Section 23A liability orders are not assessment orders and are outside the limitation for assessment proceedings.

An order under section 23A of the Income-tax Act, 1922, as amended by the Finance Act, 1955, was held not to be an assessment order under the Act. The court distinguished assessment of tax under section 23 from the separate liability-imposing mechanism in section 23A, treating section 23A as a self-contained provision. Because the computation of tax under section 23A did not amount to an assessment, the limitation period applicable to assessment orders under section 34(3) did not apply. The reference was answered against the assessee.

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Issues: Whether orders passed under section 23A of the Income-tax Act, 1922, as amended by the Finance Act, 1955, were orders of assessment and therefore subject to the limitation prescribed under section 34(3) of the Income-tax Act, 1922.

Analysis: The applicable distinction was between an assessment of tax under section 23 and the imposition of liability under section 23A. The controlling principle was that an order computing the amount of tax payable under section 23A does not amount to an order of assessment within the meaning of the Act. Section 23A was treated as a self-contained provision for imposing liability, and the computation of tax under that provision did not attract the limitation applicable to assessment orders.

Conclusion: The orders under section 23A were not assessment orders and were not subject to the limitation prescribed under section 34(3); the reference was answered against the assessee.

Ratio Decidendi: An order made under a self-contained provision imposing tax liability, even where it includes computation of the tax payable, is not an order of assessment for the purposes of the limitation applicable to assessment proceedings.

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