Broad construction of assessment under the Finance Act preserved reassessment powers and upheld notice despite omitted consultation.

Section 13(1) of the Finance Act, 1950 was construed to preserve the pre-existing State income-tax law for income arising before 1 April 1950, so "assessment" was read broadly to include reassessment of escaped or under-assessed income under Section 34 of the Income-tax Act, 1922. The commentary also treats the Patiala law's requirement that the Commissioner consult the Minister-in-charge before assigning functions as directory, not mandatory, because it concerns administrative order and does not affect substantive taxpayer rights. On that basis, non-consultation does not vitiate the officer's jurisdiction or the notice issued under the assigned authority.

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Issues: (i) Whether the expression "assessment" in Section 13(1) of the Finance Act, 1950 includes reassessment under Section 34 of the Income-tax Act, 1922 in respect of pre-integration income of a Part B State; (ii) Whether the notice issued by the Income-tax Officer was invalid because the Commissioner did not consult the Minister-in-charge before assigning functions under the Patiala State income-tax law.

Issue (i): Whether the expression "assessment" in Section 13(1) of the Finance Act, 1950 includes reassessment under Section 34 of the Income-tax Act, 1922 in respect of pre-integration income of a Part B State.

Analysis: The expression "levy, assessment and collection" was construed in its broad and ordinary sense. The statutory scheme of the Finance Act, 1950 continued the pre-existing State income-tax law for income arising before 1 April 1950, and there was no warrant to confine "assessment" to original assessment alone. The Court held that the legislative intent was to preserve the whole revenue process for pre-1950 income, including proceedings to determine escaped or under-assessed income. The power of reassessment was treated as within the ambit of the retained State law and, in any event, within the wider expression "levy" and "collection" used in the Finance Act.

Conclusion: The expression "assessment" in Section 13(1) was held to include reassessment under Section 34, and the notice was valid on this ground.

Issue (ii): Whether the notice issued by the Income-tax Officer was invalid because the Commissioner did not consult the Minister-in-charge before assigning functions under the Patiala State income-tax law.

Analysis: The consultation requirement in the Patiala law was treated as directory rather than mandatory, because it related to the orderly administration of the department and did not affect the substantive rights of taxpayers. Non-compliance with that procedural requirement was therefore held not to invalidate the appointment or the notice issued by the officer acting under the assigned jurisdiction.

Conclusion: The notice was not invalid on this ground.

Final Conclusion: The petition challenging the reassessment notice failed on all material grounds, and the impugned notice was upheld.

Ratio Decidendi: Where a taxing statute continues pre-existing State law for assessment, the expression "assessment" may, in context, extend to reassessment proceedings, and a directory administrative consultation requirement does not vitiate jurisdiction if non-compliance causes no prejudice to substantive rights.

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