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TMI Blog1972 (12) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... th rule 48A(ii). of the Income-tax Rules, 1962. The petitioner has challenged the validity of that demand in this writ petition on various grounds. It is contended that Chapter XXII-A dealing with annuity deposit was inserted in the Income-tax Act, 1961, by section 44 of the Finance Act of 1964 with effect from 1st April, 1964, that under the said scheme of annuity deposit the taxpayers have the option to make or not to make deposit, that the annuity deposit not being tax, there cannot be any compulsion to pay the same, and that in the event of non-payment of the annuity deposit the only course open to the assessing authority is to tax the total income as well as 50% of the amount saved by not making the deposit as provided in the scheme. It is further contended that by section 32 of the Finance Act of 1966, sections 280K, 280R and 280T and the words "(including annuity deposit referred to in Chapter XXII-A)" in section 156 of the Income-tax Act, 1961, had been omitted with effect from April 1, 1967, and that as a result of these omissions there is, in fact, no machinery by which the annuity deposit amounts could be assessed and recovered under the Income-tax Act. The petitioner c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion could not be sustained. Thus, the substantial question to be considered in this case is whether section 6 of the General Clauses Act enables the Income-tax Officer to apply the provisions of sections 280K, 280R and 280T even after their omission with effect from April 1, 1967, for purposes of recovery of the amount which has accrued due before that date. Before proceeding to deal with the main contention, it is necessary to consider the nature of the annuity deposit scheme and the effect of the omission of the provision to sections 280K, 280R and 280T from the Income-tax Act, 1961, by the Finance Act of 1966. The scheme of annuity deposit introduced by section 44 of the Finance Act of 1964 has been explained by the Supreme Court in Hari Krishna Bhargav v. Union of lndia at P: 247 as follows: "Broadly stated, the scheme of Chapter XXII-A is that certain classes of taxpayer in the comparatively higher income groups are required to make out of their total income deposits at the specified rates on the adjusted total income with the Central Government. The amount so deposited is made retunable with interest in ten annual instalments. In computing the total income of the year in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 280-O provides for the deduction on the annuity deposit from computation of the total income assessable. The other provisions of Chapter XXII-A, inter alia, deal with the procedure for recovery of annuity deposit as determined under section 280K. According to the petitioiier, by the omission of sections 280K, 280R and 280T the legislature has shown its intention not to enforce the levy and collection of the annuity deposit after 1st April, 1967, the levy and collection could not be made even for the anterior period as the omission of the sections will not amount to repeal, in whih case alone sectionn 6 of the General Clauses Act will apply. The learned counsel refers to the decision of the Supreme Court in Rayala Corporation (P.) Lid, v Director of Exforcement in support of his plea that where the legislature by an amending Act merely omits certain provisions of ea existing statute, it will not amount to and that, therefore, in case of omissions section 6 of the General Clauses Act will not apply. In that case the question arose as to what is the effect of omission of rule 132A(2) of the Defence of India, Rules, 1962, by clause 2 of the Defence of India (Amendment) Rules, 1965. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rue, the observation appears to suggest that section 6 will apply only to repeals and not to omissions. But as already stated, the observation has to be construed in the light of the fact of that case. In our view, the mere use of the word if "omit" instead of "repeal" by the legislature cannot be taken to show its intention to exclude the application of section 6 of the General Clauses Act as urged by the petitioner. An a matter of fact, the Supreme Court in an earlier decision State of Punjab v. Mohr Singh had clearly ruled that unless the legislature shows its intention to destroy the old rights, section 6 of the General Clauses Act will automatically apply. In that case it has been observed: "Whenever there is a repeal of enactment, the consequence laid down in section 6 of the General Clauses Act will follow unless, as the itself says, a different intention appears. In the case of a simple repeal there is scarcely any room for expression of a contrary opinion. But, when the repeal os followed by fresh legislation on the same subject, the court would undoubtedly have fresh to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before April 1, 1967, neither sub-clause (c) nor sub-clause (d) of section 6 will apply. dAccording to the petititioner the liability to make the annuity deposit it optional and the consequences of non-payment will be that the petitionr will be liable to pay any additional tax as per section 280-X. But we find that the learned counsel is not right in saying that the amount has not become due. Though the petitioner had option not to pay the annuity deposit, that option has to be exercised before the relevant date. It is not dispute that in this case the petitioner has not exercised option .In the event of the petitioner not exercising the option the Income-tax Officer is entitled to proceed to levy the annuity deposit in the course of the assessment proceedings. We are of the view that under the scheme the petitioner's liability has accrued as he has not exerised the option to opt out of the annuity deposit scheme. It has been held in Kesoram Industries and Cotton Mills Ltd. v. Commissioner of Wealth tax that a liability to pay income-tax is a present liability though the tax became payable after it is quantified in accordance with ascertainable data, and that it becomes a perfecte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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