COMMISSIONER OF INCOME TAX Vs. RUKMANI DEVI

JUDGEMENT

(1.) THIS is a reference by the Income-tax Appellate Tribunal, Delhi Bench, purporting to be one under section 66(1) of the Indian Income-tax Act. We are concerned with the opposite party, who was assessed to income-tax under the Rampur State Income-tax Act, 1944 (to be referred to as the Rampur Act), for the assessment year 1946-47. She died after this reference was made and one of her sons has got himself impleaded as her legal representative. While the assessment proceedings were pending in the Rampur State against the opposite party the State merged in India and by section 3 of the Taxation Laws (Extension to Merged States and Amendment) Act, 1949 (to be henceforth referred to as the Merger Act), the Indian Income-tax Act, 1922, and all rules and orders made thereunder were extended to, and brought into force in, the State with effect from April 1,1949, and by section 7, the Rampur Act, which was in force, ceased to have effect except for the purposes of the levy, assessment and collection of income-tax and super-tax in respect of any period not included in the previous year for the purposes of assessment under the Indian Income-tax Act, 1922, as extended to that State by section 3....... and for any purposes connected with such levy, assessment or collectio :

(2.) PROVIDED further that if any question arises as to who such corresponding officer, authority, tribunal or court is, the decision of the Central Government thereon shall be final.

(3.) THE opposite party preferred an appeal from the order imposing the penalty as provided by section 31 of the Rampur Act to the Appellate Assistant Commissioner appointed under the Indian Act. THEre is no dispute about his corresponding to an Appellate Assistant Commissioner under the Rampur Act. THE Appellate Assistant Commissioner allowed the appeal and set aside the order of penalty on the ground that imposition of penalty is not included in the phrase, the levy, assessment and collection of income-tax. He was of the view that the imposition of penalty is in addition to the assessment of income-tax and not a part of it. We are not concerned with the merits of the view taken by him; what we want to point out is that he allowed the appeal solely on the ground that the penalty could not be imposed under the Rampur Act because its operation in respect of penalty had not been saved by section 7 of the Merger Act.