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1964 (12) TMI 3 - HC - Income Tax


Issues Involved:
1. Jurisdiction of the Commissioner of Income-tax under section 33B of the Indian Income-tax Act, 1922, after its repeal by the Income-tax Act, 1961.
2. Applicability of section 6 of the General Clauses Act, 1897.
3. Validity of the Income-tax (Removal of Difficulties) Order, 1962.

Detailed Analysis:

1. Jurisdiction of the Commissioner of Income-tax under section 33B:
The appellant contended that the Commissioner of Income-tax had no jurisdiction to invoke section 33B of the Indian Income-tax Act, 1922, as it had been repealed by section 297(1) of the Income-tax Act, 1961. The court found this contention without merit. The return of income had been filed before the commencement of the 1961 Act, allowing assessment proceedings to continue under the 1922 Act by virtue of section 297(2)(a). The court interpreted "proceedings for the assessment" to include various proceedings related to assessment, such as appeal, reference, and revision, as envisaged in Chapter IV of the 1922 Act, including section 33B. The court emphasized that the term "assessment" has a comprehensive meaning, encompassing the entire procedure for imposing liability on the taxpayer, including reassessment and modification of the original assessment.

2. Applicability of section 6 of the General Clauses Act, 1897:
The appellant argued that section 6 of the General Clauses Act was not applicable. The court, however, did not find it necessary to express a definite opinion on this point. The court referred to the Supreme Court's decision in Indira Sohanlal v. Custodian of Evacuee Property, which stated that section 6 applies unless the new legislation manifests an intention incompatible with its provisions. The court noted that section 6 would be applicable unless the new Act indicates a different intention. The court also referenced decisions from other cases, such as Om Prakash v. Moti Lal and Commissioner of Income-tax v. Bidhu Bhusan Sarkar, which discussed the applicability of section 6 in the context of repealed and new enactments.

3. Validity of the Income-tax (Removal of Difficulties) Order, 1962:
The appellant challenged the vires of clause (4) of the Income-tax (Removal of Difficulties) Order, 1962, arguing it was beyond the power conferred by section 298 of the Income-tax Act, 1961. The court rejected this challenge, stating that clause (4) was intended to make explicit what was implicit in section 297(2)(a). The court held that the power conferred by section 298 is broad and allows the Central Government to pass orders to resolve difficulties in implementing the Act, provided they are not inconsistent with its provisions. The court cited the Judicial Committee's decision in King Emperor v. Sibnath Banerji to support the broad interpretation of rule-making powers under similar statutory provisions.

Conclusion:
The court concluded that section 297(2)(a) of the Income-tax Act, 1961, is comprehensive enough to preserve the Commissioner's power to initiate proceedings under section 33B of the Indian Income-tax Act, 1922, notwithstanding its repeal. The action taken by the Commissioner was deemed valid and within jurisdiction. Consequently, the appeal was dismissed with costs.

 

 

 

 

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