M M ISPAHANI LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) BEFORE P. B. Mukherji J. the only ground that was urged by the appellant was that the revenue sought to be realized was revenue belonging to the British Indian Government and it could be realized by its successor, the Indian Government, in the manner by which the British Indian Government could have realized it and within the time limit prescribed by the Indian Income-tax Act as it stood prior to the introduction of section 34(1). This point had been decided against the appellant in several cases recited in the judgment of P. B. Mukherji J. In view of the decisions in those cases Dr. Pal raised the three points, which I have already enumerated, in support of the appeal. Mr. Meyer appearing for the respondents has contended before us that the points taken in the appeal by Dr. Pal were abandoned by the the appellant by implication before the trial judge and so the appellant is not entitled to raise those points for the first time in appeal. Mr. Mitter who appeared in the trial court and who is appearing before us with Mr. Pal states that before the trial judge he did not expressly abandon any of the points taken by his client in its petition, but, in view of the opinion of the trial judge he did not press those points.

(2.) OUT of deference to Dr. Pal we have allowed him to develop the points which his client has taken in its application under article 226 of the Constitution. The first point relates to the constitutional validity of section 34(1A) of the Indian Income-tax Act. Dr. Pal argues that it violates article 14 of the Constitution by selecting only the period between September I, 1939, and March 31,1946, for its operation to the exclusion of the earlier period. It is contended that if it was the intention of the Legislature to reopen assessments which had become final by lapse of time, provision should have been made for reopening all previous assessments irrespective of the question whether the relevant previous year falls within the period specified above. I have already said that section 34(1A) of the Indian Income-tax Act imposes two restriction upon the power of the Income-tax Officer : (a) the relevant previous year must fall between September 11939, and March 31, 1946, and (b) the income which has escaped assessment amounts or is likely to amount to one lakh of rupees or more. No objection is raised by the appellant about the pecuniary restriction, but it is contended that the time-limit is arbitrary and discriminatory.

(3.) THE next question is whether there is a nexus between this differentia and the object of the statue. THE object of the statute, as I have already said, is to provide for the assessment and reassessment of persons who have to a substantial extent evaded the payment of taxes and for the purpose of achieving that object section 34(1A) has authorized the Income-tax Officer, with the approval of the Central Board of Revenue, to issue certain notices and to take certain action. In my opinion, there is a rational relation between the differentia and the object of the statute. It is to be noticed that the assessee has stated nothing in its application under article 226 of the Constitution to show that it is similarly circumstanced with assessee in respect of assessment prior to September 1, 1939, and it has, therefore, completely failed to discharge the onus which lay upon it of proving that there was a clear transgression of the constitutional principles. For all these reasons I have no hesitation in overruling the first point urged by Dr. Pal in support of the appeal.