MAHADEO PRASAD BAIS (DEAD} versus INCOME-TAX OFFICER 'A' WARD, GORAKHPUR AND ATJR.

Citation: [1991] SUPP. 1 S.C.R. 9 · Decided: 12-09-1991 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Dismissed

Judgment (excerpt)

MAHADEO PRASAD BAIS (DEAD} 
. .c\ 
v. 
l 
-r 
INCOME-TAX OFFICER 'A' WARD, GORAKHPUR AND AtJR. 
SEPTEMBER 12, 1991 
[S. RANGANATHAN, V. RAMASWAMI AND N.D. OJHA, JJ.] 
B 
Income Tax Act, 1961-Sections 148, 150 and 297(2)(d)(ii)--Reas-
sessment--Limitati01r-Removal of bar of limitation-When arises. 
The appellant (since deceased) was being assessed as the Karta of c 
the Hindu Undivided Family consisting of himself, his mother, his wife 
and three sons until the assessment years 1948-49. For the assessment 
year 1949-50 and subsequent years upto i961-62 he filed a return in his 
individual capacity claiming that there had been a total partition of the 
family and that he was assessable in respect of the income from the 
properties of the family that fell to his share on partition; in the D 
alternative he claimed partial partition. Both of his -claims having been 
negatived, the entire income was assessed in the hands of the Hindu 
""\ 
Undivided Family and the returns filed by the appellant in his individual 
capacity were finalised on-the footing that there was no income assessable 
in his individual capacity. The Hindu Undivided Family went up in 
appeals and ultimately the Tribunal accepted the claim of partial partition 
E 
in rtspect of some of the properties. The conclusion of the Tribunal was 
affirmed by the High Court, with the result that the income from some of 
the erstwhile family properties stood excluded from the assessment of the 
Hindu Undivided Family and bec;ame liable to be included in the hands of 
I 
the appellant. The original assessments made on the appellant as an 
individual for the assessment upto 1961-62 had been completed under the F 
Income-tax Act, 1922 and in these assessments no income from the 
etstwhile joint family properties had been included as the Income Tax 
Officer was of the view, as in 1949- 50, that it was assessable in the hands of 
the family. There were no proceedings initiated or pending under Section 
34 of the 1922 Act in respect of these assessment years as on 1.4.1962, when 
the 1922 Act was repealed by the 1962 Act. The Income Tax Officer G 
therefore, served a notice for reassessment on the appellant, invoking the 
---J 
provisions of Section 297(2)(d)(ii) of the Act. The appellant resisted the 
reassessment proceedings on the ground that notice was barred by 
limitation while the department contended that the reassessment 
proceedings in this case were saved by the provisions of Section 150(1) of 
the 1961 Act. The High Court accepted tile contention of the department. 
H 
9 
A 
- . 
10 
SUPREME 
COURT REPORTS 
[1991) 
SUfP. 
1 S. C. R 
• 
Dismissing the assessee's appeal, this Court, 
HELD : The provisions of Section 150(1) have been specially made 
applicable and operative in respect of a notice under section 148 issued in 
pursuance of Section 297(2)(d)(ii). The application of the provisions of 
Section 297(2)(d)(ii) gives rise to two sets of situations to one of which the 
B language of Section 150(1) would squarely apply. Section 150(1) will 
operate to lift the time bar in cases where the reassessment is initiated 
under section 148 to give effect to an order passed under the 1961 Act. 
,;,_ 
Section 297(2) is a provision enacted with a view to provide for continuity 
of proceedings in the context of repeal of one Act by a fresh one broadly 
C containing analogous provisions and the transitory provisions should as 
far as possible, be construed so as to affect such continuity and not so as to 
create a lacuna. It will therefore be appropriate to so read the words of 
section 297(2)(d)(ii) as to permit the applicability of section 150 (or 
section 153) with the necessary modifications. (18 G, 19A-B, D-E] 
D 
The last words of Section 297(2)(d)(ii) should be read to mean that 
where the proceedings initiated under Section 148, subject to the 
relaxations and limitation ofSections149and150, all the provisions of the 
Act shall apply accordingly: that is to say, in the same manner as they 
would apply in case of proceedings normally initiated under these 
E provisions. Since reassessment proceedings. so initiated ·to give effect to 
orders on appeal, revision or reference will not be subject to a time limit, 
the proceedings likewise initiated· under Section 297(2)(d)(ii) read with 
Section 149 will also not. oo subject to any limitations save to the extent 
mentioned in Section 150(2). (19 E-F] 
F 
Income Tax Officer v. Eastem Coal Co. Ltd., (1975) 101 I.T.R. 4

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