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TMI Blog1968 (8) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... it petition challenging the notice under section 148, dated March 26, 1965. Annexure F to the writ petition is a copy of the impugned notice. The main contention of Mr. P. N. Pachauri appearing for the petitioner is that reassessment proceedings were barred by time under the Indian Income-tax Act, 1922 (hereafter referred to as the old Act or the 1922 Act). Consequently, reassessment proceedings cannot be initiated under the 1961 Act. This position has been disputed by Mr. Gopal Behari appearing for the respondents. Firstly, he contended that reassessment proceedings were not barred under the 1922 Act. Secondly, even if they were barred under the 1922 Act, that does not prevent the respondents from initiating reassessment proceedings under the 1961 Act. Before taking up the question of limitation, it will be convenient to fix the amount, which is alleged to have escaped assessment. Annexure "E "to the petition is a copy of the assessment order for the year 1958-59. During the course of that order the Income-tax Officer observed: " As a sum of Rs. 80,000 had been introduced in the year 1947 action under section 147 will be taken for the assessment year 1948-49. " The petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed upon sub-section (3) of section 34 of the 1922 Act. Sub-section (3) of section 34 of the 1922 Act ran thus : " No order of assessment or reassessment, other than an order of assessment under section 23 to which clause (c) of sub-section (1) of section 28 applies... shall be made after the expiry of four years from the end of the year in which the income, profits or gains were first assessable...." Reliance was placed upon a decision of the Punjab High Court in Kanwal Tej Singh v. Income-tax Officer . In that case it was held that if at the time of making his order the Income-tax Officer found that the assessee had concealed the particulars of his income or deliberately furnished inaccurate particulars of his income, then the Income-tax Officer would be entitled to make the assessment order without any bar of limitation under section 34(3) as the case would fall within the provisions of section 28(1)(c). On examining the facts of that case, it appears that the petitioner's mother filed a voluntary return. The authorities attempted to initiate proceedings for reassessment under section 34(1)(a) of the 1922 Act. Those proceedings were quashed for want of jurisdiction. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent amounting to rupees one lakh or more for any back year without limitation of time ........" It will thus be seen that Act No. 1 of 1959 was mainly concerned with amounts exceeding a lakh of rupees which had escaped assessment. In the present case the amount involved is below one lakh of rupees. So, the respondents cannot derive much assistance from Act No. 1 of 1959. The amount involved is below one lakh of rupees. The period of limitation was, therefore, as indicated in clause (ii) of the first proviso to subsection (1) of section 34 of the 1922 Act. The petitioner is right in its contention that proceedings for reassessment under section 34(1)(a) of the 1922 Act were barred after March 31, 1957. Next we have to consider whether reassessment proceedings are permissible under the 1961 Act, although such proceedings were barred under the 1922 Act. Section 149 of the 1961 Act contains the rule of limitation. Section 149 of the 1961 Act states : " No notice under section 148 shall be issued, (a) in cases falling under clause (a) of section 147-.... (ii) for the relevant assessment year, where eight years, but not more than sixteen years, have elapsed from the end of that ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Act of 1922 had become time-barred when the Act of 1961 came into force is no bar to the initiation of proceedings under section 147 of the new Act. Dixit C.J. observed on page 659 : " The firmly established principle is that an amending Act or a new Act repealing an old Act enabling the income-tax department to make an assessment or a reassessment in respect of the years which were over when the amending Act or the new Act came into force should not be construed as authorising action in respect of a year for which action was already time-barred at the time when the amending or the new Act came into force, unless the statute clearly provides to the contrary. " The learned Chief justice further observed that the Act of 1961 does contain a provision to the contrary. A different view was, however, taken by the Gujarat High Court in Induprasad Devshankar Bhatt v. J. P. Jain . It was held that where the right to re-open assessment under section 34(1) of the Act was barred, the new Act which provides an enlarged period of time for re-opening an assessment does not give a fresh right to the Income-tax Officer to re-open the assessment, as it is settled law that if the right of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t this is a matter which may well be left to the Income-tax Officer for decision ; and this court should not interfere under article 226 of the Constitution. Reference was made to Calcutta Discount Co. v. Income-tax Officer . On page 375 it was pointed out that two conditions have to be satisfied in order to confer jurisdiction under section 34 of the Indian Income-tax Act, 1922. In that case it was not the petitioner's contention that the proceedings were barred by time. The petitioner's objection was of a different kind. In Kantamani Venkata Narayana & Sons v. First Additional Income-tax Officer, it was held by the Supreme Court that, in proceedings under article 226 of the Constitution challenging the jurisdiction of the Income-tax Officer to issue a notice under section 34(1)(a), the High Court is only concerned to decide whether the conditions which invested the Income-tax Officer with power to reopen the assessment did exist. It is not within the province of the High Court to record a final decision about the failure to disclose fully and truly all material facts bearing on the assessment and consequent escapement of income from assessment and tax. One of the preliminary co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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