BELLAND Vs. BANARASI DEBI

JUDGEMENT

(1.) THIS is an appeal from an order of Sinha J. directing issue of a writ in the nature of mandamus forbidding the ITO, Companies District IV, Calcutta, the CIT and the Union of India from giving effect to or acting upon a notice of reassessment issued under s. 34(i)(a) of the Indian IT Act and further directing the issue of a writ of certiorari quashing the said notice.

(2.) THE respondent No. 1, who is a Hindu lady, filed her return in respect of the asst. yr. 1947-48 before the ITO, Companies District IV, Calcutta. THE assessment was completed in 1948, but it was found that no tax was payable by her. On 2nd April, 1956 a notice dt. 19th March, 1956, issued under s. 34(1)(a) of the Indian IT Act, was served on the respondent. Under s. 34(1)(a), the notice had to be served within eight years from the end of the assessment year, that is, by 31st March, 1956. But it was actually served on 2nd April, 1956 that is, two days later. THE relevant portion of s. 34 may be set out hereunder :

(3.) 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 s. 4 as introduced by the amending Act 1 of 1959, Mr. Meyer has argued that the word "issue" as used in the proviso to sub-s. (3) of s. 34 of the Indian IT Act, as it stood before the amendment of 1956, should be equated with the expression "serve" as used in sub-s. (1) of s. 34 of the Act and as the notice dt. 19th March, 1956, was actually served on 2nd April, 1956 the notice can be said to have been issued beyond the period of eight years as contemplated in s. 4 of Act 1 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 1 of 1959. In support of this contention, our attention has been drawn to a decision of the Bombay High Court reported as CIT vs. D.V. Ghurye (1957) 31 ITR 683. It has been held by the Bombay High Court in this case that the proper construction of s. 34(1)(a) read with the proviso to sub-s. (3) of s. 34 is that the expression "issued" as used in the proviso to sub-s. (3) of s. 34 should be equated with the expression served"as occurring in sub-s. (1) rather than the word "served" should be equated with the expression "issued" : used in the proviso to sub-s. (3). At page 686, Chagla C.J. in dealing with the question of construction observed :