COMMISSIONER OF INCOME TAX Vs. SURAJPAL SINGH

JUDGEMENT

(1.) THIS reference under the Income-tax Act raises some important and difficult questions of law. But, unfortunately, the assessee is not represented. We have, therefore, requested Sri Raja Ram Agarwal to assist us as amicus curiae.

(2.) THE assessee is a Hindu undivided family. THE assessment year involved is 1961-62. THE assessee filed its return on 19th August, 1961. A year later on 1st August, 1962, he filed a revised return including therein income from property which had not been included in the original return. However, no action was taken by the Income-tax Officer either on the original return or on the revised return. It may be mentioned here that the assessee was an old assessee and was being assessed to income-tax for the past several years. His case fell within the jurisdiction of District III(1), Kanpur. Meanwhile on the basis of a survey report, the Income-tax Officer, Special Survey Circle, Kanpur, issued a notice to the assessee under Section 22(2) of the Indian Income-tax Act, 1922, followed by a notice <FRM>JUDGEMENT_746_ITR108_1977Html1.htm</FRM>

(3.) BEFORE we proceed further it must be stated that the Income-tax Officer was wrong in relying on the provisions of the new Act. The new Act came into force with effect from 1st April, 1962. In Section 297(2)(a) of the new Act a provision is made that where before the commencement of the new Act any proceedings under the old Act were pending, the provisions of the new Act will not apply and the proceedings would continue under the old Act. Now, in the instant case, the proceedings had commenced when the assessee filed its return on 19th of August, 1961. At that time the new Act had not come into force. The revised return, no doubt, was filed after the new Act had come into operation. But the proceedings having commenced by the filing of the original return, Clause (a) of Subsection (2) of Section 297 was attracted and as such the assessment could be completed only with reference to the provisions of the old Act. This position is supported by a decision of this court in Dhampur Sugar Mills Ltd. v. Commissioner of Income-tax [1973] 90 ITR 236 (All). However, nothing turns on this mistake because the validity of the assessment has not been questioned on this ground, nor indeed such a mistake can in any way invalidate the proceedings because the Income-tax Officer enjoys similar powers under the corresponding provisions of the old Act and there is no material difference on the point in issue between the provisions of the old and the new Acts. We shall, therefore, refer to the corresponding provisions of the old Act wherever necessary.