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Issues:
1. Validity of reassessment under section 34 of the Income-tax Act for the assessment year 1947-48. 2. Barred by limitation - Notice issued four years after the assessment year. 3. Scope and enforceability of the second proviso of section 34(3) of the Act. 4. Constitutional challenge under Article 14 of the Constitution. Analysis: The case involved the reassessment of an assessee company for the assessment year 1947-48 under section 34 of the Income-tax Act. The primary issue was the validity of the reassessment, challenged on three grounds by the assessee's counsel. The first contention was regarding the limitation period, as the notice for reassessment was issued four years after the close of the assessment year, raising concerns about the initiation of proceedings under section 34 being barred by limitation. The court examined the relevant dates to determine the limitation issue. It was established that the notice for reassessment was issued after the statutory four-year limitation period had expired, and the discovery of excessive relief granted to the assessee occurred after the limitation period had lapsed. The court emphasized that the amended second proviso to section 34(3) could not be applied retroactively to cases where the right to reopen assessment had already lapsed under the previous law of limitation. Regarding the second and third contentions raised by the assessee's counsel, the court did not delve into them as the first contention on limitation was deemed well-founded. The court cited precedents where it was established that if a right to sue had become barred by the provisions of the Act in force, a new enactment could not revive the barred right. The court also addressed the amendments made to the proviso of section 34(3) before and after April 1, 1952. It analyzed the scope of the proviso and concluded that the reassessment in the case did not fall within the purview of the unamended proviso, thereby upholding the limitation bar for initiating proceedings under section 34. Furthermore, the court dismissed the argument that the reassessment could be viewed as rectification under section 35 of the Act, emphasizing that the Department had invoked the powers under section 34. The court highlighted that the reassessment proceedings were without jurisdiction due to the limitation issue, rendering the further proceedings to reassess the assessee invalid. In conclusion, the court answered the question in the negative, ruling in favor of the assessee and awarding costs. It refrained from delving into the constitutional validity of the amended second proviso, as relief could be granted without addressing that aspect. The judgment underscored the importance of adhering to the statutory limitations and procedural laws in reassessment proceedings.
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