Statement of income filed to be held as return under the Act.

This reference under section 66 (1) of the Indian Income Tax Act has clearly to be answered against the assessee and in favour of the department.

The assessee was a tanning expert. For the previous year ended 31st March, 1947 (the assessment year 1947-48) he filed a return on 21st February, 1951 estimating his profits from business at Rs. 550. This return was filed admittedly without a notice under section 22 (2) having been issued to the assessee. The income as set out in the return was scrutinsed after enquiry and the Income Tax Officer rejected the return and estimated the assessee’s income at Rs. 30,000. We are not now concerned with the correctness of the quantum of the assessment but only with its legality. From the order of assessment the assessee filed an appeal to the Appellate Assistant Commissioner and there urged that the assessment was illegal and invalid. The ground for this contention was that as the return that he had filed declared an income below the taxable limit it was not a “ return” within the meaning of the Income Tax Act, and that proceedings could have been taken against him only by invoking the provisions of section 22 (2) read with section 34 and that as this was not done the assessment was illegal. This contention was rejected by the Appellate Assistant Commissioner who held that when an assessee had filed voluntarily a return there was no necessity for the Income-Tax Officer to call in aid section 34 and that the assessment was therefore valid. This view was upheld and the appeal of the assessee was dismissed by the Appellate Tribunal on further appeal by the assessee. They however referred to this Court the following question of law for its decision:-

“Whether the aforesaid assessment (i.e., of Rs. 30,000) for the assessment year 1947-48 is valid?”

Before we deal with the legal contentions urged on behalf of the assessee, it is necessary to mention one fact about which there is no dispute, that there was no notice issued to the assessee under section 22 (2) and that the return was filed in pursuance of the public notice under section 22 (1). In that sense the action of the assessee in filing the return was voluntary and not in compliance with any requisition by the Income Tax Officer. The only question therefore for our consideration is whether the statement, which he filed before the Income Tax Officer setting out the details of the income which he said he had received during the account year ended 31st March, 1947, does or does not amount to a “return” within the meaning of the Income Tax Act. It was urged by learned counsel for the assessee that in order that the statement of his income filed by the assessee might be a “return” it ought to disclose the receipt of taxable income. We are wholly unable to accept this interpretation of section 22. To a question by us during arguments as to whether a return filed by a person on whom a notice had been issued under section 22 (2) was a return where such a return did not disclose taxable income, learned counsel answered in the affirmative but sought to distinguish returns under section 22 (1) from those filed under section 22 (2). We are unable to follow this argument which seeks to attribute different meanings to the same word “return” used in the several sub-sections of section 22. ‘This differentiation was however sought to be sustained by the difference in the language employed in section 22(1) and (2) giving rise to the obligation to file a return. It was pointed out that whereas under sub-section (1) the public notification called for a return only when the income “exceeded the maximum amount which is not chargeable to income-tax” the decision whether this is so or not being at that stage left to the person filing the return, whereas under sub-section (2) it is the opinion of the Income Tax Officer regarding the person being in receipt of income above the taxable minimum that determined the calling for the return. It was, therefore, urged t