HAZARI LAL PT Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner, Hazari Lal, has invoked the power of this Court under Article 226 of the Constitution for issue of a writ of certiorari to quash a notice issued under Section 34 of the Income Tax Act by the opposite-party to him on 4-1-1956, and for issue of a writ of prohibition directing the opposite party to refrain from taking proceedings for re-assessment of the petitioner for the assessment year 1946-47. THE petitioner was a partner in Firm Hazari Lal Babu Lal at Kanpur which was registered under Section 26-A of the Income-tax Act. He was an assessee in his personal capacity and for the year 1946-47 an assessment order under Section 23(3) of the Income Tax Act was passed in his case on 31-8-1946. For the following assessment year 1947-48 the order of assessment under Section 23(3) of the Act was passed on 30-9-1947.

(2.) THE ordinary period within which a notice under Section 34(1)(a) of the Income-tax Act could be validly served on an assessee under the Income-tax, Act as it was in 1956 was a period of eight years-computed from the last day of the assessment year 1946-47, so that, ordinarily, a notice under Section 34(1)(a), in order to be in time, had to be served on or before 31-3-1955. On the other hand, the notice now impugned was issued on 4-1-1956, long after that period of limitation had expired. In these circumstances, on behalf of the opposite-party, reliance was placed on the second proviso to, Section 34(3) of the Income Tax Act which is as follows:

(3.) THIS view of ours, though not directly supported by is in line with various decisions in which, the expression 'in consequence of or 'as a result of has come up for interpretation before the courts. In this Court, the expression 'in consequence of used in Section 34(1)(a) of the Income Tax Act, as it stood before its amendment in 1948, came up for interpretation in the case of Subhakaran Seksaria v. Commissioner of Income Tax, U. P., C. P. and Berar, 1950-18 ITR 773: (AIR 1950 All 587). It was held: