LexM.CT.MUTHIAH & 2 OTHERS versus THE COMMISSIONER OF INCOME-TAX, MADRAS &, ANOTHER
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
2·s.c.R. SUPREME COURT REPORTS ·1247 this purpose in juxta-position with section 47 of. the Travancore Act XXIII of 1121 cannot be held to be discriminatory and violative of the fondamental right guaranteed under article 14 of the Constitution. The proceedings which took place in the course of investi- gation by the Commission up to the 26th January 1950 were valid and so also were the proceedings during. the course of investigation which took place after the inauguration of the Constitutiol). on the 26th January 1950 under which the petitioner, as a citizen of our Sovereign Democratic Republic acquired inter alia .guarantee of the fundamental right under article 14 of the Constitution. The result, therefore, is that .all the contentions urged on behalf of the petitioner fail and Civil Ap- peal No. 21 of 1954 must be ·dismissed with costs. Civil ·Appeals Nos. 21 and 22 of 1954 wil~ accord- ingly be diSlllissed with costs. There wm be a set off for costs. M. CT. MUTHIAH & 2 OTHERS ti •. THE COMMISSIONER OF INCOME-TAX, MADRAS &, ANOTHER; [S. R. DAs~ ACTING C.J, V1vr:rn BosE, BHAcrWAn, J AGANNADHADAS and B. f. SINHA JI.) Constitution of India, Art. ]'/--Taxation on Income (Investiga- tion Commisiion) Act, 1947 (Act XXX of 1947), s. 5(1)-'Whetil~ .ultra vires 'lhe· Constitution in vie1v of s. 34 of Indian lncome-Ta1r Act, 1922 (Act XI of 1922) as amended by the 'Income-Tax and Bu1i- ness Profits .Tax (Amendment) Act, 1948 (Act XLVlll tif 1948) and the Indian· Income-Tax (Amendment) Act, 1954 (Act X!XXW uf 1954). H~ld (Per S .. R. DAs, .A,cTING C.J., V1v1AN iBoSE, .BHAcwATI and B. P. SINHA, JJ . .}AGANNAoHADAS J., dissenting) that s. 5.(1) of the T<1xation on .. Income (Investigation Commission) Ac~,· .1947 (Act XXX of 1947) iis ultra vires the Constitution as it ii discriminawry and violative of the fundamental .right guaranteed by . Art. l4 of the Constitution by reason of two amenc;lments which were made in ,s. 34 of thf: Indian In~omc-Tax Act, 1922 (Act XI afl922) one ia .1948 by the .c:nac[ment of the Income-T.u: and Busine$& Profit$ Ta 1955 A. Thangal Kunju Musaliar V• M. Vmliit°'halam Polti and anothlr Bhagwati]. 1955 D1umbu 20. 1955 .M. Ct. Mutkiah a.ti 2 otlrns V· Thi c....,;.,ioner qf ltlcomrtax, Ma,Jrasand anot/rn. 1248 SUPREME COURT REP.ORTS r19s51 (Amendment) Act, 1948 (Act XLVIII of 194~) and·the other in 1954 by the enactment of the Indian Income-Tax (Amendment) Act, 1954 I Act XXXIII of 1954). If the provisions of s. 34(1) of the Indian Income-tax Act as it stood before its amendment by Act XLVIII of 1948 had been the only provisions to be considered, the .Court would have reached the same conclusion as it did in A. !hangal. Kunju Mu. saliar v. M. Venkitai:halam Potti & Anr., (rl955] 2 S.C.R. 1196), but the position was materi~lly ·affected by reason of two amend· ments made in that section by two Acts, one in 1948 atid the other in 1954. Amended s. 34(1) of the Indian Income-tax Ace was substanti- ally different fwm the old s. 34(1) which was in operation up to the 8th September 1948. The words "if in consequence of definite in· formation which has come_ into his possession the lncome·tax Officer discovers that income, profits or gains cP.argeable to incbme·tax have escaped assessment irt any yea1 ........ " which appear in the old section were substituted by the words uif the Incom~-rax Officer has reason to \>elieve that by reason of the omission or failure on the part of the :assessee ........ income, profits or gains chargeable to income-tax ·have escaped assessment ........ ". The requisites of (i) 14definite" information (ii) which had ucome into" possession of the Income-tax Officer and in consequence of which (iii) he "dis- covers" that income, profits or gains chargeable to income-tax had escaped assessment,. were no longer necessary a.nd the only thing which was required to enable the Income-tax Officer to take proceed- ings under s. 34(1) as amended was that he should have reason to believe that by reason of the omission or_ faiiu·rc on .the part of the as!iessee income, profits qr gains chargeable to income-tax had escaped assessment for a particular year. Whereas before this amended s. 34(1) came to be substituted for the olds. 34(1) there was no com- parison between the provisions of .s. 5(1) of Act XXX of 1947 and s. 34( I) of the Indian Income-tax Act as it then s
Excerpt shown. Read the full judgment & AI analysis in Lexace.