Law: Income Tax Act, 1922

Section: 34(1)(2),23,3

(a) Interpretation of statutes----No law should be construed to have a retrospective operation, but if such a construction appears very clearly or arises by necessary implication it should be given retrospective effect to the extent the language of the Act renders it necessary. (b) Income tax Act (XI of 1922) S34(1)(2) Income escaping assessment Scope and application of S.34(1)(2) Notice under S.34(1) when can be issued. A notice under subsection (1) of section 34 of Income tax Act, 1922 may in a case in which the assessee has not filed any return under subsection (1) or subsection (2) of section. 22 be issued by the Income tax Officer at any time notwithstanding that at the time of issue of such notice the period of eight years specified in the said subsection before its amendment had expired and that no assessment or re assessment made or any other proceeding taken in consequence of such notice shall be called in question in any Court, Tribunal, or before 'any other authority. The proviso appended to this subsection is to the effect that no notice under subsection (1) shall be issued in respect of any income etc., which accrued or arose or be deemed to have accrued or arisen to an assessee before the 14th day of August 1947. The proviso places the matter beyond any pale of doubt that a notice under subsection (1) of section 34 can be issued in respect of incomes of all assessment years excepting the income which arose before the 14th day of August 1947. Thus the period prior to 14th August 1947 has only been excluded from the purview of the subsection and from this it also clearly follows that in cases where there is concealment of income or no return of income has been filed, the legislature intended to bring within the fold of this subsection all income arising after the 140 August 1947 even though the time limit specified in the subsection before its amendment may have already expired. As a matter of fact the limitation of eight years which applied only to cases of concealment of income was done away with by the Finance Ordinance, 1959 whereby in such cases assessment could be made without any time limit. It was in 1961 that the cases in which no return…

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