Reassessment Limitation Exception: reassessment after cancellation under section 27 is not barred by the four year limitation.

A reassessment rendered after cancellation of an earlier assessment on the ground that the assessee did not receive statutory notice or was prevented by sufficient cause falls within the second proviso excluding it from the four year limitation; the officer may cancel the prior assessment and make a fresh assessment where jurisdictional facts of nonreceipt or prevented compliance are asserted, and an assessee cannot accept cancellation and simultaneously claim the resulting reassessment is time barred (approbation and reprobation). The reassessment challenged was therefore not barred by the four year period.

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Issues: Whether the reassessment dated 24 August 1956 for assessment year 1951-52 is legal, having regard to the four year limitation under section 34(3) and the applicability of the second proviso excluding reassessments under section 27.

Analysis: The assessment challenged is dated 24 August 1956 for assessment year 1951-52 and therefore prima facie beyond the four year period prescribed by section 34(3). The second proviso to section 34(3) excludes from that time bar a reassessment made under section 27 or an assessment made in consequence of proceedings under specified sections. Section 27 applies where an assessee within the prescribed time satisfies the officer that he did not receive required notices or was prevented by sufficient cause from complying, and the officer may cancel the prior assessment and make a fresh assessment under section 23. In the present case the officer cancelled the initial assessment under section 27 after the assessee petitioned that he had not received the notice under section 22(4) and had not had a reasonable opportunity to comply with the section 23(2) notice. The cancellation under section 27 and the subsequent reassessment terminated the proceedings under section 27 and thus falls within the exclusion in the second proviso to section 34(3). The assessee cannot accept cancellation under section 27 and simultaneously contend that the reassessment resulting from that cancellation is barred by limitation; such conduct is an approbation and reprobation. The officer possessed jurisdiction to reopen and cancel the prior assessment under section 27 on the factual basis asserted, and the reassessment following that cancellation is a reassessment under section 27 for the purposes of the proviso.

Conclusion: The reassessment dated 24 August 1956 is valid and not barred by the four year limitation; the question is answered against the assessee.

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