Limitation for reassessment notice: an appellate direction outside the year in appeal cannot revive a time-barred reopening.

A reassessment notice issued under section 34(1)(a) was held invalid because it was served after the ordinary limitation period and was not saved by section 34(3). The saving provision applied only where reassessment was made pursuant to a valid appellate direction within the appellate authority's jurisdiction, and the direction relied on here related to apportionment in the year under appeal, not to the earlier assessment year sought to be reopened. A direction concerning a year outside the appeal could not lift the statutory bar or confer jurisdiction to reopen that assessment year.

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Issues: Whether the notice issued under section 34(1)(a) of the Income-tax Act, 1922, for the assessment year 1943-44 was invalid as being barred by limitation.

Analysis: The reassessment notice was issued long after the ordinary period of limitation had expired. The saving provision in section 34(3) could operate only where the reassessment was made in pursuance of a valid appellate direction within the jurisdiction of the appellate authority. The appellate direction relied upon related to apportionment of income in the assessment year then in appeal, namely 1944-45, and the further observation that the balance would be assessable for the earlier year 1943-44 concerned a year not under appeal. A direction outside the year of appeal could not lift the statutory bar of limitation or confer jurisdiction to reopen the earlier assessment.

Conclusion: The notice under section 34(1)(a) was barred by limitation and was invalid; the reassessment for 1943-44 was also invalid. The question was answered in the affirmative and in favour of the assessee.

Ratio Decidendi: A reassessment notice issued beyond the limitation period is not saved unless it is founded on a valid appellate direction relating to the very assessment year in appeal and within the appellate authority's jurisdiction.

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