LexTHE COMMISSIONER OF INCOME-TAX, BIHAR & ORISSA versus MAHARAJA PRATAPSINGH BAHADUR OF GIDHAUR
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. November ag. 760 SUPREME COURT REPORTS [1961] THE COMMISSIONER OF INCOME-TAX, BIHAR & ORISSA . v. MAHARAJA PRATAPSINGH BAHADUR OF GIDHAUR. (J. L. KAPUR, M. HIDAYATULLAH and J.C. SHAH, JJ.) Income Tax-Escaped income-Notice issued by Income-tax Officer without approval of Commissioner-Subsequent amendment of enactment providing for Commissioner's approval-Assessment based on original notice-Validity-General Cla,,ses Act, z897 (IO of r897), s. 6-Income-tax and Business Profits Tax (Amendment) Act, r948 (48 of r948), ss. I, 8-Indian Income-tax Act, r922 (II of z922), s. 34, as amended by Act 48 of r948. The appellant who had agricultural income from his Zamin- dari was assessed to income-tax for the four assessment years, 1944-45, to 1947-48. The income-tax authorities did not include in his assessable income, interest received by him on arrears of rent, in view of a decision of the Patna· High Court, but subse- quently this view of law was reversed by the Privy Council. On August 8, 1948, the Income-tax Officer issued notices under s. 34 of the Indian Income-tax Act, ·1922, for assessing the escaped income. Before the notices were issued the Income-tax Officer had not put the matter before the Commissioner for his appro- val as the. section then did not require it and the assessments were completed on those notices. In the meantime, certain amendments were made to the Indian Income-tax Act by Act 48 of 1948, which received the assent of the Governor-General on September 8, 1948. The Amending Act substituted a new sec- tion in place of s. 34, which among other changes, added a pro- viso to the effect that "the Income-tax Officer shall not issue a notice ...... unless he has recorded his reasons for doing so and the Commissioner is satisfied on such reasons that it is a fit case for the issue of such notice", and also made it retrospective by providing that the new section "shall be deemed to have come into force on the 30th day of March, 1948". The question was whether the notices issued by the Income-tax Officer on August 8, 1948, without the approval of the Commissioner, were rendered void by reason of the opera ti on of the amended s. 34. The Com- missioner claimed that s. 6 of the General Clauses Act, i897, saved the assessments as well as the notices. Held, that s. 6 of the General Clauses Act, l8g7, was in- applicable as the Amending Act of 1948 indicated a different intention within the meaning of that section, inasmuch as the amended s. 34 of the Indian Income-tax Act, 1922, provided that it shall be deemed to have come into force on March 30, 1948 Lemm v. Mitchell, (1912] A.C. 400, distinguished. 2 s.c.R. SUPREME COURT REPORTS 761 r960 Held, further, that the notices issued by the Income-tax Officer on August 8, 1948, and the assessm1mts based on them · J"d The Commissioner were rnva 1 • 1 I . o ncome.tax, Venkatachal~m v. Bombay Dyeing 0- Mfg. Co., Ltd., [1959) Bihar & Orissa S.C.R. 703, apphed. v. CIVIL APPELL.ATE JURISDICTION: Civil AppealMaharaja Prntap- N o. 650 of 1957. . singh Bahadur 01 Appeal from the judgment dated July 13, 1956, of the Patna High Court in Miscellaneous Judicial Case No. 665 of 1954. R. Ganapathy Iyer and R.H. Dhebar, for the appel- lant. A. V. Viswanatha Sastri and R. C. Prasad, for the respondent. 1960. November 29. The Judgment of the Court was delivered by Gidltaur HID.AY.ATULL.AH, J.-This is an appeal by the Com- Hidayatullt•h J. missioner of Income-tax with a certificate against the judgment and order of the. High Court· at Patna answering two questions of law referred to it under s. 66(1) of the Income-tax Act by the Tribunal, in the negative. Those questions were : "(l) Whether in the circumstances of the case assessment proceedings were validly initiated under s. 34 of the Indian Income-tax Act? (2) If so, whether in the circumstances of t.he case the amount received from interest on arrears of agri- cultural rent was rightly included in the income of the assessee ?" The assessee, the Maharaja Pratapsingh Bahadur of Gidhaur, had agricultural income from his zamin- dari for the four assessment years 1944-45 to 1947-48. In assessing his income to income-tax, the authorities did not include in his assessable income interest recei- ved by him on arrears of rent. This was presumably so in view of the decision of the Patna High Court.- When the Privy Council reversed the view of Ia w take
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