M M ISPAHANI LTD Vs. COMMISSIONER OF INCOME TAX CENTRAL

JUDGEMENT

(1.) The facts in this case are briefly as follows: The petitioner before us is Messrs. M. M. Ispahani Ltd. It was a company incorporated in India in 193-1, but in 1947 it transfrred its registered office to Chitagong, Eastern Pakistan, For the accounting years 1939 to 1946 (assessment years 19-10 41 to 1947-48), the petitioner filed returns under the Indian Income-tax Act, 1922 and was assessed to tax. In the year 1950, proceedings were commenccd against the petitioner under the Taxation of Income (Investigation Commission) Act, 1947 inter alia for the accounting years 1939 to 1946. After the Supreme Court declared Section 5 (4) of the Taxation of Income (Investigation Commission) Act, 1947 as ultra vires, the proceedings started against the petitioner were dropped, After the Supreme Court Judgment of Surajmull Mohta and Co. v. A. V. Visvanatha Sastri, the Ineome-tax Act, 1922 was amended inter alia by the inclusion of Sub-sections (1-A) and (1-B) to Section 34. Eight separate notices under Section 34 (1-A) of the Income-tax Act, 1922 dated 15th June 1955 were served upon the petitioner on June 30/31, 1955 relating to the accounting years 1939 to 1946. The petitioner at first challenged the notices by questioning the validity of Section 34 (1-A) by a writ petition under Article 226 of the Constitution. This petition, however, failed and an appeal preferred against it also failed. In the meantime, on or about 18th January 1960 the petitioner filed eight separate returns pursuant to the said notices under Section 34 (1-A). The reassessment proceedings are still continuing. On April 1, 1962 the Income-tax Act, 1961 came into operation and repealed the earlier Act of 1922, subject to certain savings. We are concerned in this case with Section 297 of the 1961 Act, the relevant part whereof is set out below:--

(2.) The 1961 Act is an Act to consolidate and amend the law relating to income-tax and super tax. It provides for levy of such taxes, and lays down the machinery for determination of such taxes and the collection thereof. When the Act of 1961 came into operation there must have been innumerable assessees against whom proceedings under Section 34 of the 1922 Act had been taken, but had not been completed. There must also have been assessees who were liable to be proceeded under Section 34, but against whom no proceedings had in fact been taken. The point is as to whether, the Act of 1961 which is a consolidating and amending Act, can take into account these two types of cases and provide for a method and machinery as to how they should be dealt with, after the coming into operation of the new Act.

(3.) Coming now to the general law, we have Section 6 of the General Clauses Act It is provided therein, that where an Act has been repealed, then unless a different intention appears, the repeal shall not ........... (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed. (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactmeat so repealed. In the case of the repealed Act of 1922, we find from the provisions of Section 297 (2) (d) (i) of the 1961 Act, that not only there is no expression of a "different intention", but that there is an express provision which prevents the retrospective operation of the 1961 Act to reassessment proceedings already started under the 1922 Act. The first thing that should be noticed is that it is admitted that notices under Section 34 (l-A) have been issued as long ago as June 1955, and these notices are not by themselves challenged. There is no provision in the new Act that notices for reassessment already issued under Section 34 would lapse and that a fresh notice should be given under the new Act.