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Appeal against dismissal of suit for declaration of illegality of certificate case proceedings and orders, need for fresh notice under section 29 of the Indian Income-tax Act after reduction of tax in appeal, interpretation of Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964, validity of certificate proceeding based on original notice after subsequent notice issued. Analysis: The plaintiff appealed against the dismissal of the suit challenging the legality of certificate case proceedings related to Income-tax assessment. The plaintiff contended that a fresh notice under section 29 of the Income-tax Act was required after the tax amount was reduced in appeal, citing the case of ITO v. Seghu Buchiah Setty [1964] 52 ITR 538. The lower courts upheld the validity of the certificate proceeding based on the original notice, considering the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964. The Act was enacted to address situations where no second notice under section 29 was issued post appeal disposal. The plaintiff argued that the subsequent notice superseded the original, necessitating a fresh proceeding, which was refuted based on the Act's provisions. The plaintiff's counsel referred to case law and argued that the Act of 1964 did not apply to the present case as a fresh notice was issued post-appeal. The Act aimed to validate ongoing recovery proceedings post-appeal, ensuring continuity without the need for a fresh notice in certain scenarios. The plaintiff's contention that the subsequent notice invalidated the original proceeding was dismissed, emphasizing the Act's purpose to maintain continuity in recovery proceedings despite reductions in tax liability post-appeal. The court held that the second notice served as an intimation under the Act, allowing the continuation of proceedings based on the reduced amount without initiating a fresh proceeding. The judgment highlighted the provisions of the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964, which exempted the need for a fresh notice in cases where tax dues were reduced post-appeal. The court rejected the argument that the subsequent notice annulled the original proceeding, emphasizing the Act's intent to ensure the continuity of recovery proceedings. The plaintiff's appeal was dismissed, affirming the validity of the certificate proceeding based on the original notice despite subsequent notifications. The judgment underscored the Act's retrospective application to maintain the integrity of recovery proceedings and uphold tax liabilities post-appeal, without necessitating a fresh notice under certain circumstances.
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