Tendolkar, J.:— This is a perfectly hopeless appeal against a judgment and order of K.T Desai, J., whereby the learned Judge ordered that the respondents to the writ petition, who are the appellants before us, are restrained from continuing or further proceeding with the assessment proceedings. The petition arose under these circumstances. The petitioner was an assessee to whom, on the 6th of March, 1954, a notice was issued under section 34 of the Income-Tax Act that in respect of the assessment year 1945-46 certain income had escaped assessment. This consisted of two sums of Rs. 50,000 and Rs. 3,500 which were found to be deposited in the joint names of the petitioner and another in the International Bank of India at Navsari and Zaveri Bazar branches respectively. Both the deposits were in December, 1943. On the 9th February, 1955 an assessment order was made holding that these two deposits constituted income from undisclosed sources and adding them to the income of the assessee as previously found. There was an appeal to the Appellate Assistant Commissioner, who, on the 10th of February, 1956, allowed the appeal holding that, assuming that this was income from undisclosed sources, it was not the income for the assessment year 1945-46. But thereafter, on the 14th of May, 1956, another notice under section 34 was issued to the petitioner, this time seeking to include these two items of Rs. 50,000 and Rs. 3,500 as income from undisclosed sources in the assessment year 1944-45. It is this notice that was challenged before the learned trial Judge on the writ petition. Obviously, this notice had been issued eight years after the relevant assessment year, and unless it was saved by the second proviso to section 34, sub-section (3), of the Income-Tax Act, the notice was bad and the Income-Tax Officer would be acting without jurisdiction in proceeding to assess the petitioner. The plea of the Income-Tax Officer was that this notice was covered by the second proviso to section 34, sub-section (3), and the relevant part of that proviso is in these terms:
“Provided further that nothing contained in this section limiting the time within which any action may be taken or any order, assessment or reassessment may be made shall apply… to an assessment or reassessment made on the assessee… to give effect to any finding or direction contained in an order under section 31…”
2. This contention of the Income-Tax Officer was negatived by the learned trial Judge and what we have to consider is whether the learned Judge was right in doing so.
3. Now, the proviso which we have set out above is very clear and unambiguous and it saves from the limitation prescribed any action taken “in consequence of or to give effect to any finding or direction” contained in an order under section 31, which means an order by an Appellate Assistant Commissioner in appeal.
4. Therefore, all that one has got to do is to look to the order of the Appellate Assistant Commissioner and to see whether there is any finding or direction in consequence of which, or to give effect to which, the present notice under section 34 was issued. Now, when one turns to the order of the Appellate Assistant Commissioner, it is clear that the Appellate Assistant Commissioner found that these two amounts totalling to Rs. 53,500 did not form part of the income for the assessment year 1945-46. Nothing would have to be done in consequence of or to give effect to this finding, and it is not urged by Mr. Joshi on behalf of the appellants that anything was required to be done in consequence of this particular finding. Then at a later stage in the judgment the Appellate Assistant Commissioner states: “They could be assessed, if at all, for the tax year 1944-45 for which the Income-Tax Officer may take necessary steps if so advised.” Now, it appears to us to be abundantly clear, reading this sentence itself, that this involves no finding or direction. Indeed, the Appellate Assistant Commissioner was not called upon to determine whether this was the income for 1944-45 and he could not have found to that effect; and, even if he found to that effect, he would not have used the words “if at all” nor would he have used the words “if so advised” in the context of the Income-Tax Officer taking the necessary steps. Therefore, there obviously is no finding or direction in consequence of which or to give effect to which the notice was issued. Mr. Joshi attempted to argue that the grounds on which the order of the Income-Tax Officer was challenged before the Appellate Assistant Commissioner contained a ground that if this was income at all, it was income for the year 1944-45, and in support of the ground reliance was placed on a decision of the Patna High Court in Commissioner of Income-Tax v. P. Darolia & Sons [1955] 27 I.T.R 515.. The Appellate Assistant Commissioner followed that decision and in that decision it had been held that the income was not for the year 1947-48, but for the previous year. Therefore, Mr. Joshi says, the Appellate Assistant Commissioner must be deemed to have held, not only that this was not the income for the year 1945-46, but also that it was the income for 1944-45. This argument, in out opinion, is not well-founded. The Appellate Assistant Commissioner was called upon to determine in this case only if it was the income for 1945-46 and not whether it was the income for 1944-45; and, in any event, as we have pointed out already, he did not in fact determine that it was the income for 1944-45. He only stated that, if at all, it would be the income for 1944-45. It is pertinent also to note that the Appellate Assistant Commissioner, in his judgment, states that the Income-Tax Officer was in possession of no facts to connect the sum of Rs. 53,500 with the speculation business which admittedly the assessee conducted. Therefore, the Appellate Assistant Commissioner was not concerning himself with whether this was income for the year 1944-45 at all, and, in our opinion, the notice cannot be said to have been in consequence of or to give effect to any finding or direction given by the Appellate Assistant Commissioner.
5. The learned trial Judge was, therefore, right in the conclusion that he arrived at. We confirm the order of the learned trial Judge and dismiss the appeal with costs.
Appeal dismissed.