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TMI Blog1961 (7) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... actually served on April 2, 1956, that is, two days later. The relevant portion of section 34 may be set out hereunder : (1) If- (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, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed, or..... 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, 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 sub-section (2) of section 22 and may proceed to assess or reassess such income, profits or gains or recompute the loss or depreciation allowance; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 which or after each of which eight years have elapsed, not being a year or years ending before the 31st day of March, 1941; (iii) for any year, unless he has recorded his reasons for doing so, and, in any case falling under clause (ii), unless the Central Board of Revenue, and, in any other case, the Commissioner, is satisfied on such reasons recorded that it is a fit case for the issue of such notice : Provided further that the Income-tax Officer sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or at the time the assessment or re-assessment was made, the time within which such 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 (18 of 1956), had expired. It is not disputed before us that the judgment of Sinha J. is a correct one according to the law as it then stood, but it is argued that the appeal before us being in the nature of a rehearing and continuation of the original proceeding, this court of appeal should grant relief to the appellants on the basis of the law as it stands at the time of the hearing of the appeal and the main contention of Mr. Meyer, the learned counsel for the appellants, is that in view of section 4, which has been introduced by the amending Act I of 1959, which, as pointed out already, came into force during the pendency of the appeal and which bars all challenge to the issue of the notice on the ground of limitation, this appeal court should hold that the notice dated March 19, 1956, which was served on April 2, 1956, is immune from attack on the ground of limitation and so it was a good and vali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then prevailing, because the adjudication on the rights of the parties as made by the lower court was not final. The propositions laid down in this case have not been disputed on behalf of the respondent and both parties before us accept the position that this court can in deciding this appeal give relief on the basis of the change in the law now brought about by the amendment of 1959. For the purpose of invoking the provisions of section 4 as introduced by the amending Act I of 1959, Mr. Meyer has argued that the word issue as used in the proviso to sub-section (3) of section 34 of the Indian Income-tax Act, as it stood before the amendment of 1956, should be equated with the expression serve as used in sub-section (1) of section 34 of the Act and as the notice dated March 19, 1956, was actually served on April 2,1956, the notice can be said to have been issued beyond the period of eight years as contemplated in section 4 of Act I of 1959 and as such, such notice is protected from challenge on the ground of limitation by virtue of the express terms of the said section of Act I of 1959. In support of this contention, our attention has been drawn to a decision of the Bomba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or relevant date the issue of the notice and not the service of the notice, even so, as already pointed out, the question of the application of the proviso only arises when an assessment order is made. It may be pointed out that in this Bombay case, there is a reference to a judgment of the Allahabad High Court in Sri Niwas v. Income-tax Officer, Sitapur [1956] 30 ITR 381 where a similar view with regard to the construction of the proviso to sub-section (3) and sub-section (1) (a) of section 34 was taken. Our attention has also been drawn to an unreported decision of this court being Appeal from Original Order No. 146 of 1958 (Shri Debi Dutt Moody v. T. Bellan, judgment dated July 8, 1960) where a division bench of this court had to consider this question of construction, but neither Lahiri C.J. nor Bachawat J., who constituted the division bench, has expressed any definite opinion on this point. After referring to the decision of the Bombay High Court in Commissioner of Income-tax v. D.V. Ghurye [1957] 31 ITR 683 the learned Chief Justice proceeded to observe as follows: Sinha J. has held that the effect of amendment of 1956 is to supersede the decision of the Bombay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs from the end of the assessment year, the provisions of section 4 of the amending Act I of 1959 were not attracted to this case and it is further submitted by Mr. Chaudhuri that the word issued as used in the proviso to sub-section (3) of section 34 of the Act, as it stood before the amendment of 1956, cannot be equated with the word served as used in sub-section (1) of section 34. His argument is that, when the legislature has used two different expressions issued and served it is reasonable to presume that the legislature used the two different words in different senses, or otherwise the legislature could have used the same expression in the different parts of the same section. According to the learned counsel, the issue of the notice must precede service and, as the period specified in sub-section (1) of section 34 was eight years, in the proviso to sub-section (3), the expression within the time therein limited was used after the word issued as merely referring to the period prescribed in sub-section (1) and the combined effect is that issue and service both are to be effected within eight years. So the stand taken up by the learned counsel in the case before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontext, must be construed so that the word or phrase is interpreted according to the meaning that has previously been assigned to it. James L.J. in the case of Ex parte Campbell (supra), expresses this rule in the following terms: Where once certain words in an Act of Parliament have received a judicial construction in one of the superior courts, and the legislature has repeated them without alteration in a subsequent statute, I conceive that the legislature must be taken to have used them according to the meaning which a court of competent jurisdiction has given to them. ... It is in my opinion a salutary rule and one necessary to confer upon Acts of Parliament that certainty which, though it is often lacking, is always to be desired. In my view, having regard to the context in which the expressions issue and serve are used in section 34 and having regard to the scheme of that section, it is quite legitimate to hold that the two words used in section 34 have been used as interchangeable or equivalent expressions and the same meaning has to be given to the word issued as used in section 4 which has been introduced by the amending Act I of 1959. Therefore, the n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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