Reassessment time bar and saving proviso limited to connected persons, not a separate trust in the assessee's assessment.

Reassessment initiated under section 34(1)(b) of the Income-tax Act, 1922 was held time barred because the second proviso to section 34(3) did not extend to a separate trust that was not a party to the individual assessee's assessment proceedings. Although the earlier reference contained a necessary finding that the income belonged to the trust and not the individual, the saving provision applied only to the assessee or a person intimately connected with that assessment. The trust was treated as a stranger to those proceedings, so the reassessment could not be revived under the proviso.

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Issues: Whether the reassessment initiated under section 34(1)(b) of the Income-tax Act, 1922 was barred by time and, if so, whether it was saved by the second proviso to section 34(3) of that Act.

Analysis: The finding recorded in the earlier reference that the income belonged to the trust and not to the individual assessee was a finding necessary for disposing of that reference, and therefore fell within the scope of the second proviso to section 34(3). However, the saving provision applies only where reassessment is sought against the assessee or any person intimately connected with the assessment in which the finding was given. The trust was a separate entity and a stranger to the assessment proceedings of the individual assessee, so it could not be treated as "any person" for the purpose of the proviso.

Conclusion: The reassessment was time barred and was not saved by the second proviso to section 34(3); the appeal failed.

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