Assessment under income tax law completes only when tax liability is determined, not merely when income is computed.

For the first proviso to section 34(3) of the Indian Income-tax Act, 1922, "assessment" meant more than computation of total income: it was complete only when the tax payable was also determined. Although section 23 distinguishes between computation of income and determination of tax, the Court read section 34(3) in its own context and accepted the settled construction previously followed by the revenue and the Madras High Court. The Court declined to depart from that interpretation, noting that the corresponding provisions of the 1961 Act were materially different. On that basis, the limitation issue was decided in favour of the assessee.

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Issues: Whether, for the purposes of the first proviso to section 34(3) of the Indian Income-tax Act, 1922, an assessment is complete when the total income is computed by the Income-tax Officer or only when the tax payable is also determined.

Analysis: The provisions of section 23 distinguish between the computation of total income and the determination of the sum payable, but section 34(3) uses the expression "assessment". The Court held that, in this context, the word "assessment" means not merely computation of income but also determination of tax liability. The earlier construction accepted by the Madras High Court had been followed for years and acted upon by the revenue, and the Court declined to depart from that settled interpretation, especially since the corresponding provisions of the Income-tax Act, 1961 were materially different.

Conclusion: The assessment was not complete merely upon computation of income; it was complete only when the tax was determined. The assessee succeeded on the limitation issue.

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