Law: Income Tax Act, 1922

Section: 34(1)

Law: Income Tax Act, 1922

Section: 34(1)

Section 148, read with sections 153 and 253 of the Income-tax Act, 1961 [Corresponding to section 34(1), read with sections 34(3) and 31 of the Indian Income-tax Act, 1922] - Income escaping assessment - Issue of notice for - Assessment year 1944-45 - Whether expression "finding" in second proviso to section 34(3) means "finding necessary for giving relief in respect of assessment for year in question" - Held, yes - Whether proviso to section 34(3) did not save time limit prescribed under section 34(1) in respect of escaped assessment of any year other than that which was subject matter of appeal or revision - Held, yes FACTS For the assessment year 1945-46, the ITO had issued notice under section 34(1)(a) dated 29-7-1953 upon the assessee in respect of an amount which was received by the assessee on or about 23-3-1944. The Tribunal held that the proper year of assessment in regard to amount in question was assessment year 1944-45 and not 1945-46. The ITO issued notice dated 30-10-1963 under section 34(1)(a) upon the assessee in respect of the said amount for the assessment year 1944-45. The assessee filed a writ petition challenging the validity of the impugned notice as it was issued after eight years of the assessment year in which it should be assessed. However, the revenue contended that impugned notice was issued by the ITO to give effect to finding of Tribunal given under section 31 and, therefore, notice was not affected by time limit of eight years in view of proviso to section 34(3) of 1922 Act. HELD The Supreme Court ITO v. Murlidhar Bhagwan Das [1964] 52 ITR 335 , 345, held that the second proviso to section 34(3), did not save the time-limit prescribed under section 34(1) in respect of an escaped assessment of a year other than that which was the subject-matter of the appeal or revision, as the case might be. In the instant case, the assessment year which was the subject-matter of the appeal before the Appellate Tribunal was 1945-46. The amount of Rs. 56,000, which was claimed to have escaped assessment, could have been assessed in the assessment year 1944-45 and not in the assessment year 1945-46. Since the amount was not assessable for the…

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