Reassessment saving provision and concealment-based limitation failed where the later assessment did not match the earlier set-aside assessment.

A reassessment saving provision applies only where the earlier assessment set aside corresponds to the assessment later made; an assessment against an individual could not save a later assessment against a Hindu undivided family. For limitation, concealment cannot be inferred merely because the assessee's explanation is rejected; the department must produce independent material showing deliberate concealment of income. Here, the revised return corrected the omitted property income before detection, and the alleged investment disclosure was not required by the return form. The case did not fall within the concealment penalty provision, so the normal limitation period applied and the assessment was time-barred.

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Issues: (i) Whether the assessment could be saved from the bar of limitation by treating it as a reassessment under section 27 of the Indian Income-tax Act, 1922 / section 146 of the Income-tax Act, 1961. (ii) Whether the case fell within section 28(1)(c) of the Indian Income-tax Act, 1922 / section 271(1)(c) of the Income-tax Act, 1961 so as to extend the period of limitation for assessment.

Issue (i): Whether the assessment could be saved from the bar of limitation by treating it as a reassessment under section 27 of the Indian Income-tax Act, 1922 / section 146 of the Income-tax Act, 1961.

Analysis: The earlier order set aside under section 27 was an assessment made against the assessee in his individual capacity, whereas the later assessment was made against the Hindu undivided family. A reassessment under the saving provision is available only where the very assessment that was annulled or set aside corresponds to the assessment subsequently made. Since no assessment against the Hindu undivided family had been set aside, the later assessment could not be treated as one made under the reassessment provision.

Conclusion: The assessment was not saved by the reassessment provision and the objection based on section 27 / section 146 failed.

Issue (ii): Whether the case fell within section 28(1)(c) of the Indian Income-tax Act, 1922 / section 271(1)(c) of the Income-tax Act, 1961 so as to extend the period of limitation for assessment.

Analysis: The omission of property income was rectified in the revised return before detection. As to the alleged concealment of investment, the return form did not require disclosure of investments, and the assessee had offered an explanation about the source of funds. Mere rejection of that explanation was not enough to establish concealment. The department had to produce material apart from the falsity of the explanation to show deliberate concealment of income, and such material was absent. Therefore, the case did not attract the concealment penalty provision and the normal four-year limitation applied.

Conclusion: The case did not fall within section 28(1)(c) / section 271(1)(c), and the assessment made after four years was time-barred.

Final Conclusion: The assessment was barred by limitation and the reference was answered in favour of the assessee.

Ratio Decidendi: For limitation to be displaced on the footing of concealment, there must be material apart from a rejected explanation to show deliberate concealment of income, and a reassessment saving provision applies only where the earlier set-aside assessment corresponds to the assessment later made.

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