I have given in S. C. Prushar, l71C011Ul·
t,ax Officer v. Vasantsen Dwarkadas ('), in which judgment has been delivered to-day, the second proviso to
(I) (19$4] Vol. I s.c.R. 29 .
•
1 S.C.R.
SUPREME COURT REPORTS
151
sub-s. (3) of s. 34 does not revive a remedy which
became barred before April l, 1952, when the
amended proviso came into force.
Next, the appellant relied on s. 31 of the
Amending Act of 1953. I agree with my learned.
brother Kapur, J., that the question of law which
was referred to the High Court does not take in the
point now sought to be urged before us. Secondly,
for reasons given by me in S. 0. Prashar, Incomelax Officer v. Vasantsen Dwarkadas {') I do not think
that s. 31 saves the assessment.
I would accordingly dismiss the appeals with
costs; one hearing fee.
KAPUR, J.-These are two appeals pursuant to
a certificate granted by the High Court of Patna
against the judgment and order of that Court in
which the following question referred by the Income·
tax Appellate Tribunal was answered in the negative
and against the appellant :
"Whether having regard to the return dated
March 7, 1951, by Sardar Lakhmir Singh
in his individual capacity and to the provisions
of section 34 (3), the assessment made on him
on November 27, 1953, is validly made ?"
The relevant years of assessment are 1946-4 7
and 1947-48 and the two appeals relate to these years
•
respectively. The respondent is a son of S. Nechal
Singh. Up to the assessment year 1943-44 the father
and son were being assessed as a Hindu undivided
family.
For the assessment year 1944-45 a claim
was made under s. 25A of the Income-tax Act, hereinafter referred to as the 'Act' and it was contended
that the income of S. Nechal Singh and S. Lakhmir
•·
Singh should be separately assessed as their individual
incomes.
This claim was not accepted and the
income was assessed as that of a Hindu undivided
(I) [(964) Vol, I S.C.R. 29.
1962
Commissionlf '.f
lncom1-ta
...
Sordar Lakhmir
Sinth
Da, /.
Eapw, J.
&
•
1962
Commissfr,111r •}
/ruom1-tu
•.
Sartlor Wltmir
Singh
Kap11r, J.
152 SUPREME COURT REPORTS [1904] VOL
family with S. Nechal Singh ~ the Karta.
For the
assessment year
l\J45-·lli, S.
Nechal Singh and
S. Lakhmir Singh filed two separate returns and made
a claim under s. 25A which was rejected and the
father and son were assessed as Hindu undivided
family but there was a protective assessment upon
S. Lakhmir Singh as an individual.
An appeal was
taken to the Income-tax Appellate Tribunal which
held that the
income of S. Nechal Singh and
S. Lakhmir Singh was not the income of a Hindu
undivided family but their individual incomes. The
Appellate Tribnnal set aside the asscssmFnt of the
Hindu umlividLd family.
In
it~ order datr·d October 15, l!l:i:!, the App<'llatc Tribunal said:
"rl1c assessment, is therefore, set aside and the
Income-tax Ofliccr is dircckd to make a fresh
assessment :1ccordin,g to law as from the return
stage uprin the correct persons on the sources
of incolll<' belonging to them as found above".
For the assr<'tnent year I \J-Hi-4 'i, three returns
were filed ( l) by r•:o;pondcnt S. Lakhmir Singh on
March 15, l ~J;j I, in regard to his separate income,
(~) by S. Nechal Singh also in his individual capacity
and the third under protest by S. Nechal Singh as the
Karta of the Hindu undivided family. The latter
return was dated June 20, l!J50, and the total income
in the return was declared as nil.
On March 15,
1951, the Income-tax Officer assessed the total
income of S. Nechal Singh and S. Lakhmir Singh
as the income of the Hindu undivided family.
On
March 20, 1053, an appeal was taken against the
assessment for the year 1946·4 7 and the Appellate
Assistant Commissioner set aside the two orders of the
Income-tax Officer in view of the order of the Income·
tax Appellate Tribunal dated October 15, 1952,
above referred to.
On ·November 27, 195:3, the
Income-tax Officer made assessment upon respondent
S. Lakhmir Singh in his individual capacity.
An
•
...
..
1 S.C.R. SUPREME COURT REPORTS
153
appeal was taken against that assessment order to
the Appellate Assistant Commissioner and the con·
tention raised was that the order of assessment was
barred under the provisions of the unamended s.34(3)
of the Act. This contention was rejected and an
appeal taken to the Appellate Tribunal was dismissed
on September 6, 1955. The Tribunal held that
under the amended proviso to s. 34(3) the Income-tax
Officer was entitled to assess the income of the res·
pondent even though he was not the appellant before
the Appellate Assistant Commissioner and there is
no limitatioa for such an assessment. At the instance
of the respondent the question quoted above was
stated to the High Court.
The High Court held that the Amending Act
of 1953 does not apply to the facts of the present
case and the order of assessment of the Income· tax
Officer dated November 27, 1953, was barred under
the provisions of the unamended s. 34(3) of the Act;
that was because on April l, 1952, when the Amending Act of 1953 came into force the power of the
Income-tax Officer to assess the tax for 1946-4 7 had
already become barred and a right had accrued in
favour of the respondent before April 1, 1952.
In regard to the assessment of 194 7 -48 also for
the same reasons the assessment was held to be illegal.
Two appeals have been brought against those orders
in regard to the two
assessment orders ind the
appeals have been consolidated.
The argument on behalf <'f the appellant is
that the Income- tax Officer made the assessment on
November 27, 1953, in pursuance of the prder of
the
Appellate
Assistant
Commissioner_
dated
March 20, l!J53, and as at the time when the Income.
tax Officer completed the assessment the proviso to
s. 34(3) had come into operation the Income-tax
Officer could, in spite of the lapse of the period,
1962
Commissioner of
lncom1-tu
v.
Sardar Lakhmir
Sin1h
lfqru, J.
1962
Cf7mmi.uion11 of
lncom1-tax
••
s.,dor laklunir
s;.,A
""""· J.
154 SUPREME COURT REPORTS [1964) VOL.
reassess the respondent and the reassessment was
therefore valid.
The argument raised was really
the same as that raised in S. C. Prashat-, Income-wx
Officer v. Vasantsen Dwarkadas (1), judgment in which
case has been delivered today.
In the present case the pr.riod applicable was
four years.
In regard to the assessments for the
years 1946·4 7 and 194 7-48 the period of four years
ended before Ap,ril l, 1952.
For reasons given in
S.C. Prashar's () case the assessment will be barred
and in our opinion the High Court rightly held it so.
Another argument sought to be raised in
support of the aSllessment order of the Income·tax
Officer was based on s. 31 of the Amending Act 1953.
It was submitted that under the first part of that
section
the assessment
proceedings
have
been
validated.
The relevant portion oC s. 31 is as follows :-
"For the removal of doubts it is hereby declared that the provisions of sub-sections (l ), (2)
and (3) of section 34 of the principal Act (the
Indian Income-tax Act, 1922) shall apply and
shall be deemed always to have applied to any
assessment or reassessment for any year ending
before the 1st day of April 1948 in any case
where proceedings in respect of such assessment
or reassessment were commenced under the said
sub-sections after the 8th day of September
1948."
It was argued that the assessments are for the
year ending before April 1, 1948 and the assessments
were commenced under sub-ss. l, 2 and 3 of s. 34
after September 8, 1948 and therefore sub-ss. I, 2 and
3 must be deemed to have applied to the two assessments. In the first place no such question was raised
Cl) [1964) Vol. I S.C.R. 29.
•
•
•
1 S.C.R.
SUPREME COURT REPORTS
155
before the High Court.
It had oμly to answer the
question which was n ferred to it as it was acting in
itq advisory jurisdic.tion; and it could not answer any
other question.
But it was, submitted that the form
of the question itself is such 'that it takes in the applicability of s. 31 of the Amending Act of 1953.
As
we have said above this question was not referred to
either in the High Court or in the Grounds of Appeal
when the certificate was applied for nor in the
appellant's Statement of Case.
The form of the
question also docs not take in the applicability of
s. 31 of the Amending Act 1953. The question refers
firstly to the return filed by the respondent S. Lakhmir
Singh dated March 7, 1951, and then to the provi·
sions of s. 34 (3).
It has no reference to the validity
of the proceedings because of the commencement of
the proceedings after September 8, 1948.
The
commencement of the proceedings in regard to asseu·
ment year 1946-4 7 has not been shown to be after
September 8, 1948. No doubt the return was filed
on March 15, 1951, but there is nothing to show
what the date of the commencement of the proceedings was. If the appellant wanted to rely on s. 31
it was his duty to place all the effectual materials
before the Appellate Tribunal on the basis of which
a properly framed question could be referred and
then answered by the High Court.
On the material
as it stands no question of the application of s. 31 of
the Amending Act of 1953 arises nor is there a finding that the commencement of the proceedings was
on March 7, 1951, when according to the question
referred the return was filed.
In this view of the
matter the applicability of s. 31 of the Amending
Act of 1953 is not available to the appellant.
The extent of jurisdiction of the High Court
under s. fl6 of the Act has been decided by this Court
in The New Jehangir Vakil },fills Ltd. v. Commissioner of Income-tax. (')
(I) [1960j I S.C.R. 249.
1962
(' ommissioner t(
lncom1-tax
v.
Sartfar LokAmir
Sinih
Kaftur, J.
JHI
C-U1-o/
/""1f'ltf-laJt,
••
S.w ulltmir
SU.,A
s.u,, J.
156 SUPREME COURT REPORTS [1964] VOL.
· For reasons given above the appeals fail and
are dismissed with costs.
One hearing fee.
SARKAR, J.-Thcse appeals concern the two a.1scssment years, 1946-4 7 and 194 7-48. The question
is whether the assessment orders in respect of these
years which were both made on November 27, 1953,
are valid under the second proviso tc sub-s. (3) of
1. 34 of the Income-tax Act, 1922 as that proviso
stood after it was amended bys. 18 of the Incometax (Amendment) Act, 1953.
The assessee is Lakhmir Singh, the respondent
in these appeals. Up to the
year 1943-44, the
asscssee formed a Hindu undivided family with hil
father Ncchal Singh and his brothor Dhanbir Singh.
For the year 1944-45, a claim was made under s. 25A
of the Act that the joint family had been di~rupted
and the members of it should be assessed individually.
This claim was rejected. For the next year 1945-46,
the claim under s. 25A was repeated. This claim
was again rejected and the assessment was made on
the basis of a Hindu
undivided family, but a
protective assessment was made upon the assessee as an
mdividual for the income which he had shown in
the separate return filed by him.
This time an
appeal was filed against the rejection of the claim
under s.
25A. While the aforesaid appeal was
pending, the assessec and his father filed separate
returns for the year 1946-4 7 and the father also
filed a return as Karta of the Hindu undivided
family in which the income was declared as nil on
the ground that the Hindu undivided family did not
exist since 1944-45.
On March 15, 1951, the
Income-tax Officer amalgamated the incomes of the
aBSessee and his father; assessable in the year 1946-4 7,
and assessed them on the total income as the income
of a Hindu undivided family.
He however did not
make any protective assessment this time as he had
done for the year 1945-46.
The assessee's father as
•
...
1 S.C.R. SUPREME COURT REPORTS
157
the
Karta
of the Hindu
undivided
family
appealed from the order of March 15, 1951.
On October
15, 1952,
the
Income-tax
Appellate Tribunal allowed the assessee's appeal
against assessment as a Hindu undivided family for
the year 1945-46 and observed : "We, therefore,
conclude that notwithstanding the erroneous description given by the appellant to himself in his returns
before 1943-44 as Hindu Undivided Family, in
which status he was accordingly assessed in the past
on the
income from property and business etc.,
which belonged either to him or to him and his
partner and elder son Lakhmir Singh, the assessment
made for the year 1945-46, in the status of a Hindu
Undivided Family cannot be sustained. The assessment is, therefore, set aside and the Income-Tax
Officer is directed to make a
frrsh assessment
according to law as from the return stage upon the
correct persons and the sources of income belonging
to them as found above." In view of this order of
the Tribunal, the assessee's appeal from the assessment order in respect of 1946-4 7 was also allowed
by
the Appellate
Assistant Commissioner
on
March 20, 1953 and
the assessment order of
March 15, 1951 was set aside. The Appellate
Assistant Commissioner's order said, "Heard the
appellant. It having been decided that the assessment on the status of a H. U. F. is not sustainable
the assessment is SET ASIDE for a re-assessment of
sources involved on the correct persons and in the
correct status according to Law."
·
The position with regard to the year 194 7-48
was substantially the same. The assessee and his
father had been assessed on their total income as
members of a Hindu undivided family by an order
of the Income-tax Officer dated March 24, 1952.
The assessee's father as the Karta of the undivided
family appealed from this order. The Appellate
1162
Commissio,.,,. "
lncom1.fu
y,
&rdar lAlrlunir
SfntA
SarhJr, J.
/
c-.n-•f
Income-tax
y,
Sora Lalltmir
SU.,A
~ ..... 1.
158 S'fJPREME COURTREPORTS[l964] VOL.
Assistant Commissioner allowed
this appeal on
March 21, 1953, and set aside the assessment order
of March 24, 1952. He observed, "Heard Appellant.
For the same reason as in 1946-4 7 the assessment
is set aside for a re-assessment." It appears that for
the year 194 7-48 also the assessee and his father had
filed separate returns and the father filed also a
return as a Hindu undivided family declaring the
income in the last mentioned return as nil.
In this
year also there does not appear to have been any
protective assessment against the assessee individually.
Thereafter the Income-tax Officer proceeded to
make the impugne9 orders
of assessment
of
November 27, 1953, in respect of the years 1945-47
and 194 7 -48 on the returns which had been filed by
the assessee in his individual capacity.
The assessee
appealed against the order of November 27, 1953,
but the appeal was dismissed. Thereafter the assessee
obtained an order from the Tribunal referring the
following question in respect of the Tribunal's order
dismissing his appeal against the assessment for the
year 19tli-47.for the decision of the High Court at
Patna.
"Whether having regard to the return dated
7th March, 1951; by Sardar Lakhmir Singh
in his individual capacity and to the provisions
of s. 34(3) the assessment made on him _on the
27th November, 1953 is validly made".
A similar question was referred to the High Court
under another order of the Tribunal in respect of the
year 1947-48. The High Court amwered the ques·
tions against the revenue authorities who have, there·
fore, come up in appeal against the decision of the
High Court. That is why there are two appeals.
The assessee contends that the order, of assessment were not within time prescribed ins. 34(3) of
•
1 S.C.R.
SUPREME COURT REPORTS
159
the Act. Under the substantive part of sub-1:(3)
the orders of assessment should have been made
within four years of the years 1946-47and1947-48,
that is, by March 31 of 1951 and 1952 respectively
but t~ey were made on November 27, 1953. -It is,
theref~e, not in dispute that if they were not protect~d by the second proviso to sub-s. (3) of s. 34 as
amended by the amending Act, 1953 earlier men·
tioned, then the orders were not valid. The question
is, were they so protected ? The second proviso is in
these terms :
"Provided further that nothing contained in
this 1ection limiting the time within which any
action may be taken or any order, assessment
or re-assessment may be made, shall apply to a
re-assessment made under section 27 or to an
assessment or re-assessment made on
the
asseliSee or any person in consequence of or to
give effect to any finding or direction contained
in an order· under section 31, section 33, section 33A, section 33B, section 66 or section 66A."
It is contended that under this proviso, the orden
would be valid notwithstanding the provision in the
substantive part of sub-s. (3). But it strikes mt that
this proviso offends Art. 14 of the Constitution and
is, therefore, itself invalid. If that is so, of course,
no question of its protecting the asseS1ment orden
made in this case arises.
Now, the proviso purports to make valid an
assessment made beyond the period 'provided for it
in the substantive part of sub-s. (3) where the assessment is made in consequence of an order under
section 31 or certain other sections. Section 31 deals
*"
with an order .in appeal made by an Appellate
Assistant Commissioner. Now, in this case the orders
of the Appellate Assistant Commissioner were passed
1111
CommlssNiw •f
ln1~1aJt
••
Sadar CMlrmir
Sinth
S•kM. J.
1962
Comm iuionn of
lncom<-14'<
...
Sordo• L..I;,,,,,;,,
Sin th
160
SUPREME COURT REPORTS [1964] VOL.
ur,<Jer s. 31 on March 20 and 21, 1953. These
orders I have earlier set out. It was in consequence
of them that the disputed orders of assessment came
to be passed. We are not concerned with the other
sections mentioned in the proviso.
Now, the proviso in substance says that not·
withstanding that an order of assessment is bad as
having been made beyond the time prescribed in the
substantive part of sub-s. (3) for making it, it would
not be bad if "made on the assessee or any person in
consequence of.. ....... an order under section 31."
The proviso, therefore, puts in a class the assessee
and other persons against whom an order of assessment is made in consequence of an order under s. 31.
It discriminates against these persons inasmuch as an
order of assessment against them can be made at any
time but in the case of other evaders of tax, an order
must be made within the time prescribed in the
substantive part of sub-s. (3). The assessee in the
proviso is the assessee in the appeal from or in other
proceedings in whose assessment an order under s. 31
or the other sections mentioned in the proviso, is
made. It may be said-though I do not pronounce
finally on the question now that such an
asses.~ee
may be put in a separate class, for in his case, in his
presence it has been found judicially that he has
evaded tax. To that extent, he may be different
from other evaders of tax and the differentia that
distinguishes him may have a rational relation to
the object of the Act, namely, prevention of evasion
of tax and collection of tax that was due but had not
been paid.
But the proviso puts in a class not only the
assessee but other persons, namely, those against
whom an order of assessment comes to be made in
consequence of an order under s. 31 made in the
assessment case of another person, that is, the assessee
mentioned in the proviso.
These persons obviously
1 S.CJ.R.
SUPREME COURT REPORTS
161
are persons against whom the Appellate Assistant
Commissioner making the order under s. 31 in an
appeal arising out of the assessment case of another
person, entertains a view that they have evaded
payment of tax.
Such another person was not a
party to any proceeding under s. 31; he had no
opportunity to show to the Appellate Commissioner
that the view that he had entertained about him was
unwarranted.
The question then arises, whether such other
person can be put in a class as contrasted with other
evaders of tax?
It is not suggested and cannot be
suggested, that there are no other evaders of tax ex·
cept those who have been found to be such in
proceedings under s. 31 and tlie other sections mentioned in the second proviso. I find no intelligible
differ ~ntia between a person who has been found in
a s. 31 proceeding to have evaded tax and other
evaders of tax, which will have any rational relation
to the object of the second proviso.
It is true that
there may have been some kind of evidence in the
proceedings under s. 31 which may have satisfied the
Appellate Commissioner that a person not before him
had evaded tax.
But then it is possible for the
revenue authorities to be satisfied on equally good
evidence otherwise than in the course of proceedings
mentioned in the second proviso, that a person has
evaded tax.
I see no distinction between such a
person and the person mentioned in the proviso. But
such a person has the advantage of the bar of time
against an assessment order concerning him as
provided in the substantive part of sub·s. (3). This
advantage is denied to the persons mentioned in the
second proviso.
It seems to me that the second
proviso makes a hostile discrimination against persons
mentioned in it and the classification made by it is
without any intelligible differentia having a rational
connection with the object of the statute. I think,
therefore, that the second proviso to sub-s. (3) of
IHI
CflJfRlisrimwr .t
lneom1-t•
y,
Sordat L.A/rnoit
Sin,ta
Satkar, /,
1962
c...,.;,,;.,,,, ef
ltt"1m#-l4Jt
v.
S.,tfa, J..khiir
Sinth
S.,.lar, J.
162 SUPREME COURT REPORTS[l964] VOL.
s. 34, as amended by the amending Act of 1953, in
so far as it affects persons other than assessees is void
as violating Art. 14 of the Constitution
It cannot
validate the assessment orders in this case. As I have
said before, it is not necessary in this case to say that
the proviso is bad as making a hostile discrimi ·
nation against the assessee mentioned in it and I do
not do so.
The respondent Lakhmir Singh was not
the assessee in the s. 31 proceedings in consequence
of which the assessment order against him was made.
The assessee was his father as the Karta of a non·
existent family.
The proviso is invalid against the
respondent Lakhmir Singh.
I would, therefore, dismiss the appeals.
For the Judgment of
Hidayatullah
and
Raghubar Dayal, JJ., see S.C. Prr,shar, lncome·la;c
OjfiCP.r v. Vasantsen Dwarkadas, ante p. 29.
BY COURT : In accordance with the opinion of
the majority, the appeals are dismissed with costs,
one hearing fee.
Appeals dismissed.
•
'