{"id":173548,"date":"1974-11-05T00:00:00","date_gmt":"1974-11-04T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/k-l-varadarajan-vs-the-commissioner-of-income-tax-on-5-november-1974"},"modified":"2015-04-16T04:15:25","modified_gmt":"2015-04-15T22:45:25","slug":"k-l-varadarajan-vs-the-commissioner-of-income-tax-on-5-november-1974","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/k-l-varadarajan-vs-the-commissioner-of-income-tax-on-5-november-1974","title":{"rendered":"K. L. Varadarajan vs The Commissioner Of Income-Tax, … on 5 November, 1974"},"content":{"rendered":"
Supreme Court of India<\/div>\n
K. L. Varadarajan vs The Commissioner Of Income-Tax, … on 5 November, 1974<\/div>\n
Equivalent citations: 1974 AIR 2357, \t\t 1975 SCR (2) 597<\/div>\n
Author: H R Khanna<\/div>\n
Bench: Khanna, Hans Raj<\/div>\n
           PETITIONER:\nK.   L. VARADARAJAN\n\n\tVs.\n\nRESPONDENT:\nTHE COMMISSIONER OF INCOME-TAX, MADRAS\n\nDATE OF JUDGMENT05\/11\/1974\n\nBENCH:\nKHANNA, HANS RAJ\nBENCH:\nKHANNA, HANS RAJ\nGUPTA, A.C.\n\nCITATION:\n 1974 AIR 2357\t\t  1975 SCR  (2) 597\n 1975 SCC  (3) 595\n\n\nACT:\nIndian Income tax Act, 1922-Sec. 17 (1)-Proviso-Whether\t the\nwords\t\"all  assessments  thereafter\"\t includes   original\nassessments and not reassessments made under Sec. 34.\n\n\n\nHEADNOTE:\nThe  assessee,\tduring\tthe  relevant  period  was  studying\nabroad.\t  He  derived  income during the period\t by  way  of\ndividend on shares and interest from deposits.\nThe  original  assessments  for\t the  relevant\tyears\twere\ncompleted  on  January\t31,  1956,  December  27,  1956\t and\nFebruary 28, 1958.  The residential status adopted in  those\nyears\twas  \"resident\tand  ordinarily\t resident   person\".\nIncome-tax  and\t super-tax  were  calculated  at  the  rates\napplicable on the total income.\nIn  the\t course\t of  the  assessment  proceedings  for\t the\nassessment  year 1958-59, the assessee filed  a\t declaration\nunder Sec. 17(1) of the Act on March 24, 1959 claiming to be\nassessed  at  rates appropriate to his total  world  income.\nThis  assessment  was  completed on March 23,  1960  in\t the\nstatus of a non-resident.  The application under Sec.  17(1)\nwas rejected.\nAs the I.T.O. found that the assessee was a non-resident  in\nthe 3 previous years ending on December 31, 1954 to December\n31,  1956 and his total income had been assessed to  income-\ntax at the normal rates and further as he had failed to make\nthe  requisite\tdeclaration  under  Sec.  17(1)\t within\t the\nrequisite time, the I.T.O. was of the view that the  earlier\nassessments  had been made at a lower rate and action  under\nSec. 34 of the Act was accordingly taken and the assessments\nfor the above-mentioned 3 years were reopened and  completed\nunder  Sec. 23(3) read with Sec. 34 of the Act.\t The  status\nof the assessee was treated as a non-resident and his  total\nincome\twas brought to tax at the maximum rates.   According\nto  the\t assessee,  the omission on his\t part  to  make\t the\ndeclaration   earlier\ttinder\tSec.  17(1)   was   due\t  to\ninadvertence and ignorance and requested the I.T.O. that  he\nshould\tbe taxed at rates appropriate to his  world  income.\nThe I.T.O. rejected all the contentions of the assessee\t and\nheld against him.\nOn  appeal,  the  Appellate  Asstt.   Commissioner  and\t the\nTribunal held that the I.T.O.'s reasoning for not  accepting\nthe  declaration under Sec. 17(1) was not correct  and\theld\nagainst\t the revenue.  A question was referred to  the\tHigh\nCourt  as to whether the declaration filed by  the  assessee\nunder  Sec. 17(1) in respect of the assessment year  1958-59\nwas  operative\tin  relation to the  reassessments  also  in\nrespect\t of the assessment years 1955-56, 1956-57 and  1957-\n58.\nThe  High  Court held against the assessee.  and  hence\t the\nappeal before this Court.\nAllowing the appeal,\nHELD : (1) According to the second proviso to Section  17(1)\nof  the\t Act,  once  the assessee is  allowed  to  make\t the\ndeclaration  after the expiry of the period specified  \"such\ndeclaration shall have effect in relation to the  assessment\nfor  the  year\tin which the declaration is  made  (if\tsuch\nassessment  had not been completed before such\tdeclaration)\nand  all  assessments thereafter.\" The words of\t the  second\nproviso\t to  Sec. 17(1) make it clear that  the\t declaration\nwould be operative not only for the assessment for the\tyear\nin which the declaration is made if such assessment had\t not\nbeen  completed\t before\t such  declaration,  but  also\t all\nassessments   to   be  made  thereafter.   The\t words\t all\nassessments thereafter\" signify not only assessments for the\nsubsequent\n598\nyears but also would cover assessments for the earlier years\nin  case the assessments for those earlier years  are  being\nmade  subsequent  to the filing of the\tdeclaration.  [600G-\n601B]\n(2)  According to Sec. 2(8) of the Income tax Act, 1961, the\nwords  \"assessment\"  includes reassessment although  such  a\ndefinition was not there in the Act of 1922.  A. N. Lakshman\nShenoy\tv.  I.T.O., Bangalore & Ors. [1958] 34 ITR  275\t and\nCommissioner of Income tax v. Khem Chand Ramdas [1938] 6 ITR\n414 referred to. [601C]\n(3)  Further,  in  the context of Section 17(1) of  the\t Act\nalso the word \"assessment\" must include \"reassessment  under\nSec. 34 of the Act; and to hold otherwise would result in an\nanomalous  situation.  It should be noted that whenever\t the\nlegislature  intended that the word \"assessment\" should\t not\ninclude reassessment, it used express words for the purpose.\nFor  example, according to Sec. 67 of the Indian Income\t tax\nAct, 1922 no suit shall be brought in any Civil Court to set\naside  or modify any assessment made under the Act.   It  is\nobvious\t that the protection afforded by that section  would\nbe available not only for the original assessments but\talso\nfor reassessments made under Sec. 34 of the Act, even though\nthe  word  used\t in  the  section  is  assessment  and\t not\nreassessment etc. [602D-E, G; 603-C]\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL  APPELLATE JURISDICTION : Civil Appeals Nos.  1275  to
\n1277 of 1970.\n<\/p>\n
(From  the Judgment & Order dated the 2nd May, 1969  of\t the
\nMadras High Court in T.C. No. 41 of 1966.)
\nS. T. Desai, for the appellant,
\nHardyal Hardy and S. P. Nayar, for the respondent.
\nThe, Judgment of the Court was delivered by
\nKHANNA,\t J.-These three appeals by certificate are  directed
\nagainst\t the judgment of the Madras High Court\twhereby\t the
\nHigh  Court answered the following question referred  to  it
\nunder  section\t66(1)  of the Indian  Income-tax  Act,\t1922
\n(hereinafter   referred\t to  as\t the  Act)  in\trespect\t  of
\nassessment  years 1955-56, 1956-57 and 1957-58\tagainst\t the
\nassessee appellant and in favour of the revenue
\n\t      “Whether the declaration filed by the assessee
\n\t      under   section  17(1)  in  respect   of\t the
\n\t      assessment  year\t1958-59\t was  operative\t  in
\n\t      relation\tto the reassessments in\t respect  of
\n\t\t\t    the previous years ending on 31-12-195
\n4, 31-12-\n<\/p>\n
\t      1955  and\t 31-12-1956  corresponding  to\t the
\n\t      assessment years 1955-56, 1956-57 and  1957-58
\n\t      ?”\n<\/p><\/blockquote>\n
The assessee during the relevant period was studying abroad.
\nHe  derived income during that period by way of dividend  on
\nshares and interest from deposits.  The original assessments
\nfor  the relevant years were completed on January 31,  1956,
\nDecember  27, 1956 and February 28, 1958.   The\t residential
\nstatus\tadopted in those years was “resident and  ordinarily
\nresident  person”.  Income-tax and supertax were  calculated
\nat the rates applicable on the total income.  In the  course
\nof the assessment proceedings for the assessment year  1958-
\n59,  corresponding to the year ending on December 31,  1957,
\nthe assessee filed a declaration under section 17(1) of\t the
\nAct  on\t March\t24, 1959 claiming to be\t assessed  at  rates
\nappropriate to the
\n599<\/span>
\ntotal  world  income.  This assessment\twas  completed\t  on
\nMarch  23,  1960  in the status of  a  “non-resident”.\t The
\napplication  under  section  17(1)  was\t rejected.   As\t the
\nincome-tax  officer  found  that the  assessee\twas  a\tnon-
\nresident in the three previous, years ending on December 31,
\nJ954  to  December 31, 1956 and his total  income  had\tbeen
\nassessed  to income-tax at the, normal rates and further  as
\nhe  had\t failed\t to make  the  requisite  declaration  under
\nsection\t 17(1)\twithin the requisite  time,  the  income-tax
\nofficer\t formed\t the view that the earlier  assessments\t had
\nbeen  made at a lower rate.  Action under section 34 of\t the
\nAct  was  accordingly taken by the  income-tax\tofficer\t and
\nassessments  for  the  above  mentioned\t three\tyears\twere
\nreopened and completed under section 23(3) read with section
\n34  of the Act.\t The status of the assessee was\t treated  as
\nthat  of a non-resident.  The assessee’s  declaration  under
\nsection 17(1), which he had made in the course of assessment
\nproceedings  for the assessment year 1958-59,  was  rejected
\nand ignored and- his total income was, brought to tax at the
\nmaximum\t  rates.   The\tassessee  in  the  course   of\t the
\nproceedings  for  reassessment\trequested  that\t the  income
\nduring the three years in question should be taxed at  rates
\nappropriate to his world income.  According to the assessee,
\nthe  omission  on his part to make the\tdeclaration  earlier
\nunder  section 17(1) was due to inadvertence and  ignorance.
\nIt  was\t also contended that as the assessments\t were  being
\nreopened and were thus deemed to be pending for the  earlier
\nyears,\t the   assessee’s  declaration\tmad-.\tduring\t the
\nassessment proceedings for the year 1958-59 should be taken-
\ninto account for the purpose of reassessments.\tThe  income-
\ntax officer rejected all the submissions.  According to\t the
\nincome-tax  officer,  option  had  been\t exercised  by\t the
\nassessee  after\t the prescribed date and it could  not\thave
\neffect\ton the assessments for the three years in  question.
\nThe income-tax officer also referred to the first proviso to
\nsection\t 17(1)\tof the: Act and said  that  the\t declaration
\ncould be entertained only on the first occasion on which the
\nassessee  became  assessable.  The second  proviso,  it\t was
\nobserved, would also not avail the assessee.
\nThe  assessee went up in appeal to the\tAppellate  Assistant
\nCommissioner.\tIt  was contended inter alia on\t his  behalf
\nthat  the income-tax officer was wrong in holding  that\t the
\ndeclaration under section 17(1) could be entertained only on
\nthe  first  occasion  when  the\t person\t became\t assessable.
\nAccording to the assessee, the declaration could be accepted
\neven  later  provided  sufficient cause was  shown  for\t not
\nfiling\tthe  declaration  earlier.   The  assessee   further
\nsubmitted  that the assessment as non-resident was made\t for
\nthe first time in respect of assessment year 1958-59 and  as
\nsection\t  34   proceedings  were   fresh   proceedings\t the
\ndeclaration  made  in  1958-59 ought to\t be  accepted.\t The
\nAppellate  Assistant Commissioner held that  the  income-tax
\nofficer’s reasoning for not accepting the declaration  under
\nsection\t 17(1)\twas  not correct.  In  this  connection\t the
\nAppellate  Assistant Commissioner referred to his  order  in
\nthe  appeal by the assessee for the assessment year  1958-59
\nwherein\t he had held that the assessee had sufficient  cause
\nfor not filing the declaration under section 17(1) when\t the
\nassessee became first assessable.  It was also held that the
\nfailure\t to  file  the declaration bad\tnot  resulted  in  a
\nreduction of tax liability.\n<\/p>\n
600<\/span><\/p>\n
The declaration filed on March 24, 1959 by the assessee,  in
\nthe  opinion of the Appellate Assistant commissioner,  could
\nbe  availed  of for the assessments for the three  years  in
\nquestion  as  the  assessment  orders  consequent  upon\t the
\nreopening of assessments were being made subsequent to\tthat
\ndate.\n<\/p>\n
The department went up in appeal to the Income-tax Appellate
\nTribunal  against  the\torder  of  the\tAppellate  Assistant
\nCommissioner.\tThe Tribunal accepted the reasoning  of\t the
\nAppellate  Assistant Commissioner and dismissed the  appeal.
\nOn  being  moved  by the.  Commissioner\t of  Income-tax\t the
\nTribunal referred the question reproduced above to the\tHigh
\nCourt.\tThe High Court in answering the question against the
\nassessee referred to the expression “all assessments  there-
\nafter”\tin the two provisos to section 17(1) of the Act\t and
\nobserved that those words showed that the declaration  could
\nbe availed of in respect of assessments for subsequent years
\nand  not  in respect of assessments made by the\t revenue  in
\nexercise of its power under section 34 of the Act.  The word
\n“assessments” in the above expression, in the opinion of the
\nHigh Court, referred to only original assessments and not to
\nassessments  made  by the revenue in exercise of  its  power
\nunder section 34 of the Act.\n<\/p>\n
In  appeal  before us Mr. Desai on behalf of  the  assessee-
\nappellant  has assailed the judgment of the High  Court\t and
\nhas  contended\tthat correct view of law was taken  by,\t the
\nAppellate  Assistant  Commissioner  and\t the  Tribunal.\t  As
\nagainst\t that  Mr.  Hardy  on  behalf  of  the\trevenue\t has
\nsupported the view taken by the High Court.
\nAfter hearing the learned counsel for the parties, we are of
\nthe, opinion that the submission made by Mr. Desai is  well-
\nfounded.   The\tassessee, as mentioned\tearlier,  filed\t the
\ndeclaration in the course of assessment proceedings relating
\nto  the year 1958-59 on March 24, 1959.\t Although the  above
\ndeclaration  was  rejected by the  income-tax  officer,\t the
\nAppellate  Assistant  Commissioner on appeal in\t respect  of
\nassessment  for the assessment year 1958-59 held that  there
\nwas  sufficient\t cause for the assessee in  not\t making\t the
\ndeclaration  on\t the  first  occasion  on  which  he  became
\nassessable and that his failure to make such declaration had
\nnot resulted in reducing his liability to tax for any  year.
\nThe   assessee\t was,  accordingly  allowed  to\t  make\t the
\ndeclaration  after  the\t expiry of  the\t prescribed  period.
\nAccording to the second proviso to section 17(1) of the Act,
\nonce  the assessee is allowed to make the declaration  after
\nthe expiry of the period specified ,,such declaration  shall
\nhave effect in relation’ to the assessment for the. year  in
\nwhich  the declaration is made (if such assessment  had\t not
\nbeen completed before such declaration) and all\t assessments
\nthereafter”.   The  words of the second proviso\t to  section
\n17(1)  reproduced above make it clear that  the\t declaration
\nwould be operative not only for the assessment for the\tyear
\nin which the declaration is made if such assessment had\t not
\nbeen  completed before such declaration, but ‘also  for\t all
\nassessments   to  be  made  thereafter.\t  The\twords\t“all
\nassessments  thereafter”, in our opinion, signify  not\tonly
\nassessments  for. the subsequent years but would also  cover
\nassessments for
\n\t\t\t    601<\/span>
\nthe earlier years in case the assessments for those  earlier
\nyears  are.being  made\tsubsequent  to\tthe  filing  of\t the
\ndeclaration.  The words”all assessments, thereafter” have  a
\nwide  amplitude and we see no cogent reason for\t not  giving
\nthem their natural meaning or for restricting their  scope.’
\nThose words would include within their ambit all assessments
\nmade  subsequent  to the filing of  the\t declaration-and  it
\nwould be wrong to so construe them as if the legislature had
\nused the words “all assessments for the subsequent years”.
\nWe  are\t unable to subscribe to the view taken by  the\tHigh
\nCourt  that  the  assessments  referred\t to  in\t the   words
\nreproduced above mean, only the original assessments and not
\nthe  reassessments  made  under\t section  34  of  the\tAct.
\nAccording  to section 2(8) of the Income-tax Act,  1961\t the
\nwords  “assessment” includes reassessment.  Although such  a
\ndefinition  was\t not  there in the Act\tof  1922,  the\tword
\n“assessment”  in the second proviso to section 17(1) of\t the
\nAct  must  necessarily, in our opinion,\t cover\treassessment
\nunder  section 34 of the Act.In the case of A.\tN.  Lakshman
\nShenoy v. Income-tax Officer, Bangalore & Ors.(1) this Court
\nheld  that  the word “assessment” in-the Finance  Act,\t1950
\nwould  include reassessment.  It was observed that the\tcol-
\nlocation  of the words “levy, assessment and  collection  of
\nincome-tax”‘  showed  that  the\t word  “assessment”  had   a
\ncomprehensive meaning so as to cover reassessment.  The case
\nof  Commissioner of Income-tax.v. Khemchand  Ramdas(2)\tupon
\nwhich  reliance had been placed by the,revenue\tin  Shenoy’s
\ncase,  as  has\talso  been done in  the\t present  case,\t was
\ndistinguished.\t This Court referred to the observations  of
\nthe Judicial’ Committee in the case of Khemchand Ramdas\t and
\nheld  that those, observations lend no support to  the\tview
\nthat  the  word “assessment” must always bear  a  particular
\nmeaning in the Income-tax Act.\tReliance in this context was
\nplaced\tupon  the following observations of.’  the  Judicial
\nCommittee
\n\t      “These two questions are so closely related to
\n\t      one  another  that they  can  conveniently  be
\n\t      considered together.  In order to answer\tthem
\n\t      it  is  essential to bear in mind\t the  method
\n\t      prescribed by the Act for making an assessment
\n\t      of  tax,\tusing  the word\t assessment  in\t its
\n\t      comprehensive  sense  as including  the  whole
\n\t      procedure\t for  imposing\tliability  upon\t the
\n\t      taxpayer.\t   The\t method\t consists   of\t the
\n\t      following\t steps.\t  In the  first\t place,\t the
\n\t      taxable  income  of  the taxpayer\t has  to  be
\n\t      computed.\t In the next place, the sum  payable
\n\t      by  him on the basis of such computation\thas,
\n\t      to be determined.\t Finally, a notice of demand
\n\t      in the prescribed form, specifying the sum  so
\n\t      payable, has to be served upon the taxpayer.”
\n\t      This  Court further observed in Shenoy’s\tcase
\n\t      :\n<\/p>\n
\t      “If  the\tword ‘assessment’ is  taken  in\t its
\n\t      comprehensive sense, as we think it should  be
\n\t      taken  in the context of section 1 3 ( 1 )  of
\n\t      the  Finance  Act,  1950,\t it  would   include
\n\t      ‘reassessment’  made under the  provisions  of
\n\t      the Act.\tSuch ‘reassessment’
\n\t      (1) [1958] 34 ITR 275.\n<\/p>\n
\t      (2) [1938] 6 ITR 414,
\n\t      602<\/span>
\n\t      will without doubt come within the  expression
\n\t      ‘levy,  assessment and collection\t of  income-
\n\t      tax’.   In  his  speech  in  Commissioner\t for
\n\t      General.\tPurposes of Income Tax for the\tCity
\n\t      of  London v. Gibbs and Others(1)\t Lord  Simon
\n\t      has pointed out that the word ‘assessment’  is
\n\t      used  in the English Income tax code  in\tmore
\n\t      than  one\t sense- and  sometimes,\t within\t the
\n\t      bounds  of  the  same  section,  two  separate
\n\t\t\t    meanings  of  the  word  may  be  foun
\nd.   One,
\n\t      meaning  is  the fixing of the  sum  taken  to
\n\t      represent the actual profit and the other\t the
\n\t      actual sum in tax which the taxpayer is liable
\n\t      to pay.\n<\/p>\n
\t      It  has  been  contended before  us  that\t the
\n\t      Finance  Act and the Income-tax Act should  be
\n\t      read  together  as forming one ,code,  and  so
\n\t      read the words ‘assessment’ and ‘reassessment’
\n\t      acquire  definite and  distinct  connotations.
\n\t      We are unable to agree, for the reasons  which
\n\t      we  have already given, that even if  we\tread
\n\t      the Finance Act along with the Income-tax\t Act
\n\t      the   word   ‘assessment’\t can  be   given   a
\n\t      restricted  meaning.  To repeat these  reasons
\n\t      the  Income-tax  Code  itself  uses  the\tword
\n\t      assessment  in  different senses, and  in\t the
\n\t      context  and collocation of the words  of\t the
\n\t      Finance Act, the word ‘assessment’ is  capable
\n\t      of bearing a comprehensive meaning only.”
\nIn  the\t context  of  section 17(1) of\tthe,  Act  the\tword
\n“assessment”  must  necessarily include\t reassessment  under
\nsection 34 of the Act.\tTo hold otherwise would result in an
\nanomalous situation.  This can best be illustrated by taking
\na  concrete  case.  An assessee files a\t ,declaration  under
\nsection\t 17(1) of the Act in respect of the assessment\tyear
\n1955-56.   Supposing his assessment for the year 1956-57  is
\nreopened and an order for reassessment is made.\t In case the
\n,declaration made under section 17(1) can be availed of only
\nfor the original assessments and not for reassessments under
\nsection 34 of the Act, the result would necessarily be\tthat
\nthe declaration would have to be excluded from consideration
\nin making the reassessment ‘for the year 1956-57 even though
\nthe  declaration  had been filed much earlier.\t This  could
\nhardly\thave  been the intention of  the  legislature.\t The
\nentire\tscheme of section 17(1) as well as the\tcontext,  in
\nour  opinion,  clearly shows that the word  “assessment”  in
\nsection\t 17(1) has been used in a comprehensive sense so  as
\nto include reassessment.\n<\/p>\n
It  may also be observed that there are indications  in\t the
\nAct  that  whenever the legislature intended that  the\tword
\n“assessment”  should  not  include  reassessment,  it\tused
\nexpress\t words\tfor  the purpose.  Section 33B\tof  the\t Act
\nempowers the Commissioner of Income-tax if he considers\t any
\norder  passed by the income-tax officer to be erroneous\t and
\nprejudicial to the interest of revenue to make inter alia an
\norder,\tafter  complying  with\tthe  requirements  of\tthat
\nsection.  canceling  the assessment and\t directing  a  fresh
\nassessment.  Sub-section (2) of that
\n(1)  [1942] A.C. 402,406.\n<\/p>\n
603<\/span><\/p>\n
section makes it clear that no order can be made under\tthat
\nsection\t to revise an order,of reassessment made  under\t the
\nprovisions  of section 34.  If the order of  assessment\t did
\nnot  include  an  order\t of  reassessment  made\t under\t the
\nprovisions  of section 34, there would have been hardly\t any
\nnecessity  of  making  a provision  in\tsub-section  (2)  of
\nsection 33B that no order can be made under sub-section\t (1)
\nof’  that  section to revise an order of  reassessment\tmade
\nunder the pro-. visions of section 34.\n<\/p>\n
According to section 67 of the Act, no suit shall be brought
\nin  any\t Civil Court to set aside or modify  any  assessment
\nmade  under  the  Act.\tIt is obvious  that  the  protection
\nafforded by that section would be available not only for the
\noriginal  assessments but also for reassessments made  under
\nsection\t 34  of\t the Act even though the word  used  in\t the
\nsection\t is assessment and not reassessment.  Likewise,\t the
\nfact  that the legislature has used the\t word  “assessments”
\nand  not ,,.reassessments” in the second proviso to  section
\n17(1) of the Act would not exclude the applicability of that
\nproviso\t to cases of reassessments subsequent to the  filing
\nof the declaration.\n<\/p>\n
The  matter  may  also\tbe looked  at  from  another  angle.
\nProceedings under section 34 of the Act can be initiated  if
\nthe  income-tax, officer has reason to believe that  income,
\nprofits\t or  gains  chargeable to  income-tax  have  escaped
\nassessment  for\t any year or have  been.  under-assessed  or
\nassessed at too law a rate or have been made the subject  of
\nexcessive  ‘relief  under  the\tAct  or\t excessive  loss  or
\ndepreciation allowance has been computed.  The first of\t the
\nabove five contingencies deals with income, profits or gains
\nchargeable  to income-tax escaping assessment.\tIn  such  an
\nevent\tthe  income-tax\t officer  would\t  after\t  initiating
\nproceedings under section 34 make assessment of such income,
\nprofit or gain.\t In the other four contingencies, the carder
\nmade  by  the income-tax officer would\tbe  for\t reassessing
\nsuch.  income,\tprofit or gain or recomputing  the  loss  or
\ndepreciation allowance.\t If the view propounded on behalf of
\nthe  revenue  were to be accepted that assessment  does\t not
\ninclude\t reassessment made under section 34 of the Act,\t the
\nresult\twould  be that the benefit of the  declaration\tmade
\nunder  section 17 (1 ) of the Act, in case other  conditions
\nare  fulfilled,\t would\tbe  available  only  in\t the   first
\ncontingency  mentioned above relating to escaped  assessment
\nand not in the remaining contingencies because they  pertain
\nto  reassessment.  This would certainly be anomalous for  it
\nwould  result  in placing persons whose income\thas  escaped
\nassessment  in a better position compared to persons,  whose
\nincome has been under-assessed or assessed at too low a rate
\nor has been the subject of excessive relief under the Act or
\nin whose cases
\n604<\/span>
\nexcessive loss or depreciation allowance has been  computed.
\nThis   could   hardly  have  been  the\tintention   of\t the
\nlegislature.\n<\/p>\n
We, therefore, accept these appeals, set aside the  judgment
\nof  the High Court and discharge the answer given by  it  to
\nthe question referred to it.  The question reproduced  above
\nis  answered in, the affirmative in favour of the  assessee-
\nappellant  and against the revenue.  The assessee  appellant
\nshall be entitled to his costs both in this Court as well as
\nin the High Court.  One hearing fee.\n<\/p>\n
S. C.  Appeals allowed.\n<\/p>\n
605<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India K. L. Varadarajan vs The Commissioner Of Income-Tax, … on 5 November, 1974 Equivalent citations: 1974 AIR 2357, 1975 SCR (2) 597 Author: H R Khanna Bench: Khanna, Hans Raj PETITIONER: K. L. VARADARAJAN Vs. RESPONDENT: THE COMMISSIONER OF INCOME-TAX, MADRAS DATE OF JUDGMENT05\/11\/1974 BENCH: KHANNA, HANS RAJ BENCH: KHANNA, HANS […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-173548","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nK. L. 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