Case: Estate Of Late, Rangalal Jajodia Vs. Commissioner Of Income-Tax Madras

deleted from the assessment year 1949-50 and included in the assessment year 1948-49. Pursuant to that direction the Income-tax Officer initiated re-assessment proceedings in respect of the year 1948-49 and served a notice on 5 December, 1957. The question was whether the second proviso applied and saved the notice in respect of the year 1948-49. It was held that the jurisdiction of the Appellate Assistant Commissioner under section 31 of the 1922 Act was strictly confined to the assessment order of the particular year under appeal and the assessment or re-assessment made in consequence of or to give effect to any finding or direction contained in an order under S. 31, section 33A, section 33B, section 66 or section 66A must necessarily relate to the assessment of the year under appeal. The expression finding and direction in the second proviso to section 34 (3) was held to be a finding necessary for giving relief in respect of the assessment in question and that a direction which the appellate or the revisional authority was empowered to give under the sections mentioned in that proviso. The finding in Murlidhars case, (1964) 52 ITR 335 = (AIR 1965 SC 342 ) (supra) that the income be longed to the year 1948-49 was not a finding necessary for the disposal of an appeal in respect of the year of assessment in question. 16. Counsel for Aruna Devi contended that the expression any person occurring in the second proviso to section 34 (3) of the Act could not be referable to a stranger and that Aruna Devi was a stranger. In support of that proposition reliance was placed on the decision of this Court in S. C. Prashar v Vasantsen Dwarkadas, (1963) 49 ITR 1 = (AIR 1963 SC 1356 ). The facts of that case are entirely different and are of no assistance for the reason that in the present appeals Aruna Devi was impleaded as a party to the assessment proceedings as a legal representative of Rangalal Jajodia. The words any person were construed in Murlidhars case (1964) 52 ITR 335 = (AIR 1965 SC 342 ) (supra) to be confined to a person intimately connected with the assessment year under appeal It was said in that case that modification or setting aside of assessment made on a firm, joint Hindu family, association of persons, for a particular year may affect the assessment for the said year on a partner or partners of the firm, member or members of the Hindu undivided family or the individual, as the case may be. In such cases though the latter are not eo nomine parties to the appeal, their assessments depend upon the assessments on the former. The said instances are only illustrative it is not necessary to pursue the matter further.We would, therefore, hold that the expression any person in the setting in which it appears must be confined to a person intimately connected in the aforesaid sense with the assessments of the year under appeal in the present appeals the finding was that the assessment was made on Aruna Devi but no notice was given to her. The necessary direction was therefore given that notice should be given to her. Aruna Devi was heard and the assessment was made. She was not merely intimately connected with the assessment. She was in fact an assessee. Therefore the second proviso to Section 34(3) applied. 17. We are therefore of opinion that the second proviso to Section 34(3) of the Act applies to the present appeals because first the proceedings against Rangalal Jajodia commenced on filing of returns before the income-tax authorities; secondly, the assessment proceedings continued after the death of Rangalal Jajodia against the legal representatives Shankarlal Jajodia and Aruna Devi; thirdly, the assessment proceedings on being set aside and not cancelled pursuant to the appeal filed by Shankarlal Jajodia on the ground that notice was not given to Aruna Devi were continued, and, fourthly, the setting aside of the assessment was only on the ground that notice was not given to Aruna Devi and therefore the finding and direction was vital to the assessment proceedings. The High Court was in error in holding that the assessment proceedings were barred by limitation. 18. The other question is as to the applicability of section 24B of the Act Counsel on behalf of Aruna Devi repeated the contentions advanced in the High Court that section 24B does not cover the entire field of procedure to be followed in assessing the income of the deceased person. The High Court held that section 24B of the Act applied but Aruna Devi should have been given opportunities to object to the assessment by repeating the entire procedure of section 24B of the Act as during the lifetime of the deceased. Counsel for the Revenue did not impeach the conclusion of the High Court that in relation to Aruna Devi the provisions of section 24B of the Act were to be followed de novo. 19. We are of opinion that the High Court correctly held that section 24B of the Act applies to the present case. The third sub-section of section 24B clears with a case of a person dying after having furnished a return Further, in the present case the Income-tax Officer had reason to believe the return to be incorrect or incomplete, and he called upon Rangalal to furnish evidence The Act further confers Power on the Revenue officer to make the assessment and determine the tax payable by the deceased on the basis of the assessment and for that purpose to issue appropriate notice which would have had to be served upon the deceased had he survived and in that behalf to require from the executor, administrator or other legal representative of the deceased person any accounts, documents or other evidence which he might under the provisions of sections 22 and 23 require from the deceased person. These provisions adequately answer the contention of the appellant Aruna Devi 20.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]are therefore of opinion that the second proviso to Section 34(3) of the Act applies to the present appeals because first the proceedings against Rangalal Jajodia commenced on filing of returns before the income-tax authorities; secondly, the assessment proceedings continued after the death of Rangalal Jajodia against the legal representatives Shankarlal Jajodia and Aruna Devi; thirdly, the assessment proceedings on being set aside and not cancelled pursuant to the appeal filed by Shankarlal Jajodia on the ground that notice was not given to Aruna Devi were continued, and, fourthly, the setting aside of the assessment was only on the ground that notice was not given to Aruna Devi and therefore the finding and direction was vital to the assessment proceedings. The High Court was in error in holding that the assessment proceedings were barred by limitationThe other question is as to the applicability of section 24B of the Act Counsel on behalf of Aruna Devi repeated the contentions advanced in the High Court that section 24B does not cover the entire field of procedure to be followed in assessing the income of the deceased person. The High Court held that section 24B of the Act applied but Aruna Devi should have been given opportunities to object to the assessment by repeating the entire procedure of section 24B of the Act as during the lifetime of the deceased. Counsel for the Revenue did not impeach the conclusion of the High Court that in relation to Aruna Devi the provisions of section 24B of the Act were to be followed de novo.We are of opinion that the High Court correctly held that section 24B of the Act applies to the present case. The third sub-section of section 24B clears with a case of a person dying after having furnished a return Further, in the present case the Income-tax Officer had reason to believe the return to be incorrect or incomplete, and he called upon Rangalal to furnish evidence The Act further confers Power on the Revenue officer to make the assessment and determine the tax payable by the deceased on the basis of the assessment and for that purpose to issue appropriate notice which would have had to be served upon the deceased had he survived and in that behalf to require from the executor, administrator or other legal representative of the deceased person any accounts, documents or other evidence which he might under the provisions of sections 22 and 23 require from the deceased person. These provisions adequately answer the contention of the appellant Aruna Devi