Law:

Section:

Section 153, read with sections 147(b) and 150 of the Income-tax Act, 1961 - Income escaping assessment - Time limit for completion of reassessment - Assessment year 1959-60 - Whether when income excluded from one year has to be included in another year and such proceeding is fictionally treated as one under section 150, then bar of limitation provided under section 147(b) will not apply in view of express provisions in section 153(3) - Held, yes FACTS In respect of the previous year relevant to the assessment year 1959-60, the accounts of the assessee firm disclosed cash credits aggregating to Rs. 3,36,000. This amount came to be added as cash credits to the income of the assessee in the assessment year 1959-60. However, on appeal, the Appellate Assistant Commissioner found that cash credits of Rs. 2,50,000 fell within the financial year relevant to the assessment year 1958-59 and the amount came to be deleted from the income of the assessee for the assessment year 1959-60. On this finding of the Appellate Assistant Commissioner, the Income-tax Officer issued a notice under section 147 for the assessment year 1958-59, and as a result of reassessment an amount of Rs. 2,25,000 for which there was no satisfactory explanation with regard to the source according to the Income-tax Officer, came to be included in the income of the assessee for the assessment year 1958-59. The assessee's appeal against said assessment order came to be rejected. on further appeal, the Tribunal did not go into the question about the validity of the notice but set aside the orders of the Income-tax Officer and the Appellate Assistant Commissioner on the ground that the assessee was not given adequate opportunity to represent his case. The assessee now filed instant petition challenging notice of reassessment issued by the ITO. It was further mentioned in the petition that after the assessment order was passed by the ITO, he took steps under section 226(3) to recover certain amount from the assessee. The assessee's case in instant petition was that the said recovery was illegal and it was entitled to the refund of that amount. HELD It is no doubt true that section 153(2) prescribes the…

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