Case: Commissioner Of Income-Tax,Madras Vs. Janabha Muhammad Hussainnachiar Ammal

law to such proceedings. But where the proceedings related to a period when the pre-existing law was in force, there might be some doubt as to which law was to apply. Section 31 was enacted to remove that doubt and to make s. 34 of the principal Act as it stood after the 1948 amendment applicable to these proceedings. That is why the words "shall always be deemed to have applied" are used; they emphasise that the amended section is deemed always to have applied to amendment had not been made. The latter part of s. 31 also makes this view equally clear. It says that no notice or order of assessment shall be called in question on the ground that s. 34 did not apply in respect of assessment for a year prior to April 1, 1948. Section 34 here contemplated must be the section as amended in 1948, for if it was not so, then it would be the pre-existing section which of course would have applied, if not repealed, to an assessment for a year ending prior to April 1, 1948 and no question of its not so applying would have arisen.I thus arrive at the conclusion that under s. 31 of the 1953 Act, the provisions of sub-ss. (1) and (3) - I leave sub-s. (2) out as irrelevant - of s. 34 of the principal Act as amended in 1948 are to be applied and deemed always to have applied to assessment proceedings in respect of a year ended before April 1, 1948 where the proceedings were commenced after September 8, 1948, A notice issued and an order of assessment made in such proceedings are to be held valid if the notice is issued "in accordance with sub-section (1)" of s. 34 as it stood after the 1948 amendment and the assessment is "completed in pursuance of such notice within the time specified in sub-section (3)" of the same s. 34. Now the notice and assessment in the present case satisfy all these conditions. To them, therefore, s. 34 as amended in 1948 applies. Judged by that section, admittedly the notice and assessment order are unexceptionable.13. It is true that in the present case when the notice was issued and the assessment made, the time to do either under the law as it stood before the 1948 amendment had expired. It may be that law would have applied to it if the 1953 Act had not been passed. It may also be, as was said in the Calcutta Discount Co. [I.A.R. (1953) Cal. 721 .] case, that by itself, the 1948 amendment of s. 34 would not have permitted assessment proceedings in respect of 1942-43 to be commenced in 1949 when under the previous law the time to issue a notice and to make an assessment for that year had expired before the 1948 amendment had come into force. All this however is to no purpose. No such question arises here. The legislature had undoubtedly the power to make s. 34 as amended in 1948 apply to an assessment for 1942-43 by giving it a retrospective operation inspite of the time to issue a notice and to make an assessment fixed by the pre-existing law having expired before the amendment came into effect. The question really is one of interpretation, namely, whether the legislature had given such retrospective operation.Now it seems to me that s. 31 of the 1953 Act clearly gives s. 34 of the principal Act as amended in 1948 such retrospective operation. It plainly makes s. 34 as so amended applicable to assessments for years ended before the amendment came into force. In does not say that s. 34 as amended is to apply to assessments for these years only when the time to issue the notice or make the assessment in respect of these years under the pre-existing law had not expired. It applied the amended s. 34 "to any assessment ................. for any year ending before the 1st day of April, 1948 in an case where proceedings ............ were commenced .................. after the 8th day of September 1948". Likewise any notice and any assessment in respect of any year ending before April 1, 1948 is to be held valid, if valid under s. 34 as amended in 1948. I find no justification in view of the language used to interpret s. 31 as applying s. 34 as amended in 1948 only to cases where the time to issue the notice and make the assessment had not expired while the pre-existing law was in force. The latter part of s. 31 seems to lead independently to the same conclusion. It makes "and notice issued in accordance with sub-section (1) or any assessment completed in pursuance of such notice within the time specified in sub-section (3)" valid. All that is necessary is that all notices and assessment orders in respect of years ending before April 1, 1948 in proceedings commenced after April 8, 1948 shall comply with the provisions of s. 34 as amended in 1948. So a notice and an assessment order valid under s. 34 as amended in 1948 would be valid even if the time prescribed in respect of them by s. 34 as it stood before the 1948 amendment, had expired.14. In my view, for these reasons, s. 34 of the principal Act as amended in 1948 applies to the notice issued and the assessment order made in this case. Both of them are valid under s. 34 as so amended. The High Court should have answered the question framed in the affirmative.In the result, I would allow the appeal and set aside the order of the High Court. The appellant will however pay the respondents costs of this appeal as it agreed to do so as appears from the certificate on which this appeal has been admitted.[For the Judgment of Hidayatullah and Raghubar Dayal, JJ., see S. C. Prashar, Income-tax Officer v. Vasantsen Dwarkadas, ante p. 29].15.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]It seems to me quite plain that s. 31 of the 1953 Act applies sub-ss. (1) and (3) of s. 34 of the Income-tax Act, 1922 (hereafter called the principal Act), as it stood after the 1948 amendment, to assessment proceedings in respect of years ending before April 1, 1948 where the proceedings commenced after September 8, 1948 and makes the validly of the proceedings depend on that section as so amended. Indeed, the contrary has not been contended at the bar. It has to be remembered that the amending Act of 1948 was passed on September 8, 1948 but it given retrospective effect from March 30, 1948. It may be stated that the amending Act repealed the existing s. 34 of the principal Act and substituted for it a new section. I think it is quite clear that the pre-existing s. 34 which was repealed by the 1948 amendment could not have applied to proceedings commenced after repeal. There was no question of applying the pre-existing law to such proceedings. But where the proceedings related to a period when the pre-existing law was in force, there might be some doubt as to which law was to apply. Section 31 was enacted to remove that doubt and to make s. 34 of the principal Act as it stood after the 1948 amendment applicable to these proceedings. That is why the words "shall always be deemed to have applied" are used; they emphasise that the amended section is deemed always to have applied to amendment had not been made. The latter part of s. 31 also makes this view equally clear. It says that no notice or order of assessment shall be called in question on the ground that s. 34 did not apply in respect of assessment for a year prior to April 1, 1948. Section 34 here contemplated must be the section as amended in 1948, for if it was not so, then it would be the pre-existing section which of course would have applied, if not repealed, to an assessment for a year ending prior to April 1, 1948 and no question of its not so applying would have arisen.I thus arrive at the conclusion that under s. 31 of the 1953 Act, the provisions of sub-ss. (1) and (3) - I leave sub-s. (2) out as irrelevant - of s. 34 of the principal Act as amended in 1948 are to be applied and deemed always to have applied to assessment proceedings in respect of a year ended before April 1, 1948 where the proceedings were commenced after September 8, 1948, A notice issued and an order of assessment made in such proceedings are to be held valid if the notice is issued "in accordance with sub-section (1)" of s. 34 as it stood after the 1948 amendment and the assessment is "completed in pursuance of such notice within the time specified in sub-section (3)" of the same s. 34. Now the notice and assessment in the present case satisfy all these conditions. To them, therefore, s. 34 as amended in 1948 applies. Judged by that section, admittedly the notice and assessment order aremy view, for these reasons, s. 34 of the principal Act as amended in 1948 applies to the notice issued and the assessment order made in this case. Both of them are valid under s. 34 as so amended. The High Court should have answered the question framed in the affirmative.In the result, I would allow the appeal and set aside the order of the High Court. The appellant will however pay the respondents costs of this appeal as it agreed to do so as appears from the certificate on which this appeal has been admitted.