Law:

Section:

Section 149 of the Income-tax Act, 1961 [Corresponding to section 34 of the Indian Income-tax Act, 1922] - Income escaping assessment - Time-limit for issuance of notice Assessment year 1942-43 - Whether it is necessary to serve a notice on assessee within a period of eight years of close of assessment year and mere issuing of a notice within that period of time is not enough - Held, yes FACTS For the assessment year 1942-43, notice under section 34 of 1922 Act was served on the assessees on 3-4-1951. The ITO then proceeded to make an assessment which was affirmed by the AAC. An appeal was, however, taken to the Tribunal and there apparently it was pointed out that the assessees had been served more than eight years after the expiry of the assessment year and consequently the proceedings were invalid in view of section 34(1)(a). This view prevailed and the assessment was consequently quashed by the Tribunal. On reference: HELD The language of sub-section (1) of section 34 leaves on doubt that the Legislature fully intended that service on the assessee must be made within the time mentioned in that sub-section and quite obviously if the intention was that the issuing of a notice within the period mentioned was sufficient, there could have been no difficulty in using that expression instead of a totally different expression like "serve" which has a different connotation. The Tribunal rightly interpreted the meaning of section 34(1)(a ) in holding that it was necessary to serve the assessees within the period of eight years of the close of the assessment year, and the mere issuing of a notice within that period of time was not enough. The meaning of provisions of section 66 (1) is that if a question of law is raised before the Tribunal arising out of the case before it and there is some controversy later whether that question of law has or has not been rightly settled by the Tribunal, the aggrieved party can demand that it be referred to and decided by the High Court. The only question of law which did arise before the Tribunal and which was decided by the Tribunal was about the proper interpretation of certain provisions contained in section 34 as it stood at the…

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