The word "issued" in S. 4 of the Indian Income-tax (Amendment) Act, 1959 (Act No. 1 of 1959) means "served" and not "sent". Therefore, notices served beyond the prescribed time were saved under S. 4 of the Amending Act.

Judgment

SUBBA RAO, J. : These two appeals filed by special leave raise the question of the true construction of the provisions of S. 4 of the Indian Income-tax (Amendment) Act, 1959 (Act No. 1 of 1959), hereinafter called the Amending Act. The material facts lie in a small compass and they are as follows. For the assessment year 1947-48 the appellant in Civil Appeal No. 142 of 1963 filed a return of her income before the Income-tax Officer, District IV, Calcutta, and the assessment was completed sometime in 1948 as a result whereof it was found that no tax was payable by her. On April 2, 1956, the Income-tax Officer served on her a notice dated March 19, 1956 under S. 34 (1) of the Indian Income-tax Act, 1922, hereinafter called the Act, on the ground of escaped assessment. The date of the notice fell within 8 years from the end of the relevant assessment year i.e., March 31, 1948; but it was served beyond 8 years from that date and, therefore, was clearly out of time under the provisions of the said section.

2. In Civil Appeal No. 143 of 1963, for the assessment year 1947-48 the appellant was assessed on a total income of Rs. 28,993/- on December 30, 1948, by the Income-tax Officer and the tax thereon amounting to Rs. 4,747-13-0 was deposited on behalf of the appellant in the Reserve Bank of India. On April 2, 1956, the appellant was served with a notice dated March 19, 1956, by the Income-tax Officer purporting to be under S. 34 of the Act on the ground of escaped assessment. The date of the notice fell within 8 years from the end of the relevant assessment year, i. e., March 31, 1956; but it was served beyond 8 years from that date and was, therefore, clearly out of time under the provisions of the said section.

3. The appellants in the two appeals filed two petitions in the High Court of Calcutta under Art. 226 of the Constitution for quashing the said notices and for other appropriate reliefs. On March 20, 1957, Sinha, J., of that Court issued rules nisi on the said two applications to the Income-tax Officer, the Commissioner of Income-tax and the Union of India. On September 11, 1958 the said Judge made the rules absolute. The respondents to the applications preferred appeals from the judgment of Sinha, J., to a Division Bench of that Court. Pending the appeals, on March 12, 1959, S. 34 of the Act was amended by S. 2 of the Amending Act. After the said amendment the appeals were heard by a Division Bench of the High Court, consisting of Bose, C. J. and G. K. Mitter, J. Relying upon the said amendment the learned Judges held that the said notices though served on the appellants after the prescribed time, were saved under S. 4 of the Amending Act. In that view they set aside the orders of Sinha, J., and dismissed the writ petitions. Hence the appeals.

4. Learned counsel for the appellants contends that the notices under S. 34(1) of the Act were served on the appellants beyond 8 years from the end of the assessment year and, therefore, were barred and that on a true construction of the provisions of S. 4 of the Amending Act, the said notices were not saved thereunder. To appreciate the contention it is necessary to read the relevant provisions of the Act, before and after the amendment.

5. Section 34(1) of the Indian Income tax Act 1922, before it was amended by the Finance Act No. XVIII of 1956 :

If-

(a) the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under S. 22 for any year or to disclose fully and truly all material facts necessary for his assessment for the year, income, profit or gain chargeable to income-tax have escaped assessment for that year, or have been under assessed, or assessed at too low a rate or have been made the subject of excessive relief under Act or excessive loss or depreciation allowance has been computed, or

(b) ...... ...... ......

he may in cases falling under cl. (a) at any time within eight years......