Section 23A order not treated as assessment order, so assessment limitation under section 34(3) did not apply.

An order under section 23A of the Indian Income-tax Act, 1922 directing payment of additional supertax was held not to be an assessment order. As a result, the limitation period in section 34(3), which applies only to assessment orders, could not bar the section 23A order even though it was made more than four years after the assessment year ended. The Supreme Court accordingly held that the order was not time-barred and the Revenue's position prevailed.

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Issues: Whether an order passed under section 23A of the Indian Income-tax Act, 1922, directing payment of additional supertax is an order of assessment within section 34(3), and whether the limitation prescribed by section 34(3) applies to such an order.

Analysis: The answer turned on the earlier ruling that an order under section 23A, as amended by the Finance Acts of 1955 and 1957, is not an order of assessment. Since the impugned order under section 23A was not an assessment order, the period of limitation governing assessment orders under section 34(3) could not be invoked against it, even though the order was made more than four years after the end of the assessment year.

Conclusion: The order under section 23A was not barred by limitation under section 34(3) of the Income-tax Act, 1922, and the answer was in favour of the Revenue.

Final Conclusion: The appeal succeeded and the High Court's view was set aside on the footing that section 34(3) did not govern the impugned order.

Ratio Decidendi: An order passed under section 23A directing payment of additional supertax is not an order of assessment, and therefore the limitation period applicable to assessment orders does not apply.

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