BOSE, C.J. - (1.) . Constitution.
(2.) THE appellant alleges that she carries on business, inter alia, in moneylending, speculation in bullion and shares and investment in shares and other commodities under the name and style of Shankar and Co., at Ramrajatola, Santragachi, in the District of Howrah. In January, 1961, the appellant filed returns of her income for the asst. yrs. 1952-53 to 1960- 61. The ITO, D-Ward, Howrah, completed the assessments of income of the appellant in respect of the said years under s. 23(3) of the Indian IT Act, 1922, and issued the assessment orders in respect thereof on the 7th Feb., 1961. The ITO 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 ITO had completed the assessments and issued the assessment orders. On the very same date-7th Feb., 1961-the ITO, respondent No. 2, also issued notices of demand under s. 29 of the Act of 1922 in respect of the said assessment orders. On the 25th Jan., 1963, the appellant was served with a notice dt. the 24th Jan., 1963, issued by respondent No. 1, CIT, West Bengal, purporting to be under s. 33B of the Indian IT Act, 1922, alleging that respondent No. 1 had called for and examined the records of the appellant's case in respect of the asst. yrs. 1952-53 to 1960-61 and other connected records and it appeared to him that the orders of assessment passed by the ITO, "D" Ward, Howrah, on the 7th Feb., 1961, were erroneous in so far as they were prejudicial to the interests of the Revenue for the following amongst other reasons : "Enquiries made have revealed that no business as alleged was carried on from the address declared in the returns. Also the said ITO was not justified in accepting the initial capital, the acquisition and sale of jewellery, the income from business, gift made by you (the appellant), etc., without any enquiry or evidence whatsoever " and the concluding paragraph of the said notice was as follows : "I, therefore, propose to pass such orders thereon as the circumstances of the cases justify after giving you an opportunity of being heard under the powers vested in me under s. 33B of the IT Act, 1922. The cases will be heard at 11 a.m. on 1st Feb., 1963, at my above office when you are requested to produce the necessary evidence in support of your contentions. Objections in writing accompanied by necessary evidence, if any, received on or before the appointment for personal hearing will also be duly considered. Please note that no adjournment of the hearing will be granted. Yours faithfully, Sd/- F. H. Vallibhoy, 24-1-63. CIT, West Bengal. " On the 31st Jan., 1963, the appellant through her solicitors, Khaitan and Co., wrote a letter to the CIT asking the CIT to recall or cancel the notice dt. 24th Jan., 1963, and to refrain from taking any steps thereunder. It is stated in this letter that the notice served was bad in law and illegal and void ab initio, inter alia, on the following grounds : "(1) that the assessments in question had been completed before the IT Act, 1961, came into force and there were no proceedings pending relevant to those years at the time of the commencement of the Act of 1961 and, as s. 33B of the old Act had been repealed by s. 297 of the Act of 1961, provisions of s. 33B of the Act of 1922 could not be applied to the orders of assessment in question : (2) that the Income-tax (Removal of Difficulties) Order, 1962, issued under s. 298 of the IT 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 CIT 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.
(3.) AS the CIT did not take any steps to comply with the requisition contained in the letter, the appellant moved this Court under Art. 226 of the Constitution for appropriate writs for the quashing of the records and proceedings relating to the notice dt. 24th Jan., 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 Second Act which came into force on the 1st April, 1962, respondent No. 1 had no power, authority or jurisdiction to initiate the said proceedings under s. 33B of the First Act. (b) Sec. 6 of the General Clauses Act in no way authorises the initiation of the said proceedings inasmuch as no steps were taken in respect thereof when the First Act was in force and/or prior to its repeal. (c) The powers under s. 298 of the Second Act can only be exercised in respect of the matters dealt with by s. 297 of the Second Act which do not deal with proceedings under s. 33B of the First Act at all. (d) Alternatively, the powers under s. 298 of the Second Act can only be exercised in case of any difficulty arising in giving effect to the provisions of the Second Act and not for the purpose of starting fresh proceedings under s. 33B of the First Act. (e) In still further alternative the powers under s. 298 of the Second Act cannot be exercised in any manner inconsistent with the provisions thereof. " In order to determine the questions involved in this appeal, it will be convenient at this stage to set out the relevant portions of ss. 297 and 298 of the IT Act, 1961, and the Income-tax (Removal of Difficulties) Order, 1962, and also s. 6 of the General Clauses Act, 1897, and s. 33B of the Indian IT Act, 1922. "297. (1) The Indian IT Act, 1922, is hereby repealed. (2) Notwithstanding the repeal of the Indian IT Act, 1922 (hereinafter referred to as the repealed Act), (a) Where a return of income has been filed before the commencementof this Act by any person for any assessment year, proceedings for the assessment of that person for that year may be taken and continued as if this Act had not been passed ; (b) Where a return of income is filed after the commencement of this Act otherwise than in pursuance of a notice under s. 34 of the repealed Act by any person for the assessment year ending on the 31st day of March, 1962, or any earlier year, the assessment of that person for that year shall be made in accordance with the procedure specified in this Act ; (c) Any proceeding pending on the commencement of this Act before any IT authority, the Tribunal or any Court, by way of appeal, reference or revision, shall be continued and disposed of as if this 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 s. 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 s. 147 and no proceedings under s. 34 of the repealed Act in respect of any such income are pending at the commencement of this Act, a notice under s. 148 may, subject to the provisions contained in s. 149 or s. 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 general or special order, do anything not inconsistent with such provisions which appears to it to be necessary or expedient for the purpose of removing the difficulty. (2) In particular, and without prejudice to the generality of the foregoing power, any such order may provide for the adaptations or modifications subject to which the repealed Act shall apply in relation to the assessments for the assessment year ending on the 31st day of March, 1962, or any earlier year. " ;