Fresh assessment on correct assessee status is valid and protected from limitation when made under an appellate remand order.

Section 31(3)(b) was treated as empowering the appellate authority to set aside an assessment and direct a fresh enquiry, including determination of whether the assessee was assessable as an individual or as a Hindu undivided family. The remand direction was held to be within jurisdiction, and the Income-tax Officer was bound to complete the reassessment on the basis of the correct status. A reassessment made pursuant to that appellate order was also treated as protected by the proviso to section 34(3), so the ordinary limitation period did not apply. The article further notes that the constitutional objection under article 14 was rejected.

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Issues: (i) Whether the Appellate Assistant Commissioner could, under section 31(3)(b), set aside the assessment and direct a fresh enquiry and assessment determining whether the income was assessable in the hands of the assessee as an individual or as a Hindu undivided family. (ii) Whether the assessment made on 24 January 1952 was barred by limitation under section 34(3), or was protected as an assessment made in pursuance of an order under section 31.

Issue (i): Whether the Appellate Assistant Commissioner could direct a fresh assessment on the question of the assessee's status.

Analysis: Section 31(3)(b) empowered the appellate authority to set aside the assessment and direct the Income-tax Officer to make a fresh assessment after further enquiry. The question of whether the income belonged to the assessee as an individual or as a Hindu undivided family was part of the status issue arising in the appeal and could validly be determined in remand proceedings. The assessee himself had asserted the individual status, and the appellate order required the Income-tax Officer to determine the correct status before completing the assessment. The directions were therefore within jurisdiction and binding on the Income-tax Officer.

Conclusion: The remand direction and the reassessment on the basis of individual status were valid and within jurisdiction, against the assessee.

Issue (ii): Whether the assessment dated 24 January 1952 was time-barred under section 34(3).

Analysis: The assessment was made after the ordinary four-year period, but section 34(3) contained a proviso excluding the time-limit where the assessment was made in pursuance of an order under section 31. The reassessment followed directly from the appellate direction to determine the correct status and complete the assessment accordingly. The assessment was therefore made in pursuance of the appellate order and fell within the protection of the proviso. The constitutional objection under article 14 was not accepted.

Conclusion: The assessment was not barred by limitation and was valid, against the assessee.

Final Conclusion: The reference was answered in favour of the Revenue, and the assessment made on the assessee as an individual was upheld as lawful and within time.

Ratio Decidendi: Where an appellate authority, acting within section 31(3)(b), directs a fresh enquiry and assessment on the correct status of the assessee, the resulting assessment is made in pursuance of that order and is saved from the ordinary limitation bar under section 34(3).

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