THE VITH INCOME-TAX OFFICER, CITY CIRCLE 11-A, BANGALORE versus K.Y. PILLAIAH & SONS

Citation: [1968] 1 S.C.R. 6 · Decided: 18-07-1967 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Dismissed

Judgment (excerpt)

6 
THE Vlth INCOME-TAX OFFICER, CITY CIRCLE 11-A, A 
BANGALORE 
v. 
K.Y. PILLAIAB & SONS 
July 18, 1967 
IJ. C. SHAH, S. M. SIKRI AND V. RAMASWAMI, JJ.) 
Mysore Income-tax Art of 1923. s. 34-Notice served within 4 
years of the close of assessment year-Completion of assessment pro-
eeecting-Time limit for. 
B 
The Income-tax Officer, 
Bangalore commenced a proceeding 
under s. 34 of the Mysore Income-tax Act for re-assessment of the 0 
income of the respondents for the ·assessment year 1949-50 and 
served a notice in that behalf in Ma<rch 1951•, on the respondents. 
The Income-tax Officer determined the total income of the respon-
dents in May 1954, but the order was set aside by the Appellate 
Assistant Commissioner in November 1961 and the Income-tax Offi-
cer was directed to make a fresh inquiry, When the Income-tax 
Officer commenced inquiry, the respondents applied to the High 
Court for a writ of prohibition and the High Court passed an order D 
restraining the Income-tax Officer on the ground that the assessment 
oroceedin!! was barred because of the expiry of the period of limita. 
ti on. 
In appeal to this Court, 
Held: The High Court was in error, because, though the Appel-
late Assistant Commissioner vacated the Income-tax Officer's assess-
ment order of 1954 and remanded the case for further inquiry, the B 
Appellate Assistant Commissioner did not set aside the notice of 
March 1951 served on the respondents. If a proper notice was served 
within the period provided by the section (four years from the close 
of the assessment year) the 11roceeding could be completed even 
after the expiry of four years for the Act prescribes no period for 
completion of the proceeding. f8E-Gl 
Civ1L APPELL,tiTE JURISDICTION: 
Civil Appeal No. 2177 of 
p 
1966. 
Appeal by special lea.ve from the judgment and order dated 
July 12, 1963 of the Mysore High Court in Writ Petition No. 1076 
of 1962. 
Veda Vyasa, R. Ganapathy Iyer. R. N. Sachthey and S. P. G 
Nayar, for the appellant. 
R. Gopa/akrishnan, for the respondent. 
The Judgment of the Court was delivered by 
Sliah, J.-The respondents-a Hindu undivided family-were 
assessed for the assessment year 1949-50 to tax under s. 23 
of the Mysore Income-tax Act on a total income of Rs. 10,100/-. B 
The Second Additional Income-tax Officer (Urban Circle), Banga-
lore, commenced a proceeding under s. 34 of the Mysore Income-
tax Act for re-a~sessment of the income of the respondents for the 
I.T.O. V. PILLAIAH & SONS (Shah,.1.) 
7 
A assessment year 1949-50, and served a notice in that behalf on 
March 6, 1951. On May 21, 1954 the lncome-ta.x Officer determin-
ed the respondents' total income at Rs. 75.957 I·. In appeal against 
the order, the Appellate Assistant Commissioner of Income-tax, 
'A' Range, Bangalore, by order dated November 4, 1961, set aside 
the order and directed the Income-tax Officer to mal:e n fresh 
B assessment after making inquiries on certain matters specified in 
the order. 
c 
D 
E 
At the request of the respondents under s. 66(2) of the Mysore 
Income-tax Act, the Commissioner of Income-tax, Mysore, refer-
red the following questions to the High Court of Mysore: 
"I. On the facts and in the circumstances of the assessee's 
case whether within the meaning of s. 34 of the Mysore 
Income-tax Act, if a notice under that section is issued 
within the prescribed period, whether the Income-tax 
Officer can proceed to assess or re-assess such escaped 
income after fQur years from the close of the assessment 
year? 
2. On the facts and in the circumstances of the case, whe-
ther the Appellate Assistant Commissioner of lncome-
tax is competent to set aside and give directions to the 
Income-tax Officer to re-do the assessment in the manner 
the Appellate 
Assistant Commissioner of Income-tax 
has done?" 
At the hearing of the reference, the respondents did not press the 
first question, and the High Court answered the second question 
in the affirmative. 
The Income-tax Officer commenced inquiry directed by the 
F Appellate Assistant Commissioner. The respondents then applied 
to the High Court of Mysore for issue of a writ of prohibition 
restraining the Income-tax Officer from continuing the assessment 
proceeding for the year 1949-50 on the plea that the proceeding 
was because of expiry of the period of limitation barred. The High 
Court of Mysore upheld the contention of the respondents and 
allowed the petition. In the view of the High Court the provisions 

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