Law:

Section:

Section 148 of the Income-tax Act, 1961 [Corresponding to section 34 of the Indian Income-tax Act, 1922] - Income escaping assessment - Issue of notice for - Assessment year 1947-48 - ITO issued notice under section 34(1)(b) of 1922 Act taking view that excessive depreciation had been allowed to assessee - Assessee objected to reopening of assessment pleading limitation - ITO, however, revised assessment holding that assessment was not barred by limitation by virtue of second proviso to section 34(3) of 1922 Act, after its amendment by Act XXV of 1953 - Whether in view of fact that right to reopen assessment of assessee under section 34(1)(b) of 1922 Act lapsed on 31-3-1952, under law of limitation as it stood on that date, statutory amendment of period of limitation which took effect only on 1-4-1952, would not apply to assessee's case - Held, yes - Whether, therefore, when notice was issued to assessee under section 34(1) of 1922 Act on 20-1-1954, initiation of proceedings under section 34 of 1922 Act was barred by law of limitation - Held, yes FACTS The assessee was a private limited company. On 15-5-1946 it took over all the buses and lorries belonging to the "N" Ltd. Subsequently, it filed return wherein certain amount was claimed as depreciation on buses. The Income-tax Officer completed the assessment under section 23 allowing depreciation for the vehicles that actually plied during the period based on the prima facie transfer value. In the assessment of "N" Ltd., it was held by the Tribunal, by its order under section 33 of 1922 Act, that the sale to the assessee-company was only a sale to a subsidiary company within the meaning of the 4th proviso to section 12B(1) of 1922 Act and accordingly did not attract the provisions of section 12B(1) of 1922 Act at all. consequently on the Tribunal's order, the Income-tax Officer found that excessive depreciation allowance had been granted to the assessee, and accordingly, issued a notice to the assessee under section 34 of 1922 Act on 19-3-1954. The assessee objected to the revision of assessment, pleading limitation. The ITO, however, revised the assessment holding that the assessment was not barred by…

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