TMI Blog1968 (1) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... sad and Harkisondas, formed the third Hindu undivided family. The partnership deed, however, showed these 13 persons constituting the three undivided Hindu families and the three outsiders as sixteen partners of the firm. Since the commencement of the firm up to the assessment year 1939-40, the sixteen partners were all assessed as individuals in respect of their respective shares of profits of the partnership firm. For the assessment years 1939-40, 1940-41 and 1941-42 the Income-tax Officer assessed them as six units : the three outsiders partners as three units and the remaining 13 constituting the Hindu undivided families as the three Hindu undivided family units represented by their respective kartas, Narayandas Pokarmal, Meghraj Pokarmal and Hanumandas Sewakram. It appears that the assessment for these three years on the said basis was made in pursuance of a settlement arrived at between the assessees and the income-tax department. The settlement, however, was to apply only for these three years and it was agreed that the Income-tax Officer was to make an order and declare that a partial partition disrupting the joint families had taken place on the 30th October, 1940, which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the Income-tax Officer to tax the income in the hands of the separated members of the family, who were entitled to receive the same. This order was made by the Appellate Assistant Commissioner on the 3rd of March, 1954. In consequence of these directions given by the Appellate Assistant Commissioner, the Income-tax Officer issued notices under section 34 to the 13 persons on the 8th of April, 1954. The said notices were served on them on the 9th of April, 1954. Of these 13 notices, four were issued to individuals and the remaining nine were issued in the status of Hindu undivided families requiring them to submit returns on behalf of their respective Hindu undivided families. The four persons, to whom notices were issued as individuals, were Narayandas Pokarmal, Meghraj Pokarmal, Hanumandas Sewakram, represented by his legal representative, since he had died by that time, and the fourth was Beniprasad Meghraj, one of the sons of Meghraj Pokarmal. All these persons to whom notices were issued, objected to the action taken by the Income-tax Officer and filed their returns under protest. They contended before the Income-tax Officer that the proceedings under section 34 were illegal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of the eleven assessees excepting Narayandas Pokarmal, Meghraj Pokarmal and Hanumandas Sewakram, the proviso had no application inasmuch as they could not be regarded as parties to the appeals filed by the three Hindu undivided families, which were assessed. The Tribunal, however, held that the second proviso to section 34(3), in its present amended form, which received the assent of the President on the 24th May, 1953, was applicable retrospectively from the 1st of April, 1952. The assessment being in respect of the assessment year 1944-45, 8 years from the last day of the assessment year would expire only on the 31st March, 1953. The period of limitation, therefore, under section 34, if it was 8 years, was not over before the second proviso to section 34(3) became applicable. In its opinion, all the 11 cases before it were governed by section 34(1)(a) and, consequently, the period of limitation under which action could be normally taken under the said provision was 8 years. There is, however, no discussion in the order of the Tribunal as to why it regarded that the cases of 7 of the 11 assessees to whom notices under section 34 were issued in the status of Hindu undivided fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on certain questions formulated by them as arising out of the Tribunal's order and on the said application the Tribunal has drawn up a statement of the case and referred to this court two questions of law as arising out of its order. The first of these relates to all the 12 appeals and is as follows : "Whether, having regard to the direction given by the Appellate Assistant Commissioner in his order dated March 9, 1954, in the case of the appropriate Hindu undivided families and having regard to the second proviso to section 34(3) as amended by section 18 of the Indian Income-tax (Amendment) Act, 1953, the reassessment made by the Income-tax Officer on January 31, 1955, in the case of any one or more of the assessees is governed by any limitation period such as is mentioned in the substantive part of section 34(3) ?" The second question, which relates to the assessments of Narayandas Pokarmal , Meghraj Pokarmal, Hanumandas Sewakram by his legal representatives and Beniprasad Meghraj for the assessment year 1944-45 and in the case of Onkarmal Meghraj for the assessment year 1943-44, is as follows : " Whether in the case of the assessee, the remedy available to the Income-tax O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuing the notices, the Commissioner's satisfaction on the reasons recorded by the Income-tax Officer and the orders of the Income-tax Officer and the appellate authority and the manner in which the assessment proceedings were dealt with and disposed of by them. In that view of the matter, this court directed that a supplementary statement of case be called for from the Tribunal and the matter may be further considered and disposed of after the said statement was received, after reframing the questions referred to by the Tribunal in a suitable manner. The supplementary statement as called for by this court has now been forwarded by the Tribunal annexing thereto such record as was indicated by this court in its order calling for the supplementary statement. In addition to the two questions which are referred to by the Tribunal and which we have already set out above, a further question will have now to be framed in view of the further contention raised and the supplementary statement called in respect thereof. We will accordingly frame an additional question as follows and make it question No. 3 : " Whether section 4 of the Income-tax (Amendment) Act (I of 1959) was applicable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is whether on the consideration of the said material a conclusion can be positively reached that the notice at its initiation was intended to be given under section 34(1)(a). Mr. Javeri has argued that the department having sought to have the normal bar of limitation removed by reason of a special provision, the burden is on the department to prove satisfactorily that the case comes within the ambit of the special provision. What will have to be seen, therefore, on the consideration of the material is whether the department has discharged the said burden and the material on which it wants to rely can satisfactorily show that the action intended to be taken was under section 34(1)(a) of the Act. Mr. Joshi, the learned counsel for the revenue, on the other hand, has argued that the question as to whether the notice was issued under section 34(1)(a) or not will have to be judged on the basis of the action which was possible under the law at the material time in force, the manner in which the action has been taken and how the Income-tax Officer has conducted himself in dealing with the proceedings. Mr. Joshi says that it is well settled that a notice under section 34 is not require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent under the sub-clause not originally contemplated by him, because under section 4 of the Act 1 of 1959, unless the action contemplated by the Incometax Officer at its initiation was one under section 34(1)(a), section 4 of the Act 1 of 1959 will not be applicable. What will, therefore, have to be seen is whether on the material on record it can be said that the action contemplated in the present case and the notice issued in pursuance thereof was one under section 34(1)(a). Coming now to the several items of the material on record, the notices issued under section 34 by themselves give no help in deciding whether they are issued under section 34(1)(a) or under section 34(1)(b). The notices can be conveniently divided into two groups : one of seven which were issued to Hindu undivided families and the other of four, which were issued to individuals. The notices issued in each group are all similar and it will, therefore, suffice to refer to one notice in the case of the group of the seven assessees and one notice in the cases of the other four. Thus in the case of Onkarmal Meghraj, the notice issued to him, which appears at page 18 of the supplementary record, is addressed to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch reassessment has to be made, " new case " and in column No. 6 requiring a statement as to whether the case falls under clause (a) or (b) of section 34(1), he has merely mentioned : " 2nd proviso to section 34(3) ", and the reasons given by him as required by column 7 for starting proceedings under section 34 are "consequent to the Appellate Assistant Commissioner's direction in his order dated March 9, 1954, against appeal filed for 1944-45 in the case of Meghraj Pokarmal, the assessment has to be made on the assessee for 1944-45 on his income included in the assessment for 1944-45 in the case of Hindu undivided family of Meghraj Pokarmal as directed by the Appellate Assistant Commissioner, G-Range, Bombay." Underneath the report made by the Income-tax Officer, there is an endorsement made by the Commissioner of Income-tax, Bombay City I, in compliance with column No. 8, which is that he is satisfied that it is a fit case for action under section 34 of the Income-tax Act. Mr. Joshi has argued that the statements made by the Income-tax Officer in his report under columns (2) and (4), viz., that the status is " Hindu undivided family " and that it is a " new case " are clearly ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer had taken the view that the income belonged to the bigger Hindu undivided family and not to Onkarmal Meghraj, the mention of the status as " Hindu undivided family " of the assessee proposed to be assessed and the description of the proposed proceeding of assessment as a " new case ", could not be regarded as leading to a necessary conclusion that the proposal was intended to initiate the proceedings under section 34(1)(a). That the Income-tax Officer in making the proposal had not come to the conclusion that the case would fall under section 34(1)(a) would be evident from the statement which he has made in column No. (6) as also from the reasons which he has given for starting the proceedings. Column No. (6) requires a statement whether the case falls under clause (a) or (b) of section 34(1). If he was clear in his mind that it was a case coming under section 34(1)(a) and he was taking action under that provision we should have expected a statement to that effect to the query made in column (6). We find, however, that what he has stated is that the case falls under the second proviso to section 34(3). When we go to the reasons they bear out the statements that he has made in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the family constituted fresh information having come into the possession of the Income-tax Officer leading him to the conclusion that income had escaped assessment. In our opinion, the submissions of Mr. Javeri are not without substance and the conclusions, which he has suggested as capable of being drawn from the statements made by the Income-tax Officer in his report, cannot be said to be either unreasonable or far fetched. It would indeed appear, as we will presently show from the order of the Income-tax Officer itself, that he does not appear to be aware that in dealing with the assessment it was necessary for him to ascertain whether the case would fall under sub-clause (a) or sub-clause (b) of section 34(1). At any rate, we have no doubt that the proposal made by him to the Commissioner for sanction to start proceedings under section 34 does not supply evidence that the Income-tax Officer was contemplating action under section 34(1)(a). The sanction given by the Commissioner also recorded on the proposal does not improve the position. What he has stated therein is that he is satisfied that this is a fit case for action under section 34 of the Income-tax Act. In the abse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4(1)(a) and having regard to the other material on record it would be seen that the proceedings taken against the assessee were understood by him as under section 34(1)(a). We will deal with the other items of the material, to which Mr. Joshi has referred, later on. So far as the representation is concerned, we do not think that it indicates that the assessee understood that the action taken against him was under section 34(1)(a). We then go to the order of assessment made by the Income-tax Officer which appears at page 28 of the supplementary record. The Income-tax Officer in his order has set out the contentions which were urged before him on behalf of the assessee, which are: (1) that the proceedings initiated under section 34 are illegal, bad in law and without jurisdiction as they had been started after the period of limitation under section 34(3) had expired ; (2) that the second proviso to the said section 34(3) as amended is not applicable and (3) that the said amendment is ultra vires and of no effect at least in so far as it was sought to be applied to the assessments of persons other than the assessee in whose case the relevant order under section 33 is passed and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to make an assessment under section 34 without bothering in any way to find out whether the conditions of section 34(1)(a) or section 34(1)(b) are satisfied or not. Now, in the present case, the assessments under section 34 were being made for the assessment year 1944-45. The notices that were issued under section 34 were served in April, 1955, which was beyond the period of eight years from the last date of the year of assessment. If the second proviso to section 34(3) were to be availed of in order to get rid of the bar of limitation to the initiation of the action under section 34, it was necessary to consider whether the proviso was applicable to the cases. If the period of four years was applicable to the cases, the same having expired on the 31st March, 1949, the proviso could not help because in the present amended form it came on the statute book on the 6th of May, 1953, and had retrospective effect only from the 1st of April, 1952. If the period of eight years was applicable, then, of course the proviso would apply, since it had come into operation from the 1st of April, 1952, and the action would not be barred by time. It was necessary and essential, therefore, for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... might have been taken in the appeal memo by the legal adviser of the assessee, who understood the action taken by the Income-tax Officer as one under section 34(1)(a), that would not bind the assessee and estop him from contending that the action was not initiated under section 34(1)(a). The manner in which the contention has been disposed of by the Appellate Assistant Commissioner indicates that he agreed with the view taken by the Income-tax Officer and did not appreciate the importance of considering the contention raised before him as to whether the case fell under section 34(1)(a) or section 34(1)(b). Dealing with the assessee's contention the Appellate Assistant Commissioner states : "Consequent on the Appellate Assistant Commissioner's directions quoted above, the Income-tax Officer started action under section 34 against the present appellant, viz., Onkarmal Meghraj, Hindu undivided family. It may be mentioned here that under the normal provisions of section 34(3), the period of limitation to start action had already expired but the Income-tax Officer relied on the second proviso to the said sub-section which prescribes no time-limit." This is what he has stated with r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ail of the provisions of section 4 of Act 1 of 1959 in order to avoid the bar of limitation, the burden was on the department to establish that the case fell within the ambit of the said provision. On the material on record it cannot be said that the said burden has been discharged by the department. Consequently, we must come to the conclusion that the provision of section 4 of Act 1 of 1959 is not applicable to any one of the eleven cases relating to their assessment for the assessment year 1944-45. There is one more case to be considered so far as this point is concerned and that is, the case of Onkarmal Meghraj for the assessment year 1943-44. The proposal for assessment in that case was made by the Income-tax Officer on the 21st January, 1954, and appears at page 24 of the record. He has mentioned the status as " Hindu undivided family ". He has also referred to the proposed assessment as a " new case " and in column No. (6), in answer to the query whether the case falls under clause (a) or clause (b) of section 34(1), he has stated : "section 34(1)(a) and the second proviso to section 34(3)." The reasons given for the proposed assessment are that, consequent on the Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roviso to section 34(3), there is no question of limitation. The only indication so far as the record of this case is concerned is the mention of section 34(1)(a) specifically in the proposal. Normally the said mention in the proposal by the Income-tax Officer must be regarded as indicative of his having considered the case as coming within that category for the purpose of initiation of the proceedings at any rate. Since there is nothing on record which can show that the said entry in column (6) is either by inadvertence or through mistake, we must give it its proper effect and hold that in that case action can be said to have been initiated under section 34(1)(a) and, consequently, section 4 of Act 1 of 1959 will apply to it and the challenge to the said assessment merely on the ground that the time within which the notice should have been issued under section 34(1)(a) as it stood before its amendment by clause (a) of section 18 of the Finance Act of 1956 had expired. Our answer to question No. 3, therefore, will be that section 4 of Act 1 of 1959 was not applicable to all the cases excepting the one in R. A. No. 881, i.e., the case of the assessment of Onkarmal Meghraj for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of the decision of the Tribunal, the Appellate Assistant Commissioner allowed the said appeals, quashed the assessments on the Hindu undivided family and directed the Income-tax Officer to tax the income assessed in the hands of the separated members of the family, who were entitled to receive the amount. Assessments were started under section 34 in pursuance of the directions of the Tribunal for the assessment year 1943-44 and in pursuance of the Appellate Assistant Commissioner's directions for the assessment year 1944-45. In all these assessments, the assessments for the assessment year 1943-44 were not challenged by the assessees. Only one of them, viz., Onkarmal Meghraj, challenged the said assessment for the assessment year 1943-44 and took his challenge up to the Tribunal, and for the assessment year 1944-45 all the assessments were challenged by the respective assessees. The grounds of challenge were that the action taken was beyond time and was not saved by the second proviso to section 34(3) in all the cases, and the said proviso at any rate was not available in the case of the assessees who were not parties to the appeals in which the directions were given by the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lusions of the Tribunal that are challenged before us so far as the first question is concerned. Mr. Javeri, the learned counsel appearing for the assessees, has argued that the Tribunal has erred in holding that the cases of the assessees fell under section 34(1)(a) and were, therefore, governed by the eight years' rule. His argument is that the conditions necessary to be satisfied in order that the cases may fall under sub-clause (a) of sub-section (1) of section 34 are that, in the first place, there must be an omission or failure on the part of the assessee to make a return or an omission or failure on his part to disclose fully and truly all material facts necessary for the assessment of that year and in the second place such omission or failure must have led to the escapement of income or its under-assessment, etc. His argument is that, in the present case, none of the conditions specified in section 34(1)(a) are satisfied. In the first place, he says that there has been no omission or failure on the part of the assessees to make a return. All the assessees had made returns and in each of the returns they had disclosed the income received by them towards their share in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has argued that the cases have been properly held by the Tribunal as falling under section 34(1)(a). He says that in the cases of seven of the eleven assessees, who have been assessed under section 34 as smaller Hindu undivided families, there has been a failure or omission on the part of these assessees to make a return. The returns, which were made by the seven assessees in their individual capacity, who are now assessed in the status of Hindu undivided family, cannot be treated as returns made by the Hindu undivided families. In the case of these seven Hindu undivided families, therefore, the case is governed by section 34(1)(a) because it is a case of omission or failure to file a return. As to the other four, he says that it is no doubt true that their original returns were as individuals and the present returns, which they were required to file, were also in the status of individuals. Still, however, the present status as individuals, which is as a separated member of a Hindu undivided family, is not the same as the former status of an individual, in which status the original returns were made, viz., as individual partners of a partnership firm and, therefore even in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rns filed by these seven persons as representing the smaller Hindu undivided families into which the larger Hindu undivided family was disrupted and made assessments on the said basis. There were, in our opinion, returns made by these seven assessees originally in which the facts material and necessary for their assessment were disclosed and which could have led to a proper assessment being made on them. It could, therefore, be treated as a case of no return. It is also clear that the order of " no assessment " made on these returns was not because of a wrong or improper return having been submitted by these assessees, but because of an erroneous view taken by the Income-tax Officer that the income had to be assessed in the hands of the Hindu undivided family. As to the group of the other four assessees, it is difficult to see how their case could fall under section 34(1)(a) as held by the Tribunal. These four persons had submitted their returns as individuals and in the said returns had disclosed fully and truly the income received by them, which was liable to assessment. The Income-tax Officer had, however, made the assessment on the three Hindu undivided families represented b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of circumstances. If the status in which the return is to be made is as an individual, no further information is required to be furnished under the law of income-tax as to in what capacity the status as an individual is possessed or on what set of circumstances the status as an individual is claimed by the assessee. Secondly, even assuming that the assessee was an individual in the sense of being the sole surviving coparcener of a joint family, and the character of the property, from which he derived his income, was that of joint family property, the income derived from the said property was the income of the sole surviving coparcener and wholly belonged to him. If the return was to be made as an individual, it was the income of the individual, who was making the return and had to be assessed on that basis. It really made no difference to the assessment of the income whether the income, which belonged to the assessee, and which was returned by him, was derived by him from the property, which was his self acquired property or from the property which he held as the sole surviving coparcener of the joint family. In the first place, since the return was rightly made in the status of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-disclosure of this fact because, though this income undoubtedly escaped assessment, the escapement was not by reason of non-disclosure of the sale proceeds received in the account with the company but by reason of the erroneous view taken by the Income-tax Officer that sale proceeds received in British India did not attract chargeability." In the present case before us the non-disclosure in the first returns made by each of these four persons that the individual status held by them was on the basis of their being separated members of the Hindu undivided family was, in the first place, not material or necessary for their assessments. The income was as such assessable in their hands as individuals whether it was derived from the property which they held as the sole surviving coparceners in the joint family or as individual partners in the partnership firm. It made no difference to the assessment whether the said explanation was given or not given. Secondly, the result of " no assessment " on the said returns was not due to the non-disclosure of this information, but because of the erroneous view taken by the Income-tax Officer that the income belonged to the bigger Hindu undivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 1 of 1959 to the case merely protects the notices against the plea of the bar of limitation and no other bar is sought to be abrogated thereby. So far as our answer to the first question relating to the case of this assessee is concerned, it will be the same as in the other cases. The next contention that has been urged in connection with this question, is that at any rate, so far as the eight of the present eleven assessees relating to the assessment year 1944-45 are concerned, the second proviso to section 34(3) will not apply to them as they were not parties to the proceedings in which the direction or order was given and the same is the contention put forth on behalf of the assessee, Onkarmal Meghraj, regarding his assessment for the assessment year 1943-44. The argument of Mr. Javeri is that, so far as the 1944-45 assessments are concerned, these are in pursuance of and to give effect to the directions given by the Appellate Assistant Commissioner in the three appeals preferred by the three Hindu undivided families in whose hands the income was assessed by the Income-tax Officer. It may be mentioned that these three Hindu undivided families were Narayandas Pokarmal, Meghra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upreme Court and on that view it would not be applicable in all cases. He has, however, been content to proceed on the basis that the second proviso to section 34(3) is ultra vires in so far as it affects persons other than parties to the proceedings. In view of the position adopted by Mr. Javeri that he would argue on the footing that the proviso is ultra vires so far as it affects persons other than parties to the proceedings, it is not necessary to consider the correctness or otherwise of the view taken by this court in M. Bhawanji Thakar v. S. P. Pande that the proviso has been wholly declared ultra vires by the Supreme Court by its decision in S. C. Prashar v. Vasantsen Dwarkadas. We may, however, point out that when this court took the view that the case of Vasantsen Dwarkadas declared that the said proviso was wholly ultra vires, it had not the advantage of the Supreme Court decision in the case of Commissioner of Income-tax v. Sardar Lakhmir Singh and the view expressed by Sarkar J. in the said decision. In Vasantsen Dwarkadas's case Sarkar J., when he expressed his view that he thought that the second proviso to section 34(3) of the Income-tax Act is invalid, had preceded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment for the assessment year 1945-46. On 27th November, 1953, the Income-tax Officer made an assessment on the assessee in his individual capacity on the basis of the original return filed by him. The High Court on a reference held that the assessment was invalid on the ground that the period of limitation for the assessment of the income in question relevant for the assessment year 1946-47 under section 34, before it was amended in 1953, had expired on March 31, 1951, and the second proviso to section 34(3), as amended in 1953, did not have the effect of reviving the right of the Income-tax Officer to make an assessment for the year 1946-47 as it was given retrospective effect only from 1st April, 1952. The Supreme Court held that the second proviso to section 34(3), as amended in 1953, could not be availed of also for the reason that it was ultra vires in so far as it affected persons other than the assessees and the assessee in the case was not an assessee in the appeal of the Hindu undivided family, in which the assessment was quashed. Sarkar J. in his judgment pointed out: " The respondent, Lakhmir Singh, was not the assessee in the section 31 proceedings in consequenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be initiated under section 34 of the Act. In the appeals filed by K, the partition was accepted and, by an order dated 18th December, 1954, the assessments on K as the karta of an undivided family were cancelled. On 2nd March, 1957, notices under section 34(1) were issued for all the three years on K and M for bringing to tax their respective incomes as divided members. It was held by the Madras High Court that, as K was found to have been divided from his son, M, at the time when he submitted the returns, he did not purport to, and, in fact, would have no right to, represent his son, M, and the findings arrived at in the appeal preferred by K could not bind M and on the principle laid down in Income-tax Officer v. Murlidhar Bhagwan Das , M's case was not covered by the proviso. In view of these decisions, the eight persons excepting the three others, who were considered to be the kartas of the three bigger Hindu undivided families, were not parties to the proceedings in the appeals before the Tribunal and the Appellate Assistant Commissioner filed by the three Hindu undivided families and, consequently, the second proviso to section 34(3) did not apply to them. So far as the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Officer had already become time-barred under section 34 before that section was amended in 1953 with retrospective effect from April 1, 1952. We may point out that this question was framed also in connection with the twelfth case, which is of Onkarmal Meghraj relating to the assessment year 1943-44. We have already pointed out that in that case, irrespective of whether the eight years' or four years' rule applies, since the last date, even taking the longer period to be applicable, expired on 31st March, 1952, the proviso which became applicable from the 1st day of April, 1952, would have no application. As we have stated earlier, the Tribunal has observed in its statement that the second question framed by it arises only in five cases, namely, in four cases of assessments for the assessment year 1944-45 in which the notices were issued to the assessees as to individuals and in the case of Onkarmal Meghraj for the assessment for the assessment year 1943-44. Mr. Javeri had contended before the Tribunal during the hearing of the application under section 61(1) that the question arose in the case of all the assessees and should not, therefore, be restricted to the four ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the four years' rule. In that view of the matter, the remedy available to the Income-tax Officer to take action under section 34 was already barred before the section was amended in 1953 in all cases. In the result, therefore, our answers to the two questions referred to us by the Tribunal will be as follows: So far as the first question is concerned, our answer will be that the second proviso to section 34(3) as amended by section 18 of the Indian Income-tax (Amendment) Act, 1953, is not applicable in the case of any one or more of the assessees and their assessments are governed by the period of limitation as mentioned in the substantive part of section 34(3). The question is accordingly answered in the affirmative. Our answer to the second question is in the affirmative. Our answer to the third question, which we have framed on the supplementary statement of the case, is in the negative so far as the cases of the eleven assessees for the assessment year 1944-45 are concerned, and is in the affirmative in the case of the assessment of Onkarmal Meghraj for the assessment year 1943-44. The Commissioner will pay the costs of the assessee of the reference as well as of ..... 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