1987 (4) TMI 8 - SC - Income Tax

Action taken by the Assistant Director of Inspection of the Income-tax Dept. in connection with what was said to be a proceeding under the Income-tax Act, in the case of Aruna Estate Limited by issuing summons under section 131 of the Income-tax Act, 1961, to compel attendance before him - held that Prior to the insertion of sub-s. (1A) in s. 131, ADI had no such powers to insist on personal attendance to give evidence - Since the amendment was way back in 1975, the issue is purely academic

Issues Involved:
1. Interpretation of Sections 131 and 135 of the Income-tax Act, 1961.
2. Jurisdiction of the Assistant Director of Inspection to issue summons under Section 131.
3. Validity of the amendment to Section 131 in 1965.
4. Application of the maxim generalia specialibus non-derogant.

Issue-wise Detailed Analysis:

1. Interpretation of Sections 131 and 135 of the Income-tax Act, 1961:

The main question revolved around whether the Assistant Director of Inspection had the authority to issue a summons under Section 131 of the Income-tax Act, 1961. Section 131 grants certain powers to specified authorities, including the Income-tax Officer, Appellate Assistant Commissioner, Inspecting Assistant Commissioner, and Commissioner, akin to those of a court under the Code of Civil Procedure, 1908. These powers include discovery and inspection, enforcing attendance, compelling the production of documents, and issuing commissions. Section 135 states that the Director of Inspection, Commissioner, and Inspecting Assistant Commissioner shall have all the powers of an Income-tax Officer for making any enquiry under the Act.

2. Jurisdiction of the Assistant Director of Inspection to issue summons under Section 131:

The respondents argued that the Assistant Director of Inspection did not have jurisdiction to issue the summons under Section 131, as he was not one of the authorities mentioned in that section. The Department countered by stating that Section 135 empowered the Assistant Director of Inspection to exercise all the powers of an Income-tax Officer, including those under Section 131. The trial judge, K. L. Roy J., rejected this argument, stating that Section 131 specifically empowers only the officers mentioned therein to exercise those powers, and Section 135 does not extend these powers to the Assistant Director of Inspection for issuing summons.

3. Validity of the amendment to Section 131 in 1965:

The petitioners argued that the 1965 amendment to Section 131, which added the "Inspecting Assistant Commissioner of Income-tax" to the list of authorities, would have been unnecessary if the Department's interpretation of Section 135 were correct. This amendment indicated that the Legislature did not intend for Section 135 to confer the powers under Section 131 to any officer not explicitly mentioned in Section 131. The trial judge agreed with this interpretation, emphasizing that the amendment was made to specifically include the Inspecting Assistant Commissioner, which would not have been needed if Section 135 already conferred such powers.

4. Application of the maxim generalia specialibus non-derogant:

The trial judge applied the maxim generalia specialibus non-derogant, meaning that general provisions do not detract from specific provisions. He concluded that Section 135 is a general provision, while Section 131 is a special provision. Therefore, Section 135 cannot be used to extend the specific powers granted under Section 131 to officers not explicitly mentioned in that section. The judge held that the Assistant Director of Inspection did not have the authority to issue the summons under Section 131, and the proceedings were quashed.

Conclusion:

The Supreme Court upheld the decision of the Calcutta High Court, agreeing that the Assistant Director of Inspection did not have the authority to issue summons under Section 131. However, the Court noted that the issue had become academic due to the amendment of Section 131 by Act 41 of 1975, which explicitly conferred the power to issue summons on the Assistant Director of Inspection. Consequently, the appeals were dismissed without costs.

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