9911796707
TMI Blog1978 (10) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961, as amended by the Taxation Laws (Amendment) Act of 1970, is applicable to the case and the proceedings are not barred by limitation ? " The assessment years with which we are concerned are 1962-63 to 1967-68 and 1969-70. The assessee is a registered firm having business in commission agency in tea. It challenges the correctness and the propriety of the levy of penalty under s. 271(1)(c) of the I.T. Act in reassessment proceedings taken against the firm under s. 147(a) of the Act. The reassessment orders stated that in the course of investigation into the assessment for the year 1969-70, it was revealed that the assessee was selling sample tea in the open market and such sale proceeds were not accounted for in the books of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of 1970), with effect from 1st April, 1971, enlarging the period of two years to a period of two months from the end of the financial year in the course of which action for imposition of penalty had been initiated or completed, or six months from the end of the month in which the order of the Assistant Commissioner, or as the case may be, the Tribunal, is received by the CIT, whichever period expires later. The Tribunal noticed that, according to the amended provision, the proceedings would not be barred on the date on which the IAC passed the relevant orders. For the assessee, the contention was that as the proceedings commenced on April 1, 1971, the amendment would be inapplicable to the case. The Tribunal, in its statement of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke in stating the provision of the amended section). It was held that the scheme of the provisions only confirms the impression that the amendment was procedural in character and, therefore, retrospective ; that s. 275 of the Act embodied a rule of limitation and that it governs the proceedings despite the fact that it had come into force only subsequent to the filing of the return. In the course of the judgment, the Division Bench noticed the contention of counsel for the assessee that s. 275 embodied a jurisdictional condition or a letter on the right or jurisdiction of officer and not a period of limitation. This argument was rejected. In para. 3 of the judgment, the Division Bench noticed that attention was called to a number of decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where that court observed that the provisions dealing with imposition of a penalty are substantive in character and not procedural. It would be difficult to demur to a proposition stated in that form. True, the proposition was stated in relation to s. 9(2) of the Central Sales Tax Act, 1956, which embodies a provision having a like effect as s. 275 of the I.T. Act. The decision was affirmed on appeal by the Supreme Court in Khemka & Co. (Agencies) P. Ltd. v. State of Maharastra : State of Mysore v. Guldas Narasappa Thimmaiah Oil Mills [1975] 35 STC 571 (SC). Chief Justice Ray, speaking for the majority, stated that penalty is not merely adjunct to assessment and not merely consequential to assessment. It is not merely machinery. Penalty is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... express enactment. The language used should leave no serious doubts about its effect so that the persons who are to be subjected to such a liability for the infringement of law are not left in a state of uncertainty as to what their duties or liabilities are. This is an essential requirement of a good government of laws. It is implied in the constitutional mandate found in article 265 of our Constitution : 'No tax shall be levied or collected except by authority of law.' " The minority view was represented by the judgment delivered by Mathew J. on behalf of himself and Chandrachud J. We do not, with respect, think that the observations relied on by counsel for the assessee, deal directly with the position that we have to consider in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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