Case: Commissioner of Income Tax, Central, Calcutta Vs. National Taj Traders

statute which contain machinery provisions and by no stretch could s. 33B be regarded as a charging provision. As regards aspect (c) we have already pointed out above that a casus omissus has not to be readily inferred and it could not be inferred from the mere fact that both ss. 33B and 34(3) together with the second proviso were inserted simultaneously in the Act by the same Amending Act of 1948, and that in the case of the former a relaxing provision was not made as was made in the case of the latter provision, firstly because the two provisions operated in distinct fields and, secondly, it would be improper to do so without comparing the various stages of amendments through which each set of these provisions had undergone since inception. The further aspect that the legislature has in the 1961 Act made the requisite provision removing or relaxing the bar of limitation in s. 263(3) is, in our view, not of much consequence. Irrespective of the question whether the second proviso to s. 34(3) was enacted ex majore cautela or not (over which conflicting views obtain), it is clear to us that s. 263(3) of the 1961 Act must be regarded as an ex majore cautela provision. Admittedly, at the time when the said provision was enacted in the 1961 Act, the Bombay view held the field and there was no decision to the contrary of any other High Court. Obviously, therefore, the enactment of s. 263(3) must be regarded as declaratory of the law which was already prevailing and this position has been clarified in the Notes on Clauses of the Income-tax Bill, 1961, where it has been stated that sub-cl. (3) of s. 263 was new and had been added to get over the difficulty experienced in (wrongly stated caused by ) the Bombay High Courts decision in Solankis case [1960] 39 ITR 522. The enactment of an ex majore cautela provision in the 1961 Act would, therefore, be a legislative recognition of the legal position that obtained as a result of judicial pronouncement qua the 1922 Act. In our view, therefore, the Assam case was wrongly decidedReference may now be made to a decision of this court in Pooran Malls case [1974] 96 ITR 390 , where in a similar situation arising under s. 132 of the I.T. Act, 1961, a restricted construction was accorded by this court to sub-s. (5) thereof which prescribed certain period of limitation. In that case, pursuant to an authorisation issued under s. 132(1) of the 1961 Act, searches were carried out on October 15 and 16, 1971, at the residence and business premises of P, an individual, and at certain office premises of the firms in which he was a partner, and jewellery, cash and account books were seized. There was also a search of two banks and a restraint order was made under s. 132(3) in respect of 114 silver bars pledged with those banks on the ground that they were the property of P. On January 12, 1972, the ITO passed a summary order under s. 132(5) on the basis that all the assets seized and 114 silver bars belonged to P. Thereupon, P & Sons, one of the firms in which P was a partner, and P filed a writ petition in the High Court challenging the order dated January 12, 1972, and on April 6, 1977, on the basis of the consent of the parties, the High Court quashed the order and permitted the department to make a fresh enquiry after giving an opportunity to the petitioner and pass a fresh order within two months. After a fresh enquiry the ITO passed an order on June 5, 1972, holding that the silver bars belonged to P, the individual, and not the firm, P and Sons. Thereupon, the firm and P again filed a writ petition challenging the second order. The High Court held that the ITO had no jurisdiction to pass that order beyond the period prescribed in s. 132(5) and set aside the order and directed the return of the 114 bars of silver. This court held, inter alia, that the order made in pursuance of a direction given under s. 132(12) or by a court in writ proceedings, was not subject to the limitation prescribed under s. 132(5). At page 394, this court has observed thus:" Even if the period of time fixed under section 132(5) is held to be mandatory that was satisfied when the first order was made. Thereafter, if any direction is given under section 132(12) or by a court in writ proceedings, as in this case, we do not think an order made in pursuance of such a direction would be subject to the limitations prescribed under section 132(5). Once the order has been made within ninety days the aggrieved person has got the right to approach the notified authority under section 132(11) within thirty days and that authority can direct the Income-tax Officer to pass a fresh order. We cannot accept the contention on behalf of the respondents that even such a fresh order should be passed within ninety days. It would make the sub-sections (11) and (12) of section 132 ridiculous and useless." 5. It may be pointed out that in s. 132 there is no provision removing or relaxing the bar of limitation contained in s. 132(5) enabling the ITO to pass an order afresh pursuant to any direction issued to him by a higher authority under s. 132(12) and even then this court took the view that the limitation prescribed under s. 132(5) will be applicable only to the initial order to be made by the ITO and not to an order that would be made by him pursuant to a direction from the Board or notified authority. The concerned provisions were read together and such construction was put on sub-s. (5) of s. 132 as made a consistent enactment of the whole statute 6.

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

Explanation:
1[ds]Having regard to the above discussion we are clearly of opinion that the view taken by the Bombay High Court in Solankis case [1960] 39 ITR 522  , on the construction ofsubs.(2)(b) of s. 33B is correct and we approve of it. In Sabitri Devi Agarwallas case [1970] 77 ITR 934, the Assam High Court took a contrary view and held that under s. 33B(4) of the Act the Tribunal would not be justified in remanding the case to the Commissioner after the two years had expired from the date of the order sought to be revised. The decision seems to rest on three aspects : (a) it being a fiscal statute the same must be strictly construed, (b) the bar of limitation contained insubs.(2)(b) was absolute and unqualified and covered all types of orders, and (c) that unlike the second proviso to s. 34(3), there was no provision for removing or relaxing the bar of limitation on the power of the Commissioner under s. 33B(2)(b) and that since s. 33B as well as s. 34(3) with the second proviso had been introduced in the Act by the same Amending Act of 1948, there was a deliberate omission to make a provision removing or relaxing the bar of limitation in s. 33B and for such an omission the remedy lay with the legislature and not with the court. The Assam High Court also alluded to the fact that under the 1961 Act the legislature had made a provision removing or relaxing the bar of limitation in s. 263(3). As regards aspect (b) we have already dealt with it above. As regards aspect (a), it is well settled that the principle that the fiscal statute should be construed strictly is applicable only to taxing provisions such as a charging provision or a provision imposing penalty and not to those parts of the statute which contain machinery provisions and by no stretch could s. 33B be regarded as a charging provision. As regards aspect (c) we have already pointed out above that a casus omissus has not to be readily inferred and it could not be inferred from the mere fact that both ss. 33B and 34(3) together with the second proviso were inserted simultaneously in the Act by the same Amending Act of 1948, and that in the case of the former a relaxing provision was not made as was made in the case of the latter provision, firstly because the two provisions operated in distinct fields and, secondly, it would be improper to do so without comparing the various stages of amendments through which each set of these provisions had undergone since inception. The further aspect that the legislature has in the 1961 Act made the requisite provision removing or relaxing the bar of limitation in s. 263(3) is, in our view, not of much consequence. Irrespective of the question whether the second proviso to s. 34(3) was enacted ex majore cautela or not (over which conflicting views obtain), it is clear to us that s. 263(3) of the 1961 Act must be regarded as an ex majore cautela provision. Admittedly, at the time when the said provision was enacted in the 1961 Act, the Bombay view held the field and there was no decision to the contrary of any other High Court. Obviously, therefore, the enactment of s. 263(3) must be regarded as declaratory of the law which was already prevailing and this position has been clarified in the Notes on Clauses of thex Bill, 1961, where it has been stated that. (3) of s. 263 was new and had been added to get over the difficulty experienced in (wrongly stated  caused by ) the Bombay High Courts decision in Solankis case [1960] 39 ITR 522.   The enactment of an ex majore cautela provision in the 1961 Act would, therefore, be a legislative recognition of the legal position that obtained as a result of judicial pronouncement qua the 1922 Act. In our view, therefore, the Assam case was wrongly decidedIt may be pointed out that in s. 132 there is no provision removing or relaxing the bar of limitation contained in s. 132(5) enabling the ITO to pass an order afresh pursuant to any direction issued to him by a higher authority under s. 132(12) and even then this court took the view that the limitation prescribed under s. 132(5) will be applicable only to the initial order to be made by the ITO and not to an order that would be made by him pursuant to a direction from the Board or notified authority. The concerned provisions were read together and such construction was put onsubs.(5) of s. 132 as made a consistent enactment of the whole statute