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TMI Blog1980 (4) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... ken into consideration the concealment as found both by the Income-tax Officer and by the Appellate Assistant Commissioner ? " Briefly, the facts are as follows : The assessee is the same in both these references; the assessment years are 1969-70 and 1970-71. The income-tax returns were filed by the assessee for the two years on September 10, 1969, and August 4, 1970, respectively. After the assessments were made, certain concealments were noticed and notices under s. 148 of the I.T. Act, 1961 (hereinafter called " the Act "), were issued to the assessee. Reassessments were made on March 12, 1973. The concealment noticed for both the years exceeded sum of Rs. 25,000. Hence, the ITO referred the matter to the IAC in view of the provisions of sub-s. (2) of s. 274 as it stood on the said date. Prior to April 1, 1976, and after April 1, 1971, the ITO was empowered to impose penalty under s. 271 in all cases in which the concealment was Rs. 25,000 or below. In all cases where the concealment exceeded Rs. 25,000, he was required to refer the matter to the concerned IAC for passing necessary orders. The Taxation Laws (Amend.) Act, 1975, brought about certain changes in the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right in the procedure. Change of forum is also a matter of procedure. Therefore, on and after April 1, 1976, the penalty proceedings were competent only before the ITO. Hence the orders passed by the IAC on September 22, 1976, were without jurisdiction. (ii) Even assuming that s. 6 of the General Clauses Act would save proceeding instituted under a repealed law, the said provision was not at all attracted to this case as sub-s. (2) of s. 274 of the Act was omitted, and not repealed. (iii) In any event, there are clear indications available in the amending Act to show that it was not the intention of the Legislature to save the power of the IAC in respect of references already made before April 1, 1976. In support of his first submission, the learned counsel relied on the decision of the Supreme Court in Maria Christine de Souza Soddar v. Maria Zurna Pereira Pinto, AIR 1979 SC 1352, and a decision of this court in Purushotham Sakharam Shah v. Prabhu Bharama Sutar [1968] 1 Kar LJ 570. In support of his second submission that s. 6 of the General Clauses Act has no application in cases where a provision is omitted instead of being repealed, he relied on a decision of the Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 75 which shows the intention of the Legislature not to save the power of the IAC which was available to him under sub-s. (2) of s. 274 of the Act before April 1, 1976. With reference to the submission made on behalf of the assessee that omission does not tantamount to repeal and, therefore, s. 6 of the General Clauses, Act is not attracted, he relied on a decision of the Madras High Court in J. K. K. Angappan v. ITO [1974] 94 ITR 397, in which the Madras High Court had held that the observations in the judgment of the Supreme Court on the point should be confined to the facts of the said case. As regards the second question arising for our consideration, the learned counsel for the assessee did not dispute that the same is covered by the decision of this court in CIT v. M. Nagappa [1978] 114 ITR 707. Therefore, the second question has to be answered in the affirmative. We proceed to consider the second submission made for the petitioner first, i.e., as to the effect of s. 65 of the Amendment Act of 1975 by which sub-s. (2) of s. 274 was omitted. The said section reads: " In section 274 of the Income-tax Act, sub-section (2) shall be omitted.". Section 6 of the General Claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the General Clauses Act could not be invoked. The relevant part of the judgment reads as follows (p. 503): " In the case before us, section 6 of the General Clauses Act cannot obviously apply on the omission of rule 132A of the D.I. Rules for the two obvious reasons that section 6 only applies to repeals and not to omissions, and applies when the repeal is of a Central Act or Regulation and not of rule. If section 6 of the General Clauses Act had been applied, no doubt this complaint against the two accused for the offence punishable under r. 132A of the D.I. Rules could have been instituted even after the repeal of that rule. " (Underlined by us). In the aforesaid portion of the judgment the Supreme Court in coming to the conclusion that s. 6 of the General Clauses Act could not be invoked for sustaining proceedings instituted for violation of r. 132A of the D.I. Rules before it was omitted, gave two reasons, i.e., (1) s. 6 was not attracted because it was omitted and not repealed, and (2) that s. 6 was also not attracted as the said section applies only to repeals of Central Act or Regulation and not to rules. In view of the pronouncement made in the above judgment, we ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said case, the Supreme Court, has laid down the principle on which the applicability or non-applicability of s. 6 of the General Clauses Act should be decided. The relevant portion of the judgment at page 793 reads as follows : " The principle of this section is that unless a different intention appears in the repealing Act, any legal proceeding can be instituted and continued in respect of any matter pending under the repealed Act as if that Act was in force at the time of repeal. In other words, whether there is a repeal of an enactment the consequences laid down in section 6 of the General Clauses Act will follow unless, as the section itself says, different intention appears in the repealing statute. In the case of simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject the court would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate different intention. The question is not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them Section 6 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 76, the right of the assessee to prefer appeals against such orders would also have been retained. Further, the, addition of a proviso to s. 271(1)(iii) of the Act clearly indicates that on and after April 1, 1976, the power of the IAC was only to accord previous approval in cases where the concealment exceeded Rs. 25,000 when the matter is referred by the ITOs and not to pass orders himself imposing the penalty. In this behalf, it is also necessary to point out that under subs. (1) of s. 271 of the Act, the ITO had throughout been the competent authority to find out the concealment and to initiate penalty proceedings subject to the condition that earlier to April 1, 1976, he was required to refer all cases where concealment was above Rs. 25,000 to the IACs for initiation of penalty proceedings in view of the non obstante clause contained in sub-s. (2) of s. 274 of the Act. By the deletion of sub-s. (2) of s. 274 and addition of a proviso to s. 271(1)(iii) of the Act, the Legislature has provided that the same officer should deal with all the proceedings relating to the penalty subject to the condition that the previous approval of the IAC should be taken if the concealment exceede ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w canvassed for the revenue relying upon the judgment of the Supreme Court in New India Insurance Co. Ltd. [1977] 47 Comp Cas 453; AIR 1976 SC 237, the judgment of this court in, W.P. No. 3143 of 1976 (Bangalore Dist. Co-operative Central Bank Ltd. v. State of Karnataka [1981] 58 FJR 159) following the said judgment, the decision of the Bombay High Court in Sripatrao Dajisaheb Ghatge, AIR 1977 Boni 384 [FB] and another decision of this court in A. V. Ibrahim v. Mandepanda Kariappa, AIR 1971 Mys 298, was to the effect that the jurisdiction to continue the proceeding before an officer before whom the proceedings have been initiated, is not a mere matter of procedure, but substantive right and, therefore, the concerned authority would have jurisdiction to make final orders on pending proceedings. At the outset, we have to point out that the basis on which the questions which arose in all the above cases was, as to whether a party who had a right to a remedy under the law by way of instituting a legal proceeding before a particular court or tribunal or authority and who had instituted any proceeding before a court, tribunal or authority in exercise of such right had the right to purs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he law under which the power was conferred on an officer to initiate the proceedings, the said officer is divested of such power without any reservation and the same is vested in another officer, the former loses the power to deal with the case and the latter alone can exercise the statutory power vested in him. In I.T.R.C. 200 and 201 of 1975 (Addl. CIT v. M. Y. Chandragi [1981] 128 ITR 256) decided by us today, in a separate order we upheld the contention of the revenue that though concealment of income was made by the assessee in that case prior to April 1, 1971, and though on the date of concealment the ITO had no jurisdiction to initiate proceedings against him for the imposition of penalty as it exceeded Rs. 1,000, he was competent to initiate proceedings after April 1, 1971, against the same assessee, as from that date, he was given the power to impose penalty in all cases where the concealment did not exceed Rs. 25,000 by the Taxation Laws (Amend.) Act, 1970. We rejected the contention of the assessee to the effect that the date of concealment determines the jurisdiction of the officer, disagreeing with the view taken by the Madras High Court in Continental Commercial Corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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