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TMI Blog1960 (6) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... e as therein laid down. The petitioner was doing business in the name of Messrs. Indian Industries at Gondal and was also carrying on business at Rajkot. For the assessment year 1949-50, he was assessed under the Saurashtra Income-tax Ordinance by the Income-tax Officer, Madhya Saurashtra Circle, Rajkot. The State of Saurashtra became a part of the State of Bombay after the Constitution came into operation on January 26, 1950. The Indian Finance Act, 1950, was enacted by the Central Parliament and received the assent of the President on March 31, 1950. The integration of the State of Saurashtra with the Union of India came into effect on and from April 1, 1950. It is not now disputed before us that the present case is governed by the Indian Income-tax Act. But what is disputed is that the notice served on the petitioner under section 34 of the Act is beyond the period of limitation prescribed in that section. It is not necessary, therefore, to discuss the applicability of the Indian Income-tax Act to the case of the assessee or to refer to section 3 of the Indian Income-tax Act, (sic.) which extended the Indian Income-tax Act to the State of Saurashtra. The Income-tax Officer, War ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears of the end of that year, serve on the assessee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under-section (2) of section 22 and may proceed to the assess or re-assess such income, profits or gains or recompute the loss or depreciation allowance; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section: Provided that the Income-tax Officer shall not issue a notice under clause (a) of sub-section(1)-- (i) for any year prior to the year ending on the 31st day of March, 1941. (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 or have been under-assessed or assessed at too low a rate or have been made the subject of excessive relief under this Act, or the loss or depreciation allowance which has been computed in excess, 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 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that this proviso did not and could not apply to that case and had not to be considered when that decision was given. Even so it is urged that the decision in that case supports the contention of the petitioner when he asks us to equate the expression "issue" in the initial part of the proviso so section 34(1) with the expression "serve" in that substantive part of that sub-section. In that decision, the notice that came up for consideration was in respect of escaped income for the year 1943-44 and had been issued on March 20, 1952, and served on the assessee on April 16, 1952, and the notice had to be examined by applying the law prior to the amendments made in the section in 1956. The language of section 34(1) which we have set out above is now different in a material respect from the language of section 34(1) as it stood prior to the Amending Act of 1956. Moreover, the proviso which we have set out above, was not part of section 34(1) and had not to be considered by the court in that case. It is not necessary to set out the language of section 34(1)(a) as it stood prior to its amendments in 1956 as nothing turns on the same. The crucial change is in the words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h period exceeded the period of eight years or four years, as the case may be. It was in negative the argument advanced by the learned Advocate-General on behalf of the Revenue that the court expressed the view that the expression "issue" in the proviso to sub-section (3) should be equated with the expression "serve". It is true that the expression "issue" in the proviso to sub-section (3) of section 34 has been interpreted in the decision of the Bombay High Court relied on by Mr. Shah. It is also true that as far as possible the same expression should receive the same interpretation in the other parts of the same section. But the court in that case was considering the expression "issue" as used in section 34(3) and in a different context and different collocation and that decision is, therefore, clearly distinguishable. Any opinion of the learned Chief Justice and Mr. Justice Tendolkar would be considered by this court with the greatest respect; but the provision which we are called upon to construe was not the provision which they had to examine. Not only that, but we are here, though dealing with the same section, concerned with provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ah to rely on clause (ii) of the proviso. It was suggested that the words in the beginning of the sub- clause, "for any year if eight years have elapsed after the expiry of that year", refer to the expiry of the accounting year of the assessee and not the assessment year. In our judgment, there is no warrant for this contention. Reading of section 34 as a whole, as well as the meaning of the expression "year" in the present context and the present setting, necessarily leads to the conclusion that the year contemplated is the assessment year and not the accounting year or the previous year of the assessee. The scheme and the object of these limitative provisions of section 34(1), even if it were necessary to examine the same, go to support the conclusion reached by us. Confining our observations to clause (a) of section 34(1) the scheme of that sub-section is that, if the Income-tax Officer has reason to believe that any income has escaped assessment in cases falling under the same, he may, at any time, serve the requisite notice on the assessee and proceed to assess such escaped income. The proviso engrafts certain safeguards on that rule. Clause (a) puts an em ..... X X X X Extracts X X X X X X X X Extracts X X X X
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