Law: Income Tax Act, 1922

Section: 34(1)

Section 34(4) , read with section 34(1) of the Indian Income-tax Act, 1922 - Reassessment - Limitation - Assessment year 1942-43 - Following finding of Appellate Commissioner that sum in question was income of assessee taxable in assessment year 1942-43 and not in 1943-44, ITO issued a notice dated 19-1-1960 under section 34 of 1922 Act asking assessee to file return for assessment year 1942-43 - Assessee raised objection that impugned notice was barred by limitation - Whether in view of introduction of sub-section (4) of section 34 of 1922 Act by amending Act 1959 with retrospective effect, impugned notice was not barred by limitation but was a valid notice - Held, yes FACTS The assessee was assessed under section 34 of 1922 Act in respect of a sum as income received by him within the assessment year 1943-44 on the ground that the assessee had purchased certain plot of land for a consideration of a sum which was paid on certain dates 17-12-1941, and 16-2-1942, but which had not been disclosed by the assessee. The AAC, held that it was income, but such income accrued in course of the assessment year 1942-43 and not 1943-44 as held by the ITO. Thereafter ITO by an order dated 19-1-1960 issued a notice under section 34 of 1922 Act to assessee stating that he had reason to believe that income-tax for assessment year 1942-43 had escaped assessment and had been under assessed. The assessee filed a petition before the ITO objecting to the validity of the said notice on, inter alia, the ground that the issue of the said notice was barred by limitation. The ITO did not entertain the objection of the assessee. The assessee filed a writ petition challenging the impugned notice. When the matter came up before this Court for final hearing, the contention put forward on behalf of the department before the judge was that by reason of the amended second proviso in sub-section (3) of section 34 of 1922 Act, the notice issued on 19-1-1960, was saved from the bar of limitation. The other contention put forward on behalf of the respondent was that in any event sub-section (4) of section 34 of 1922 Act which had been introduced by an amendment made in 1959 also saved the notice…

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