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TMI Blog1962 (4) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... ursuance of an order under section 23A of the Income-tax Act and which could not be included in the total income at the time of the original assessment? (2) Whether, on the facts and in the circumstances of this case, the assessments made in pursuance of orders under section 31 of the Income-tax Act were not barred by limitation by virtue of the second proviso to section 34(3) of the Income-tax Act? The facts giving rise to the reference are as follows: The questions arise out of tree orders passed by the Tribunal in respect of the three assessment years 1940-41, 1941-42 and 1942-43. The assessee is a company owning 150 ordinary shares in another company known as J.K. Jute Mills Company Ltd. J.K. Jute Mills Company Ltd., w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, it could not possibly show in them the dividends which it was deemed to have received under section 23A orders passed against the company. The Income-tax Officer passed assessment orders on the returns and the assessee preferred appeals on certain grounds, with which we are not concerned in this reference. These appeals were allowed by the Appellate Assistant Commissioner and he remanded all the three cases for fresh assessment by the Income-tax Officer. When the Income-tax Officer proceeded to reassess the assessee, he did so on the basis of the dividends it was deemed to have received in accordance with his section 23A orders. In other words, he assessed the assessee on larger incomes now than previously. The following statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax Officer thinks fit or the Appellate Assistant Commissioner may direct, and the Income-tax Officer shall thereupon proceed to make such fresh assessment and determine where necessary the amount of tax payable on the basis of such fresh assessment. When an Income-tax Officer makes a fresh assessment in compliance with the Appellate Assistant Commissioner's directions, he is of course bound by the directions, but, subject to them, he has the same powers as he had originally when making an assessment under section 23. The reassessment is nothing but a second assessment in substitution of the assessment made previously and set aside by the Appellate Assistant Commissioner on appeal. There are no restrictions at all on the powers of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he date of the original assessment orders. His finding arrived at in the original assessment proceedings that the income from the dividends shown in the return was correct might have been correct but fell with the assessment order itself and was neither operative nor binding in the reassessment proceeding. By the time he came to reassess the assessee he had the section 23A orders before him under which the assessee was deemed to have received larger income from the dividends. The assessment for 1941-42 was based on the income of the accounting year 1940. The original assessment was made on December 31, 1945, and the order was set aside by the Appellate Assistant Commissioner on March 31, 1947. In the meantime, the section 23A order had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 23A orders the for the next two assessment years were passed by the Income-tax Officer after the Appellate Assistant Commissioner had ordered reassessment and, therefore, the Appellate Assistant Commissioner's orders did not contain any reference to them. The first question must, therefore, be answered in the affirmative. The second question raises the question of limitation. Section 34(3) provides that no order for assessment or reassessment (barring certain orders with which we are not concerned) can be made after the expiry of four years from the end of the year in which the income was first assessable. This bar is subject to two proviso, the second proviso being that it will not operate in a case of reassessment made in purs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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