Case: The Income-Tax Officer, Bangalore Vs. K. N. Guruswamy

2. The relevant facts are these. The respondent K. N. Guruswamy was carrying on business as an Excise Contractor in the Civil and Military Station of Bangalore, hereinafter called the retroceded area, in Mysore. He was assessed to income-tax for each of the four years mentioned above under the law then in force in the retroceded area by the Income-tax Officer having jurisdiction therein. For 1945-46 the original assessment was made on February 12, 1946, for 1946-47 on January 21, 1949, for 1947-48 on January 22, 1949, and for 1948-49 also sometime in the year 1949. The tax so assessed was duly paid by the assessee. On January 5, 1954 more than four years after , the Income-tax Officer, Special Circle, Bangalore, served a notice on the assessee under S. 34 of the Indian Income-Tax Act, 1922, for the purpose of assessing what was described as escaped of under-assessed income chargeable to income-tax for the said years. The assessee appeared through his auditors and contested the jurisdiction of the Income-tax Officer to issue the notice or make a re-assessment under S. 34 of the India Income-tax Act,On February 19, 1954, the Income-tax Officer overruled the assessees objection, and made a re-assessment order for the yearFebruary 25 1954, the assessee filed four writ petitions in the Mysore High Court in which he challenged the jurisdiction of the Income-tax Officer to take proceedings under S. 34 or to make an order of re-assessment in such proceedings; he asked for appropriate orders or writs quashing the pending proceedings for three years and the order of reassessment forDuring the pendency of the cases in the High Court, the Income-tax Officer was permitted to make an assessment order for 1946-47, subject to the condition that if the assessee succeeded in establishing that the Income-tax Officer had no jurisdiction, that order would also be quashed. The High Court heard all the four petitions together, and by its judgment and order dated March 22, 1955, allowed the writ petitions and quashed the proceedings in assessment as also the two orders of re-assessment, holding that the Income-tax Officer had no jurisdiction to imitate the proceedings or to make the orders of re-assessment,. The High Court, however, granted a certificate that the cases were fit for appeal to this Court, and these four appeals have been brought on that certificate. Before us, the appeals have been heard together and will be governed by this judgment.

Reasoning:
14. We, therefore hold that the saving provisions save S. 34 of the Indian Income-tax Act, 1922, in its entirety, as it was in force in the retroceded area prior to July 1, 1948 and the contention of the respondent that it stood repealed from that date is not correct. As to the period of limitation, it would be the period laid down in S. 34 of the India Income-tax Act as it was in force in the retroceded are a prior to July 1, 1948.