The Income-tax Officer is entitled to ignore the return filed by the assessee in pursuance of an invalid notice under S. 34 of the Income-tax Act, 1922.

Judgement

RAMASWAMI, J. : This appeal is brought, by special leave, form the judgment of the High Court of Andhra Pradesh, dated April 14, 1964 in Referred Case No. 46 of 1962.

2. The respondent, hereinafter called the "assessee" was a Hindu Undivided Family consisting of K. Ankineedu and his two sons. For the assessment year 1949-50 corresponding to the previous financial year ending March 31, 1949, the assessee submitted a return in response to a notice sent to him. The Income-tax Officer computed his total income as Rs, 2,429 only which was below the taxable limit to pay income-tax. Subsequent to the assessment, the Income-tax Officer had information that the assessee had done some business as procurement agent for the Government and in this business he had earned large profits which had escaped assessment. Accordingly he issued a notice under S. 34 of the Income-tax Act, 1922 (hereinafter called the Act ) on March 22, 1957. In response to the notice the assessee made a return on April 30, 1957. Prior to the issue of the above notice the Income-tax Officer had taken the view in the assessment made for the year 1954-55 that the correct status of the assessee was not Hindu Undivided Family but his status was "individual". In accordance with this view the notice under S. 34 of the Act was issued to the assessee on March 22, 1957 in the status of an individual . As the proceedings under this notice were continuing, but before the assessment could be made, the Appellate Assistant Commissioner in the appeal for the assessment year 1954-55 accepted the contention of the assessee and held that the status of the assessee was that of Hindu Undivided. Family and not individual . Thereafter, the Income-tax Officer issued a fresh notice under S. 34 on February 12, 1958 which was served on the assessee on the same day. This notice was issued to assess the income of the assessee as a Hindu Undivided Family from the procurement business which had escaped from the original assessment made on February 10, 1950. A return in pursuance of the second notice was duly filed on February 28, 1958 and the assessment was ultimately made under S. 34 of Act in the status of Hindu Undivided Family on August 16, 1958. In this assessment, a sum of Rupees 60,000 was included as the income escaping from the original assessment. The assessee preferred an appeal to the Appellate Assistant Commissioner and contended that the proceedings under S. 34 of the Act were not valid because no notice could be issued after the expiry of 8 years from the close of the previous year as distinct from the assessment year . The Appellate Assistant Commissioner accepted the contention raised by the assessee and held that the proceeding was invalid. The Income-tax Officer took the matter in appeal before the Income-tax Appellate Tribunal and claimed that the period of limitation for starting proceedings under S. 34 was to be counted from the end of the assessment year and not from the end of the previous year . The Tribunal accepted his contention and overruled the view of the Appellate Assistant Commissioner on this point. The assessee also contended that the assessment proceeding started by the second notice dated February 12, 1958 was bad in law as he had already made a return on April 30, 1957 which was in pursuance of the first notice under S. 34 issued on March 22, 1957. It appears from the statement of the case that the Income-tax Officer was required to disclose the particular notice on which he made the assessment. The Income-tax Officer said that the assessment was based on the second notice. The Appellate Tribunal took the view that the return filed by the assessee on April 30, 1957 in response to the first notice was not a valid return and the Income-tax Officer was not bound to act upon it. Accordingly the Appellate Tribunal held that the assessment made under the second notice was legally valid. Since the Appellate Assistant Commissioner did not deal