Shah, J. - (1.) The respondents - a Hindu undivided family - were assessed for the assessment year 1949-50 to tax under S. 23 of the Mysore Income-tax Act on a total income of Rs. 10,100/-. The Second Additional Income-tax Officer (Urban Circle) Bangalore, commenced a proceeding under S. 34 of the Mysore Income-tax Act for reassessment of the income of the respondent for the assessment year 1949-50, and served a notice in that behalf on March 6, 1951. On May 21, 1954 the Income-tax Officer determined the respondents' total income at Rs. 75,957/-. In appeal against the order the Appellate Assistant Commissioner of Income-tax, 'A' Range, Bangalore, by order dated November 4, 1961, set aside the order and directed the Income-tax Officer to make a fresh assessment after making inquiries on certain matters specified in the order.
(2.) At the request of the respondent under S. 66 (2) Of the Mysore Income-tax Act, the Commissioner of Income-tax, Mysore, referred the following questions to the High Court of Mysore: "1. On the facts and in the circumstances of the assessee's case whether within the meaning of S. 94 of the Mysore Incometax Act, if a notice under that section is issued within the prescribed period, whether the Income-tax Officer can proceed to assess or re-assess such escaped income after four years from the close of the assessment year 2. On the facts and in the circumstances of the case, whether the Appellate Assistant Commissioner of Income-tax is competent to set aside and give directions to the Incometax Officer to re-do the assessment in the manner the Appellate Assistant Commissioner of Income-tax has done - At the hearing of the reference, the respondents did not press the first question, and the High Court answered the second question in the affirmative.
(3.) The Income-tax Officer commenced inquiry directed by the Appellate Assistant Commissioner. The respondents then applied to the High Court of Mysore for issue of a writ of prohibition restraining the Income-tax Officer from continuing the assessment proceeding for the year 1949-50 on the plea that the proceeding was because of expiry of the period of limitation barred. The High Court of Mysore upheld the contention of the respondents and allowed the petition. In the view of the High Court the provisions of S. 34 of the Mysore Incometax Act were "more or less similar to Rule 34 of the Mysore Sales Tax Act, 1948. Hence the present case clearly comes within the rule laid down by this Court in K. S. Subbarayappa and Sons vs. State of Mysore, 1952 Mys LJ 234 which means that the present proceedings are barred." The Commissioner of Income-tax has appealed to this Court with special leave.;