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1966 (10) TMI 26 - SC - Income TaxWhether the notice dated 23rd February, 1950, was validly issued under section 34 or not? Whether the order of assessment dated 2nd May, 1956, made by the P.I.T.O. was barred by time? Held that:- Since the case of the assessee was transferred to the P.I.T.O. at the stage when no proceeding was pending before the A.I.T.O., the P.I.T.O. became seized of the jurisdiction to take any proceedings against the assessee which the law permitted. It was clearly in exercise of this jurisdiction that the P.I.T.O. issued the subsequent notice dated 11th February, 1956. That notice was, therefore, competently issued by him and was also valid, because it was issued before the expiry of eight years from the end of the relevant assessment year 1947-48. The notice having been issued validly within the period of limitation permitted by section 34(3), the actual order of assessment could be made validly before the expiry of the period of one year from the date of the notice. The order of assessment dated 2nd May, 1956, was, Consequently, a valid order and was not barred by time. In the circumstances, the answer returned by the High Court to the two questions referred to it has to be held to be incorrect. Both the questions have to be answered against the assessee and in favour of the Commissioner of Income-tax, so that the answer returned by the High Court to the two questions is set aside, the first question is answered in the affirmative, and the second in the negative. Appeal allowed.
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