Retrospective tax amendment and notice limitation: "issued" and "served" read as equivalent, saving the reassessment notice.

A retrospective amendment must be applied by the appellate court on the law in force at the time of hearing, and where a statutory expression has already received settled judicial construction, the same wording in a cognate provision may be read consistently. On that basis, the expressions "issued" and "served" in section 34 of the Income-tax Act were treated as equivalent for the purpose of section 4 of the 1959 Amendment Act. A reassessment notice served after the eight-year period was therefore treated as issued out of time but saved by section 4, and the limitation challenge failed.

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Issues: Whether the notice for reassessment served after the expiry of eight years was protected by section 4 of the Indian Income-tax (Amendment) Act, 1959, and whether the expressions "issued" and "served" in section 34 of the Indian Income-tax Act were to be treated as equivalent for that purpose.

Analysis: The appeal was decided on the law as it stood at the time of hearing, the amending Act of 1959 having come into force during the pendency of the appeal and being expressly retrospective. The Court held that the word "issued" in section 4 of the 1959 Amendment Act had to be read in the same sense as "served" in section 34 of the principal Act, because the scheme of section 34, the context of the proviso, and the earlier judicial construction of the same expressions supported treating them as interchangeable. On that construction, a notice served after the eight-year period was treated as issued beyond time, bringing section 4 into operation and saving the notice from attack on the ground of limitation.

Conclusion: The reassessment notice was protected by section 4 of the Indian Income-tax (Amendment) Act, 1959, and the challenge based on limitation failed.

Ratio Decidendi: Where a subsequent enactment is retrospective, an appellate court must decide the matter according to the law then in force, and where statutory language has already received judicial construction, the same expression used in a later cognate provision may be construed consistently with that settled meaning.

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