Judgment

RAMASWAMI, J.-This appeal is brought by a certificate on behalf of the Commissioner of Income-tax from the judgment of the Calcutta High Court, dated 12th September, 1963 in Income-tax Reference No. 81 of 1960.

2. The assessee Kamal Singh Rampuria was born in December, 1935. His mother died within a week after his birth. Before her death she had executed a will by which she disposed of Rs. 5,00,000 received by her as a gift previously from her husband Hulash Chand Rampuria. She bequeathed by this will Rs. 1,00,000 to her daughter, Rs. 1,00,000 made up of various sums to charities and the balance of Rs. 3,00,000 was bequeathed to her son Kamal Singh Rampuria. This sum of Rs. 3,00,000 was invested by the assessee in the firm of M/s. Hazarimal Hiralal and earned interest. Besides, the assessee s mother bequeathed to the assessee 1/6th share held by her in M/s. Bikaner Trading Company. The assessee a minor was admitted to the benefits of the partnership in respect of the said share. In the several returns made during his minority by his father Hulash Chand Rampuria, the income from the firm was shown in the son s account till the year 1944-45. The interest payments to the assessee though shown in his account were assessed against the father under Section 16(3) (i) of the Income-tax Act, 1922 (hereinafter called the Act). Hulash Chand Rampuria was dissatisfied with the order of the Income-tax Officer in dealing with the interest income for the year 1940-41 and the matter was ultimately referred to the High Court in a reference under Section 66(1) of the Act. In respect of the assessment year 1945-46 the return of the income of the minor assessee submitted by the father included the share income from M/s. Bikaner Trading Company but the interest income was shown in the account of the father. The share income alone was therefore assessed on February 28, 1950. About two years later, the High Court decided the reference for the assessment year 1940-41 and held that the interest income could not be assessed in the hands of the father as Section 16(3) of the Act had no application. The Income-tax Officer thereafter issued a notice under Section 34 of the Act to the assessee in March, 1954 by which time the assessee had attained majority. The assessment was duly completed on 25th March, 1955. No objection appears to have been taken to the application of Section 34 before the Income-tax Officer but the objection was taken before the Appellate Assistant Commissioner who repelled it and held that the assessment under Section 34 of the Act made by the Income-tax Officer was valid. The assessee appealed to the Tribunal and contended that the Income-tax Officerwas wrong in starting proceedings under Section 34. It was contended that the Income-tax Officer knew that the income belonged to the assessee but had chosen nevertheless to assess it in the hands of the father and having done so it was not open to him after the decision of the High Court to initiate proceedings under Section 34. The Tribunal rejected the argument of the assessee and held that the assessee had not discharged his duty of returning his income at the proper time, and so, the provisions of Section 34(1) (a) of the Act applied. At the instance of the assessee the Appellate Tribunal referred the following question of law to the High Court under Section 65(1) of the Act :

"Whether on the facts and in the circumstances of the case the assessment made under Section 34(1) (a) of the Income-tax Act was justified in law ?"

By its judgment, dated 12th September, 1963, the High Court answered the question in the negative and in favour of the assessee.

3. On behalf of the appellant it was pointed out that the basis of the reasoning of the High Court was that there was no evidence to support the finding of the Tribunal that the Income-tax Officer had reason to believe that there was any omission on the part of the assessee to disclose fully and truly all material facts necessary for