BOSE, J. - (1.) THIS appeal is against the order of Sinha J. dismissing a writ application under Art. 226 of the Constitution for quashing of certain income-tax proceedings initiated under s. 34 of the Indian IT Act.
(2.) THE appellant was assessed under s. 34 of the Indian IT Act in respect of a sum of Rs. 34,323 as income received by him within the asst. yr. 1943-44 on the ground that the appellant had purchased a plot of land at 95/96, Indra Biswas Road for a consideration of Rs. 24,323 which was paid on certain dates between 17th Dec., 1941, and 16th Feb., 1942, but which had not been disclosed by the appellant. The appellant appealed against this order of assessment to the AAC on the ground that the said sum was not an income and even if it was held to be an income, such income would be income relevant for the asst. yr. 1942-43 and not 1943-44. The AAC by his order dt. 25th Feb., 1959, held that it was income, but such income accrued in course of the asst. yr. 1942-43 and not 1943-44 as held by the ITO. The AAC in making his order gave the following direction : "I therefore delete the addition for the assessment year under appeal and direct that ITO should take necessary action to assess the same amount for 1942-43 assessment year." Thereafter, by a notice dt. 19th Jan., 1960, issued under s. 34 of the Indian IT Act which was served on the appellant on the 21st Jan., 1960, the ITO called upon the appellant to file a return of the income for the asst. yr. 1942-43. The relevant portion of the notice may be set out hereunder : "To Sri Brindaban Chandra Basak, . Whereas, I have reason to believe that your income assessable to income-tax for the asst. yr. 1942-43 has (a) escaped assessment. (b) been under-assessed..... I hereby require you to deliver to me within 35 days of the receipt of this notice a return in the attached form of your total income and total world income assessable for the said year ending 31st March, 19..... This notice is being issued after obtaining the necessary satisfaction of the CIT, Calcutta.
(3.) ON 8th Feb., 1960, the appellant field 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. But as the ITO by his letter dt. the 12th Feb., 1960, intimated that he was unable to entertain the objection of the appellant, the latter moved this Court under Art. 226 of the Constitution and obtained a rule nisi on 24th Feb., 1960. When the matter came up before Sinha J. for final hearing, the contention put for ward on behalf of the Department before the learned judge was that by reason of the second proviso in sub-s. (3) of s. 34 of the Indian IT Act as amended by Act 25 of 1953, which came into force from 1st April, 1952, the notice issued on 19th Jan., 1960, was saved from the bar of limitation. The relevant portion of the proviso which was relied upon may be set out hereunder : "Provided further that nothing contained in this section limiting the time within which any action may be taken or any order, assessment or re-assessment may be made shall apply to a re- assessment made under s. 27 or to an assessment or re-assessment made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under s. 31, s. 33, s. 33A, s. 33B, s. 66 or s. 66A." ;