Repeated reassessment under income tax law is permitted within limitation when further escapement or under-assessment emerges.

Section 34 of the Income-tax Act, 1922 was interpreted to permit repeated reassessment within the statutory period, even where a prior reassessment had already been made under the same provision. The expression "assessment" was treated as covering the full process of tax computation, and the grounds of under-assessment, escaped assessment, and assessment at too low a rate were described as overlapping rather than separate compartments. The provision was therefore read as allowing further reopening if additional escapement or under-assessment came to light, unless the action was shown to be mala fide or taken for a collateral purpose.

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Issues: Whether Section 34 of the Income-tax Act, 1922 authorised repeated reassessment within the statutory time limit, including a second reopening of an assessment already made under that provision.

Analysis: The expression "assessment" was treated as covering the entire process leading to the final tax computation, not merely the original order. Under-assessment, escaped assessment, and assessment at too low a rate were held to be overlapping grounds, and there was no warrant for drawing watertight boundaries between them. Within the period prescribed by Section 34, the statute was held to permit reopening more than once if further escapement or under-assessment came to light. The Court noted that hardship to the assessee could not override the plain meaning of the provision, though interference would remain possible if the reopening were shown to be mala fide or for a collateral purpose.

Conclusion: Section 34 authorised a further reassessment in the facts of the case, and the objection that a second reassessment was incompetent failed.

Ratio Decidendi: Section 34 of the Income-tax Act, 1922 permits repeated reassessment within the statutory period where income has escaped assessment or been under-assessed, so long as the action is not mala fide or taken for a collateral purpose.

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