SATISH CHANDRA, J.

( 1 ) THE question raised in this reference relates to the interpreatation of the second proviso to Section 34 (3) of the Indian Income-tax Act, 1922.

( 2 ) THE question relates to the assessment year 1955-56, the accounting period for which ended on March 31, 1955. During this accounting period, the assessee, which is a charitable trust, received a sum of Rs. 82,053 from M/s. Karam Chand Thapar and Bros. (Coal Sales) Ltd. , as commission/ brokerage. It appears that the company had deducted the tax payable on this commission at source. In April, 1956, the assessee-trust filed an application before the Income-tax Officer under Section 48 of the Indian Income-tax Act, 1922, for the refund of the tax deducted at source. Its plea was that the assessee was a charitable trust not liable to tax. This plea was repelled by the Income-tax Officer, who in view of the C. B. R. 's order No. FN 20/20162-I. T. (AI) dated August 9, 1962, brought this amount of Rs. 82,053 to tax; and after taking into account the amount deducted at source in respect of tax payable on it, raised a demand of Rs. 14,921. 99. He directed that this amount has been adjusted with the refund due to the trust for the assessment year 1956-57.

( 3 ) BEING aggrieved, the assessee went up in appeal. At the hearing of the appeal, it was submitted that the Income-tax Officer had no jurisdiction to pass an assessment order on an application for refund made under Section 48 of the Act of 1922. No notice under Section 23 of the Act was served on the assessee nor any opportunity of hearing afforded to the assessee. The Appellate Assistant Commissioner accepted this submission. He set aside the impugned order and directed the Income-tax Officer to make fresh assessment according to law.

( 4 ) AFTER remand, the Income-tax Officer issued a notice under Section 23 (2) of the Act which was served on the assessee on November 28, 1970. The assessee, however, did not appear in response to the notice which required it to produce certain documents. The Income-tax Officer, under the circumstances, made an assessment to the best of his judgment. He held that the assessee was not exempted under Section 4 (3) (i) of the Act and that the amount in question was the business income of the assessee liable to tax. He accordingly passed an assessment order under Section 23 (3) of the Act of 1922.

( 5 ) THE assessee-trust went up in appeal. It was, inter alia, submitted before the Appellate Assistant Commissioner that the assessment was barred by limitation, The assessment was for the year 1955-56 for which the period of limitation came to an end on March 31, 1960. The assessment order was passed on December 10, 1970. The submission was accepted by the Appellate Assistant Commissioner. He held that the assessment was barred by limitation and was void. The assessment was cancelled. Being aggrieved, the Department went up in appeal to the Tribunal, but failed.

( 6 ) AT the instance of the Revenue, the following question of law had been referred for our opinion :"whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the saving provision in the second proviso to Section 34 (3) of the Indian Income-tax Act, 1922, was not applicable and the assessment was barred by limitation, the same not having been made within the period specified in the main paragraph of the said Section 34 (3) ?"

( 7 ) THE second proviso to Section 34 (3) of the Act of 1922 is as follows:"section 34 (3 ). . . . . . 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 a reassessment made under Section 27 or to an assessment or reassessment made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under Section 31, Section 33, Section 33a, Section 33b, Section 66 or Section 66a. "

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