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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether section 4 of the Indian Income-tax (Amendment) Act, 1959 saved a notice issued under section 34(1)(a) of the Indian Income-tax Act, 1922 from the bar of limitation.
Analysis: The notice in question was issued before the commencement of the 1959 Amendment Act and the dispute was not about the pre-1956 limitation period alone. The saving provision protected only those notices from challenge on the specific ground that, under the law as it stood before the 1956 amendment, the time for issuing the notice had expired. It did not erase all limitation requirements introduced by the 1956 amendment. A notice otherwise barred under the amended law could not be validated by section 4 merely because it was issued before the 1959 Act commenced. The language of the saving clause was held to be plain and controlling.
Conclusion: Section 4 of the Indian Income-tax (Amendment) Act, 1959 did not save the notice from limitation, and the answer to the referred question was in favour of the assessee.
Final Conclusion: The reassessment notice was held time-barred under the governing amended limitation scheme, and the assessee succeeded in appeal.
Ratio Decidendi: A saving clause protecting pre-commencement notices from one limitation bar does not validate a notice that is independently barred under the limitation regime introduced by a later amendment unless the statute expressly so provides.
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