TMI Blog1964 (12) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Indian Income-tax Act, 1922, and issued the assessment orders in respect thereof on the 7th February, 1961. The Income-tax Officer found that the sources of income of the assessee during the accounting years were income from interest from investments and speculation in shares and silver and/or other sources for which no bank account nor any proper books of accounts were kept by the assessee and the income returns had been based on estimate. In the assessment proceedings, the appellant was represented by one Sri Bagchi, an advocate--an authorised representative of the appellant--and after hearing this advocate and discussing with him in detail certain particulars, the Income-tax Officer had completed the assessments and issued the assessment orders. On the very same date--7th February, 1961--the Income-tax Officer, respondent No. 2, also issued notices of demand under section 29 of the Act of 1922 in respect of the said assessment orders. On the 25th January, 1963, the appellant was served with a notice dated the 24th January, 1963, issued by respondent No. 1, Commissioner of Income-tax, West Bengal, purporting to be under section 33B of the Indian Income-tax Act, 1922, alle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax (Removal of Difficulties) Order, 1962, issued under section 298 of the Income-tax Act, 1961, was ultra vires ; (3) that the notice is absolutely vague, as it does not indicate in what respects the said orders of assessments are erroneous and/or prejudicial to the revenue, and further, no particulars of the alleged enquiry had been stated in the notice. " This letter also gave intimation to the Commissioner that failing compliance with the requisition contained in the letter, the appellant would be compelled to move the High Court at Calcutta for appropriate reliefs. As the Commissioner of Income-tax did not take any steps to comply with the requisition contained in the letter, the appellant moved this court under article 226 of the Constitution for appropriate writs for the quashing of the records and proceedings relating to the notice dated 24th January, 1963, and for direction upon the respondents to forbear from giving effect to that notice or taking any steps thereunder. The rule nisi was issued on that date limited to grounds (a), (b), (c), (d) and (e) of paragraph 17 of the petition which are as follows : " (a) The First Act having been repealed by the Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Act had not been passed. (d) Where in respect of any assessment year after the year ending on the 31st day of March, 1940,-- (i) a notice under section 34 of the repealed Act had been issued before the commencement of this Act, the proceedings in pursuance of such notice may be continued and disposed of as if this Act had not been passed ; (ii) any income chargeable to tax had escaped assessment within the meaning of that expression in section 147 and no proceedings under section 34 of the repealed Act in respect of any such income are pending at the commencement of this Act, a notice under section 148 may, subject to the provisions contained in section 149 or section 150, be issued with respect to that assessment year and all the provisions of this Act shall apply accordingly... (j) Any sum payable by way of income-tax, super-tax, interest, penalty or otherwise under the repealed Act may be recovered under this Act, but without prejudice to any action already taken for the recovery of such sum under the repealed Act. . . " 298. Power to remove difficulties.--(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of the repealed Act and any appeal, reference or revision in respect of the proceedings so disposed of shall be instituted and disposed of as if the repealing Act had not been passed. " Section 6 of the General Clauses Act is as follows : " 6. Effect of repeal.--Where this Act or any Central Act or regulation made after the commencement of this Act repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not-- (a) revive anything not in force or existing at the time at which the repeal takes effect ; or (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder ; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed ; or (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed ; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid ; and any such investigation, legal proceeding or remedy may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 297 including the proceeding by way of revision under section 33B of the Act. It has been argued on behalf of the appellant that the expression " proceedings for the assessment " has reference to the original assessment proceedings initiated for the first time after a return is filed and it does not cover proceedings by way of appeal, reference or revision against an order of assessment passed by the Income-tax Officer after completion of the assessment, inasmuch as clause (c) of sub-section (2) of section 297 deals expressly with appeal, reference and revision and so it could not have been intended by the legislature that cases of appeal, reference and revision would also be covered by clause (a). The short answer to this argument is that clause (c) deals with proceedings by way of appeal, reference and revision pending at the commencement of the Act of 1961. In other words, clause (c) is limited to pending appeals, references and revisions. It is well-known that when the law is altered during the pendency of an action or a proceeding, the rights of the parties are decided according to the law as it existed when the action or proceeding had begun. By enacting clause (c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income-tax v. Khemchand Ramdas observed : " One of the peculiarities of most Income-tax Acts is that the word 'assessment' is used as meaning sometimes the computation of income, sometimes the determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the taxpayer. " The Supreme Court in the case of C. A. Abraham v. Income-tax Officer, Kottayam, in interpreting the expression " assessment " as occurring in section 44 of the Indian Income-tax Act, observed : " The expression 'assessment' used in these sections (provisions of Chapter IV of the Indian Income-tax Act) is not used merely in the sense of computation of income and there is in our judgment no ground for holding that when by section 44 it is declared that the partners or members of the association shall be jointly and severally liable to assessment, it is only intended to declare the liability to computation of income under section 23 and not to the application of the procedure for declaration and imposition of tax liability and the machinery for enforcement thereof. . . . By section 28, the liability to pay additional tax which is desi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lgate general or special orders making provisions for removal of such difficulties and in order to remove such difficulties that the Income-tax (Removal of Difficulties) Order, 1962, was promulgated and clauses (2), (3) and (4) were inserted in that Order and sub-clause (1) of clause (4) of the Order of 1962 has made express provisions to the effect that proceedings by way of appeal, reference or revision in respect of any order made under the Indian Income-tax Act, 1922, can be instituted and disposed of as if the repealing Act had not been passed. But it is to be pointed out that the vires of clause (4) of the Income-tax (Removal of Difficulties) Order 1962, has been challenged before us on the ground that such a provision is plainly beyond the power of the Central Government as conferred upon it by section 298 of the Income-tax Act, 1961. The submission of the counsel for the appellant is that clause (4) is inconsistent with section 297 of the Act and it has sought to fill up a lacuna which existed in that section. But if my interpretation of section 297(2)(a) is correct and the " proceedings for the assessment " are wide enough to include the proceedings by way of appeal, ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al language of sub-section (1) amply justifies the terms of rule 26 and avoids any of the criticisms which the learned judge expressed in relation to sub-section (2) Their Lordships are, therefore, of opinion that Talpade's case was wrongly decided by the Federal Court, and that rule 26 was made in conformity with the powers conferred by sub-section (1) of section 2 of the Defence of India Act. " The same observations are, in my view, applicable in interpreting sub-sections (1) and (2) of section 298. Under this section the Central Government may pass any order to resolve any difficulty that may arise in implementing the provisions of the Act of 1961. The only limitation put upon this power as is clear from sub-section (1) of section 298 is that the order that may be passed by the Central Government, whether it is a general or a special order, should not be inconsistent with the provisions to implement which the same is passed. Sub-section (2) of section 298 is illustrative and makes express provision authorising the Central Government to make provision, in such general or special order, as is contemplated in sub-section (1), for adaptations and modifications subject to which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority for the proposition that an application in revision stands on exactly the same footing as an appeal and that both are vested rights which can be taken away only by express enactment or necessary intendment. Consequently, section 25 of the Provincial Small Causes Court Act, as it was before its substitution by the U. P. Act XVII of 1957, whereby the jurisdiction conferred by the High Court was transferred to the district court, did not confer any right or privilege on any person and in this respect neither clause (c) nor clause (e) of section 6 of the U. P. General Clauses Act was attracted. It was however held in this case that as the High Court in exercise of its power of revision under section 25 of the Provincial Small Causes Court Act entertained the application for revision which was moved prior to 4th June, 1957, and directed the records to be called for, the order passed by the High Court on such application was an " act duly done " within the meaning of clause (b) of section 6 of the General Clauses Act and, therefore, the High Court still retained jurisdiction to dispose of that application in revision and was not bound to return the records to the district courts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for all purposes as alive in respect of such matters. The saving clauses contained in sub-section (2) of section 297 in my view do indicate a different intention as contemplated by section 6 of the General Clauses Act and ousts the operation of the general provision contained in section 6, with the result that section 66A(2) which was completely obliterated by reason of the provision for repeal contained in sub-section (1) of section 297 of the new Act cannot be availed of by the petitioner for the purpose of initiating the proceeding for a certificate for appeal to the Supreme Court as contemplated in section 66A(2) of the Act. But it is to be noted that to meet such contingencies as the present one, the Central Government has promulgated an order on the 8th August, 1962, which is known as the Income-tax (Removal of Difficulties) Order, 1962....." After referring to clause 4 of the said order, it was further observed as follows : " Sub-clause (1) of clause 4 makes it clear that any proceeding by way of appeal, reference or revision in respect of any order made under the provisions of the repealed Income-tax Act, 1922, has to be instituted and disposed of as if the repealing Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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