Hussain Bhai And Others v. Commissioner Of Income Tax, Madras

SaAATE AIT HS WEA AIART BAITIT, ATT (Hussain Bhai and Others Commissioner of Income-tax, Madras) (16 ast, 1971) (qea eararfaatt ae Gro AR, HAto vito Bo fax, Ho Uae Bn, :Yo Uo Wat MT To HTAMIVT teet) gfosaa gean daa Uae, 1922—ener 34(1)(¢)—ax ar gafraten—farizy ag1948-49faaafefkan,1956 gia aarafeaaren 34(1) (a) & weiter fratza & fag faa vf qaar fafera g—Get quar qean sea (MAvSAez)Gaz, 1959 sare 4 F gett agmast.7 frafem ae 1948-49 & fae aegearars coal at 30 fearaz, 1948 At anfee at Sfaae ¥9,102 wat at ga ara ae frafea. fear aa aTvafrat 3 ora & fara eat wt frat var at a A Tao To ATT TE Hea aywy a sat ot at are (Tat gear) AT ara ATT| AIA AE AAA FUTfe megearars GaeAe A oTaTAgT feat aa ars efosat fafats st arar A28 yarg, 1947 Bt 40,000 waa ame sat fae T1 (amet,1954 Br aegeTT,ag nora at ag at ag1 fetta segearargy Gaeta at acer & fatesafta ait sfafafa & wo F garage wegearary Tt 9 Bratt, 1957 Ht feredsean zqy daz, 1922 Ht aren 34(1)(t) Hasta gaan at arate st 7sI mat saa afafaan at are 23(2) e aelta artarfeat afta a at fsgoa vararag # ua fadiaa oreet fear aar fat aver 34(1)(c) F aehta ay1é srtatfeat at fafaareaat wr gait ey we et 1 15 are, 1957 at fratea [1971]3. eH fo go fear tat| 15 ata, 1957 at afafrar et are 30% aha TIT ATR(ata) & aret oe ata prea at rE & aret oe ata prea at rE aret oe ata prea at rE oe ata prea at rE ata prea at rE prea at rE at rE rE1 15 at} 1958 at gem eararag 3 agfee factart ga arare qe arts ae feat fe fraffedl 2 afataa Bh ataerates aay Tard ar raat gh A var fear 21 seq eararag A Te 4net each fear at fe are 34(1)(e) & wate a ae adarfeat ade @ | aaae,wget (aN) Fare 34% ela ata ardarfedl Aadaar Race FoSa aaa & fread ar agate wea go fate a se are ge areaBC fear fe aren 34} seta aren at wf ardarfeat ade ot ate fafrarea.qa at (ata) & aret oe ata prea at rE & aret oe ata prea at rE aret oe ata prea at rE oe ata prea at rE ata prea at rE prea at rE at rE rE RTT aR arfeat A aT MeeaTUTe GTA Rat fatessfafafact & arr 9 garg, 1958 a arer.34( )(&) a aeta ow Te aa faaett |araae afrare F arte 14 fearaz, 1960 art area are ae afafraiferFear f& qreagy feaa fa are eftear fafats H st 40,000 eat anal ® eatatHaatfae ay fF eqs ya war Seta cisaastat F fraifest al oa &aT & are a ate aagare sat gaat faatcer Pears faatfedt a FAD CyWISeT (Ata) @ adie at ate weg grat ® ara-ara ae cette at fr faerieaay afsa & | agian aaa (ata) + ag afafaatica fear fis arer 34%meat anfan artarigal & acare # far ae agen alge (atta) & areaHare 34 (3) & mafeaia até frome ar fade grates adi ICME OIE14 fearaz, 1960 arar faatey arte sefea 21 ga oc ueea fata F aeSC Tet Taw F ara ales HIRT aT! alaeafer retoz ade afsaca & ager fae UHATAGT GT FBT dag ast afafran at are 34 (3) B regan h yar F at FSIBes aT 4 ag fone feta fe are 34 (3) ar fedta Tega ar atgeet eararea F aner ag sete at ae ot fe frstca ata ® as ag Bare Ter 31 (4) (t) & wet anita at ag ve gaa aarancafsaz iumfama & ag cetter dt fax gear Zea, (mivsiiz) daz, 1959 (1959 ar ljatene4 afedtar & asta 8 ag gaa at eager aed 21THT TAA A age afH-faaffea fear fe 1959 & afafaan at are 4,9 garg, 1958 at ater 34 (1)(&) & aeta fear ce gaat st ofedtar® asta 8 saad Bt F WKTAZA TI TMT Hr Tat frat F faeg fear: «Sea aaa F area H fees ga cararaa F adie st as| 1958afafaaticn—aan daa (atvstve) tee, 1959 at arr 4,9 gang,TEat afar gan gam Raz, 1922 atorrer 34 (1) (c) & sweftr Praralte GAT Ft earge aa edt1 sat gre 4} gam aaa} aeata 1959 saa afafraa Soren se oF feet Ht ana 1922. 8 saa afafra at 1190 HUSSAIN BHAI AND OTHERS COMMISSIONER OF INCOME TAX, MADRAS. April 16, 1971 rs. M. s1i;:R1, c. 1 .• G. K .. MrITER, K. s. HEGDE, A. N. GRovEil: AND P. 1AGANMOHAN REDDY, 11.J Income tax Act, (II of 1922), s. 34(1)(a) and lncome-ta'1: (Amendment) Act, 1959, s. 4--Effer:t on bar of limitation. Notioe under s. 34(1) (a) of the Income-tax Act, 1922 was served in February 1957 on the appellant with respect to escaped income of Rs. 40,000 for the assessment year 1948-49. On appeal the Appellate Assistant Commissioner held that the proceedings were illegal. On July 9. 1958,. the Income-tax Officer issued another notice and assessed the assess.:e's in-come including therein the Rs. 40,000, to tax. . When the matter came up before the High Court on reference, the High Court held that the notice dated July 9, 1958 was a fresh notice· but that it was saved from the bar· of limitation by s. 4 of the Income tax (Amendment) Act, 1959. In appeal to this Court, HELD: Section 4 of the 1959-Act refers to all notices issued under s. 34(1) la) of the 1922 Act at any time before the commencement of the· 1959-Act. The notice dated July 9, 1958, in the present case, fell within E that description. But s. 4 of the 1959-Acl. does not save such notices from attack on all grounds whatsoever; the only ground of attack which cannot be taken is that at the time the notice 'Nas issued. the period prescribed by s. 34(1) (a) of the 1922-Act, as in force before its amendment by the Finance Act, 1956, had expired. But in the present case, what the assessee was saying wa.s, that a notice under s. 34(1) (a) as amended by the Finance Act of 1956, could have been issued under that Act in respect of the assess-F ment year 1948-49 till April l, 1957; but when the Finance Act "f 1956, came into force, he came to be governed by the 8 year period prescribed by the Act as amended by the 1956 Act and not the 8 year period prescribed by the Act as it stood before the amendment in 1956. Accordingly the escaped income being less than a lakh, the assessee's ground of attack was that the 8 years prescribed by s. 34 as amended after 1956 had already expired before July 9, 1958. The assessee"s stand was correct, and the· notice was barred. (3958-F]. Observations of Sarkar, J. in S.C. Prashar v. Vasantani Dwan1kadas, [1964] I S.C.R. 29. 90, applied. CIVIL APPELLATE JURISO!Cf!ON : Civil Appeal No. 1097 o( 1967. Appeal from the judgment and order dated December I, 1965 of the Madras High Court in Tax Case No. 17S of 1963 (Reference; No. 49 of 1963). T. A. Ramachandran, for the appellants. Jagadish Swarup, Solicitor-General, S. Mitra, P. L. Juneja and R. N. Sachthey, for the respondent. The Judgment of the Court was delivered by Sikri, C. 1~ This appeal by certificate granted by the Madras High Court under Section 66A (2) of the Indian Income-tax Act. 1922, hereinafter referred to as the Act, is from the judgment of the Madras High Court in a reference made to it under Section 66 (I) of the Act by the Income-tax Appellate Tribunal, Madras Bench. The Tribunal referred the following question . "Whether the present proceedings initiated under Section 34(1) (a) of the Act against the assessees are valid in law?" arer34 a srarar(1) # ae (v) B meta Frarat TE wal qaae at ad zsqTaT.aTae 9 Fars, 1958 areal FAA Fa auta Ht afer F arat oi frre agqrar tall qaarail at fret at ware aH TA raver Tt Mat S etrga sel Beat2faa afafrra, 1956 arer aateatfct are 34 ({) (z) & waa, AAAPraizer at 1948-49 F araer H 1 sete, 1957 a4 frat aT andl at Attqa 1956 at fae afafaas saa garae sa a1956 6 afafray areaaramifra afatiaa are fafea ars ad at areata ary eA amt, afar |1956 & fee ae amaal F ga Tat faaart sa afafaan grea fafga are atal Brava| (Fz 18)Cc mgAica Frere [1964](1964)1 Tow. IT 29 Ges 90 - GA. At. WTA,giantoafaarl aay aaeaaa aremart (S.C.Prashar,I. T. O. Vs. Vasantasen Dwarkadas)19 fafaa sete afaarfcat: 1967 a Ao 1097 atet fafa aara: 1963 & to 175 are BL Aaa AIAe (1963 ar. Ho 49 ater faze)|Haare set TATAT % ade 1 fearaz, 1965 ae frata aie are & fatei egrarara at faata gaa earatiaaft Tae THe died fet gem raratfaafa ata—— ag ada, ware Gea earTag & efesrt gan ea ae, 1922 (faeser TAT a) at arer 660(2) F wala TATTTT AATgad ean ceargq afatiaaHwee1 agair wast atta AfTHTT, ARIA FqTATS, Te wae At Yee|66(1) ® wala ware sea cararara wT fee| ag fee A se caraTay SIRT feraae frata& free Ft TE oI 2. afaacy& faeafafad set fad fae feat at—| vqar afafaaaarr 34(1)(t) Fada frvifefaat % freeaized Fl 7E sega sraarfgat afer at afte & faferarea gz?” | Feaee arate frvier afte [1971] 3 ame Fro Go Tara,3. Fa gaa geal or wae ae fear are | Frater ae 1948-49 (12Faraz, 19481947 Ht at area sateAat Sfaag ae Har ¥ 9, ah) 102 aH eat fare at MegeAAS EAT Aa BAAAA Br 30TATTt fraieay fRarAT 1 a Prater Ft sare} frat ata a frat aa aFF Clo To WNT WsBETA St HE A tel oe At are (az ear) ae aeahe aa aeaegagAEH gar fa aegearng arama 9 THAT (Tt fe wa Tat gaa F 2)__fear ae are afosar fafats a oer #28 TA, 1947 Bt 40,000 wax ®wR HET A aa fees1 WTI, 1954 st aegearars waaay a WeQl met feina mageat wre samme at aeqer Bh fafa arfte atte sfefafirRB BTOR gtand megane az 9 meat, 1957 at afafean a are—. (34)(1)(@) & rete gaat arte at 1819 ard, 1957 3 Ue fare wer,at 7g fart 8,237 wad araeq F afqa faq me & fag cae ey F gatas40,000 ea at ufe afar até of ] .seq4, at afaftrs at arr 23(2) & aeta wraatfeat afeaa et eff fasateararera Huw factor preer Pear mar fra ayer ere 34(1)(@) & ata 1g ardarfgay at fafeareaat at Sia a as at15 ars, 1957 ay Frafeafear war 1 15 aim, 195741 after at are 30 & ada aarae aIgaT(adler) & ane cH athe ger at ae) 15, Hrd, 1958 et gee eqraray Fag fee fades ga arare ge afer at fear fe fratfedt & afarfror ®att srafer aay soar ar sraer Tet et yer fear 2 1 agree WITaT(atta) & arte 29 ada, 1958 art ae a we sme dat 3: fe gesmasraretag wa aaae Pear ar fae eet 34(1)(t) & wee at og ardarfgat at agra oma (ata) X arr 34% ate stag araatfeatMAqa F araey F eq eargragy F fread sy AJIT HT BU, Fa eT grePreateer BY ee aT Te TTT HT feat fr ST 34% alt areca at 7salga tfeat wae at site faferateq wet at: fates+5. Rae THY ATT wT afer Fae Mega BATS RB agaatsfafafirat & ata 9 garg, 1958 #t are 34(1)(u) & adler un agagfraratt | rer ae afrard & arate 14 feaeaz, 1960 ate AT AST eT afafaattea frat fe creagz fers da ar afteat fafats % st 40,000ead aHe SAT feu ae FF wey ga aT RUT Usaetal F fratfedt st oaF OTHE Tat J ae F ate gagare gay waar fraiea fear; The relevant facts may now be stated. For the assessment year 1948-49 (accounting year ending November 12, 1947) an assessment was made on Abdullabhai Fazalali in the status of an individual on September 30, 1948, on a total income of Rs. 9,102. The sour~es of income consideted in the assessment were share income from the firm of S. A. Bhagat and Co., and property in-come. Subsequently, it came to light that Abdullabhai Fazalali had deposited Rs. 40,000 in cash on July 28, 1947 in the branch of the Bank of India Ltd. at Palanpur, now in North Gujarat. Abdullabhai Fazalali died on August I, 1954. Notice under See-tion 34 (1) (a) of the Act was served on February 9. 1957 on Hussainbhai Abdullabhai as legal heir and representative of the estate of the late Abdullabhai Fazalali. On March 9, 1957 a return was filed showing the income as Rs. 8,237. but in Column 'D' the sum of Rs. 40,000 aforesaid was mentioned. While the proceedings were pending under Section 23(2) of the Act a petition was filed in the High Court challenging the validity of the proceedings under Section 34(1)(a). On March 15, 1957 assessment was made. An appeal to the Appellate Assis-tant Commissioner under Section 30 of the Act was filed on April 15, 1957. On March 15, 1958 the High Court dismissed the writ petition on the ground that the assessee had already availed himself of the ordinary remedies provided under the Act. It appears from the order of Appellate Assistant Commissioner dated April 29, 1958 that the High court expressed the view that the proceedings under Section 34 (!) (a) were illegal. The appellate Assistant Commissioner, by this order following the finding of the High Court regarding the illegality of the proceedings under Section 34 set aside the assessment on the ground that the proceedings intiat-ed under Section 34 were illegal and not valid. The Income Tax Officer then issued a fresh notice under Sec-tion 34 (1) (a) on July 9, 1958 to all the legal representatives of the deceased Abdullabhai Fazalali. By his order dated December 14, 1960, the Income-tax Officer held that the cash deposit of Rs. 40,000 in the Bank of India in Palanpur came from undisclos-ed sources of income of the assessee in the then taxable territories and assessed it accordingly. We may mention that no reference was made to the Income-tax (Amendment) Act, 1959 (I of 1959) by him- The assessee appealed to the Appellate Assistant Commis-sioner and inter alia contended that the assessment was time-barred. The Appellate Assistant Commissioner held that the Appellate Assistant Commissioner's order passed in respect of the original proceedings under Section 34 did not conUlin any finding or direc-tion within the meaning of Section 34 (3) and accordingly the assessment order dated December 14, 1960 was vitiated. The Revenue then filed an appeal, before the Incomo-tax Ap-pellate Tribunal. The Appellate Tribunal set aside the order of the Appellate Assistant Commissioner holding that the proceedings under Section 34 (!) (a) had been properly initiated by the notices issued on July 9, 1958, and directed him to decide the other is.~ucs raised according to law. er6.BH aR aa? fe SAR are aR aa? fe SAR are aa? fe SAR are fe SAR are SAR are are gar Baa (avsies) daz, 1959 (1959| aR aa? fe SAR are aa? fe SAR are fe SAR are SAR are are gar Baa (avsies) daz, 1959 (1959| aa? fe SAR are fe SAR are SAR are are gar Baa (avsies) daz, 1959 (1959| fe SAR are SAR are are gar Baa (avsies) daz, 1959 (1959| SAR are are gar Baa (avsies) daz, 1959 (1959| are gar Baa (avsies) daz, 1959 (1959| gar Baa (avsies) daz, 1959 (1959| Baa (avsies) daz, 1959 (1959| (avsies) daz, 1959 (1959| daz, 1959 (1959| 1959 (1959|| 1) & of at fade ad fear gar ary & of at fade ad fear gar ary of at fade ad fear gar ary at fade ad fear gar ary fade ad fear gar ary ad fear gar ary fear gar ary ary BH aR aa? fe SAR are aR aa? fe SAR are aa? fe SAR are fe SAR are SAR are are gar Baa (avsies) daz, 1959 (1959| aR aa? fe SAR are aa? fe SAR are fe SAR are SAR are are gar Baa (avsies) daz, 1959 (1959| aa? fe SAR are fe SAR are SAR are are gar Baa (avsies) daz, 1959 (1959| fe SAR are SAR are are gar Baa (avsies) daz, 1959 (1959| SAR are are gar Baa (avsies) daz, 1959 (1959| are gar Baa (avsies) daz, 1959 (1959| gar Baa (avsies) daz, 1959 (1959| Baa (avsies) daz, 1959 (1959| (avsies) daz, 1959 (1959| daz, 1959 (1959| 1959 (1959|| 6.BH aR aa? fe SAR are aR aa? fe SAR are aa? fe SAR are fe SAR are SAR are are gar Baa (avsies) daz, 1959 (1959| aR aa? fe SAR are aa? fe SAR are fe SAR are SAR are are gar Baa (avsies) daz, 1959 (1959| aa? fe SAR are fe SAR are SAR are are gar Baa (avsies) daz, 1959 (1959| fe SAR are SAR are are gar Baa (avsies) daz, 1959 (1959| SAR are are gar Baa (avsies) daz, 1959 (1959| are gar Baa (avsies) daz, 1959 (1959| gar Baa (avsies) daz, 1959 (1959| Baa (avsies) daz, 1959 (1959| (avsies) daz, 1959 (1959| daz, 1959 (1959| 1959 (1959|| 1) & of at fade ad fear gar ary & of at fade ad fear gar ary of at fade ad fear gar ary at fade ad fear gar ary fade ad fear gar ary ad fear gar ary fear gar ary ary77.| 77.| frathedt § aarae arg (atte) & acter at ate gee art ® ara. afafrattca fear fs are 34% aeta arefeas araatfeat & arara ¥ feu avaa ag sel at fe fate aay afsa et wera arg (adr) X azaes yw (atta) F ade F, are 34(3) & setae arg frowg ar fade ;ae-|4fC4|.Lo||K:-qvos7.: 4Lacoyyi: gaa ats Fo MIAH AIQeT Aaa [Yo Ato Ala] 33 meatase él g AIX aaqare ardia 14 fearaz, 1960 arat frateq antesafra&|_ 8.gaat Uses faut A re at ata afaaw F ane ada Heaacter afar A aelaH agar (att) F sa aiee a ag afafraifeaHUI FT aIeT HT feat fe are 24(1)(c) F.aeha st we mrtaifeai, arde9 Fag, 1958 Hr faaretl 7y Garrat sre shar ate oe areea at TE Ff ate3a 4g fate fear fa gata ae wea faararat ar fafer) & aaare fafaray fearHIT|. 9. an ag sar[g] fH afedtar & seq ae ada afsacn a aaer fraRATT SIRT Tt ae atag at ag seq afafrry at are 34(3) e aeqa Fwae Hat ASale afraray a ag froaeg fara fe age argaa(aita)Sa arae ar, frat gam aegear ard H (sit fafera: freifect wfatafix 2)free aren 34 (1) (G) ® aeta a ag arefens arqarfeal at athe fear:Tat ar, Car Matera faay ar aware fe sas great araac aifsatFl azfren fear war & fa araarfgat aq fat & areew at aTOe 10. -farg sea earaiaa A ga fade Hag frog frarar fe are 34(3)er fadla vega ary vat tar1 Tea rararaa A ag Na cam feai— “agae wget (atte) H arte 24 aya, 1958 arr area Farg Car face ar fasae agt ar frat arare oe fis ag Tega APT staySI TGR Fsatqat F fay fassg tar Mar afec wy faaicaalaattaat Hat ada FH faare ger sea at aTaa at” We may mention that on the point of limitation the only _point debated before the Appellate Tribunal was regarding the effect of the proviso to Section 34(3) of the Act. The Appellate Tribunal came to the conclusion that the order of the Appellate Assistant Commissioner dismissing the original proceedings under Section 34 (!) (a) against Hussainbhai Abdullabhai, who legally represented the assessee, could be construed as giving a direction to the Income-tax Officer to initiate fresh proceedings. The High Court in the reference, however, came to the con-clusion that the second proviso to Section 34 (3) would be inappli-cable. The High Court observed : "There was no direction or finding in the Order of the Appellate Assistant Commissioner dated April 24, 1958 as would attract that proviso._ A finding for the purpose of that proviso should be one on a point at issue ill the assessment proceedings or in the appeal". It was contended before the High Court that a fresh notiL'C served under Section 31 (4) (a) beyond eight years of the assess-ment order was barred by time. The Revenue contended that Section 4 of the Income Tax (Amendment) Act, 1959 (I of 1959) saved a fresh notice from the bar of limitation. The High Court held that Section 4 of Act I of 1959 saved the notice under Sec-tion 34 (1) (a) issued on July 9, 1958 from the bar of limitation, .and accordingly answered the question against the assessee. The short question before us is whether Section 4 of the Indian Income-tax (Amendment) Act, 1959 saves the fresh notice from the bar of limitation. But in order to fully deal with thl: point it is necessary to set out the relevant portion of Section 34 (!) (a) as it existed at various times. The relevant portion of Section 34 (I), as amended in 1948, :reads as follows : (a) The Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income-tax have escaped assessment for that year . . . . he may in cases falling under clause (a) at any time within eight years and in cases falling under clause (b) at any time within four years of the end of that year, serve on the assessee, or, ... a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of Section 22 . . . . " The relevant portion of Section 34 (I) as amended by the Finance Act, 1'56 (Act XVIII <,>f 1956) reads thus : he may in cases falling under clause (a) at any time and in cases falling under clause (b) at any time within four years of the end of that year, serve on the assessee 11. • • . • • • a notice containing all or any of the require-ments which may be included in a notice under sub-sec-tion (2) of section 22. Provided that the Income-tax Officer shall not issue a notice under clause (a) of sub-section (!)-. (i) for any year prior to the year ending on the 31st day of March, 1941; 11.. Sea eqraTaa & ana ag asta st 7g at fe faaiem aaa ® asaySi & timer are are fart 31 8 (4) (¢) ag aefter FR A wehta fs eam aria dam a (sAosBoz) we ag quar daz, aaa1959 are (1959’ afaaeT 1) mt are 4 ofan F asia & ag qaar Hl carga Hel&| Tea eararea+ ag afufratfcafear fa 1959 % tae at are 4,9 garg, 1958 atare 34(1)(u) & seita faareit 7g gaar ay ofeelar se ata & raga aedaAT ATFJAT FA TWA BT Far faaifedt & faegs fear1oe 12. gar ana At aq wet faareata g ag ag g fe sarefeear gaaéaa (miosis) daz, 1959 wt are 4 aftaata Fat gear A aaaMTSfag ga vet ae quiaar faa aw at afe tag arama gfeara 34(1) (q) ar gaaas am, darfs ag fatter anal az free ar,srdfa fear are|aa: 13. are 34 (1) 1, TT 1948 y gar autfaa, GAT aT AI THT AT eaTaTeTA Frog afaeT (%) ara ae afasrd & crag favara weaarr efi,fratag % ferq aver 22% aeta asl ara at faazatt a4 F arsaad & faa are faster F faqaaa aa aay aeat ay 4—_qua: ate aa BT FH ome Hea F fraifeddst ate S ge ats arTAT H HITT MTT TATA ara, aM ar afwara sa agfag faatza a ge aa g, xxxx|xxXX at ag avs (=) & mela ara are aire Ha ad} wea 8 arsag & vtaz frat at ana ate ave (a) F seta are aver araHga ay Ryea Fare ad H daz feat wy ana fratfeet ax, ——axxx|ua gaat al adler ata fat a ad) ateroar gat a argRet ater aeafaee gett sit are 22 a see (2) Xx xRe aefter gaanafeafee at ort ae 1” ©14. aren 34 (1) aT gana amt, faa eq & fa ag faa afaftan,(1956 (1956 FT 18) art aeifaa fear vat at, ga THT I—| 34. (I) af (ae) rer ae afersrey Bora ag faeara HA aT aT g fF fadt ae & fae are 22 & aeta ool ora at faacarl aa F ar S77 Fag st THT F— (a) The Income-tax Officer has reason to believethat byreason of the omission or failure on the part of an assessee to va ay % fag ast fraiey }fae araae wa aaa aaBY GUT:A aa ETH He HUF fraffedt st ae a ae AeTT AAGAT FH PT MA-ES TAF aa, aw ar afar gaag & fac faaiza & gz ae Z,xx.Xx aM ag ave (a) F gellee ae are ara F ga at B aeq F faewl aaa at awe (a) F get aA ary wma F sa ad B aqTare ay F alae fetana faatfedy gexOKOXUa Aaa at atta Beta frat F a gta’ ar sat a arsCet ater seatace at A arer 22 Ht grarer (2) ¥ att gearFH aftafaa at ar ae:: TY ara Ht afsard sqarer (1) # aes (aH) F aefh}a—(i)31 are, 1941 at aaa ar ara ag & qaadt feat agfag;: (ii) Frat atag & faq aie ga ag & gaara B® aqaS ay ondta et ya a;:| gaat ad frarerat wa aa fa ara-az STG WT, AM aT afrara, at faaizar & ge WT B,x-Xx at a sa ag & fa ar fat sa ag ate feet aca ae at agh }fry fart cere at sat et ua. Tealq 31art, 1941 ¥TAT ate art ws agi, x x x gat feat we UH are eT ay 11. (ii) for any year, if eight years have elapsed after the expiry of that year, unless the income, profits or gains chargeable to income-tax which have escaped assessment . . . . . . . amount to, or are likely to amount to, one lakh of rupees or more in the aggregate; either for that year, or for that year and any other year or years after which or after each of which eight years have elapsed, not being a year or years ending before the 31st day of March, 1941 .. Section 34(4) of the Act as inserted by the Indian Income-tax !Amendment) Act. 1959 reads as follows : "(4) A notice under clause (a) of sub-section (1) may be issued at any time notwithstanding that at the time of the issue of the notice the period of eight years specified in that sub-section before its amendment by clause (a) of section 18 of the Finance Act, 1956 (18 of 1956) had ex-pired in respect of the year to which the notice relates." Section 4 of the Indian Income-tax (Amendment) Act, 1959 .. provided : "4. Saving of notices, assessments, etc., in certain cases.-No notice issued under clause (a) of sub-section (1) of section 34 of the principal Act at any time before the commencement of this Act and no assessment, re-asess-ment or settlement made or other proceedings taken in consequence of such notice shall be called in question in any court, tribunal or other authority merely on the ground that at the time the notice was issued or at the time the assessment or re-assessment was made, the time within which suoh·notice should have been issued or the assessment or re-assessment should have been made under that section as in force before its amendment by clause (a) of section 18 of the Finance Act 1956 ([8 of 1956), had expired." The learned counsel for the State quite rightly does not rely on Section 34 (4) of the Act to validate the notice because this contemplate a notice issued after the coming into force of the 1959 Act. It seems to us that Section 4 of the Amending Act of 1959 does not save the notice under Section 34 (1) (a) issued on July 9, 1958. In this case we are concerned with an income less than l lac mentioned in Section 34 as amended by Finance, Act, 1956. It is no doubt true, as urged by the learned counsel for the Reve-nue, that the first sentence of Section 4 includes all notices issued under Clause (a) of sub-section (1) of Section 34 of the Act at any time before the commencement of the 1959 Act and the notice dated I uly 9, 1958 falls within this description. But in our view the section does not save such notices from attack on all grounds whatsoever ; the only ground which cannot be taken to attack the validity of the notice is that at the time the notice was issued the period prescribed under Section 34 (I) (a), as in force before its amendment by Section 18 of the Finance Act, 1956, had expired. Is the assessee then raising this ground ? It seems to us that he is not. What he is saying is that a notice under Section 34 (!) (a), as amended by the Finance Act of 1956, could have been issued under that Act in respect of the assessment year 1948-49 till April I, 1957, and when the Finance Act of 1956 came into force he came to be governed by the 8 year period prescribed by the Act as amended by the 1956 Act and not the 8 year period pre>cribed by the Act as it existed before the amendments made in 1956. Accordingly the assessee's ground of attack .is that the 8 years prescribed by Section 34 as amended after 1956 have exrired and not that 8 years prescribed by Section 34 before il• amendment by Finance Act, 1956 have expired. In our view the stud taken by the assessee is correct.