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TMI Blog1971 (1) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... ears 1947-48 and 1948-49, the Income-tax Officer, Ranchi, held that Banwari Lal Agarwal, hereinafter called "the assessee", had invested Rs. 17,425 in the year of account relating to the assessment year 1947-48, and Rs. 35,500 in the year of account relevant to the assessment year 1948-49, in Indian Woollen and Silk Stores, Ranchi of which the assessee was a partner. The Income-tax Officer included those sums as the income from undisclosed sources in the assessment of the Hindu undivided family styled M/s. Narmal Ramkumar of which the assessee was a member in the two respective assessment years. The Hindu undivided family appealed against that order. The Appellate Tribunal held in respect of the appeal for the assessment year 1947-48 that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore invalid. At the instance of the Commissioner of Income-tax, the Tribunal referred the following question to the High Court of Patna: "Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in holding that proceedings under section 34(1)(a) of the Income-tax Act for the assessment year 1948-49 in the case of the assessee was invalid ?" The High Court answered the question in the affirmative. Against that order the Commissioner of Income-tax has appealed to this court. The principal argument advanced in the appeal is that the judgment of the Bombay High Court in Hiralal Amritlal Shah's case on which reliance was placed by the Tribunal was overruled by this court in K. C. Thomas, 1st Income-tax O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of assessment or reassessment in cases falling within clause (a) of sub-section (1)...of this section shall be made after the expiry of four years from the end of the year in which the income, profits or gains were first assessable... Provided further that nothing contained in this section...shall apply to...an assessment or reassessment made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 31, section 33, section 33A, section 33B, section 66 or section 66A." It was held by this court in K. C. Thomas's case that proviso (ii) to sub-section (3) was an exception to the entire section. Therefore, to an order of assessment or reassessment of the income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment or reassessment under section 34(1)(a) cannot be served against the assessee beyond the period of eight years from the last day of the year of assessment This court took a different view holding that the second proviso to section 34(3) applied to notices under section 34(1)(a) as well. This court in S. C. Prashar v. Vasantsen Dwarkadas held that the second proviso to section 34(3) of the Income-tax Act, 1922, in so far as it authorises the assessment or reassessment of any person other than the assessee after the expiry of the periods of limitation specified in section 34 in consequence of or to give effect to a finding or direction given in an appeal, revision or reference arising out of proceedings in relation to the assessee vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation prescribed by sub-section (3). On that part of the case, no question is raised. Counsel for the Commissioner has fairly conceded that the question referred does not bring oat the only plea on a favourable decision on which the department may bring to tax the income which had escaped assessment. Counsel conceded that the question whether by virtue of the second proviso to sub-section (3) of section 34 the assessment could, in the circumstances of the case, be completed outside the bar of that sub-section was not argued and not even raised before the Tribunal or before the High Court. We do not, therefore, deem it necessary to record our answer to the question raised. The appeal fails and is dismissed. There will be no order as t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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