TaxTMI 
TaxTMI 
1962 (4) TMI 114
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to have been received by the assessee in pursuance of an order under section 23A of the Income-tax Act and which could not be included in the total income at the time of the original assessment? (2) Whether, on the facts and in the circumstances of this case, the assessments made in pursuance of orders under section 31 of the Income-tax Act were not barred by limitation by virtue of the second proviso to section 34(3) of the Income-tax Act?" The facts giving rise to the reference are as follows: The questions arise out of tree orders passed by the Tribunal in respect of the three assessment years 1940-41, 1941-42 and 1942-43. The assessee is a company owning 150 ordinary shares in another company known as "J.K. Jute Mills Com....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ax Officer passed assessment orders on the returns and the assessee preferred appeals on certain grounds, with which we are not concerned in this reference. These appeals were allowed by the Appellate Assistant Commissioner and he remanded all the three cases for fresh assessment by the Income-tax Officer. When the Income-tax Officer proceeded to reassess the assessee, he did so on the basis of the dividends it was deemed to have received in accordance with his section 23A orders. In other words, he assessed the assessee on larger incomes now than previously. The following statement gives the dates of the original assessments, of the Appellate Assistant Commissioner's orders setting them aside and remanding the cases for reassessment, a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t to them, he has the same powers as he had originally when making an assessment under section 23. The reassessment is nothing but a second assessment in substitution of the assessment made previously and set aside by the Appellate Assistant Commissioner on appeal. There are no restrictions at all on the powers of the Income-tax Officer when he proceeds to reassess the income; subject to the directions given in the Appellate Assistant Commissioner's order, he has to proceed as if he were making an assessment under section 23 at the time when he proceeds to reassess. He is not bound or restricted by anything that had happened either when he made the original assessment or when the appeal was heard by the Appellate Assistant Commissioner;....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ve received larger income from the dividends. The assessment for 1941-42 was based on the income of the accounting year 1940. The original assessment was made on December 31, 1945, and the order was set aside by the Appellate Assistant Commissioner on March 31, 1947. In the meantime, the section 23A order had been passed on December 14, 1946, and on March 3, 1949, on which the Income-tax Officer reassessed the assessee, he had to reassess him on the basis of the income deemed to have been received by it in accordance with the section 23A order. If he had not made the original assessment and was making the assessment for the first time on March 12, 1949, it cannot be disputed that he would make it on the basis that the assessee had received ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t or reassessment (barring certain orders with which we are not concerned) can be made after the expiry of four years from the end of the year in which the income was first assessable. This bar is subject to two proviso, the second proviso being that it will not operate in a case of reassessment made in pursuance of an order under section 31. All the three reassessment were made after the expire of four years from the last days of the assessment years and, but for the proviso, they would have been all, barred by time, but since they were made in pursuance of the order given by the Appellate Assistance Commissioner they were not subject to any time limit. All the reassessment orders were made in direct compliance with the directions containe....