A. T. M. MASUD, J.-These two appeals by special leave arise from the judgment of a Bench of the High Court Division passed on July 22, 1980, in Application No. 6 of 1976 under section '66 (1) of the Income---tax Act. The Commissioner of Taxes, Chittagong Zone, is the appellant in Civil Appeal No. 114 of 1981, wherein leave was granted to consider whether 4 the High Court Division correctly interpreted provisions of subsection (2)(a) of section 34 of the Income-tax Act. The assessee is the appellant in Civil Appeal No. 115 of 1981 wherein leave was granted to consider whether the B expression 'person' mentioned in subsection (5) of section 5 of the Income-tax Act was correctly interpreted by the High Court Division.
2. The assessee Messrs M. Ismail & Sons, which is a wholesale dealer in Yarn and Textile and Clearing and Forwarding Agent, was originally assessed income-tax on 22nd July, 1950, on a total income of Tk. 44,702. On February 16, 1962, notice under section 34 of the Income-tax Act was issued upon it for re-assessm ent, the ground being that it was under assessed for the year concerned. The assessee appeared and submitted return under protest and showed the income at Tk 44,702 the income which was originally shown claiming that no part of its income was under- assessed or escaped assessm ent. Thereupon notices under sections 23(2) and 22(4) of the Income---tax Act were issued upon it, for the production of Books of Accounts and necessary evidence. The assessee, against whom, the allegation was that it bad imported cotton yarn of a total invoice value of Tk. 21,49,843 which was not shown in its return, appeared and submitted its inability to produce the Books of Accounts and other documents as those could not be traced out due to lapse of time.
3. The Income-tax Officer then assessed tax summarily under section 23(4) of the Income-tax Act.
Being aggrieved, the assessee preferred appeal before the Appellate Assistant Commissioner, who set aside the assessm ent on the ground that the Income-tax Officer had not given any reason for summary assessm ent and directed the Income-tax Officer to make fresh assessment in accordance with law. On the points of jurisdiction and limita--tion, the Appellate Assistant Commissioner, however, held that initiation of proceedings under section 34 of the Act was valid and not barred by limitation. The assessee preferred a second appeal before the Income-tax Appellate Tribu--nal, which allowed the appeal and annulled the order of re-assessment on the findings that (i) prior to 1963, the definition of 'person' did not include `firm': (ii) that the Income-tax Officer bad no jurisdiction to issue a fresh notice under section 34 of the Income-tax Act and re- open the assessm ent:,
4. Against the aforesaid order of the Appellate Tribunal, the Revenue filed Application No.6 of 1976 under section 66(1) of the Income-tax Act before the High Court Division submitting, inter alia, the following questions of law which arose out of the order of the Tribunal; (1) whether the proceedings started by the Income-tax Officer under section 34 of the Income---tax Act was barred by limitation; (2) whether the word 'person' includes 'firm' of the assessee.
5. A Division Bench of the High Court Division answered the questions in the affirmative and held that (1) the issuance of notice upon the assessee for re-assessment under the amended provisions of section 34 was not in accordance with law as it existed, at the relevant time, and (2) that the expression 'person' as occurs in section 5(5) of the Income-tax Act does not exclude a 'firm' from its ambit.
6. In Civil Appeal No. 114 of 1981, the only point for determination is whether learned Judges of the High Court Division correctly interpreted subsection (2-A) of section 34 of the Income-tax Act.
7. Mr. Habibul Islam Bhuiyan, the learned counsel appearing for the appellant in the said appeal, contended that the High Court Division wrongly interpreted subsection (2-A) which clearly empowered the Income-tax Officer to issue a notice under section 34 (1) at any time, notwithstanding at the time of issue of such notice the period of 8 years specified in the said subsection before its amendment had expired. He submits that the learned Judges of the High Court Division arrived at an erroneous conclusion as they failed to consider all the relevant provisions of law which would indicate that subsection (2-A) had retrospective effect: Mr. Bhuiyan argues that even if the 8 years' period mentioned in unamended provision of section 34(1) has expired, under section (2-A), the Income-tax Officer was competent to issue fresh notice and re- open the assessm ent.
8. Mr. S. M. Hussain, the learned counsel, appearing for the respon--dents in the said Civil Appeal No. 114 of 1981 argues that the High Court Division has correctly interpreted subsection (2-A) of section 34 of the Income---tax Act. He contends that subsection (2-A) came into force with effect from the 1st day of April, 1959 and it had no retrospective operation, so as to cover any assessment already barred by limitation, before the amendment came into force. Mr. Hussain submits that the impugned notice was issued on 16-2-1962 and the original assessment was made on 22-7-1950.
The period of 8 years mentioned in the unamended provision of section 34(1), in the case of the assessee, expired on 31-3-1959ind as such the Income-tax Officer was not competent to issue any fresh notice upon the assessee under the amended provision of section 34(1).
9. Admittedly, during assessm ent year 1950-51, relevant provision of law empowered the Income tax Officer to issue a notice for re-assessment, if any income had escaped assessment of income tax at any time within 8 years prior thereto. By an amendment of section 34(I) of the' Income-tax Act effective from 1st April, 1959, the provision of 8 years' limit was deleted MW accordingly re- assessm ent could be made at any time. It is hat disputed that a complete assessment may be re- opened, if the relevant provisions of law are amended with appropriate retrospective effect.
10. Newly-inserted subsection (2-A) of section 34 which also came into effect from 1st April, 1959, provided that a notice under section 34(1) could still be issued at any time. It specially provided that such notice could be issued notwithstanding that at the tine of the issue of such notice, the period of 8 years as provided before the amendment of section 34(1) had already expired.
Subsection (2-A) of section 34 reads as follows :-- "A notice under subsection (1) may, where the Income-tax Officer has reason to believe that the assessee or any other person on his behalf has (* * *) concealed the particulars of his income or deliberately furnished inaccurate particulars thereof ( * * * ), be issued at any time notwithstanding that at the time of issue of such notice the period of eight years specified in the said subsection before its amendment had expired and no assessment or re-assessment made (or any other proceeding taken in consequence of any notice or any assessment or re assess--ment made under section 2(B) or any other proceeding taken in consequence of any notice issued for that purpose) shall be called in question in any Court, Tribunal or other authority merely on the ground that at the time the notice was issued or at the time the assessment or re4ssestment was made, the time within which such notice should have been made under this section as in force before its amendment expired; provided that no notice under subsection (1) shall he issued to reaped of income, profits and gains, which were received or are deemed to have been received, or which accrued or arose or are deemed to have accrued or arisen to an assesses before the 14th day of August, 1947."
11. It may be noticed that in the said subsection (2-A), there is specific provision that no assessment or re-assessm ent made or any other proceeding taken in consequence of such notice shall be called in question in any Court, Tribunal or other authority merely on the ground that at the time the notice was issued or at the time the assessment or re-assessment was made, the time within which such notice should have been issued or the assessment or the re-assessment should have been made under this section as in force before its amendment had expired. It appears that the learned Judges of the High Court Division did not take into consideration all the material provision of subsection (2-A) and as such it reached the erroneous conclusion the "when the amended provision of subsection (2-A) of section 34 came into force on 1st April, 1959, 8 years from the assessm ent year, having already expired on 31st March, .1959, the Income-tax Officer, could not issue an fresh notice upon the assesses under the amended provision of section 34 (1) of the Act on 16th February, 1962." The aforesaid observation of the learned, Judges is clearly based on an erroneous interpretation of subsection (2-A). As observed earlier the subsection has clearly provided for issuing such notice and re-opening assessment, even after the period of 8 years had expired. The decision cited by Mr. Hussain from Indian Courts are not of any assistance in this case, since some material provisions of subsection (2-A) are not to be found in the relevant sections of Indian Income-tax Act, which came into consideration by the Courts in the cited cases.
12. For the aforesaid reasons, the interpretation of subsection (2-A) of section 34 as given by the High Court Division cannot he said to be correct. Accordingly, the impugned decision is set aside and Civil Appeal No. 114 of 1981 is allowed but without any order as to costs.
13. In Civil Appeal 115 of 1981 the question for determination is whether the learned Judges of the High Court Division correctly interpreted the expression 'person' as contained in various provisions of the Income-tax Act. It is contended by Mr. Hussain, the learned counsel the appellant in Civil Appeal No. 115 of 1981 that the expression 'firm' was not included in the definition of 'person'. He argues that subsection (5) of section 5 of the Act does not empower the Commissioner of Income- tax to confer jurisdiction on the assessing officer to perform his functions in respect of a firm because the subsection contemplates assignment of cases 'person-wise' or 'income-wise' coupled with an 'arts'. He further argues that the expression 'firm' having own definition in the Act itself, no other definition could be attributed to it such as the expression 'person' includes a 'firm'.
14. Mr. Habibul Islam Bhuiyan the learned counsel for the respondent, contends that the High Court Division rightly held that the definition of `person' made from time to time by various amendments of Income-tax Act, was always inclusive and not exclusive and that such definition of 'person' was never exhaustive to exclude a 'firm', simply because "firm" was included by subsequent amendment.
15. The learned Judges of the High Court Division observed that section 3 of the Income-tax Act, which is the charging section is com--prehensive enough not only to include any partner of any firm or member of any association 'individually but also the firm and the association collectively. It was further observed that during the relevant assessment year 1950-51, the charging provision of section 3 of the Income-tax Act specifically included a firm.
16. Subsection (5) of section 5 should be read in conjunction with section 3 of the Income-tax Act and ending the two provisions together, it would be apparent that the relevant authority of the Income-tax Department was quite competent to assess income tax even upon a firm, because 'person' mentioned in subsection (5) of section 5 included an association of person or a firm or a company or a local authority as such.
Section 3 of the Income-tax Act which is the charging section provides that the Income-tax Officer may assess tax in respect of total income of previous year of every person.
17. Under clause (9) of section 2 'person' includes an individual, Hindu undivided family, a firm, an association of persons or a body of individuals, whether incorporated or not, a Company, a local authority and every other artificial judicial person. Accordingly, 'firm' is a 'person' for the purpose of Income-tax Act and it is liable to be taxed for its total income for the pre--vious year.
Section 3 provides that such person shall be charged at the specified rate in respect of the total income of the previous year if such firm becomes an assessee.
18. We are, therefore, of opinion that the learned Judges of the High Court Division correctly interpreted the expression 'person'.
Accordingly, Civil Appeal No. 115 of .1981 is dismissed, without any order as to costs.