Time-barred reassessment cannot be revived by later amendment; reopening under the old law was without jurisdiction.

Reassessment under section 34 of the Income-tax Act, 1922 was held barred by limitation because the original assessment year had long since closed before the notice under section 34(1)(b) was issued. The Court held that a later amendment to the limitation provision could not revive a reopening right that had already expired, and that the unamended proviso did not authorise reassessment against a different person merely because the liability arose from proceedings involving another assessee. The attempt to justify the action as rectification under section 35 also failed, as the impugned action had in fact been taken only under section 34. The reference was answered against the Revenue, with costs to the assessee.

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Issues: Whether the reassessment initiated under section 34 of the Income-tax Act, 1922 was barred by limitation and therefore without jurisdiction.

Analysis: The original assessment year had closed long before the notice under section 34(1)(b) was issued. On the law as it stood before the amendment of the second proviso to section 34(3), the Department's right to reopen the assessment had already expired. A later amendment of a limitation provision does not revive a right that has already become barred. The unamended proviso was held not to cover a reassessment against a different person merely because the liability emerged from earlier proceedings involving another assessee. The Department's attempt to sustain the action as rectification under section 35 was not accepted, since the impugned action had in fact been taken only under section 34.

Conclusion: The reassessment proceedings were barred by limitation and were without jurisdiction; the question was answered in favour of the assessee.

Final Conclusion: The reference was answered against the Revenue, and the assessee obtained costs.

Ratio Decidendi: A time-barred right to reopen an assessment is not revived by a later amendment to the limitation provision, and a reassessment not authorised by the unamended proviso cannot be sustained once limitation has expired.

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