Section 34(3) of the Indian Income-tax Act, 1922 — the law in short
What the courts have decided on section 34(3) of the Indian Income-tax Act, 1922, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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ITO v Murlidhar Bhagwan Das — a finding is only what the year under appeal actually required
Supreme CourtHelps taxpayer
The Commissioner (Appeals) allowed my appeal for one year and said in passing that the amount really belongs to an earlier year. The officer has now reopened that earlier year and calls the remark a finding. Is it one?
Probably not. A Constitution Bench of five judges construed the second proviso to s.34(3) of the 1922 Act — the ancestor of s.150 — and held by three to two that it lifts the time limit only for the year that was actually before the appellate, revisional or reference authority. The majority adopted the Allahabad High Court's definition of “finding” in Pt. Hazari Lal and added that a finding can only be what was necessary for the disposal of an appeal in respect of the assessment of a particular year. A “direction” means one the authority is empowered to give under the sections named in the proviso, and s.31 gave the Appellate Assistant Commissioner no power to order an assessment for a year that was not before him. The words “any person” in the proviso were confined to a person intimately connected with the assessment of the year under appeal. The Revenue's appeal was dismissed with costs. Raghubar Dayal and Mudholkar JJ dissented.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.
