Reassessment limitation under appellate directions extends to persons directly connected with the assessment proceedings, not only strangers.

Section 34 notices issued to give effect to appellate directions were not barred by limitation because the second proviso to section 34(3) applies where reassessment follows a finding or direction under section 31. The phrase "any person" in that proviso is not limited to complete strangers or only the illustrations in section 31(4); it covers a person directly and intimately connected with the assessment proceedings whose liability is affected by the appellate order. As the assessee-company had been directly involved in the original assessments, the appeal, and the directions to assess it, it could not claim stranger status. The limitation and Article 14 challenge therefore failed.

---

---

Issues: Whether notices issued under section 34 of the Indian Income-tax Act, 1922, pursuant to directions in appeal under section 31 were barred by limitation because the assessee was allegedly a stranger to the original assessment proceedings, and whether the Appellate Assistant Commissioner's directions could validly extend the limitation period under the second proviso to section 34(3).

Analysis: The assessment proceedings arose from deemed dividends and the income of a non-resident company, which had been the subject of notices and returns in the appellant's own capacity or through its agent. The second proviso to section 34(3) removes the bar of limitation where reassessment is made in consequence of or to give effect to a finding or direction contained in an order under section 31. The expression "any person" in that proviso is not confined to total strangers nor limited only to the illustrations in section 31(4); it extends to a person intimately connected with the assessment proceedings, whose assessment is directly affected by the appellate order. The appellant-company was directly concerned with the original assessments, the appeal, and the appellate directions to make assessment on it directly, and therefore could not be treated as a stranger. The earlier decisions distinguishing strangers from persons intimately connected with the assessment supported this construction, and the challenge based on limitation and article 14 failed.

Conclusion: The notices were validly issued in consequence of directions under section 31 and were not barred by limitation. The appellant-company was covered by the expression "assessee or any person" in the second proviso to section 34(3), and the challenge was rejected.

---