9911796707
TMI Blog1981 (10) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... . 86,623. The assessment was completed on the total income of Rs. 16,26,990 and the tax payable thereon after adjustment of tax deducted at source and double income-tax relief due came to Rs. 2,35,091. As the estimate filed by the assessee was prima facie wrong, the ITO issued a notice under s. 274 to show cause why penalty should not be levied. The assessee's reply was that the penalty proceedings were time-barred as two years had elapsed after the assessment order was passed on January 20, 1971. The objection was overruled and the ITO levied Rs. 1,09,526 as penalty. The assessee appealed to the AAC. He (the AAC) pointed out that under s. 275, before the amendment in 1970, the penalty proceedings were required to be completed within two ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the course of which the proceedings for the imposition of penalty have been commenced..." This provision was deleted and a new provision was substituted in its place by the Taxation Laws (Amendment), Act, 1970, with effect from April 1, 1971. The amended provision, to the extent relevant, runs as follows : " No order imposing a penalty under this Chapter shall be passed (a) in a case where the relevant assessment or other order is the subject matter of an appeal to the Appellate Assistant Commissioner under section 246 or an appeal to the Appellate Tribunal under sub-section (2) of section 253, after the expiration of a period of (i) two years from the end of the financial year in which the proceedings, in the course of which actio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve to refer to a passage in the judgment of Hidayathullah J. (as he then was) in Prashar's case at p. 67 running as follows : "........ we wish to say a few words about the well-known principle that subsequent changes in the period of limitation do not take away an immunity which has been reached under the law as it was previously. In this sense statutes of limitation have been picturesquely described as `statutes of repose'. We were referred to many cases in which this general principle has been firmly established. We do not refer to, these cases because in our opinion it is somewhat inapt to describe section 34 with its many amendments and validating sections as a section of repose. Under that section there is no repose till the tax is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r after the assessment was made. There are several decisions which have taken the view that the amended provision would alone apply so long as the period of limitation had not expired on April 1, 1971, when the new provision was brought into force. The decisions are too numerous and all of them take a uniform view. Therefore, we do not think it necessary to detail them here. It has also been held that this provision is a procedural one. Learned counsel for the assessee contended that he had acquired a vested right of the penalty proceedings having to be completed within two years from the assessment and that the said vested right could only be affected by express retrospective amendment. Section 275 being only in the nature of a procedu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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