NDLI: Hungerford Investment Trust Ltd. Vs. Income Tax Officers and Ors.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Income Tax Act 1922: Section 34(3)
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Indian Income-tax Act, 1922 (11 of 1922)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Income Tax Act, 1922-Section 34(3)-lncome escaping assessmentLimitation-Expression ''the assessee or any other person'' occurring in Section 34-Undistributed income of the Indian Company under an order passed under Section 23-A (prior to amendment in 1955) deemed to be dividend received by the non-resident Company-With a view to subject these income to tax, ITO issued notices to the Indian Company as agents for the Non-Resident Company and directly to the Non-resident Company-Returns filed pursuant to notices both by the Indian Company and by the non-resident company through the cover letter of Indian company being agents-ITO making assessment and issuing demand notice on the Indian company as agents of the non-resident company-On appeal by the Indian company, Appellate Assistant Commissioner directed fresh assessment to be made on the non-resident company directly after notice-Held, in the proceedings before the AAC, the non resident company was a person intimately connected with the assessee and was not a stranger-Hence was covered by the expression "assessee or any person", occurring in second proviso to Section 34(3)- Therefore the said notices though issued beyond the time period prescribed, was not time-barred-The expression "any person " occurring in Section 34(3) is not confined to the persons enumerated in Section 31(4)Words and Phrases-Words ''assessee or any other person ''-Meaning of-In the context of Section 34(3) of Income Tax Act, 1922.The appellant, a non-resident company owned 100% shares in an Indian Company. Consequent to an order passed by the Income Tax Officer under Section 23-A of Income Tax Act, 1922 (prior to its amendment in 1955) in the case of Indian Company, the undistributed portion of the assessable income of the Indian Company was deemed to have been paid to, and received by, the appellant-Company as dividends for assessment years 1949-50, 1950-51 and 1951-52. In order to subject this income of the appellant-Company to tax, the Income Tax Officer issued notice under Section 23(2) of the Act in respect of assessment year 1949-50 to the Indian Company as the agents of the appellant-Company. With respect to other assessment years, the Income Tax Officer issued notices under Section 34 to the appellant-Company directly as assessee. Pursuant to these notices, returns were filed with respect to assessment year 1949-50 by the Indian Company as agents of the appellant-Company and with respect to assessment years 1950-51 and 1951-52 by the appellant-Company. The Income Tax Officer passed assessment orders for the said assessment years and issued demand notices in respect of each of the said assessment years to the Indian Company. On appeal, the Appellate Assistant Commissioner directed the Income Tax Officer to make a fresh order of assessment on the appellant-Company. Accordingly, notices were issued by the Income Tax Officer to the appellant-Company for the said assessment years. The appellant-Company challenged these notices before the High Court by way of a writ petition which was dismissed, holding that the assessment proceedings against the appellant-Company were validly commenced. The appeal before the Division Bench of the High Court was also dismissed. Hence this appeal.It was contended by the appellant-Company that it was a stranger to the proceedings before the Appellate Assistant Commissioner and hence the direction given by him to make assessment on the appellant-Company was without jurisdiction under Section 31 of the Act and that the notices issued were beyond the period prescribed by Section 34 of the Act and were not saved by the Second proviso to Section 34(3) lifting the embargo of limitation in such cases.
Judge	Hon'ble Ms. Justice Sujata V Manohar
Neutral Citation	1998 INSC 96
Petitioner	Hungerford Investment Trust Ltd.
Respondent	Income Tax Officers And Ors.
SCR	[1998] 1 S.C.R. 905
Judgement Date	1998-02-17
Case Number	474

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