# " •. THE SUPREME COURT REPORTS THE FIRST ADDITIONAL INCOME-TAX OFFICER, MYSORE v. H. N. S. IYENGA!'t

- **Citation:** [1962] Supp. 1 S.C.R. 1
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Case number:** Civil Appeal No. 60 of 1961
- **Bench:** S. K. Das, J. L. Kapur, M. Hidayatullah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-supreme-court-reports-the-first-additional-income-tax-officer-mysore-v-h-n-2414
- **Pages:** 7

## Headnote

Income
Ta.~-lnco171e escaping
assessment-Notice to
mrike
re!u.rn-T.imitation-Eight years, if from
end of
acconnti'.ng or
a.Jse.~8ment
y~ar-' Any year', Meaning ofln'lian ln~ome-tric Act, 1922 (II of 1.922), 88. 22(1), 34 (J)(a)-
India.n Fin.once Act, 1948 (XX of 1948).
In 1956 a notice was issued to the respondent under
s. 34(l)(a) of the Indian Income-tax Act, calling upon him to
make a return on the ground that his income had escaped
assessment for the year ending 31st March, 1949. The respondent l'.'.on tended that notice under s. 34 of the Act could not be
i.sued to him because of the lapse of eight years from the
end of the accounting year. This contention was not accepted
by the Income Tax Officer. The asse,,ee then filed an application under Art. 226 of the Constitution. The High Court
held on a construction of s. 34 of the Act, that the words
'any year' as used ins. 34(l)(a) mean, not the assessment
year but the accounting year.
The Income-tax officer appealed. The contention was that the words 'any year' in cl. (a)
refer to tht'. assessment year.
Held, that the correct way of interpreting s. 34(l)(a) of
the Indian Income-tax Act, 1922, read with the provisions of
the Indian Finance Act, 1948, is that the words •for any
year
1 mean for any assessment year and not for any accounting
year because the as::;cssment is tor the assessment year although
of the income which accrued in the previous year (year of
account). The nreviou• year for different heads of income
falling under different sections of the Indian Income-tax Act
may vary but <loes not give different starting
points of
limitation for different sources of income.
Panna Lal Nand Lal Bhandari v. Commis•ioner of Income
Tax, Bombay City, [1961] 2 S. C.R. 35, referred to.
C. W. Spenoer v. Income-tax Officer, Madras, [1957] 31
I. T. R. 107, approved.
CrvIL APPELLATE JuR1snroTION: Civil Appeal
No. 60 of 1961.
1961
o,,,,,,., 6.
J9fiJ
11u First At!ditional
Jn&om1-ta.~ 0 J/1ct',
Mysore
v.
H. N. S. l;yt•f"'
2 SUPREME COURT REPORTS
[1962] SUPP.
Apμeal from the judirroent and order dated
September 15, 1958, of the l\Iysore High Court at
Bangalore in Writ Petition No. 144 of 1D57.
K. N. Rajagopal Sastri and P. D. Menon, for
for the appellant.
Rumeshux1r Nath, S. N. Andley and P. L. Vohra,
•
for the respondent.
1961. October 5. The Judgment of the Court
wM delivered by
KAPt'R, J.-This is an appeal on a certificate
of the High Court under Art. 133 ( l )( c) of the
Constitution against the judgment and ordC'r of
the High Court of Jllysore passed in a petition
under Art. 226 of the Constitution of Indh. The •
appellant before us is the lst Additional Incometax Officer and the respondent is the assessee, and
the matter relates to tho assessment vear 1948-49
tho accounting year being 1947·48.
•
The facts of this appeal are
as follows :
On November 27, 1956, a notice was issued to tho
-
respondent under s. 34 (l)(a) of the Indian Incometax Act calling upon him to make a return on the
ground that his income had escaped assessment
for the assessment year ending 31st March, 1949.
This notice was served on the respondent on
No\·ember 29, 1956. The responde?1t objected that
no notice under s. 34 of the Income-tax Act could
be issued to him because of the lapse of eight yea.rs
frvm the end of the accounth1g year. This objection
was overruled and the respondent filed on June 12,
19:37, in the High Court of Mysore, a petition under
"
Art. ~~6 of the Constitution for a writ of certiorari
quashing the order made by the Income.tax
Officer.
The High Court held on a construction of
s. 34 of the Indian Income.tax Act, that the word~
"any year" ns used in s. 34(1 )(a) mean not the
assessment year but the accounting year. It is
that question which is required to be decided in
this appeal. Section 34(1 )(a) reads :-
•
..
•
(I) S.C.R.
SUPREME OOURT REPORTS
s. 34(1) "If3
(a) the Income-tax Officer has reason
to believe that by reason of the omission or
failure on the part of an assessee to make a
ret

## Text

" •.
THE SUPREME COURT REPORTS
THE FIRST ADDITIONAL INCOME-TAX
OFFICER, MYSORE
v.
H. N. S. IYENGA!'t
(S. K. DAS, J. L. KAPUR and M. HIDAYATULLAH, JJ.)
Income
Ta.~-lnco171e escaping
assessment-Notice to
mrike
re!u.rn-T.imitation-Eight years, if from
end of
acconnti'.ng or
a.Jse.~8ment
y~ar-' Any year', Meaning ofln'lian ln~ome-tric Act, 1922 (II of 1.922), 88. 22(1), 34 (J)(a)-
India.n Fin.once Act, 1948 (XX of 1948).
In 1956 a notice was issued to the respondent under
s. 34(l)(a) of the Indian Income-tax Act, calling upon him to
make a return on the ground that his income had escaped
assessment for the year ending 31st March, 1949. The respondent l'.'.on tended that notice under s. 34 of the Act could not be
i.sued to him because of the lapse of eight years from the
end of the accounting year. This contention was not accepted
by the Income Tax Officer. The asse,,ee then filed an application under Art. 226 of the Constitution. The High Court
held on a construction of s. 34 of the Act, that the words
'any year' as used ins. 34(l)(a) mean, not the assessment
year but the accounting year.
The Income-tax officer appealed. The contention was that the words 'any year' in cl. (a)
refer to tht'. assessment year.
Held, that the correct way of interpreting s. 34(l)(a) of
the Indian Income-tax Act, 1922, read with the provisions of
the Indian Finance Act, 1948, is that the words •for any
year
1 mean for any assessment year and not for any accounting
year because the as::;cssment is tor the assessment year although
of the income which accrued in the previous year (year of
account). The nreviou• year for different heads of income
falling under different sections of the Indian Income-tax Act
may vary but <loes not give different starting
points of
limitation for different sources of income.
Panna Lal Nand Lal Bhandari v. Commis•ioner of Income
Tax, Bombay City, [1961] 2 S. C.R. 35, referred to.
C. W. Spenoer v. Income-tax Officer, Madras, [1957] 31
I. T. R. 107, approved.
CrvIL APPELLATE JuR1snroTION: Civil Appeal
No. 60 of 1961.
1961
o,,,,,,., 6.
J9fiJ
11u First At!ditional
Jn&om1-ta.~ 0 J/1ct',
Mysore
v.
H. N. S. l;yt•f"'
2 SUPREME COURT REPORTS
[1962] SUPP.
Apμeal from the judirroent and order dated
September 15, 1958, of the l\Iysore High Court at
Bangalore in Writ Petition No. 144 of 1D57.
K. N. Rajagopal Sastri and P. D. Menon, for
for the appellant.
Rumeshux1r Nath, S. N. Andley and P. L. Vohra,
•
for the respondent.
1961. October 5. The Judgment of the Court
wM delivered by
KAPt'R, J.-This is an appeal on a certificate
of the High Court under Art. 133 ( l )( c) of the
Constitution against the judgment and ordC'r of
the High Court of Jllysore passed in a petition
under Art. 226 of the Constitution of Indh. The •
appellant before us is the lst Additional Incometax Officer and the respondent is the assessee, and
the matter relates to tho assessment vear 1948-49
tho accounting year being 1947·48.
•
The facts of this appeal are
as follows :
On November 27, 1956, a notice was issued to tho
-
respondent under s. 34 (l)(a) of the Indian Incometax Act calling upon him to make a return on the
ground that his income had escaped assessment
for the assessment year ending 31st March, 1949.
This notice was served on the respondent on
No\·ember 29, 1956. The responde?1t objected that
no notice under s. 34 of the Income-tax Act could
be issued to him because of the lapse of eight yea.rs
frvm the end of the accounth1g year. This objection
was overruled and the respondent filed on June 12,
19:37, in the High Court of Mysore, a petition under
"
Art. ~~6 of the Constitution for a writ of certiorari
quashing the order made by the Income.tax
Officer.
The High Court held on a construction of
s. 34 of the Indian Income.tax Act, that the word~
"any year" ns used in s. 34(1 )(a) mean not the
assessment year but the accounting year. It is
that question which is required to be decided in
this appeal. Section 34(1 )(a) reads :-
•
..
•
(I) S.C.R.
SUPREME OOURT REPORTS
s. 34(1) "If3
(a) the Income-tax Officer has reason
to believe that by reason of the omission or
failure on the part of an assessee to make a
return of his income under section 22 for any
year or to disclose fully and truly all material
facts necessary for his assessment for that
year, income .• profits or gains chargeable to
income-tax have escaped assf'sRment
for
that year, or have been under-assessed, or
assessed at too low a rate, or have been made
the subject of exceHsive relief under the Act,
or excessive
lo~R or depreciation allowance
has bPen computed, or
(b) ................................................. ..
he may in cases falling under clause (a) at
any time within eight years serve on the
assessee, or if the assessee is a company, on the
principal officer thereof, a noti0e 0ontiiining
all or any of the rc·quirements which may
be included in a notice under sub-section (2)
of section 22 and may proceed to assess or
re-assess such income, profits or
g~ins or
recompute the loss or depreciation allowance;
and the provisions of this Act shall, so far
as may be, apply accordingly as if the notice
were a notice issued under that sub-section;".
The argument is that the words "any year"
in cl.( a) refer to the assessment year because under
the Income-tax Act the income of the previous year
is assessed for the assessment year.
For this
purpose reference was made to some of the other
provisions of the Income-tax Act. In s. 3 of that
Act, which is the charging section, it is provided:-
S. 3 "Where any (Central
Act) enacts
that income-tax
shall be charged for any
year at any rate or rates tax at that rate or
those rates shall be charged for that year in
accordance with, and subject to the provisions
IP61
The Firat Additional
lnc(Jme~tax Offic1r,
Mysore
v.
H. N. S, {yengar
Kapu,-J.
1k FirJt Additiorral
/1.co'f'!'>-:•:Q)( 0 ffic1r,
}.-~';J(J'ft
..
H. 1''. S. 1;-tntar
Kaprn J.
SUPREME COURT REPORTS (1962) SlTPP.
of, this Act in respect of (the total income)
of the previous year of every (individual,
Hindu undivided family, (company and other
local authority, and of every firm and other
associat.ion of persons or the partners of the
firm or the members of the association individually)"'.
This
shows
that income-tax is
charged for
"any year" at the rate or rates set out in a Central
Act and the reference is to the Indian Finance
Act-in this c.ase to that of 1948, (Act XX of lfl·!S).
Section 9 of that Act rcads_as follows :-
S. 9( l) "Subject to the prodsion8 of
sub-sections (3),(4), (5) and (6), for th~ year
beginning on the Ist day of April, I 948,-
(a) income-tax shall be charged at th('
rates speeified in Part I of tho Second
Schedule to this Act, and
(b) ................................................ .
...
•
•
(2) In making any assessment for the
•
year ending on the 31st day of March, 1949,
...........................
(3) In making any assessment for
tho
year ending on the 31st chy of l\forch,
I 949,-
(a) .................................................. .
(b) ........................................ ··········
It is qnitc clear from this R"etfon that nccorclin~ to the Finance A<;t. 1!)48. th .. inconw tnx 1r;"
to'bc charged at the rat~s specified in the Schedule
attached thereto for the year beginning on the !st
day of April, 19·18, and the asi;cs~ment waH for the
vcar ending on March 31, 1949 under Rilb·ss. (2)
and (3).
ThuR according to the Indian Financ,e Ac:t
assessment waa to be mado for the year ending
!\larch 31, I 949 at rates sp<'rified for the year
beginning April I, 1948.
·
Coming now to s. 22( l) it is there pro\·ided that s. 22(1) "_The Income-tux Officer
I
I
"
•
L
(I) S.C.R.
SUPREME COURT REPORTS
5
shall, on or before the 1st day of May in
each year give notice by publication in the
preH$ s nd by publication in the prescribed
mam1u, requiring every person whose total
income during the previous year exceeded
the maximum amount which is not chargeable to income.tax to furnish, within such
period not being less than sixty days as may
be specified in the notice, a return, in the
prescribed manner, setting forth (along with
such other particulars as may be required
by the notiee) his total income and total
world income during that year : ............. "
It shows, therefore, that a return has to be made
for the year of assessment in regard to the total
ineomc during the previous year which is the
accounting year; in other words income-tax is
assessed for the assessment year on total income of
the previous year.
\Vhen under s. 34 (1) (a) a return is required
the return has to be made under e. 22 for any year,
and when the reference is to omission to make a
return of the income under s. 22 for any year, the
year is tho assessment year, although the income
which is declared relates to the previous year.
The reference in o!. (a) of sub·s. (1) to s. 22 of the
Act therefore makes the meaning of the phrase
"for any year" referable to an assessment year.
The clause makes it clear that an assessee can be
called upon to make a full and true disclosure of a.II
materials necessary for his assessment of that year
which necessarily must mean an assessment year
and it is, in our opinion, erroneous to say that a
return under s. 22 of the assessees income for any
year would have a different meaning in the first
part from that dealing with the full and true disclosure of all material facts necessary for the assessment for that year.
With due respect to the learned Judges of
the High Court who gave the decision, the view
1961
'l'lu First Additional
l~ome~tax Officer
Mysore
v.
H. N. S. Iyengar
KapurJ •
Tiu r·irst Adci1l-:0110.l
/ncom•-tax Ojffrer,
M_·nort
v.
JI.~~-. S. l;·t11ca:
Kapur J.
6 [_SUPREME COURT REPORTS [1962] SUPP.
taken by them a;i tu the meaning of "any yPar·•
was erroneou8, and the <:urrcct way of inteqm·ting
s. 34 (l) (a) is that the words "for i\ny year"' mean
for a11y assei;sment y<'ar and 11<1t fur any account.·
ing y<'ar because, as we have snid above, the
assessmeut i~ for the asseo>mellt year althougll of
the income which accrued in thf-: previous year. It
may he added that the prcviou;; ·'ear fur different
he:tds of income falling umler diffl'n·nt ~ections of
the Indian Income-tax Act may vary and it could
.wt have been the intllntion of the L<'gislature to
give different starting points of limitntion for
differ<'nt sources of inco111c.
!leading the Yarious
sections of the Indian Income Tax Act, \I hich are
set out above and the provisions of Indian Finuncc
Act I 948, it is clear that the \\"Or<ls "that year'' in
s. 34 (I) (a) have rcfer~nce tu the iisse&Bmcnt year
:ind not the accuunting year.
Our attention was drawn to n. judgment of this
court in Pannalal Sand/al Bhawlm i v. Com m·issioner of lncome-l<t.r, Bombay City('). In that ual!e it
was hold that once a notice is givl·n in tllf' pn•scribed manner under s. :?2 (I) of the fnc,011a'-taX Act
every person whose income exceeds the maximum
amount, exempt from tax, is obliged to submit a
return, and, if he docs not do so it will be deemed
that there was an omi""ion on hi" part within
s. :!4 (I) (a).
The question now debated was not
raised there but it was observed that the notices
had been issued within eight years from tho end of
the years of assessment and if cl. (I) (al of s. 34 was
applied the assessment was not barred hy the law
of Limitation. It was also observed at page 79
that "the appellant not having Rubmittcd a return
in pursuance of the notice issued under s. 22 (I) the
Income-tax Officer was competent under s. 34 (I) (a)
to issue notice at any time within eight years
of tho end of the year of assessment for assessing
him to tio.x''.
(I) [1961] 2 S. C.R. 35.
,. ..
•
•
.'}
-
I
I
I
• •
•
(I) S.C.R.
SUPREME COURT REPORTS
7
,
The appellant also relied upon C.W. Spencer v.
Income-tax Office,r, Madras('). It was there observed:
"The period of limitation,· whether it is
, eight years for cases falling under section 34
(1) (a) .or four years falling under section
34 (1) (b), has to be computed from the end
of that year. Though the expression "year"
has not been further defined by section 34
itself, it should be clear from the context to
the section itself that the year referred to is
the assessment year and has no reference to
the accounting year, which is elsewhere specified by the Act itself as the previous year."
In our opinion therefore, the view taken by the
Madras High Court in 0. W. Spencer's (') ca'se is tl:ie
eorrect view and the view taken by the learned
judges of the Mysore High Court is erroneous. We
therefore allow this appeal, set aside the judgment
and order of the Hight Court by which the proceedings taken against the respondent were quashed.
The respondent will pay the costs of the appeal in
this court and in the High Court.
(I) [1957] 31 I. r. R. 107,
1961
The First Additi01un
lncome~tax Officer,
Mysora
v.
H. N. S. {y1ngar
Kapur .I .