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S.C. Prashar And Anr. vs Vasantsen Dwarkadas And Ors. on 5 October, 1955

The assessment of tax had according to the law at the rele- vant time. in force, ordinarily, to be completed by the Income-tax Officer within four years from the last date of the year of assessment in which the income, was first assessable. But to this 393 rule there were several exceptions. If the assessment had to be made on the assessee or any person 'm consequence of or to give effect to any findings or direction contained in an order of the Appellate Assistant Commissioner or of the Appellate Tribunal or of the Commissioner in revision or of an order made in a reference, the assessment could be made even after the expiry of the four years. The exception applied to an assessment made against the assessee or any person in consequence of, or to give effect to any finding or direction contained in the order of any superior tribunal, or 'the High Court or this Court. This Court in S. C. Prashar and another v. Vasantsen Dwarkadas and others(1) held that the second proviso to s. 34(3) of the Incometax Act, 1922, insofar as it authorised the assessment or reassessment of any person other than the assessee after the expiry of the period of limitation specified in s. 34 in consequence of or to give effect to a finding or direction given in an appeal, revision or reference arising out of the proceeding in relation to the assessee violated the provisions of Art. 14 of the Constitution and was invalid to that extent.
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