Limitation under section 34: "issue" is distinct from "serve", and late service does not invalidate notice where the statute permits it.

Under the amended section 34(1) of the Income-tax Act, 1922, the word "issue" in the proviso was construed as distinct from "serve" in the substantive provision. The omission of the earlier words "within eight years" from the operative part was treated as significant, and the proviso was read harmoniously with the main provision, which allowed service at any time in cases falling under clause (a). The Court rejected the argument that "issue" must be equated with "serve" and held that a notice was not invalid merely because it was served after eight years. The expression "year" in the proviso was held to mean the assessment year, not the accounting year.

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Issues: Whether a notice issued under section 34 of the Income-tax Act was invalid as time-barred because it was served after eight years, and whether the word "issue" in the proviso to section 34(1) could be equated with "serve" in the substantive part of that provision.

Analysis: The relevant scheme of section 34(1), as amended in 1956, distinguished between the power to "issue" notice under the proviso and the power to "serve" notice in the substantive provision. The omission of the earlier words "within eight years" from the operative part of the section was treated as material. The proviso was read as a whole and harmoniously with the substantive part, which allowed service "at any time" in cases falling under clause (a). The earlier Bombay decision was distinguished because it dealt with a different statutory context and with the pre-amendment language of section 34. The Court also held that the expression "year" in the proviso referred to the assessment year and not the accounting year.

Conclusion: The notice was held to be valid and not barred by limitation. The contention that "issue" had to be equated with "serve" was rejected, and the petition failed.

Ratio Decidendi: Under the amended section 34(1) of the Income-tax Act, 1922, the word "issue" in the proviso is not synonymous with "serve", and a notice is not invalid merely because it is served after the expiry of eight years if the statute, on its proper construction, permits service at any time.

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