Judgment

JAGANNADHADAS, J. : This is an appeal by the assessee on leave granted under S. 66-A, Income-tax Act. The assessee by name Chatturam Horilram Ltd., who is the appellant before us, is a private limited company carrying on in Chota Nagpur the business of exporting mica for sale to foreign coutries. The assessment in question is for the year 1939-40 and the accounting year is the calendar year 1938. These proceedings were initiated on a notice issued to the assessee under S. 34, Income-tax Act 1922 (Act 11 of 1922) (hereinafter referred to as the Act).

It is the applicability of this section to the fact of this case that is the sole matter for consideration in this appeal. The circumstances under which the above mentioned notice under S. 34 was issued are as follows. The appellant had previously been assessed to tax on an income of Rs. 1,09,200 for the same year 1939-40 by an order dated 22-12-1939 which was reduced on appeal by Rs. 31,315. That assessment was set aside by the Income-tax Appellate. Tribunal on 28-3-1942, on the ground that the Indian Finance Act of 1939 was not in force during the assessment year 1939-40 in Chota Nagpur, which was a partially-excluded area.

On a