Timely reassessment notice sustains later completion; an unpressed reference issue cannot be reopened in writ jurisdiction.

A reassessment notice served within the four-year period under section 34 of the Mysore Income-tax Act, 1923 was sufficient to keep the proceeding alive, because the statute required only timely initiation and did not impose a separate time limit for completing the reassessment. Later reassessment steps taken after remand therefore remained valid and were not barred by limitation. A question arising from a section 66(2) reference that was not pressed before the High Court could not later be reopened in a writ petition under article 226, as the point stood concluded against the party. The result was that the High Court's interference was unsustainable.

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Issues: (i) Whether a reassessment proceeding under section 34 of the Mysore Income-tax Act, 1923 could be completed after four years from the close of the assessment year when the notice initiating the proceeding had been served within the prescribed period. (ii) Whether the respondents could re-agitate in a writ petition under article 226 of the Constitution of India a question arising out of a reference under section 66(2) of the Mysore Income-tax Act, 1923 which had not been pressed before the High Court.

Issue (i): Whether a reassessment proceeding under section 34 of the Mysore Income-tax Act, 1923 could be completed after four years from the close of the assessment year when the notice initiating the proceeding had been served within the prescribed period.

Analysis: Section 34 required only that escaped income be identified and notice be served within four years from the end of the assessment year. Once valid notice was issued in time, the statute did not prescribe any further period for completing the reassessment. The notice in this case had been served within time, and the later reassessment steps were taken pursuant to that valid initiation. The setting aside of the assessment and remand for further inquiry did not invalidate the notice or create a time bar for completing the proceeding.

Conclusion: The reassessment proceeding was not barred by limitation and the finding was against the assessee.

Issue (ii): Whether the respondents could re-agitate in a writ petition under article 226 of the Constitution of India a question arising out of a reference under section 66(2) of the Mysore Income-tax Act, 1923 which had not been pressed before the High Court.

Analysis: The question had been referred at the respondents' instance, but it was not pressed before the High Court and therefore stood concluded against them. A party could not, after allowing the reference point to go against it, reopen the same issue in a writ petition under article 226. The prior non-pressing of the question operated to preclude further challenge on that point in the writ proceedings.

Conclusion: The issue could not be re-agitated in the writ petition and the finding was against the assessee.

Final Conclusion: The High Court's interference was unsustainable, and the reassessment proceedings were held to be valid and continuing in law.

Ratio Decidendi: Where a notice for reassessment is served within the statutory period, the reassessment may be completed later if the statute prescribes no separate completion limit; a question not pressed in a reference cannot subsequently be reopened in writ jurisdiction.

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