Law:

Section:

explanation 2 to section 153 of the income-tax act, 1961-reassessment-time limit for completion-original assessment made under the 1922 act-whether, in order to give effect to any finding or direction by the appellate authorities involving the application of the said explanation 2, exemption from limitation as provided for in section 153(2) is available-held that the explanation 2 cannot be pressed into service Facts A sum of Rs. 47,000 was included in the assessee's total income in the assessment for the assessment year 1956-57 as income from undisclosed sources. The Tribunal held that this sum is assessable for the assessment year 1958-59. The original assessment was made under the provisions of the 1922 Act but to give effect to the Tribunal's findings the ITO resorted to section 147(a) of the 1961 Act and his argument was that by reason of section 153(3), the time limit as provided under section 153(1) would not apply. This was a case involving the application of the transitional provisions of section 297(2)(k ), and the Tribunal upheld the assessee's contention that since the original assessment was made under the provisions of the 1922 Act, and had become final, Explanation 2 to section 153(3) of the 1961 Act could not be pressed into service. The reassessment sought to be made was, therefore, barred by limitation as provided for in section 153(1), the Explanation 2 not being applicable. The question that arose was whether, on the facts of this case and having regard to the transitional provisions contained in section 297(2)(d )/(k), the provisions of section 153(3) and Explanation 2 thereto were applicable in this case so as to remove the time bar imposed by section 153(1). Held As the language of section 153 plainly stands, read together with Explanation 2, the bar of limitation will stand lifted only if the reassessment proceedings are in pursuance of or to give effect to findings or directions contained in orders under sections 250, 254, 260, 262, 263 or 264. There is no warrant for inferring that corresponding orders under the 1922 Act are also covered, mutates mutandis, in these provisions. What has been described as the mutatis mutandis rule, would…

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