MOHAMMED ABDUL KADER Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) This is a reference under S.8[5] of the Travancore Taxation on Income (Investigation Commission) Act, 1124.

(2.) The assessee was a dealer in empty tins, gunnies and tapioca starch. For the assessment year 1118 ME. [1942-43] he was first assessed for a total income of Rs. 37,004/- by an order dated 16-11-1118 of the Deputy Commissioner of Income Tax, Trivandrum, who, however, soon initiated proceedings to assess his escaped income for the year, and re-assessed him on a total income of Rs. 57,927/- by his order dated 32-10-1120. For the year 1119 ME [1943-44] the Deputy Commissioner assessed him on a total income of Rs. 1,50,462/- by another order dated 32-10-1120. The assessees appeals before the Commissioner of Income Tax against the above said assessments proved unsuccessful. But on further appeal the Chief Revenue Authority of Travancore, by his order dated 7-10-1947, reduced the assessed incomes to Rs. 37,004/- and Rs. 84,921/- respectively for the above said two years. On 7-3-1949 the Travancore Taxation on Income [Investigation Commission] Act, 1124 [Act XIV of 1124] [hereinafter referred to as the Travancore Investigation Act] was passed to come into force on such date as the Government might by notification appoint. No such notification was however issued by the Government upto 1-7-1949 when the State of Travancore was integrated with the State of Cochin to form the State of Travancore-Cochin. By Ordinance No. I of 1124, subsequently re-enacted by Act VI of 1125, the existing laws of Travancore were continued in force in the territory of the erstwhile State. By a notification on 26th July 1919 the Travancore Investigation Act was brought into force with effect from July 22, 1949. Thereafter by an order dated 5-8-1949 the Government of Travancore-Cochin referred the case of the petitioner to the Commission for investigation of his escaped incomes. After an elaborate enquiry the Investigation Commission found that the actual income of the petitioner for the assessment years 1118 and 1119 ME were Rs. 66287/- & Rs. 1,26,110/- respectively. This report was dated 10-1-1950 The Government of Travancore-Cochin by their proceedings dated

(3.) Matters remained thus when the Finance Act, 1950 and the Opium and Revenue Laws [Extension of Application] Act, 1950 [Central Acts 25 and 33 of 1950) became law in April 1950. The former extended the operation of the Indian Income Tax Act to the State and transferred the functions of all the authorities under the Travancore Income Tax-Act to the corresponding authorities appointed under the Indian Income Tax Act; and the latter substituted the Central Government in place of the State Government in the Travancore Taxation on Income [Investigation Commission] Act. By virtue of the powers thus conferred, the Government of India on 30-5-1952 directed assessment proceedings, under the Travancore Income Tax Act, 1096, to be taken against the assessee for the years 1118 and 1119 M.E. Thereupon on 13-6-1952 the Income Tax Officer wrote to the assessee withdrawing the prior notices of demand issued to him, intimating therein that the proceedings arising out of the report of the Investigation Commission, referred to, will be taken up and completed in accordance with the law, in due course.