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 years 1951-52 to 1953-54 - Whether where an assessment or re-assessment is made on assessee or any person in consequence of or to give effect to any finding or direction given in an appeal, revision or reference, period of limitation prescribed in section 34 of Act of 1922 for assessment or re-assessment shall not apply - Held, yes - On partition of HUF its business was transferred to assessee-firm in which its members were partners - Return filed by assessee-firm was not accepted by ITO as he did not accept partition of family and included income returned by assessee in assessment of HUF - On appeal, AAC held that there was partial partition and excluded income of assessee from assessment of HUF and also directed ITO to initiate proceedings under section 34 of Act of 1922 on assessee-firm - ITO accordingly issued notices to assessee for relevant assessment years under section 34(1) of Act 1922 - Assessee challenged said notice on ground that since notices were issued after expiry of four years, they were barred by limitation - Whether direction given by AAC to assess firm while dealing with appeal of HUF was covered by terms of 2nd proviso to section 34(3) and ordinary period of limitation prescribed under section 34 would not apply to consequential assessments of firm made by ITO in pursuance of such direction - Held, yes Section 147 of the Income-tax Act, 1961 [Corresponding to section 34 of the Indian Income-tax Act, 1922] - Income escaping assessment - General - Assessment years 1951-52 to 1953-54 - On partition of HUF, its business was transferred to assessee-firm constituting members of HUF - ITO did not accept partition of HUF and income returned by assessee was included in assessment of HUF but he did not take any action on return filed by assessee - However, AAC directed ITO to exclude income of assessee from assessment of HUF and to initiate proceedings under section 34 of Act of 1922 against assessee - ITO accordingly issued notice under section 34 to assessee - Whether…

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