The word "serve" in sub-section (1) of section 34 of the Indian Income-Tax Act, 1922, means "serve" and not "issue".

MEHAR SINGH, J.

1. The question referred to this court under sub-section (1) of section 66 of the Indian Income-Tax Act, 1922 (Act 11 of 1922), is :

"Whether on a true interpretation of section 34 of the Indian Income-Tax Act, the assessment made under section 34 of the Income-Tax Act was bad in law because the notice issued under that section was not served on the assessee within four from years from the end of the assessment year 1947-48 ?"

2. The question on the facts arises under section 34(1)(b) of Act 11 of 1922. The assessee is a Hindu undivided family. In its return for the assessment year 1947-48, among other incomes, it showed its share of profits from the income of a registered firm with style of a Jokhiram-Balmukand, Pilkhuva, as Rs. 2,258. At that time the assessment on that firm had not yet been made. Subsequently, when assessment of the income of that firm was made, the share of the assessees profit was computed at Rs. 6,843. On March 31, 1952, a notice was issued by the Income-tax Officer under section 34(1)(b) and section 22(1) Act 11 of 1922 calling upon the assessee to submit a return of its total income. The notice was served on the assessee on April 10, 1952. The Supplementary assessment was completed on March 25, 1953. In that assessment the Income-tax Officer substituted the share of the profit of the assessee from the income of that firm on the higher figure of the already referred to in place of the earlier figure of Rs. 2,258 and raised a demand against the assessee for income tax accordingly. On appeal by the assessee, the Appellate Assistant Commissioner being of the opinion that notice under section 34(1)(b) of Act 11 of 1922 should have been served on the assessee at least on March 31, 1952, found that the service in the case of the notice was beyond that date and that nullified the resultant action against the assessee. In an appeal by the department to the Income-tax Appellate Tribunal (Delhi Bench) that order of the Appellate Assistant Commissioner was upheld following Sri Niwas v. Income-tax Officer, "A" Ward, Sitapur. The order of Income-tax Appellate Tribunal is of December 20, 1956. It was after that the Commissioner of Income-tax obtained a reference of the question as above to this court.

3. In sub-section (1) of section 34 of the Act 11 of 1922, clause (a) deals with income escaping assessment on account of the commission or failure on the part of an assessee to make a full disclosure of his income and clause (b) then reads :

"Notwithstanding that there has been no commission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income tax have escaped assessment for any year, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive relief under this act, or that excessive loss or depreciation allowance has been computed he may in cases falling under clause (a) at any time within eight years and in cases falling under clause (b) at any time within four years of the end of the year, serve on the assessee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in notice under sub-section (2) of section 22 and may proceed to assess or reassess such income, profits or gains or recompute the loss or depreciation allowance; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section."

4. Sub-section (3), with the first proviso, of the same section is in these words :

"No order of assessment under section 23 to which clause (c) of sub-section (1) of section 28 applies or of assessment or reassessment in cases falling wihtin clause (a) of sub-section (1) of this section shall be made after the expiry of four years, from the end of year i