1953 (12) TMI 4 - SC - Income Tax

The jurisdiction of the Income-tax Officer, Special Survey Circle, Bangalore, to assess the appellant to income-tax and super-tax on his income accruing prior to 1st April, 1950, in the State of Mysore challenged Held that - We find nothing in Article 277 of the Constitution to preclude Parliament making a law providing for the levy and collection of income-tax and super-tax under the Mysore Act through authorities appointed under the Indian Income-tax Act. Accordingly, we hold that the Income-tax Officer, Special Survey Circle, Bangalore, had jurisdiction to assess the appellant to income-tax and super-tax in respect of the income of the period prior to the commencement of the Constitution. Appeal dismissed.

Summary

Issues:
1. Challenge to jurisdiction of Income-tax Officer to assess appellant's income accruing prior to 1st April, 1950 in the State of Mysore.
2. Validity of the proviso to Section 13 of the Indian Finance Act, 1950.
3. Interpretation of Article 277 of the Constitution regarding the levy, assessment, and collection of taxes.

Detailed Analysis:
1. The appeals arose from applications challenging the jurisdiction of the Income-tax Officer to assess the appellant's income prior to 1st April, 1950, in Mysore. The officer applied the income-tax law in force in Mysore until the end of the year 1948-49. The appellant contended that the Union Parliament lacked the power to authorize the officer under the Indian Income-tax Act, 1922, to levy taxes under Mysore law before the Constitution. The argument was based on constitutional principles and Article 277 of the Constitution.

2. The contention regarding the proviso to Section 13 of the Indian Finance Act, 1950, was that it was ultra vires and void. The proviso allowed officers appointed under the Indian Income-tax Act to assess and collect taxes under Mysore law. The appellant argued that Parliament could not graft the machinery of the Indian Income-tax Act onto the Mysore income-tax law. The Court held that Parliament had the power to legislate for the levy and collection of taxes under Mysore law through officers appointed under the Indian Income-tax Act.

3. The interpretation of Article 277 of the Constitution was crucial in determining the continued levy, assessment, and collection of taxes post-constitution. The appellant argued that Article 277 prohibited Parliament from legislating to apply the Indian Income-tax Act machinery to Mysore State for tax purposes. However, the Court held that Article 277 did not preclude Parliament from making a law providing for the levy and collection of taxes under Mysore law through officers appointed under the Indian Income-tax Act. The Court emphasized the efficiency and economy in transitioning from Mysore Income-tax law to the Indian Income-tax Act.

In conclusion, the Supreme Court dismissed the appeals, upholding the jurisdiction of the Income-tax Officer to assess the appellant's income prior to the Constitution under Mysore law. The Court found that the proviso to Section 13 of the Indian Finance Act, 1950, was valid and that Parliament had the authority to legislate for the levy and collection of taxes under Mysore law through officers appointed under the Indian Income-tax Act.