AIR 1969 SUPREME COURT 408

Supreme Court Of India

(From Mysore: AIR 1968 Mysore 258)

Hon'ble Judge(s): J. C. Shah, V. Ramaswami, A. N. Grover , JJJ

(A) Income-Tax Act (43 of 1961) , S.156, S.220, S.221, S.222, S.226(3), S.297(2)(j)— Tax liability for assessment year 1961-62 determined under Income-tax Act 1922 - Notice of demand under S. 156 of 1961 Act - Subsequent notice under S. 226 (3) including this tax liability is valid - For issue of notice under S. 226 (3) assessee need not be in default Interpretation of S. 226 (3) leading to absurd result of nullifying S. 297 (2) (j) should be avoided - Procedure of new Act applicable mutatis mutandis to all cases contemplated by S. 297 (2) (j). AIR 1968 Mys 258, Reversed. The assessment proceedings for the assessment year 1961-62 were taken and concluded under the old Act and tax of Rs. 2947.56 was imposed and demanded. In appeal the tax liability was, however, reduced to Rs. 485.55. Thereupon the Income-tax Officer issued a notice to the assessee dated December 11, 1963 purporting to be under S. 156 of the new Act. The limit of 35 days for payment of the amount expired on January 22, 1964. The impugned notice under S. 226 (3) was issued on April 23, 1965 and this notice included the tax liability as one of the items. Held that the Income-tax Officer had authority to issue the notice dated December l1 1968 under S. 156 of the new Act with respect to the tax liability of Rs. 485.55 incurred by the assessee under the old Act.(Para....