Limitation for reassessment: a general remand for fresh assessment does not extend time under the saving proviso.

The second proviso to section 34(3) of the Indian Income-tax Act, 1922 does not save a reassessment where the appellate order merely sets aside the original assessment and directs a fresh assessment according to law. An order of remand that records no finding on limitation and does not authorise assessment beyond the statutory period leaves the limitation issue open. On that basis, a reassessment completed after expiry of the four-year period under section 34(3) remains time-barred. The operative effect is that a general direction for fresh assessment, without a specific mandate extending time, is insufficient to invoke the saving proviso.

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Issues: Whether the second proviso to section 34(3) of the Indian Income-tax Act, 1922 applied so as to save the reassessment from limitation where the appellate order merely set aside the assessment and directed a fresh assessment according to law.

Analysis: The appellate order did not decide the question of limitation and did not contain any finding or direction intended to authorise an assessment beyond the statutory period. It only set aside the earlier assessment for procedural defects and required the Income-tax Officer to make a fresh assessment in accordance with law. Such a remand left the matter open, including the limitation issue, and therefore did not attract the saving provision in the second proviso to section 34(3). Since the reassessment was made long after the expiry of the four-year period prescribed by section 34(3), it remained time-barred.

Conclusion: The second proviso to section 34(3) was not applicable, and the reassessment was barred by limitation, in favour of the assessee.

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