Limitation for assessment proceedings does not bar completion where valid notice and enquiry had already commenced the process.

Assessment proceedings validly initiated by statutory notice and enquiry remain pending until finally concluded, so completion after the statutory period is not barred by limitation. The court treated the notice in Form XII, scrutiny of accounts, and other assessment steps as sufficient commencement of proceedings, and distinguished cases where no return was filed and no assessment process had ever begun. Because the proceedings were already in motion within time, the later assessment could not be struck down as time-barred, and the tribunal erred in cancelling it on that ground.

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Issues: Whether assessment proceedings, once validly initiated by notice and enquiry, remained pending so that completion of assessment after the statutory period was not barred by limitation.

Analysis: The assessment for the relevant year had been set in motion by a statutory notice calling for production of accounts, followed by scrutiny of the books and completion of an assessment order, though that order was later treated as non est. The governing principle applied was that assessment proceedings are pending from the time they are initiated until finally concluded, and where such proceedings are already pending within time, there is no bar to completing them later. The Court distinguished cases where no return was filed and no statutory assessment proceedings were ever commenced. It held that the notice issued in form XII and the subsequent steps taken under the rules showed that the assessment proceedings were already in motion, and therefore the later completion of assessment could not be struck down as time-barred.

Conclusion: The assessment was not barred by limitation and the Tribunal was wrong in cancelling it on that ground; the assessee's objection failed and the revenue succeeded.

Ratio Decidendi: Where assessment proceedings have been duly initiated within time, they remain pending until concluded, and their completion after the statutory period is not barred by limitation.

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