Reassessment limitation and writ relief: time-barred tax proceedings can be quashed despite an available appeal.

Reassessment under the Income-tax Act, 1961 could be invoked only where the limitation period for proceedings under section 34 of the Indian Income-tax Act, 1922 had not already expired. On the recorded reasons, the concealed income was treated as about Rs. 59,000, so the matter remained within the 1922 Act framework and the reassessment was time-barred and without jurisdiction. The availability of an appellate remedy did not bar relief under article 226 where the assessment order was ex facie without jurisdiction, so writ jurisdiction could still be exercised. The assessment order and consequential demand notice were quashed on these grounds.

---

---

Issues: (i) Whether reassessment proceedings could validly be initiated under the Income-tax Act, 1961, after the limitation period under the Indian Income-tax Act, 1922 had expired; (ii) Whether the existence of an appellate remedy barred relief under article 226 where the assessment order was ex facie without jurisdiction.

Issue (i): Whether reassessment proceedings could validly be initiated under the Income-tax Act, 1961, after the limitation period under the Indian Income-tax Act, 1922 had expired.

Analysis: The applicable saving provision permitted recourse to the 1961 Act only where the limitation period for proceedings under section 34 of the 1922 Act had not expired. On the recorded reasons, the concealed income was treated as about Rs. 59,000 and not as exceeding Rs. 1,00,000. The case therefore remained governed by the 1922 Act, and the period for reassessment had already expired before the 1961 Act came into force.

Conclusion: The reassessment proceedings were without jurisdiction and invalid.

Issue (ii): Whether the existence of an appellate remedy barred relief under article 226 where the assessment order was ex facie without jurisdiction.

Analysis: An alternative remedy does not compel refusal of writ relief where the impugned action is plainly without jurisdiction on the face of the record. In such a case, the availability or pendency of an appeal does not preclude the exercise of writ jurisdiction.

Conclusion: The existence of an appellate remedy did not bar relief under article 226.

Final Conclusion: The assessment order and consequential demand notice were quashed because the reassessment was barred by limitation and the writ petition was maintainable notwithstanding the pending appeal.

Ratio Decidendi: Section 297(2)(a)(ii) of the Income-tax Act, 1961 applies only when the limitation period for reassessment under section 34 of the Indian Income-tax Act, 1922 has not expired, and the availability of an alternative remedy does not defeat writ relief where the impugned assessment is ex facie without jurisdiction.

---