SIMRATHMULL K Vs. ADDITIONAL INCOME TAX OFFICER

JUDGEMENT

(1.) THIS is a petition for the issue of a writ prohibiting the Additional Income-tax Officer, Ootacamund, from continuing certain proceedings which he initiated by means of a notice issued under Section 34 of the Income-tax Act dated 6-2-1957, and numbered as 86-S/45-46.

(2.) THE petitioner is an assesses on the file of the Additional Income-tax Officer, Ootacamund in G. I. No. 86-s. On 18-12-1946, the Income-tax Officer assessed the petitioner on a total income of Rs. 5143, under Section 23 (3) of the Act. Subsequently, on 31-3-1956, the Income-tax Officer re-assessed him on a total income of Rs. 39,568. In this amount was Included a sum of Rs. 31,000, which the assesses alleged he had taken on loan from Messrs. Mangilal Inderchand, a firm carrying on business in Rajasthan, but which the Income-tax Officer held was income from undisclosed sources.

(3.) THE first contention which Mr. Subbaraya Aiyar, the learned advocate for the petitioner, put forward was that the proceedings which the Additional Income-tax Officer, Ootacamund, has now initiated are barred by limitation. His argument may be put this way. If the Income-tax Officer proceeded on the basis of Section 34 (1) (b) of the Act, he should have issued a notice within four years from the end of the assessment year, that is to say, on or before 31-3-1950. THE second proviso to Sub-section (3) of Section 34 was amended by Central Act XXV of 1953. Sub-section (2) of Section 1 of that Act directed,