Law: Income Tax Act, 1922

Section: 34(3),34

Law: Income Tax Act, 1961

Section: 150,297(2)(d)(ii)

(a) Income-tax----Reassessment---Limitation---Removal of bar of limitation---Finding or direction in order in appeal, revision or reference---Provision of S. 150 Indian Income-tax Act, 1961 applies to assessments completed under Income-tax Act, 1922. Section 150(1) of the Indian Income-tax Act, 1961, will operate to lift the time bar in cases where reassessment is initiated under section 148 in consequence of, or to give effect to, any finding or direction contained in an order passed under the 1961 Act. Equally, where an assessment have been reopened under section 34 of the Income-tax Act, 1922, before April 1, 1962, to give effect to a finding or direction in an order passed under the 1922 Act and the reassessment proceedings are continued after that date by virtue of section 297(2)(d)(ii) of the 1961 Act, the provisions of the second proviso to section 34(3) of the 1922 Act would preclude the operation of the normal rule of limitation for assessments. In this situation, it will be a great anomaly to reach the conclusion, because of the words "any proceeding under this Act" in section 150(1) of the 1961 Act, that the time-limit will operate in cases contemplated by section 297(2)(d)(ii) where proceedings are initiated under section 148 of the 1961 Act to give effect to an order on appeal, revision or reference, merely because such order is passed under the 1922 Act. Neither reason nor rhyme can explain how the statute could have intended such anomaly and why it should be so interpreted as to result in discriminatory treatment only to this class of cases, namely, cases of reassessment to give effect to a finding or direction made in an order under the provisions of the 1922 Act when no proceeding for reassessment is pending on April 1, 1962. An interpretation which will result in such anomaly or absurdity should be avoided. Section 297(2) is a provision enacted with a view to providing 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 continuity and not so as to create a lacuna. Therefore, the words of…

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