INDURKAR V R Vs. PRAVINCHANDRA HEMCHAND

JUDGEMENT

(1.) THIS is a perfectly hopeless appeal against a judgment and order of K. T. Desai, J., whereby the learned judge ordered that the respondent to the writ petition who are the appellant before us, are restrained from continuing or further proceeding with the assessment proceedings. The petition arose under these circumstances. The petitioner was an assessee to whom, on the 6th of March, 1954, a notice was issued under section 34 of the Income -tax Act that in respect of the assessment year 1945 -46 certain income had escaped assessment. This consisted of two sums of Rs. 50,000 and Rs. 3,500 which were found to be deposited in the joint names of the petitioners and another in the International Bank of India at Navsari and Zaveri Bazar branches respectively. Both the deposits were in December, 1943. On the 9th February, 1955, an assessment order was made holding that these two deposits constituted income from undisclosed sources and adding them to the income of the assessee as previously found. There was an appeal to the Appellate Assistant Commissioner, who on the 10th of February, 1956, allowed the appeal holding that, assuming that the is was income form undisclosed sources, it was not the income for the assessment year 1945 -46. But thereafter, on the 14th of May, 1956, another notice under section 34 was issued to the petitioner this time seeking to include these two item of Rs. 50,000 and Rs. 3,500 as income from undisclosed sources in the assessment year 1944 -45. It is this notice that was challenged before the learned trial Judge on the writ petition. Obviously, this notice had been issued eight years after the relevant assessment year and unless it was saved by the second proviso to section 34, sub -section (3), of the Income -tax Act, the notice was bad and the Income -tax Officer would be acting without jurisdiction in proceedings to assess the petitioner. The plea of the Income -tax Officer was that this notice was covered by the second proviso to section 34, sub -section (3), and the relevant part of that proviso is in theses terms : 'Provided further that nothing contained in this a sections limiting the time within which any action may be taken or any order, assessment or reassessment may be made shall apply......to an assessment or reassessment made to on the assessee.........to give effect to any finding or direction contained in an order under section 31.....'

(2.) THIS contention of the Income -tax Officer was negatived by the learned trial Judge and what we have to consider is whether the learned Judge was right in doing so.

(3.) THE learned trial Judge was, therefore, right in the conclusion that he arrived at. We confirm the order of the learned trial Judge and dismiss the appeal with costs.