Reassessment limitation under income-tax law: "any person" covers only those intimately connected with the assessment under appeal.

The second proviso to section 34(3) of the Indian Income-tax Act, 1922 was construed narrowly: "any person" means a person intimately connected with the assessment under appeal and liable for the income forming part of that assessment. On that basis, the non-resident company was treated as properly connected because its income was assessed through its resident agent and the reassessment directions related to the same income and assessment years. A valid appellate direction by the Appellate Assistant Commissioner could therefore be issued against the proper assessee, and the reassessment notices were not barred by limitation.

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Issues: Whether reassessment notices issued to the non-resident company were barred by limitation under section 34(3) of the Indian Income-tax Act, 1922, and whether the expression "any person" in the second proviso to section 34(3) covered a person intimately connected with the assessment whose liability arose through assessment proceedings against its agent.

Analysis: The assessment related to deemed dividend income under section 23A for the relevant years. The Court applied the principle that the expression "any person" in the second proviso to section 34(3) is not to be read in its widest possible sense, but is confined to a person intimately connected with the subject-matter of the appeal or revision and liable for the income that entered the assessment year under appeal. The Court held that the non-resident company was not a stranger to the assessment proceedings, since it was assessable through its resident agent and the reassessment directions concerned the same income and assessment years. The Court also accepted that the Appellate Assistant Commissioner was competent to give the necessary direction for reassessment on the proper assessee.

Conclusion: The second proviso to section 34(3) applied, the reassessments were not barred by limitation, and the notices were valid.

Final Conclusion: The appeal failed because the reassessment proceedings against the appellant were held to be legally sustainable and within the scope of the statutory exception to limitation.

Ratio Decidendi: For the purposes of the second proviso to section 34(3) of the Indian Income-tax Act, 1922, "any person" means a person intimately connected with the assessment under appeal and liable for the income forming part of that assessment, and reassessment pursuant to a valid appellate direction is not barred by limitation.

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