Full Judgment Text
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PETITIONER:
MAHADEO PRASAD BAIS (DEAD)
Vs.
RESPONDENT:
INCOME-TAX OFFICER ’A’ WARD, GORAKHPUR AND ANR.
DATE OF JUDGMENT12/09/1991
BENCH:
RANGNATHAN, S.
BENCH:
RANGNATHAN, S.
RAMASWAMI, V. (J) II
OJHA, N.D. (J)
CITATION:
1991 AIR 2278 1991 SCR Supl. (1) 9
1991 SCC (4) 560 JT 1991 (6) 150
1991 SCALE (2)541
ACT:
Income Tax Act, 1961--Sections 148, 150 and
297(2)(d)(ii) Reassessment--Limitation Removal of bar of
limitation---When arises.
HEADNOTE:
The appellant (since deceased) was being assessed as the
Karta of the Hindu Undivided Family consisting of himself,
his mother, his wife and three sons until the assessment
years 1948-49. For the assessment year 1949-50 and subse-
quent years upto 1961-62 he filed a return in his individual
capacity claiming that there had been a total partition of
the family and that he was assessable in respect of the
income from the properties of the family that fell to his
share on partition; in the alternative he claimed partial
partition. Both of his claims having been negatived, the
entire income was assessed in the hands of the Hindu Undi-
vided Family and the returns filed by the appellant in his
individual capacity were finalised on the footing that there
was no income assessable in his individual capacity. The
Hindu Undivided Family went up in appeals and ultimately the
Tribunal accepted the claim of partial partition in respect
of some of the properties. The conclusion of the Tribunal
was affirmed by the High Court, with the result that the
income from some of the erstwhile family properties stood
excluded from the assessment of the Hindu Undivided Family
and became liable to be included in the hands of the appel-
lant. The original assessments made on the appellant as an
individual for the assessment upto 1961-62 had been complet-
ed under the Income-tax Act, 1922 and in these assessments
no income from the erstwhile joint family properties had
been included as the Income Tax Officer was of the view, as
in 1949- 50, that it was assessable in the hands of the
family. There were no proceedings initiated or pending under
Section 34 of the 1922 Act in respect of these assessment
years as on 1.4.1962, when the 1922 Act was repealed by the
1962 Act. The Income Tax Officer therefore, served a notice
for reassessment on the appellant, invoking the provisions
of Section 297(2)(d)(ii) of the Act. The appellant resisted
the reassessment proceedings on the ground that notice was
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barred by limitation while the department contended that the
reassessment proceedings in this case were saved by the
provisions of Section 150(1) of the 1961 Act. The High Court
accepted the contention of the department.
10
Dismissing the assessee’s appeal, this Court,
HELD: The provisions of Section 150(1) have been spe-
cially made applicable and operative in respect of a notice
under section 148 issued in pursuance of Section
297(2)(d)(ii). The application of the provisions of Section
297(2)(d)(ii) gives rise to two sets of situations to one of
which the language of Section 150(1) would squarely apply.
Section 150(1) will operate to lift the time bar in cases
where the reassessment is initiated under section 148 to
give effect to an order passed under the 1961 Act. Section
297(2) is a provision enacted with a view to provide for
continuity of proceedings in the context of repeal of one
Act by a fresh one broadly containing analogous provisions
and the transitory provisions should as far as possible, be
construed so as to affect such continuity and not so as to
create a lacuna. It will therefore be appropriate to so read
the words of section 297(2)(d)(ii) as to permit the applica-
bility of section 150 (or section 153) with the necessary
modifications. [18 G, 19A-B, D-E]
The last words of Section 297(2)(d)(ii) should be read
to mean that where the proceedings initiated under Section
148, subject to the relaxations and limitation of Sections
149 and 150, all the provisions of the Act shall apply
accordingly: that is to say, in the same manner as they
would apply in case of proceedings normally initiated under
these provisions. Since reassessment proceedings so initiat-
ed to give effect to orders on appeal, revision or reference
will not be subject to a time limit, the proceedings like-
wise initiated under Section 297(2)(d)(ii) read with Section
149 will also not be subject to any limitations save to the
extent mentioned in Section 150(2). [19 E-F]
Income Tax Officer v. Eastern Coal Co. Ltd., (1975) 101
I.T.R. 477; Commissioner of Income Tax’ v. Kamalapat Moti-
lal, (1977) 110 I.T.R. 769; Ambaji Traders v. Income Tax
Officer, (1976) 105 I.T.R. 273; Commissioner of Income Tax
v.T.P. Asrani, (1980) 122 I.T.R. 735; Jain v. Mahendra,
(1972) 83 I.T.R. 104; Govinddas v. Income Tax Officer,
(1976) 103 I.T.R. 123; Seth Gujannal Modi v. Commissioner of
Income Tax, (1972) 84 I.T.R. 261; Third Income Tax Officer
v. Damodar Bhat, (1969) 71 I.T.R. 806; Jain Bros. v. Union
of India, (1970) 77 I.T.R. 107, referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1934 of
1978.
From the Judgment and Order dated 21.12.1977 of the Allaha-
bad
11
High Court in Civil Misc. Writ Petition No. 227 of 1977.
Ms. Rachna Gupta for the Appellant.
S.C. Manchanda and K.P. Bhatnagar for the Respondents.
The Judgment of the Court was delivered by
RANGANATHAN, J. The Income-tax Act, 1961 replaced the
Indian Income-tax Act, 1922 w.e.f. 1.4.1962. The repeal of
the earlier Act necessitated the enactment of transitional
provisions to facilitate the change over. Perhaps the sim-
plest course would have been to provide that the new Act
would apply to all proceedings for the assessment year
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1962-63 and thereafter. The legislature, however, evolved a
more complicated procedure. While section 297(1) of the new
Act declared that the Indian Income-tax Act, 1922 stood
repealed by the new Act, sub-section (2) of the above sec-
tion made detailed and meticulous provisions in clauses (a)
to (m) as to whether the new Act or the old Act will govern
in the various situations dealt with therein. These provi-
sions have led to a lot of litigation and the controversy in
this appeal also arises out of one such provision. We are
concerned here with the scope of proceedings for reassess-
ment in respect of assessment years prior to 1962-63 and the
answer to the question before us turns on the provisions of
the following two sections of the 1961 Act:
Section 297
"297(1) xxx xxx xxx
(2) Notwithstanding the repeal of the Indian
Income-tax Act, 1922 (11 of 1922) (hereinafter
referred to as ’the repealed Act’)
xxx xxx xxx xxx
(d) where in respect of any assessment year
after the year ending on the 31st day of March
1940
(i) a notice under section 34 of the re-
pealed Act had been issued before the com-
mencement of this Act, the proceedings in
pursuance of such notice may be continued and
disposed of as if this Act had not been
passed;
12
(ii) any income chargeable to tax had es-
caped assessment within the meaning of that
expression in section 147 and no proceedings
under section 34 of the repealed Act in re-
spect of any such income are pending at the
commencement of this Act, a notice under
section 148 may, subject to the provisions
contained in section 149 or section 150 be
issued with respect to that assessment year
and all the provisions of this Act shall apply
accordingly."
Section 150
"150(1) Notwithstanding anything contained in
section 149, the notice under section 148 may
be issued at any time for the purpose of
making an assessment or reassessment or recom-
putation in consequence or, or to give effect
to, any finding or direction contained in an
order passed by any authority in any proceed-
ing under this Act by way of appeal, reference
or revision."
(underlining ours)
We may proceed now to set out how the question arises in
the present case: The appeal arises out of an order of the
High Court in a writ petition filed by one Mahadeo Prasad
Bais (since deceased, represented by his legal representa-
tives) challenging reassessment proceedings initiated
against him for the assessment years 1953-54 to 1963-64. The
appeal is, however, restricted to the assessment years
1953-54 to 1961-62. Upto assessment year 1948-49, the appel-
lant was being assessed as the Karta of a Hindu Undivided
Family consisting of himself, his mother, his wife and three
sons. For the assessment year 1949-50 and subsequent years
upto 1961-62 he had filed a return in his individual capaci-
ty on the footing that there had been a total partition of
the family within the meaning of Section 25A of the Indian
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Income-tax Act, 1922 and that he was assessable in respect
of the income from the properties of the family allotted to
him at the partition. In the alternative, he claimed partial
partition of some of the joint family properties.f Both
these claims were initially negatived and the entire income
was assessed in the hands of the Hindu Undivided Family. The
returns filed by the appellant in his individual capacity
were finalised by holding that there was no income assessa-
ble in his individual capacity. The Hindu Undivided Family
went up in appeals and ultimately the Tribunal accepted the
claim of partial partition in respect of some of the proper-
ties with effect from different dates. This conclusion of
the Tribunal was also affirmed by the High Court in the
decision reported as Mahadeo Prasad Bais v. Income-
tax Officer, (1972) 84 ITR 48 which related .
13
to the assessment years 1956-57 to 1958-59. Consequent on
these decisions of the Tribunal and the High Court, the
income from some of the erstwhile family properties stood
excluded from the assessment of the Hindu Undivided Family
and became liable to be included in the hands of the present
appellant. The assessment for 1949-50 and subsequent years
upto 1961-62 on the family had been completed and the ap-
peals and reference disposed of under the Indian Income-tax
Act, 1922.
The original assessments made on the appellant as an
individual for the assessment years 1953-54 to 1961-62 had
been completed under the Indian Income-tax Act, 1922. In
these assessments no income from the erstwhile joint family
properties had been included as the officer was of the view,
as in 1949-50, that it was assessable in the hands of the
family. There were no proceedings initiated or pending under
Section 34 of the 1922 Act in respect of these assessment
years as on 1.4.1962. Quite sometime after the High Court
had decided the reference for 1949- 50 in the case of the
family, the Income-tax Officer thought of steps to include
the income assessable in the hands of the appellant conse-
quent on the decisions of the Tribunal and the High Court
which he had failed 10 assess earlier. He, therefore, served
on the appellant on 19.3.1977 notices for reassessment, as
required by section 297(2)(d)(ii), under section 148 of the
1961 Act. The appellant resisted these proceedings, inter
alia, on the ground that the notices were barred by limita-
tion. The department, however, contended that, though nor-
mally reassessment proceedings had to be initiated within a
period of four, eight or sixteen years as the case may be,
under the then provisions of Section 149 of the 1961 Act,
the reassessment proceedings in this case were saved by the
provisions of Section 150(1) of the 1961 Act set out earli-
er. This contention of the department has been accepted by
the High Court in the decision under appeal before us which
is reported in (1980) 125 ITR 49.
The issue involved in this appeal is basically a short
one turning on the language of section 150(1). Before con-
sidering the interpretation of this section, we may, howev-
er, point out that, on this question, there appears to be a
conflict of judicial opinion between the several High
Courts. The Allahabad High Court, in the decision presently
under appeal (1980)125 I.T.R. 49 and the Calcutta High Court
in I.T.O. v. Eastern Coal Co. Ltd., (1975) 101 ITR 477 have
taken the view that a reassessment in such circumstances is
saved by the provisions of Section 150(1) of the 1961 Act.
An earlier Allahabad decision in C.I.T. v. Kamalapat Moti-
lal, (1977)110 I.T.R. 769 and an earlier Bombay decision in
Ambaji Traders v. 1.T.O., (1976)105 I.T.R. 273 took a simi-
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lar view on the analogous provision contained in section
153(3) of the 1961 Act but a contrary view was taken by the
latter
14
High Court in the latter case reported as CIT v.T.P. Asrani,
(1980) 122 ITR 735. Both sets of decisions have placed
reliance on certain observations of this Court in differing
contexts. But it will be best to have a look at the statuto-
ry provisions first, in the context of the facts of the
present case.
To start with, there is no dispute that reassessment
proceedings were rightly initiated under section 148 of the
Act. It is also common ground that on the language of sec-
tion 148, as it stood at the relevant time, no notice under
section 148 could have been issued in March 1977 for the
assessment years in question. The Revenue can successfully
support the validity of this notice only by reference to
section 150 (1). Two questions then arise: (i) Are the
provisions of section 150 (1) attracted ? (ii) If yes, do
they save the impugned proceedings ? The answer to the first
question is furnished by section 297 (2) (d) (ii), the very
clause which authorises the issue of the notice of reassess-
ment under section 148. It permits the issue of the notice
under section 148, "subject to the provisions contained in
section 149 or section 150". Though the words "subject to"
may be appropriate in the context of section 149 and section
150 (2) (which place restrictions on the issue of the notice
u/s 148), they are somewhat inappropriate a propos section
150 (1) which relaxes the conditions for issue. But there is
no doubt that the statute clearly intends that the benefit
of enlargement of the time limited under section 149 should
be available in respect of the notice issued under s. 148
read with s. 297 (2) (d) (ii). The answer to the second
question is furnished by s. 150 (1).itself. It removes the
bar of time when the reassessment proceedings are initiated
in consequence of or to give effect to a finding contained
in an order passed by any authority in any proceeding by way
of appeal, reference or revision. There is no difficulty
here for the orders of the Tribunal and the High Court for
the several years between 1949-50 and 1961-62 were passed in
proceedings by way of appeals and reference and there is no
dispute that the reassessment proceedings have been initiat-
ed to give effect to findings in such orders. There is,
however, a catch in applying the terms of s. 150(1) ’ to
this case. There is no doubt that the whole idea of the
sub-section was to lift the embargo placed on initiation of
reassessment proceedings and to remove the time limit where
the notice of reassessment is issued with a view to give
effect to a direction or finding contained in an appellate
order or an order passed on revision or on reference. Unfor-
tunately, however, in expressing its above intention, the
legislature has worded the exemption from time limit so as
to cover only cases where the finding or direction is con-
tained in an order passed by any such authority in any such
proceeding "under this Act" i.e. the 1961 Act. In the
present case the assessments for 1949-50 and subsequent
years in the case of the family were made under the old Act
and were the subject matters of appeal to the
15
Appellate Assistant Commissioner and Tribunal and of refer-
ence to the High Court under the provisions of the 1922 Act.
In other words, the finding in consequence of which the
assessments presently under consideration are being sought
to be reopened is a finding contained in orders passed not
’under this Act’ but in orders passed under the 1922 Act.
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Literally applied, therefore, the language of section 150
(1) does not help the department to overcome the bar of
limitation otherwise imposed by Section 149.
Pressing for the literal construction of the sub-sec-
tion, it is contended for the appellant that there are good
reasons why this construction should be accepted:
(1) To accept the contention of the depart-
ment would mean the virtual deletion of the
words "under this Act" from s. 150 (1);
(2) It seems clear that the above words have
not been inadvertantly used in the statute. If
one turns 10 s.153 (3), which is an extension
of s. 150 (1 ) removing the time ban for the
completion of reassessments initiated for the
same purpose, the legislature goes further
than section 150 (1) and makes specific refer-
ence to particular provisions of the new Act;
(3) The provisions of s. 150 (1) will not
become redundant if read in the manner con-
tended for by the assessee. While no doubt the
proceedings are initiated, in all cases cov-
ered by section 297 (2) (d) (ii), under the
new Act, the orders, for giving effect to a
finding or direction in which such proceedings
are initiated, may belong to either category -
they may be orders passed under the old Act or
they may be orders passed under the new Act.
The terms of section 150 (1) will be effective
in the latter category of cases; and
(4) The provisions contained in Ss. 150 (1)
and 153 (3) are provisions exempting the
applicability of a normal rule of limitation
otherwise applicable to actions for reassess-
ment and such provisions should be construed
strictly.
On the other hand, it is contended for the department
that the object of the provision being very obvious, namely,
that where reassessment proceedings are initiated to give
effect to orders on appeal, reference or
16
revision, there should be no time limit tying down the hands
of the Revenue as such orders are seldom likely to be passed
within the limits of time mentioned in s. 149, we should
give effect to the clear intention of the legislature and
should not frustrate its object. It is, therefore, necessary
to examine the provisions of s. 297 (2) (d) (ii) and s. 150
(1) a little more closely and examine which of the two
interpretations is preferable.
Taking up the appellant’s interpretation first, it has
no doubt the attractiveness of simplicity. It is a strict
and literal interpretation of s. 150 (1). This apart,
learned counsel drew our attention to the fact that the
decided cases have referred to certain decisions of this
Court in this context. We do not, however, think that the
decisions of this Court in Jain v. Mahendra, (1972) 83 ITR
104 and Govinddas v. I.T.O, (1976)103 ITR 123 cited by
appellant’s counsel arc of any assistance to them. In the
former case, a notice u/s 34 had been issued before 1.4.1962
but it had been quashed as without jurisdiction as it was
barred by time. The question was whether the proceedings
initiated by the notice can be said to have been pending as
on 1.4.1962. The Court answered the question in the affirma-
tive. It held that, for purposes of s. 297 (2) (d) (ii), all
that had to be seen was whether proceedings under s. 34 of
the 1922 Act were factually pending on 1.4.1962. That the
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notice issued before that date was barred by time and was
held so later was immaterial. The notice had in fact been
quashed by the High Court in a writ only much later, on
6.3.1963, and so proceedings under s. 34 were pending as on
1.4.1962. We are unable to see how this decision is of any
help here. In the second case, the claim by the assessee, a
Hindu undivided family, that there had been a partial parti-
tion on 15.11.1955 (as a result of which the share income
from two firms had ceased to be the income of the family
from that date) was accepted by the Income-tax Officer.
Subsequently, the assessments of the two firms for the
assessment years 1950-51 to 1956-57 had been reopened and
reassessments were made on them enhancing their income.
Consequently action was also taken to reopen the assessments
of the family (which, for the relevant previous years had a
share in the firms’ income). These assessments were initiat-
ed under the new Act in accordance with the provisions of s.
297 (2) (d) (ii). The assessee had no grievance thus far.
But, while completing the reassessment, the officer, in
addition to reassessing the family, also took advantage of
the provisions enacted in Ss. 171(6) and (7) of the 1961 Act
- which had no counter part in the 1922 Act - and passed
orders apportioning the tax assessed on the family amongst
its members. This was objected to by the assessee. The
department, referring to the language of s. 297 (2) (d)
(ii)-"that all the provisions of this Act shall apply ac-
cordingly", contended that the I.T.O. could legitimately
invoke the provisions of Ss. 171 (6) and (7) as well while
17
making the reassessments. This contention was negatived. The
Court observed:
"These words merely refer to the machinery
provided in the new Act for the assessment of
the escaped income. They do not import any
substantive provisions of the new Act which
create rights or liabilities. The word "ac-
cordingly" in the context means nothing more
than "for the purpose of assessment" and it
clearly suggests that the provisions of the
new Act which are made applicable are those
relating to the machinery of assessment."
It will be at once clear that this line of approach can
have no validity in the context of section 297 (2) (d) (ii).
Here there is no need to guess or speculate on which provi-
sions of the new Act are to apply. The section itself, in so
many words, provides that Ss. 148, 149 and 150 will apply to
the initiation of a reassessment proceeding under s. 297 (2)
(d) (ii) and this cannot be negatived by the last few words
of that clause. On the contrary, as pointed out earlier,
they place it beyond all doubt that the provisions of the
1961 Act have to be applied to the reassessment on the basis
that Ss. 148 to 150 apply. This case also does not, there-
fore, advance the case of the assessees.
It is next contended by the appellant’s counsel that the
very issue before us had been considered in the decision of
this Court in Seth Gujarmal Modi v. CIT, (1972) 84 ITR 261
and this concludes the issue in his favour. The second
headnote at page 261 seems to bear out this contention. It
reads:
" ..... Since the Appellate Assistant Com-
missioner’s order was not passed under the
1961 Act, the department could not take any
support from section 150 (1) of the Act."
A perusal of the decision shows, indeed, that this was
the ground on which a separate contention urged on behalf of
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the department on the basis of section 150 (1) was repelled.
It is no doubt seen from the facts of the case that it was a
case of reassessment under section 297 (2) (d) (i) of the
Act and the Court specifically held that reassessment pro-
ceedings should have been initiated under section 34 of the
1922 Act and not under section 148 of the 1961 Act. In view
of this conclusion no question of drawing any support from
section 150 (1) could at all arise. Still an argument was
addressed and was repelled on the basis of the words "under
this
18
Act" used in section 150 (1) thus upholding the literal
construction argument now addressed on behalf of the asses-
see. We shall consider this decision later after considering
the department’s contentions.
As against the above contentions, Sri Manchanda submits
that the provisions of section 150 (1) should be applied not
blindly but with necessary modifications to suit the situa-
tion. In support of this plea, he relies strongly on the
last few words of s. 297 (2) (d) (ii). It is urged that the
expression :"all the provisions of this Act shall apply
accordingly" should be so construed as to enable the Revenue
to invoke reassessment proceedings on the footing that the
orders on appeal or reference were ones passed "under this
Act" within the meaning of s. 150 (1). Sri Manchanda cited
two decisions in support of his contention. In Third I.T.O.
v. Damodar Bhat, (1969) 71 I.T.R. 806 the question was
whether proceedings under s. 226 (3) of the new Act would
apply with respect to a tax liability incurred under the
1922 Act. The answer to this question, in the affirmative,
turned on the language of s. 297 (2) (j). which provided
that any tax or other dues payable under the 1922 Act may,
notwithstanding the repeal of the 1922 Act, be recovered
under the Act. The contrary interpretation accepted by the
High Court in that case would have had the effect of nulli-
fying the provisions of s. 297 (2)(j). Again, in Jain Bros.
v,. Union of India, (1970) 77 ITR 107, it was held that
penalty could be imposed under s. 271 (1) of the 1961 Act in
respect of returns filed before 1.4.1962 and assessments
completed after 1.4.1962 but under the 1922 Act. This was
because of s. 297 (2) (g), the special transitory provision
in this behalf, which provided that "any proceeding for the
initiation of a penalty in respect of any assessment for the
year ending on the 31st day of March 1962 or any earlier
year, which is completed on or after the 1st day of April,
1962, may be initiated and any such penalty may be imposed
under this Act." Here again s. 297 (2) (g) had been enacted
to provide for the exact situation in question and to have
held to the contrary would have rendered the provisions of
s. 297 (2) (g) meaningless and redundant.
The position is no doubt a little different here. The
provisions of s. 150 (1) have been specially made applicable
and operative in respect of the notice under s. 148 issued
in pursuance of s. 297 (2) (d)(ii) and, as pointed out
earlier, the application of the provisions of s. 297
(2)(d)(ii) gives rise to two sets of situations to one of
which the language of s. 150(1) would squarely apply and so
the interpretation sought for by the appellant does not
render the words of s. 150 (1) redundant. Despite this point
of difference in the two situations, we think that the
principle of the above decisions that the mutatis mutandis
rule should be invoked in interpreting
19
s. 297 (2) has application here also. Not to do so would no
doubt not make section 150(1) redundant but it will bring
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about an unintended and inequitable situation. It is clear
that section 150 (1) will operate to lift the time bar in
cases where the reassessment is initiated under section 148
to give effect to an order passed under the 1961 Act. Equal-
ly, where assessments had been reopened under section 34 of
the 1922 Act before 1.4.1962 to give effect to orders passed
under the 1922 Act and are continued after that date by
virtue of section 297 (2) (d) (i), the provisions of the
second proviso to section 34 (3) of that Act would preclude
the operation of the normal rule of limitation for reassess-
ments. In this situation, it will be a great anomaly to
reach the conclusion that the time limit will operate in
cases where proceedings under section 148 are initiated to
give effect to an order on appeal, revision and reference
merely because such order is one passed under the 1922 Act.
Neither reason nor rhyme can explain how the statue could
have intended such anomaly or why it should be so interpret-
ed as to result in a discriminatory treatment only to this
class of cases. An interpretation which will result in such
anomaly or absurdity should be avoided. It is also necessary
to remember that s. 297 (2) is a provision enacted with a
view to provide for continuity of proceedings in the context
of repeal of one Act by a fresh one broadly containing
analogous provisions and the transitory provisions should,
as far as possible, be construed so as to effect such conti-
nuity and not so as to create a lacuna. For these reasons we
think that it will be appropriate to so read the words of
section 297 (2)(d)(ii) as to permit the applicability of
section 150 (or section 153) with the necessary modifica-
tions. To paraphrase, the last words of s. 297(2)(d)(ii)
should be read to mean that where the proceedings initiated
under s. 148, subject to the relaxations and limitation of
Ss. 149 and 150, all the provisions of the Act shall apply
accordingly: that is to say, in the same manner as they
would apply in case of proceedings normally initiated under
these provisions. Since reassessment proceedings so initiat-
ed to give effect to orders on appeal, revision or reference
will not be subject to a time limit, the proceedings like-
wise initiated under s. 297(2)(d)(ii) read with s. 148 will
also not be subject to any limitations save to the extent
mentioned in s. 150(2).
We would like to add that, even if section 150(1) is to
be read literally and considered as posing a hurdle as
contended for by the appellant, we think this result can be
overcome by a liberal interpretation of section 297(2)(k).
This clause reads:
"any agreement entered into, appointment made,
approval given, recognition granted, direc-
tion, instruction, notification,
20
order, or rule issued under any provision of
the repealed Act shall, so far as it is not
inconsistent with the corresponding provision
of this Act, be deemed to have been entered
into, made, granted, given or issued under the
corresponding provision aforesaid and shall
continue in force accordingly;"
This is principally a provision intended to save admin-
istrative steps taken under the 1922 Act by deeming them to
be steps taken under the 1961 Act. Strictly construed, the
words "order issued" also would seem, prima facie, to carry
only a similar connotation. But we see no objection, for our
present purposes, in the way of our construing these words
liberally and consequently deeming the orders passed and
issued by the Tribunal and the High Court in this case for
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the assessment year 1949-50 and subsequent assessment years
as orders passed or issued under the corresponding provi-
sions of the new Act. Once this deeming is made, there is no
difficulty in the way of accepting the Revenue’s contention.
We think that the circumstances justify a slight straining
of the language of this clause and applying it so interpret-
ed to the problem before us so as to avoid a meaningless
anomaly. Thus construed, the statute can be said not to have
misfired in its application to the situation in the present
case.
We should, before we conclude, refer to the decision of
this Court in the Gujar Mat Modi case. As we have pointed
out earlier, the principal conclusion reached in that case
was that proceedings under section 148 could not have been
initiated as the case fell under the provisions of section
297(2)(d)(i). It was, therefore, unnecessary to deal with
the contention based upon section 150. Moreover, this part
of the decision was only based on a prima facie reading of
section 150(1) and contains no discussion of the various
aspects that need consideration and have been touched upon
above. We do not, therefore, think that the above decision
can be treated as conclusive on the issue before us which,
for the reasons discussed above, we think, should be an-
swered differently.
We affirm the conclusion of the High Court and dismiss
the appeal. No costs.
Y.L. Appeal dismissed.
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