Merit Enterprises vs Dy. Commissioner Of Income Tax on 26 April, 2006
Sub-section (4) added In Section 34 in the year 1959 and Section 34(1B), as amended in 1956, would not throw any light on the question, but in a way would support the view that they were concerned only with the escaped incomes covered by Section 34(1)(a), excluding therefrom those covered by Section 34(1A). The argument based on the alleged anomaly led nowhere and indeed the retention of Section 34(1A) on the statute book was intentionally done, as Parliament, having already placed a particular class of assessees under a special and heavy burden, did not think fit to make any provision which was likely to harass them further. The ambiguity in the section, if any, should go for the benefit of the taxpayer and not the tax-gatherer. This argument was accepted by the Madhya Pradesh and Gujart High Courts in Rustomji v. Income-tax Officer, Special Investigation Circle, Indore [1964] 54 ITR 461 and Mathurdas Govinddas v. G.N. Gadgil, Income-tax Officer, Special Investigation Office, Ahmedabad[1965] 56 ITR 621.