TMI Blog1976 (10) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant accounting year, and accordingly proceedings under section 34(1)(a) of the Act were initiated with the prior sanction of the Commissioner of Income-tax, U.P. This notice was served on the assessee on 30th November, 1955. In response to this notice the assessee filed a return disclosing a total income, which was equivalent to that which was originally assessed. Notices under sections 22(4) and 23(2) of the Act calling for books of accounts were issued but the assessee did not comply on the ground that no accounts were in his possession. The Income-tax Officer, however, added an amount of Rs. 1 lakh to the total income of the assessee by order dated 15th March, 1961. An appeal was then filed by the assessee. It was contended that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Indian Income-tax Act, 1922, was barred by limitation ?" The controversy raised in the present reference is short but interesting. Section 34 of the Income-tax Act, before it was amended by section 18 of the Finance Act, 1956, permitted issue of notices under section 34(1)(a) only within a period of 8 years from the end of the assessment year. By Act 18 of 1956, the limitation regarding issue of notice within 8 years was deleted. Section 34(3) which prescribed the limitation for making an order of assessment or reassessment was also amended, and as a result of the amendment no period of limitation was fixed for reassessment in cases falling under section 34(1)(a) of the said section. In the present case notice for reassessment was issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of section 34(3). In support of this contention he has drawn our attention to the decision of the Supreme Court in the case of S. C. Prashar v. Vasantsen Dwarkadas [1963] 49 ITR 1 (SC) and in particular to the observations of Hidayatullah J. at page 53, where, considering the provisions of the Finance Act, 1956, which amended section 34, it was observed: "That this section was to operate on back period does not admit of any doubt. No clearer language could be used for the purpose. The first proviso to sub-section (1) makes this abundantly clear by allowing notices to be issued 'at any time' for any year later than the year ending on March 31, 1941, and then limiting action to eight years from the end of the year in cases comin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e legislature extended the period of limitation, no vested right had accrued to the assessee, in the sense that the Income-tax Officer had on account of the efflux of time lost jurisdiction to make the assessment. When the amending Act was introduced limitation for making the assessment still subsisted. All that happened was that the 1956 Act extended the limitation. The question really is whether this extended period of limitation can be applied in respect of cases which were pending and the Income-tax Officer had still time left to make the assessments. It is settled beyond doubt, by a catena of decisions that the law of limitation is a procedural one and it is open to a legislature to extend the period of limitation. It is only in those ..... X X X X Extracts X X X X X X X X Extracts X X X X
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