. '

ESTHURI ASWATHIAH

COMMISSIONER OF INCOME-TAX, MYSORE • [K. SUBBA RAO, M. HIDAYATULLAH AND R.S. BACHAWAT, JJ.j

Income-tax Act (11 ?f. 192,2). s, 2(11)-Length of previoU3 year-ft should be only 12 calendar months--Previous year of 21 months-Rate a/

tax applicable.

Up to the assessment year lsl51-S2, the appellant adopted the yea• ending on 30th June as the previous year applicable to him. For the

.... essment year, 1952-53, the assessee filed a return for 21 months commencing on !st July 1950 and ending-on 31st March, 1952 and ruested the Income-tax Officer to accord his , Sanction to the change of the previous year from an year ending on 30th Jorie to an year ending on 31st March.

The Income-tax Officer sanctioned the change on condition that the total' income in the period of 21. month$ .en.diµg on 31st March 1952 would be asseosed to tax at the rate applicable to the total income in the sitld 21 months. Tue Appellate Assistant Coqunissioner and the Appellate Tribunal on appeal, and the High Court, on a reference, confirmed the order.

In appeal to this Court it was contended that: (i) the scheme of Act and.particularly ss. 2(11) and 3.show that tl; tere cannot be a prevrous year consisting of more than 12 il)\)nths; (ii) the Income-tax Officer had no power to direct under the proviso to cl. (l)(a) of s. (2)(11) that the' previous year should consist of 2t months; (iii) the Income-tax Officer ohould have granted the. s.anction on condition that the asseMCc shall have 2 previoiµ, years, one consisting of a period of nine months from !st July

1950 µp to 31st March 1951 and the other of a period of 12 months from 1st April 1951 to 31st March 1952; and (iv) the Income-tax Officer should have accorded sanction to the change on the basis that the income for 21 months should be assessed at the rate applicable to the income of the last period of 12 months.

HELD: (i) A combined reading of the several clauses of s. 2(11} shows that the length of a previous year need not nocessarily be 12 calendar months. Under .s .. 2( 11 )(i)(b), the previous year is such . period as may be determined by the Central Board of Revenue or such f authority as the Board may authorise in this behalf, and the period so, determined.may be more or less than 12 months. [362 H-363 A)

(ii) The Income-tax Officer may refuse .to give his consent to a change of the previous year, but if he gives his consent, he has ample power to impose the condition that the full period from the end of the "prev:ous year" for the preceding year's assessment to the end of the new accounting year should be taken as the previous year for the current assessn:ient year. The condition properly safeguards the interests of the Revenue because, if he had sanctioned the change on the footing that the previous year would only be the period of 12 months from 1st April 1951 to 31st March 1952 the income of the preceding 9 months from !st July 1950 to 3 lst March 1951 would have escaped taxation. [363 D-F]

{iii) There cannot be two p'tevious yeas in respec~ of the same assess .. _ ment year and stich a concept of two previous years is repugnant to s. 3.

Section 25 ( I) does not contemplate assessments in the same assessment IOSup. Cl/66-10

year in respect of two previous years. It only contemplates the usual aaeament in respect of the income of the previous year and a special and

separate assessment in the same assessment year in respect of the income of the broken period between the end of the previous year and the date or

discontinuance of the business. (363 H-364 C]

iv) The lncome-ta.x Officer as no power to vary the rate on which the m<:ome of the previous year IS to be assessed. The condition imposed by the Jncome-tax Officer, that the income of the previous year of 21 months would be assessed at the rate applicable to the income for 21 months is redunda.nt, because, once the length of the previous year is found lo be a penod of 21 months, the income of the entire period of 21 months, must be considered to, be the income of the previous year relevant for the asseosment year. 1952-53, and the. entire income lllQlt be 83SeSSed at the rate specified in the relevant Finance Act, and at no other rate. [364 D-G]

QYIL APPl;!.LATE JURISDICDON : Civil Appeal No. 402 of 1965 Appeal from the order dated June 4, 1962 of the Mysore High Court in Income-tax Referred Case No. 7 of 1961.

K. Srinirasan and R. Gopalakrishnan, for the appellant.

R. Ganapathy Iyer and R. N. Sachthy, for the respondent. o

The Judgment of the Court was delivered by

Bachawat, J. The appeal raises a question of interpreiauon of the proviso to cl. (i)(a) of s. 2(11) of the Indian Income-tax Act,

1922. Up to the assessment year 1951-52, the appellant adopted the year ending on June 30 as the "previous year" applicable to him. The assessment for the assessment year, 1951-52 was accordingly made in respect of the previous year ended on June 30, 1950.

For the assessment year, 1952-53, the assessee filed a return for 21 months commencing on July I, 1950 and ending on March 31, 1952, and requested the Income-tax Officer to accord his sanction to the change of the previous year from an year ending on June 30 lo an year ending on March 31. The Income-tax Officer duly sanctioned the change. In the assessment order for the year, 1952-53 he stated:

"The return of income filed for this year is for the period between 1-7-50 and 31-3-52. The permission to change the previous year is granted subject to the condition that the total income in the period of 21 months ending 31-3-52 will be assessed to lax at the rate applicable to the total income in the said 21 months."

The appellant was apparently happy with this order, and he made no protest before the Income-tax Officer. The assessment for the assessment year 1952-53 was accordingly made in respect of the income of the previous year consisting of 21 months commencing from July l, 1950 and ending on March 31, 1952. In his appeals before the Appellate Assistant Commissioner and the Income-

....

A tax Appellate Tribunal, the appellant, however, contended that the total income of 21 months should be assessed at the rate applicable to the proportionate income for a period of 12 months. Both the authorities concurrently rejected this contention. On the application of the assessee, the Tribunal referred the following two question( of law for the decision of the High Court of Mysore: B

P' "(!) Within the meaning of Sec. 2(ll)(a) of the . Income-tax Act, whether the Income-tax Officer is entitled to have the length of the 'previous year' as 21 months though the assessee itself applies for such a change?

(2) When the length of the assessee's previous year is allowed to be 21 months, whether it is obligatory on the part of the Income-tax Officer to tax the income for the said period of 21 months at the rate applicable to the proportionate income for a period of 12 months?"

At the hearing of the reference, the second question of law was no pressed. The first question of law was pressed, and it was contend- D ed that according to the scheme of the Indian Income-tax Act, there cannot be a previous year consisting of more than 12 months, and the Income-tax Officer was not competent to constitute a previous year consisting of 21 months under the proviso to cl. (i)(a) to s. 2(11). The High Court rejected this contention and answered the questions in favour of the Revenue and against the assessee.

The assessee now appeals to this Court on a certificate granted by E the High Court under s. 66A(2) of the Indian Income-tax Act, 1922.

Mr. Srinivasan repeated before us the contentions which he urged before the High Court. He submitted that the scheme of the Act and particularly ss.2(11) and 3 show that there cannot be a previous year consisting of more than 12 months, and the Income- F tax Officer had no power to direct under the proviso to cl. (i)(a) of s.2(1 I) that the previous year should consist of 21 months.

We are unable to accept this contention.

Section 3 is the charging section. For any assessment year, income-tax is charged on the income of the previous year. Section

3 does not define the length of the previous year. The "previous G year" is defined ins. 2(11). The main part of cl. (i)(a) of s. 2(11) reads:

"(II) 'previous year' means-

(i) in respect of any separate source of income, profits and gains-

(a) the twelve months ending on the 31st day of March next preceding the year for which the assessment is to be made, or, if tte accounts of the assessee have been made

up to a date within the said twelve months in respect of a year ending on any date other than the said 31st day of March, then at the option of the assessee, the year ending on the date to which his accounts have been so made up."

The main part of cl. (i)(a) of s. 2(11) gives the primary meaning of the expression "previous year", and this meaning was elucidated by Mahajan, J. in Commissioner of lncome-rax, Madras v. K. Srini-

1asm1 and K. Gopa/an(') thus:

"The expression 'previous year' substantially means an accounting period comprised of a full period of twelve months and usually corresponding to a financial year preceding the financial year of assessment. It also means an .accounting year comprised of a full period of twelve months adopted by the asscssee for maintaining his accounts but different from the financial year and preceding a financial year."

Thus, under the main part of cl. (i)(a) of s. 2(11 ), the previous year is either a period of 12 months ending on March 31 next preceding the assessment year or al the option of the assessee the year ending on some other date within the aforesaid period of 12 months, if the account' of the assessee have been made up to such date.

The proviso to sub-cl. (i)(a) reads :

"Provided that where in respect of a particular source E of income, profits and gains an assessee has once been assessed, or where in respect of a business, profession or vocation newly set up an asscssce has exercised the option . under sub-clause (e), he shall not, in respect of that source or, as the case may be, business, profession or vocation, exercise the option given by this sub-clause so as F to vary the meaning of the expression 'previous year' as then applicable to him except with the consent of the Income-tax Officer and upon such conditions as the Incometax Officer mav think fit to impose."

Sub-clause (i)(b) of s. 2(11) empowers the Central Board of Revenue or its nominee to detennine the period of the previous year in G respect of any person, business or company or class of person, business or company. Sub-clause (i)(c) dejines the previous year in respect of a newly set up business, profession or vocation. Subclause (ii) defines the previous year in respect of the share of the assessec's income in a firm.

A combined reading of the several clauses of s. 2( 11) shows that the length of a previous year need not necessarily be 12 Calendar ----------

(1) [19631 S.C.R. 486, 501

' '

' '

months. Under s. 2(11 )(i)(b ), the previous year is such period as may be determined by the Central Board of Revenue or such authority as the Board may authorise in this behalf, and the period so determined may be more or Jess than 12 months. Under s. 2(ll)(i)(c), the period of the previous year in respect of a newly set up business, profession or vocation may be Jess than 12 months.

In this background, Jet us consider the meaning of s. 2(Jl)(i)(a).

The assessee has the option to choose his accounting year ending on any date within the preceding financial year as his previous year.

Once he exercises this option, the meaning of the expression "previous year" as applicable to him is determined, and he cannot exercise this option again "so as to vary the meaning of the expression 'previous year' as then applicable to him except with the consent of the Income-tax Officer and µpon such conditions as the Income-tax Officer may think fit to impose." If the assessee wants to change the meaning of the previous year as then applicable to him, he must obtain theconsent of the Income-tax Officer, and the Income-tax Officer may accord such consent on proper terms. The Income-tax Officer may refuse to give his consent, but if he does give his consent, he has ample power to impose the condition that the full period from the end of the 'previous year' for the preceding year's assessment to the end of the new accounting year should be taken as the previous year for the current assessment year. Thus, if the previous year at any given time applicable to the assessee ends on June 30 and he wants to vary it so as to make it end on March 31 next, the Income-tax Officer has power to accord sanction to the change on the condition that the previous year would consist of the entire period of 21 months commencing on June 30 of the year up to which his accounts were last made up to March 31 of the year up to which his accounts are newly made up. The condition properly safeguards the interest of the Revenue. Had he sanctioned the change on the footing that the previous year of the assessee in relation to the current assessment year would be the period of 12 months from April I to March 31, the income of the preceding 9 months from July I to March 31 would have escaped taxation altogether.

G Mr. Srinivasan submitted that the Income-tax Officer could grant the sanction on condition that the assessee should have two previous years, one consisting of a period of nine months from July I up to March 31 and the other of a period of 12 months from April I to the next succeeding March 31. This is an impossible contention. There cannot be two previous years in respect of the H same assessment year. The charge under s. 3 for any assessment year is in respect of the income of the previous year. The concept , of two previous years in relation to the same assessment year is repugnant to s. 3. In Dhandhania Kedia & Co. v. Commissioner

SUPREME COURT

IU>PORTS

(1966] 3 S.C.R

of Income-tax( ), this Court pointed out that it is a contradiction in terms to speak of six previous years 0in relation to any specified assessment year. Mr. Srinivasan is not right in submitting that s. 25(1) contemplates two previous years. Section 25(1) provides that in case of discontinuance of any business, profession or vocation in any assessment year, the Income-tax Officer may in that year make an accelerated assessment in respect of the income of the period between the end of the previous year and the date of such discontinuance, in addition to the usual assessment in respect of the income of the previous year. Section 25( 1) contemplates the usual assessment in respect of the income of the previous year and a special and separate assessment in the same assessment year in respect of the income of the broken period between the end of the previous year and the date of the discontinuance; it does not contemplate, as counsel submitted, assessments in the same assessment year in respect of two previous years.

Mr. Srinivasan alternatively submitted that the Income-tax Officer could accord sanction to the change on the basis that the income for 21 months should be assessed at the rate applicable to the income of the last period of 12 months. This again is an impossible contention. The Income-tax Officer has no power to vary the rate on which the income of the previous year is to be assessed. The rate of tax is fixed by the Finance Act every year.

Bys. 3, the tax is levied at that rate for an assessment year in respect of the income of the previous year. Once the length of the previous year is fixed and the income of the previous year is determined, that income must be charged at the rate specified in the Finance Act and at no other rate. The order of the Income-tax Officer, in substance, permitted the change of the previous year on condition that the previous year in relation to the assessment year, 1952-53, would consist of the period of 21 months commencing from July I, 1950-and ending on March 31, 1952.

The Income-tax Otftcer bad power to impose this condition. The further condition that the income of the previous year of 21 months would be' assessed at the rate applicable to the income for 21 months is redundant. Once the length of the previous year is found to be a period of 21 months, the income of the entire period of 21 months must be considered to be the income of the previous year relevant for the assessment year, 1952-53, and the entire income must be assessed at the rate specified in the relevant finance Act.

The appeal is dismissed with costs.

Appeal dismissed .

IJ) (1938) 33 l.T.R. 400, 404.

A . ~

I' B

ESTHURI ASWATHIAH

COMMISSIONER OF INCOME-TAX, MYSORE

K. SUBBA RAO

M. HIDAYATULLAH

R.S. BACHAWAT, JJ

Income-tax Act

ss. 2(11) and 3

1st April 1951 to

1st April 1951

31st March 1952

3 lst March 1951

s. 3

Section 25

Mysore High Court

K. Srinirasan

R. Gopalakrishnan

R. Ganapathy Iyer

R. N. Sachthy

Bachawat

s. 2(11)

Indian Income-tax Act

High Court of Mysore

Sec. 2(ll)(a)

Income-tax Act

Income-tax Act

s. 2(11)

s. 66A(2)

Indian Income-tax Act, 1922

Srinivasan

ss.2(11) and 3

s.2(1 I)

Section 3

Section

3

s. 2(11)

s. 2(11)

Mahajan

K. Gopa

s. 2(11 )

s. 2(11)

Central Board of Revenue

s. 2( 11)

s. 2(11 )(i)(b )

s. 2(ll)(i)(c)

s. 2(Jl)(i)(a)

s. 3

s. 3

s. 25(1)

Section 25(1)

Section 25( 1)

March 31, 1952


EVEREST APARTMENTS CO-OPERATIVE HOUSING

SOCIETY LTD.

STATE OF MAHARASHTRA & ORS.

January 18, 1966

[K. SUBBA RAO, M. HIDAYATULLAH AND R. S. BACHAWAT JJ.j

Maharashtra Co--0perative Societies Act, 1960 (24 of 1961), ss. 23(2), 154-0rders of Deputy Registrar under s. 23(2)-Whether final-State Government whether has revisional jurisdiction over 'then1 under s. 154- Parties whether can invoke revisional jurisdiction.

The appellant was a registered co-operative Housing Society, regi& tered under the Maharashtra Co-operative Societies Act, 1960.

S, respondent no. 4, applied for membership of the society but this was retu.ed. He appealed under s. 23(2) of the Act to the Deputy Registrar Co-operative Societies who decided in bjs favour.

The appellant filed an application before the State Government for revision purporting to be under s. 154 of the Act which was rejected on the ground that Government bad no revisional jurisdiction against orders under s. 23(3). The appellant then went to the High C.Ourt under Arts. 226 and 227 and failing there also came to this Court by special leave. The questions that fell to be decided were. (i) Is the finality under s. 23(3) subject to s. 154 and (ii) Has a party a right to move the State Government under •. 154?

HELD : (i) There is no doubt that s. 154 is potential but not compulsive. Power is reposed in Government to intervene to do justice when occasion demands it and of the occasion for its exercise Government is made sole judge. This power can be exercised in all cases except in a case in which a similar power has already been exercised by the Tribunal under s. 149(9) of the Act.

The exception was considered necessary because the legality or propriety of an order having been considered once,. it would be an act of superetogation to consider the matter twice.

It follows, thetefore, that Government can exercise its powers under s. 154 in all cases with one exception only, and that the finality of the order under s. 23(3) does not restrict the exercise of the power. The word •final' in this context means that the order is not subject to an ordinary appeal or revision but it does not touch the special power legislatively conferred on Government. The Government was in error in considering that .it had no jurisdiction in this case for it obviously had. [371 B-DJ

Conunissioner of Income-tax West Punjab v. The Trii.J-ruze Trust, Lahore, ( 1948) 16 l.T.R. 214 (P.C.) and Sheffield Corporation v. Luxford, [1929] 2 K.B. 180, refecred to.

(ii) The fact that s. 154 does not expressly permit a party to invoke the revision jurisdiction under that section does not mean that a party is prohibited from moving the Government.

But as Government is not compelled to take action, unless it thinks fit the party who moves the Government cannot claim that he has a right of appeal or revision.

On the other hand Government should welcome such applications because they draw its attention to cases in some of which it may be interested to intervene. [371 FJ

366 .

SUPREME COUllT REPORTS

I 1966] 3 S.C.R.

Sheffield Corporation v. Lu.tford, (1929] 2 K.B. 180, distinguished.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. I of 1966.

Appeal by special leave from the order dated June 30, 1965 of the Bombay High Court in Special Civil Application No. 1027 of 1965.

S. V. G11p1e, Solici1or-Cie11eral and N. N. Keswani, for the appellant.

JViren De, Additional So/icitor-Ge11eral and B. R. G. K. Achar, for respondent No. I.

The judgment of the Court was delivered by

Hidayatullab, J, In this appeal by special leave we are not concerned with the merits of the controversy between the appellant and the fourth respondent, who are the contesting parties, because bnly two short questions of law arise for our decision. The appellant is a registered co-operative Housing Society, registered under the Maharashtra Co-operative Societies Act, 1960 (XXIV of 1961 ).

The Society was prori1oted by two individuals for the construction of a block of flats in Bombay. Shivdasani (respodent 4) claims to we paid the entrance fee, share money and other demands and cilmplaints that his membership was wrongly rejected by the Society.

The Society denies these statements and the claim.

We arc not concerned with the details of this dispute.

What we are concerned with is this: On being informed of the rejection of his application for membership, Shivdasani filed an appeal under s. 23(2) of the above Act, which was heard and decided in his favour by the District Deputy Registrar, Co-operative Societies, Bombay. "The Society filed an application before the State Government for revision purporting to be under s. 154 of the Act. "l11is application was rejected. The Society was intimated this result by the Under Secretary to the Government of Maharashtra (Agriculture and Cooperative Department) and the communication (CAR/1064/426590/ C-42, 17th May, 1965) was as follows :

"Sir,

I am directed to state that following the hearing to you by the Deputy Secretary of this Department on 10th March, 1965, in connection with the subject noted above, a note was received in this Department from Shri M. G.

Mani, Advocate wherein it was claimed that though an order was final under Section 23(3) of the Maharashtra Cooperative Societies Act, 1960, Government had inherent revisionary powers under Section 154 of the said Act to entertain in such representations against such an order.

I am to inform you that the matter has been examined by Government and to state that in such cases orders given

J' '

under Section 23(3) are final and Government has no revisional jurisdiction, in such .a matter. .

Yours fa!thfully,

Sd/- (D. A. EKBOTE) Under Secretary to Government."

The Society filed a petition under Arts. 226 and 227 of the Constitution in the High Court of Bombay which was also rejected (S.C.A.

1027/65, 30 June, 1965). The High. Court passed a short and laconic order which reads:

"Government right in declaring no jurisdiction. It is wrong to say that respondent had wHhdrawn the application voluntarily. Attitude of the Society unjust. Admittedly the promoters were members of Everest Co. and they wanted Rs. 3,000 from each one for themselves.

Societies are not meant for self aggrandizement.

No ground to interfere .

REJECTED." It is against the last order that the present appeal has been brought and the first question is whether the Government is right in law in declining to interfere because it has "no revisional jurisdiction in E such a matter." The answer to this question depends upon the construction of s. 154 of the Act but before we attempt it, we shall say something about the Act and the provisions applicable to this case.

The Maharashtra Co-operative Societies Act, which replaced the Bombay Co-operative Societies Act, 1925 was passed to provide for the orderly development of the co-operative movement in the

State of Maharashtra. It deals, among others, with housing societies, the object of which is to provide their members with dwelling houses. Every society having as its objects the promotion of the economic interests or general welfare of its members, or of the public, in accordance with co-operative principles and which is economically sound may register under the Act. This entitles the societies to obtain certain benefits. The State Government appoints a · Registrar of Co-operative Societies, who has numerous powers under the Act, and may appoint one or more persons to assist him and may confer all or any of the powers of the Registrar upon them.

Chapter II of the Act then deals with registration of societies and all matters connected therewith. Chapter III next deals with members and their rights and liabilities. Section 22 in that Chapter Jays down who may become a member of a society and by its second sub-section provides:

"22. Person who may become member.

(I) • •

(2) Where a person is refused admission as a member of a society, the'decision (with the reasons therefor) shall be communicated to that person within fifteen days of the date of the decision, or within three months from the date of the application for admission,-whichever is earlier."

Section 23 then gives a right of appeal to a member who has been refused admission. It provides:

"23. Open membership.

(I) No society shall, without sufficient cause, refuse admission to membership to any person duly qualified therefor under the provisions of this Act and its by-laws.

(2) Any person aggrieved by the decision of a society, refusing him admission to its membership, may appeal to the Registrar.

(3) The decision of the Registrar in appeal, shall be final and the Registrar shall communicate his decision to the parties within fifteen days from the date thereof."

The appeal of Shivdasani was made under the above section. After the or.der in appeal \\as passed by the Registrar, the Society moved the State Government under s. 154 to exercise its powers under that section. It reads:

"154. Power of State Government and Registrar to call for proceedings of subordinate officer and to pass orders thereon.

The Stale Government and the Registrar may call for and examine the record of any inquiry or the proceedings of any other matter of any officer subordinate to them, except those referred to in sub-section (9} of section

149 for the purpose of satisfying themselves as to the legality or propriety of any decision or order passed, and as to the regularity of the proceedings of such officer.

If in any case, it appears to the State Government, or the Registrar, that any decision or order or proceedings so called for should be modified, annulled or reversed, the State Government or the Registrar, as the case may be, may after giving persons affected thereby an opportunity of being heard pass such order thereon as to it or him may seem just."

The State Government held that it had no jurisdiction as orders given under s. 23(3) were final.

Two questions arise here: (i) Is

A the finality under s. 23(3) subject to s. 154, and (ii) Has a party a right to move the State Government under s. 154? r• Mr. Niren De defending the order of the State Government as well as that of the High Court, admits that the State Government ,/ has been given a power to call for and examine the record of.any

B enquiry or the proceedings of any other matter of any officer subordinate. to it, except those referred to in sub-section 9 of s. 149, and that as the present is not a matter under s. 149(9) the power could be exercised by Government for the purpose of satisfying itself as to the legality or propriety of the order. In other words, he does not contest that the finality stated by s. 23(3) does not affect the power of the State Government. In making c this admission he is clearly right. The Act has provided for , , appeals in other sections and the decision on appeal is stated to be final. Yet the power of superintendence is given to the . State , Government in general terms in respec_t of any inquiry or proceeding with only one exception, namely, the proceedings of the Maharashtra State Trjbunal, when the Tribunal calls for and

D examines the record of any proceeding in which an appeal lies to it, for the purpose of satisfying itself as to the legality or propriety of any decision or order passed. By mentioning one specific exception to the general power, the Act has indicated an intention to . • include every other inquiry or proceeding within the action by Governments as contemplated by s. 154. Mr. De, however, con-

E tends, firstly, that the action by Government is intended to be on its own motion and not by application, and, secondly, that the power need not be exercised unless Government itself feels that its exercise is necessary. He refers, by way of contrast, to the opening words of s. 150 where provision is made for review of orders of the Tribunal in these words : .

F "150. Review of orders of Tribunal. -· t (I) The Tribunal may, either on the application of the Registrar, or on the apflication of any party interested, review its own order in any case, and pass in reference thereto such order as it thinks just: Provided that, no such application made by the party G interested shall be entertained, unless the Tribunal is satisfied that there has been the discovery of new and important matter of evidence, which after the exercise ·"' of due diligence was not within the knowledge of the applicant or could not be produced by him at the time • when its order was made, or that there has been some ,. ...

H mistake or error apparent on the face of the record, or for any other sufficient reason_:

Mr. De next submits that this power not being coupled with A any duty need not be exercised by Government even if moved to take action, unless Government itself feels inclined.

He relies upon • l the Commissioner of Income Tax, West Punjab v. The Tribune Trust, Lahore.' In that case th@ question was whether s. 33 of the Indian ' Income Tax Act, 1922 which conferred revisional jurisdiction on the Commissioner established a right to relief on the application of an B assessce. It was contended by the assessces in that case that the relief claimed by them under s. 33 was wrongly denied to them.

In dealing with this contention Lord Simond (later Viscount) observed, at page 225 of the report, as follows:-··

"The fallacy implicit in this question has been made clear in the discussion of the first two questions. It assumes that Section 33 creates a right in the assessce.

In their Lordships' opinion it creates no such right.

On behalf of the respondent the well-known principle which was discussed in Julius v. Bishop of Oxford-(1880) 5 App.

Cas. 214-was invoked and it was urged that the section which opens with the words "The Commissioner may of his own motion" imposed upon him a duty which he was bound to perform upon the application of an assessee.

It is possible that there might be a context in which words so inept for that purpose would create a duty.

But in the present case there is no such context. On the contrary Section 33 follows upon a number of sections which determine the rights of the assessee and is itself, as its language clearly indicates, intended to provide administrative machinery by which a higher executive officer may review the acts of his subordinates and take the necessary action upon such review.

It appears that as a matter of convenience a practice has grown up under which the Commissioner has been invited to act "of his own motion" under the section and where this occurs acertain degree of formality has been adopted. But the language of the section does not support the contention, which lies at the root of the third question and is vital to the respondent's case, that it affords a claim to relief.

As has heen already pointed out, appropriate relief is specifically given by other sections: it is not possihle to interpret Section 33 as conferring general relief." Mr. De also relies upon certain passages from Julius v. Bishop of Oxford2 which show the distinction between power which is discretionary in its exercise and power which must be exercised every time the occasion for its exercise arises.

He contends in the words of Talbot J. in Sheffield Corporation v. Luxfort/l that the

(I) (1948) 16 1.T.R. 214 P.C.

(2) (1880) 5 App. Cas. 214. (3). (1929) 2 K.B. 180 al 183.

I '1

i F

E. H. , SOCIETY v. MAHARASHTRA (Hidayatu/lah, !.) 371

word "may" always means "may" which is a permissive or enabling expression and that there are no circumstances either in the Act or in the facts here, by which it can be said that Government was under a duty to interfere. He submits that the order of Government must be read as indicating the above position and not that it had no jurisdiction. There is no doubt that s. 154 is potential but not compulsive.

Power is reposed in Government to intervene to do justice when occasion demands it and of the occasion for its exercise, Government is made the sole judge. This power can be exercised in all cases except in a case in which a similar power has already been exercised by the Tribunal under s. 149(9) of the Act. The exception was considered necessary because the legality or the propriety of an order having been considered once, it would be an act of supererogation to consider the matter twice. It follows, therefore, that Government can exercise its powers under s. 154 in all cases with one exception only and that the finality of the order under s. 23(3) does not restrict the exercise of the power. The word 'final' in this context means that the order is not subject to an ordinary appeal or revision but it does not touch the special power legislatively conferred on Government. The Government was in error in considering that it had no jurisdiction in this case for it obviously had .

There remains the question whether a party has a right to move Government. The Tribune Trust case is distinguishable and cannot help the submission that Government cannot be moved at all.

Tue words of the two enactments are not materially equal. The Income-tax Act used the words 'suo mo tu' which do not figure here.

It is, of course, true that the words "on an application of a party" which occur in s. 150 of the Act and in similar enactments in other Acts, are also not to be found. But that does not mean that a party is prohibited from moving Government. As Government is not compelled to take action, unless it thinks fit, the party who moves Government cannot claim that he has a right of appeal or revision.

On the other hand, Government should welcome such applications because they draw the attention of Government to cases in some of which, Government may be interested to intervene. In many statutes, as for example the two major procedural Codes, such language has not only not inhibited the making of applications to the High Court, but has been considered to give a right to obtain intervention, although the mere making of the application has not clothed a party with any rights beyond. bringing a matter to the notice of the Court. After this is done, it is for the court to consider whether to act or not. The extreme position does not obtain here because there is no right to interference in the same way as in a judicial proceeding. Government may act or may not act; the choice is of Government. There is no right of relief as in an appea1

or revision under the two Codes.

But to say that Government has no jurisdiction at all in the matter is to err, and that is what Government did in this case.

The order of the High Court in these circumstances overlooked that the Government had denied to itself a jurisdiction which it undoubtedly possessed by considering that the finality of the order under s. 23(3) precluded action under s.

154. The High Court ought to have issued a mandamus to Government to deal with the application before it within its jurisdiction under s. 154. That mandamus shall now issue to Government.

The appeal is thus allowed with costs.

Appeal a//oll'ed.

STATE OF MAHARASHTRA & ORS

January 18, 1966

K. SUBBA RAO

M. HIDAYATULLAH

R. S. BACHAWAT JJ

Societies Act, 1960

ss. 23(2), 154

s. 23(2)

s. 154

s. 23(2)

s. 154

s. 23(3)

Arts. 226 and 227

s. 23(3)

s. 154

s. 154

s. 149(9)

s. 154

s. 23(3)

s. 154

CIVIL APPELLATE JURISDICTION

Bombay High Court

N. N. Keswani

B. R. G. K. Achar

Hidayatullab

Bombay

Shivdasani

Shivdasani

s. 23(2)

s. 154

Government of Maharashtra

M. G.

Mani

Section 23(3)

Section 154

Section 23(3)

Arts. 226 and 227

High Court of Bombay

Everest Co.

s. 154

Bombay Co-operative Societies Act, 1925

Maharashtra

Chapter II of the Act

Section 22

Section 23

s. 154

section

149

s. 23(3)

s. 23(3)

s. 154

s. 154

Niren De

section 9

s. 149

s. 149(9)

s. 23(3)

Maharashtra State Trjbunal

s. 154

De

s. 150

s. 33

Income Tax Act, 1922

s. 33

Simond

Section 33

Section 33

Section 33

Talbot

s. 154

s. 149(9)

s. 154

s. 23(3)

Tribune Trust

Income-tax Act

s. 150

s. 23(3)

s.

154

s. 154


• I

M. V. KRISHNAN NAMBISSAN

STATE OF KERALA

January 18, 1966

(K. SUBBA RAO, M. HIDAYATULLAH AND

R. S. BACHAWAT, JJ.]

Prevention of Food Adulteration Act (37 of 1954), ss. 7 and 16(1) (a)(i) and Prevention of Food Adulteration Rules, rr. 5, 44 and Ap,.endi:x B-Butter-mi1k-Standard of quality whether specified.

The appellant was the manager of a dairy farm.

He was charged with an offence under ss. 7 and 16(1) (a) (i) of the Prevention of Food Adulteration Act, 1954, read with r. 44 of the Prevention of Food Adulteration Rules, 1955, in that, he exposed for sale skimmed thick buttermilk, which to analysis, was fonnd to be adulterated with water tD the extent of 11 per cent, and had thus not maintained the standard prescribed for butter-milk. The trial Court acquitted him on the ground that no standard of quality was prescribed for butter-milk.

On appeal, the High Court convicted him, on the view that, the standard for milk h•s been fixed by the Rules, that the same standard was made applicable to curd and that, as butter.milk was in essence curd from which butter has been extracted, butter-milk should contain the same quantity of solids-notfat as curd should contain .

In appeal to this Court,

HELD . Appendix B to the Prevention of Food Adulteration Rules, which specifies the standards of quality of various articles of food, shows that it is not an ingredient of the definition of butter-milk that it should contain any particular percentage of solids-not-fat.

Wherever the rulemaking authority intended to prescribe a specific standard for the contents of a product, it definitely stated so, but in the case of butter-milk, no standard for contents either specifically or with reference to other items is prescribed. The only requirement is that it shall be a product obtained after removal of butter from curd by churning or otherwise. Therefore, the appellant had not committed the offence with which hy was charged.

(377 C, F-H]

CRIMINAL APPELLATE JURISDICTION :. Criminal Appeal No. 93 of 1964.

Appeal from the judgment and order dated October 11, 1963 G of the Kerala High Court in Criminal Appeal No. 153 of 1962.

R. Ganapathy Iyer, for the appellant.

P. Govinda Menon and M. R. K. Pillai, for the respondent.

The judgment of the Court was delivered by Subba Rao, J. The appellant is the manager of the Palghat Depot of Messrs. Nambissan's D. V. Dairy Farm. On July 20, 1961, one' of the Food Inspectors visited his depot and purchased from the second accused, the salesman in cha.rge of the depot, two

nazlzies of "skimmed thick butter-milk" out of the stock exposed for sale in the depot.

He sent a sample of it for analysis to the Public Analyst. The Analyst reported that the solids-not-fat content in the said sample was 7.5 per cent. as against 8 5 per cent. prescribed for curd: he was of the opinion that the sample contair;- ed not less than 11 per cent. of added water. When the sample was analysed a few months later hy the Central Food Analyst, he reported that the solids-not-fat content in the sample was only 6·4 per cent. Thereupon a complaint was filed in the Court of the District Magistrate (Judicial), Palghat, against the .ippcllant and his sales-man-we arc not concerned in this appeal with the charge against the sales-man. The charge against the appellant was that he committed an offence under s. 16(l)(a)(i) and >. 7 of the Prevention of Food Adulteration Act, 1954 (37 of 1954), hereinafter called the Act, read with r. 44 of the Prevention of Food Adulteration Rules, 1955, hereinafter called the Rules. The charge against him was that he exposed for sale "kimmed thick butter-milk" which on analysis was found to be adulterated with water tJ the extent of 11 per cent. The learned District Magistrate, on a consideration of the entire evidence placed before him, came to the conclusion that the appellant was not guilty of the offence with which he was charged: he held that no standard of quality was prescribed for butter-milk and, therefore, the accused could not be convicted for the offence under the Act and the Rules. On appeal, the High Court took the view that the standard for milk had been fixed by the Rules, that the same standard was made applicable to curd and that, as butter-milk was in essence curd from which butter had been extracted, the butter-milk should contain the same quantity of solids-not-fat as curd should contain. On this reasoning, the High Court held that, as the sample showed only 6·4 per cent. of solids-not-fat content while it should have contained 8 5 per cent. of it, the accused had committed the offence under the said provisions and sentenced him to pay a fine of Rs. 100/-, in default to suffer simple imprisonment for one month.

Hence the present appeal, by certific-Jte.

Mr. R. Ganapathy Iyer, learned counsel f.Jr the appellant, contended that the appellant was prosecuted for not maintaining the standard prescribed for butter-milk and that, as no standard was in fact prescribed for the said product, the High Court went wrong in convicting him.

To appreciate this contention it is necessary to notice the relevant provisions of the Act and the Rules.

Sectio11 2(i)(l). An article of food shall be deemed to be adulterated if the quality or purity of the article falls below the prescribed standard or its constituents are

.. t

' B

_,. , '

......

present in quantities which are in excess of the prescribed limits of variability.

Section 7. No person shall himself or by any person on his behalf manufacture for sale, or store, sell or distribute:

(i) any adulterated food:

(ii) any misbranded food;

(v) any article of food in contravention of any other provision of this Act or of any rule made thereunder. ·

Section 16. (i) If any person-

(a) whether by himself or by any person on his behalf imports into India or manufactures for sale, or stores, or distributes, any article of food in contravention of any of the provisions of this Act or of any rule made thereunder.

he shall, in addition to the penalty to which he may be liable under the provisions of s. 6, be punishable ...•

In exercise of the power conferred under s. 23 of the Act, the Central Government made rules defining the standard of quality for, anJ fixing the limits of variability permissible in respect of, any article of food.

Rule 5 reads: "Standards of quality of the various articles of food specified in Appendix B to these Rules are as defined in that Appendix."

APPENDIX B A.11.01. Milk means the normal clean and fresh secretion obtained by complete milking of the udder of a healthy cow, buffalo, goat or sheep during the period following at least 72 hours after calving or until colostrum free whether such secretion has been processed or not.

A.11.01.01. Cow milk shall contain not less than 3 5 per cent of milk fat, except in Orissa, where it shall be not less than 3 per cent and in Punjab and PEPSU where it shall be not less then 4 0 per cent. The milk solids other than milk fat shall be not less than 8 5 per cent ..

A.11.01.02. Buffalo milk shall contain not less than 5 O per cent of milk fat except in Delhi,. Punjab, PEPSU.

Uttar Pradesh, Bihar, West Bengal, Assam, Bombay and Saurashtra where it shall not be less than 6 per cent. 1he lOSup. Cl/66-11

milk solids other than milk fat shall not be less than 9 per cent.

A.11.01.03. Goat or sheep milk shall contain not less than 3 0 per cent of milk fat except in Madhya Pradesh, Punjab, PEPSU, Bombay, Uttar Pradesh and Travancore- Cochin where it shall be not less than 3 5 per cent. The milk solids other than milk fat, shall be not less than 9 per cent.

Where milk, other than skimmed milk is sold or offered for sale without any indication as to whether it is derived from cow, buffalo, goat, or sheep the standard prescribed for buffalo milk shall apply.

A.11.02. Skimmed milk, either fresh or reconstituted, means milk from which all or most of the milk fat has been removed by mechanical or any other process and includes "separated milk" or "machine skimmed milk". The milk solids other than milk fat shall be not less than 8 5 per cent.

A.11.03. Butter-milk means the product obtained after removal of butter from curds by churning or other wise.

A.11.05. (a) Table (creamery) butter means the product prepared exclusively from milk, cream or curd E of cow or buffalo or a combination thereof with or with out the addition of salt and coloured with annatto and shall contain not less than 80 per cent of milk fat and not more than 16 per cent of moisture. No preservative is permissible in table butter. Diacetyl may be added for flavour but shall not exceed 4 parts per million.

(b) Deshi (cooking) butter means the product prepared exclusively from milk, cream or curd of cow or buffalo or a combination thereof, without the addition of any salt or any colour or any preservative and intended exclusively for use in cooking or for preparation of ghee. It shall contain not more than 20 per cent of moisture and not less than 76 per cent of milk fat. Where butter is sold or offered for sale without any indication as to whether it is table butter or deshi butter, the standards of quality prescribed for table butter shall apply.

A.U.06. Dahi or curd-{a) Whole milk dahi or curd means the product obtained from fresh whole milk either of cow or buffalo by souring. It shall not contain any ingredient not found in Milk except sucrose and/or gur.

'~· •

(b) Skimmed milk dahi or curd means the product obtained from skimmed milk either of cow or buffalo by souring. It shall not contain any ingredient not found in milk, except sucrose and/or gur.

The standard of purity of dahi or curd shall be the same as prescribed for the milk from which it is derived.

Where dahi or curd, other than skimmed milk dahi is sold or offered for sale without any indication as to whether it is derived from cow or buffalo milk, the standards prescribed for dahi prepared from buffalo milk shall apply.

It will be seen from the said provisions that it is not an ingredient of the definition of butter-milk that it should contain any particular percentage of solids-not-fat. Indeed, no standard in regard t<> its contents is prescribed. The only standard, if it may be described as one, is that it shall be a product obtained after removal ef butter from curd by churning or otherwise. It is not suggested that the butter-milk in question was not a product obtained in the manner described thereunder. Prime facie, therefore, it follows. that the appellant has not committed any offence with which he was charged, namely, that he had added water to the extent of 11 per cent to the butter-milk.

Mr. Govinda Menon, learned counsel for the State, contended that a fair reading of the definition of the various milk products in Appendix B leads to an irresistible conclusion that for buttermilk the same standard of solids-not-fat prescribed for curds would apply. It was said that butter-milk was nothing more than curd from which fat had been removed and, therefore, there was n<> reason why, apart from fat, the other contents should be different from those found in the milk.

It will be seen from the definitions of the various products in Appendix B to the Rules, which we have already extracted, that wherever the rule-making authority intended to prescribe a specific standard for the contents of a product, it definitely states so. The standards of solids-not-fat are fixed for the milk of cow, buffalo, goat or sheep. Though standards are fixed for the said milk products, in defining "skimmed milk", "deshi (cooking) butter", and "skimmed milk dahi or curd" the standard of quality is prescribed with reference to other products. But when we come to butterlllilk, no standard for its contents either specifically or with reference to other items is prescribed. A comparative study of the said items leaves no room for doubt that the rule making authority, for reasons, which, we think, are obvious has not thought fit or feasible to prescribe any such standard in regard to the contents of butter-milk. We cannot by inference read some thing in the definition of butter-milk which is not there. The reason for this omis-

SUPRBME COURT

REPORTS

[1966) 3 S.C.R.

sion is presumably due to the fact that it is not possible to maintain in butter-milk the same percentage of solids-not-fat content as is found in curds or milk, for water will be added in the process of making butter-milk owing to the fact that butter grains in the chum arc washed with cold water which will run off into the butter-milk.

Anyhow, we would prefer to rest our judgment on the absence of fixation of any standard in respect of butter-milk rather than on the process of conversion of curds into butter-milk. We should not be understood to have expressed any view on the question whether a prosecution could be launched for adulteration of butter-milk under some other clauses of the definition of "adulterated" in s. 2 of the Act, for in the present case the prosecution was only for not maintaining the standard.

In the result, the order of the High Court is set aside and that Qf the District Magistrate is restored. The fine, if it had already

been collected, shall be refunded

Appeal allowed .

I

M. V. KRISHNAN NAMBISSAN

STATE OF KERALA

January 18, 1966

K. SUBBA RAO

M. HIDAYATULLAH

R. S. BACHAWAT, JJ.

Prevention of Food Adulteration Act

ss. 7 and 16(1)

Prevention of Food Adulteration Rules

ss. 7 and 16(1)

Kerala High Court

R. Ganapathy Iyer

P. Govinda Menon

M. R. K. Pillai

Subba Rao

July 20, 1961

District Magistrate (Judicial), Palghat

.ippcllant

s. 16(l)(a)(i)

R. Ganapathy Iyer

Section 7

Section 16

India

s. 6

s. 23

Central Government

Orissa

Punjab

PEPSU

Delhi

Uttar Pradesh

Bihar

West Bengal

Assam

Bombay

Saurashtra

Madhya Pradesh

PEPSU

Travancore- Cochin

Govinda Menon

s. 2


. ~· '

,. !

COMMISSIONER OF INCOME-TAX, PATIALA & ORS.

M/s. SHAHZADA NAND & SONS & ORS.

January 19, 1966

[K. SUBBA RAO. M. HIDAYATULLAH AND R. S. BACHAWAT, JJj

Indian Income-tax Act, 1922 (11 of 1922), &. 34, sub-s. 34(l)(a) as amended by the Finance Act 1956; sub"S. 34(1A)-Field of operation of the two sub-sections whether overlapping in respect of war years-Whether s. 34(1A) as a special provision over-rides s. 34(1) (a) in respect of .the -war ytars.

On March 26, 1954 the Income-tax authorities issued a notice to the respondents under s. 34(1) (a) of the Indian Income-tax Act, 1922 in respect of assessment year 1945-46. The assessment made pursuant to the notice was set aside by the appellatte authorities on the ground that the notice under s. 34(1)(a) was time baned because the assessment year in question was beyond the period of 8 years covered bys. 34(l)(a).

Sub-s<>. (IA) to (ID) were imerted in s. 34 by the Income-tax (Amendment) Act 1954. By sub-s. (IA) power was given to the Income-tax authorities to issue notice in respect of escaped income of the previous years within the period September 1, 1939 to March 31,

1946. By the Finance Act 1956 with effect from April 1, 1956 s. 34(1) (a) was amended so that notices in respect of """!IPed income could be issued 'at any time' subject to certain conditions. ·-0n July 25, 1958 tho Income-tax Officer again issued a notice to the respondents calling upon them to file a return for tho as3CSSment year 1945-46. An appeal to the Centrll Board of Revenue by some of respondents failed. Thereupon they filed a petition und"" Art. 226 of the Constitution challenging the notice on various grounds. Their main contention Wat that no notice under s. 34(l)(a) couid be issued in respect of the war years as tbe escapee.I income of the said war years was governed by ' 34(lA), whereunder notices could be issued only up to March 31, 1956. The High Coutt having taken a view favourable to the respondents, the Revenue appealed to this Court by special leave.

It was contended on behalf of the appellant that the terms of s. 34(1)(a) after its amendment in 1956 were clear and unambiguous and the scope of the expression 'at any time' could not be curtailed by cons' truction and that s. 34( IA) did not operate to restrict the operation of s. 34(1)(a) in respect of the war years. On behalf of tbe respondents it was contended thats. 34(1A) was a species of which s. 34(1)(a) was genus that in respect of the war years th..-e was a conflict between. the two sub-sections, and that in view of the maxim, generalia specialibus non _derogant, s. 34( IA) should prevail.

HElD:

(i) It would not be appropriate to describe subJS. (IA) aJJ one carved out of sub-s. (l)(a) or to call it a species of which sub-s. (!)(a) is the genus.

When s. 34(1A) was enacted s. 34(1)(a) bad practically ceased to function in respect of the war years.

Again wheri S 34(1)(a) was amended with effect from April 1, 1956 s. 34(1A) had practically ceased to operate as no notices under it could be issued after March 31, 195 6.

There is no conflict between the two sub-sections. after that date. The wide phraseology of the amended s. 34(1) (a) take•.

in all the escaped concealed incomes during all the yeara oommencing from 1941 and confers power on the lncome-iax Officer to give notice there under in respect of the •aid income without any bar of limitation.

[390 C-FJ

(ii) Sub.Section (IA) does not really preocribe any period of lirnita tion. It enables the Income-tu Officer to !&kc proceedings within a panicular time, though the period of limitation had expired. It conferred a special power on the Income-tax Officer which expired on April I,

1956. The non.obstante clause in llllH. (IA) indicatea that it waa enacted to operate notwithstanding that the period of 8 yoan had expired. The 1aid sub-section served its purpose only when the period of 8 yeara governed a notice under su!H. (I) (a). But when that bar of limilation was removed, sub-s. (IA) bad become otiose. (390 G-391 Al

Funher sub-s. (IB) as amended by the Fmance Act of 1956 and 111b-1. 4 added by tho In4i1D Inotu Act (Alllendmcat) Act 19St,

also reinforces the construction that su!H. 34(l)(a) as amended in 1956 was applicable to the war years despite sub~. 34(1A). (391 B., D-E]

(iii) The reason why su!H. (IA) wea retained in the statute even after the Finance Act of 1956 was that though DD new notices could be isimed under that sulH; ection after April 1, 1956, notices already issued before that date were pending. They could be disposed of in the manner prescribed by su!Hls. (IA), (IB), (IC), and (IDl of s. 34.

All the aid 111b"ctions formed an intq1al code. 11io lcPiature, premmably,

intended to keep the said sub-oectiOlllJ whercunder proceedings had already been initiated and make available to the said proceedings the procedure prescribed under the said provisions. It may also be that sub,,. (IA) wea kept in super abundant caution. What.ever that may be, it cannot, in the circumstances, detract from the clear provisions of sub-s. (I) (a).

1391 F, G]

Case law referred to.

Qvn. APPFH.ATE JtJP.ISDICTION and 495 of 1964.

Civil Appeals Nos. 494

Appeals by special leave from the judgment and order datod September 26, 1961 of the Punjab High Court in Civil Writ No. 80lof1959.

F S. T. Desai, R. Ganapathy Tyer and R. N. Sachthey, for the appellant.

N. A. Palkhiva/a, l. M. Nanavati, T. A. Ramachandran, J. B.

Dadachanji, 0. C. Mathur and Ravinder Narain, for the respon- •• G N. A. Palkhivala, J. B. Dadachanji, 0. C. Mathur and Ravinder Narain, for intervener Nos. I and 2.

[, M. Nanavali, J. B. Dadachanji, 0. C. Mathur and Ravirtder Narain, for intervener No. 3.

N. A. Palkhivala, R. J. Ko/ah, J.B. Dadachanji, 0. C. Mathur H and Rll'linder Narain, for intervener No. 4.

D. N. Mukherjee, for intervener No. 5.

.> .,

/ '

A The judgment of the Court was delivered by

Sobba Rao, J. These two appeals, one by special leave and the other by certificate, raise the question whether notice can be issued at any time for reassessment under s. 34(1)(a), as amended by the Finance Act, 1956, of the Indian Income-tax Act, 1922, hereinafter called the Act, in respect of a concealed income to which s. 34(1A) thereof applied.

The facts may be briefly stated. Messrs. Shahzada and Sons, the lst respondent in both the appeals, was an undivided Hindu Family firm and it was assessed in that capacity up to the assessment year 1945-46. It is alleged that subsequently there was a partition in the family and a new firm came into existence, whic\ took over the business of. the family. On March 26, 1954, the Income-tax authorities issued a notice to the members of the clefunct Hindu undivided family under s. 34(1)(a) of the Act i11 respect of the assessment year 1945-46 on the ground that certain •ncome of the said family had escaped assessment. Pursuant to the proceedings so initiated, a sum of Rs. 3,63,000/- was added to the original assessment of the said family. The assessee took up the matter on appeal to the Appellate Assistant Commissioner, who held that the said notice was barred by time, though on the merits he confirmed the order of the Income-tax Officer. The Income-tax Department as well as the l st respondent preferred appeals against the said order to the Income-tax Appellate Tribunal. The Tribunal held that the notice was barred by time and, therefore, the' income-tax authorities had no jurisdiction to give a finding on the merits. Meanwhile s. 34(1)(a) of the Act was amended by the Finance Act, 1956, with effect from April l, 1956, whereunder, subject to certain conditions, a notice under s. 34(1)(a) could be issued at any time. Thereafter, on July 25, 1958, the Income-tax Officer issued a notice to the 1st respondent calling upon the members who constituted the undivided family to file a return for the assessment year 1945-46. Respondents 2 to 5, who were the members of the said undivided Hindu family, appealed to the Central Board of Revenue for redress without any success. Thereafter, they filed a petition under Art. 226 of the Constitution in the High Court of Punjab challenging the notice on various grounds. Their main contention was that no notice under s. 34(l)(a) could be issued in respect of the war years, as the escaped income during the said years was governed by s. 34(1A) of the Act whereunder a notice .could be issued only before March 31, 1956. The writ petition

came up before a single Judge of the High Court, who referred the following question to a larger Bench :

"Whether or not in the circumstances of the present case the notice under section 34 issued on 25th July 1958 was barred by time."

The Division Bench, in its turn, referred the said queation to a Full Bench. The Full Bench, inter alia, held that s. 34(1A) was a special provision whereas s. 34(1)(a) was a general provision and that, as the escaped income of the year 1945-46 was governed by s. 34(1A), no notice under s. 34(1)(a) could be issued. In the result, after expressing that view, the Full Bench sent back the case to the single Judge before whom it came in the first instance. Dua, J., who heard the petition, following the view expressed by the Full Bene.Ii, allowed the petition. The appellants, thereafter, preferred a Letters Patent appeal against that order to a Division Bench, which dismissed the same. Civil Appeal No. 494 of 1964 has been !iled by the Revenue by special leave against the order of the Full Bench dated September 8, 1961, and Civil Appeal No. 495 of 1964 has been filed, by certificate, by the Revenue against the order of the Division Bench confirming that of Dua, J.

At the outset it will be convenient to read the material pro' visions of s. 34 of the Act as amended by the Finance Act, 1956, and by the Income-tax (Amendment) Act, 1959.

Stction 34. (I} If-

(a) the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income-tax have escaped assessment for that y(:ar, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed.

he may in cases falling under clause (a) at any time ................ serve on the asscssee .............. .. a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 22 and may proceed to assess or reassess such income .. profits or gains or recompute the loss or depreciation allowance; and the provisions of this Act shall,

SO> far as may be, apply accordingly as if the notice were a notice issued under that sub-section :

Provided that the Income-tax Officer shall not issue a notice under clause (a) of sub-section (1)-

(i) for eny year prior to the year ending on the 31st day of March, 1941;

(ii) for any year, if eight years have elapsed after the expiry of that year, unless the income, profits or gains

.-' ,..,, -1 B ,

chargeable to income-tax which have escaped assessment or have been under-assessed or assessed at too low a rate or have been made the subject of excessive relief under this Act, or the Joss or depreciation allowance which has been computed in excess, amount to, or likely to amount to, one Jakh of rupees or more in the aggregate, either for that year, or for that year and any other year or years after which or after each of which eight years have elapsed, not being a year or years ending before the 3 Ist day of March, 1941;

(iii) for any year, unless he has recorded his reasons for doing so, and, in any case falling under clause (ii), unless the Central Board of Revenue, and, in any other case, the Commissioner, is satisfied on such reasons recorded that it is a fit case for the issue of such notice :

(IA). If in the case of any assessee, the Income-tax Officer has reason to believe :-

(i) that income, profits or gains chargeable to incometax have escaped assessment for any year in respect of which the relevant previous year falls wholly or partly within the period beginning on the !st day of September, 1939, and ending on the 31st day of March, 1946, and

(ii) that the income, profits or gains which have so escaped assessment for any such year or years amount, or are likely to amount, to one Jakh of rupees or more,

he may, notwithstanding that the period of eight years or, as the case may be, four years specified in sub-section (I) has expired in respect thereof, serve on the assessee ....................... . a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 22, and may proceed to assess or re-assess the income, profits or gains of the assessee for all or any of the years referred to in clause (i), and thereupon the provisions of this Act [excepting those contained in clauses (i) and (iii) of the proviso to sub-section (I) and in subsections (2) and (3) of this section], shall, so far as may be, apply accordingly :

Provided that the Income-tax Officer shall not issue a notice under this sub-section unless he has recorded his reasons for doing so, and the Central Board of Revenue is satisfied on such reasons. recorded that it a fit ease for the issue of such notice :

Provided further that no such notice shall be issued after the 3.lst day of March, J 956 •

(IB) Where any assessee to whom a notice has been issued under clause (a) of sub-section (I) or under sub-section (IA) for any of the years ending on the 31st day of March of the years 1941 to 1948 inclusive applies to the Central Board of Revenue at any time within six months from the receipt of such notice or before the assessment or re-assessment is made, whichever is earlier, to have the matters relating to his asessment settled, the Central Board of Revenue may, after considering the terms of settlement proposed and subject to the previous approval of the Central Government, accept the terms of such settlement, and, if it does so, shall make an order in accordance with the terms of such settlement specifying among other things the sum of money payable by the assessee.

(IC) Any sum specified in a settlement arrived at in pursuance of sub-section (IB) may be recovered and any penalty for default in making payment of any such sum may be imposed and recovered in the manner provided in Chapter VI.

(ID) Any settlement arrived at under this section shall be conclusive as to the matters stated therein; and no person, whose assessments have been so settled, shall he entitled to re-open in any proceeding for the recovery of any sum under this Act or in any subsequent assessment or re- E .assessment proceeding relating to any tax chargeable under this Act or in any other proceeding whatsoever before any court or other authority any matter which forms part of such settlement.

(4) A notice under clause (a) of sub-section (I) may he issued at any time notwithstanding that at the time of the issue of the notice the period of eight years specified in that sub-section before its amendment by clause (a) of section 18 of the Finance Act, 1956 (18of1956) had expired in respect of the year to which the notice relates.

Sub-section (I A) was inserted in s. 34 of the Act by the Income-tax (Amendment) Act, 1954, and it came into force on July 17, 1954. aause (a) of sub-s. (I) of s. 34 was amended by the Finance Act, 1956, with effect from April I, 1956. Sub-section (IB) of s. 34, which was inserted by the Income-tax (Amendment) Act, 1954, was also amended by the Finance Act, 1956, whereunder the wordi

"to whom a notice has been issued under clause (a) of sub-section (I) or under sub-section (IA) for any of the years ending on the 31st day of March of the years 1941 to 1948 inclusive" were substituted for the words "to whom a notice has been issued under sub-

... '

.. ,

' ......

section (lA)." Sub-section (4) was added by the Income-tax (Amendment) Act, 1959.

The gist of the relevant provisions may be stated thus : Under s. 34(l)(a), before it was amended by the Finance Act, 1956, in the case of concealed income a notice for re-assessment could be issued within 8 years of the end of the relevant year; and after the said amendment, notice in respect of the said income could be issued at any time, but it was subject to three conditions, namely,

(i) it would not be issued for any year prior to the year ending on March 31, 1941, (ii) such concealed income amounted to one lakh of rupees or more in the aggregate, and (iii) the Income-tax Officer gave reasons for doing so and obtained the consent of the Central Board of Revenue. Sub-section (IA) of s. 34 did not undergo any change after the Finance Act, 1956. Escaped assessment for any year in respect of which the relevant previous year fell within the period beginning on September I, 1939, and ending on March 31, 1946, could be reached by issuing a notice thereunder: but, it was subject to the condition that the income which escaped assessment for any year amounted to or was likely to amount to rupees one lakh or more; it was subject to a further condition that no such notice should be issued after March 31, 1956. Sub-section (lB) of s. 34, as amended in 1956, enabled an assessee to whom a notice has been issued under cl. (a) of sub-s. (l) or sub-s. (IA) for any of the years ending on March 31 of the years 1941 to 1948 inclusive, to apply to the Central Board of Revenue for a settlement of the amount of tax payable by him, Sub-section (4), which was inserted in 1959, emphasized the fact that a notice could be issued under s. 34(1)(a), notwithstanding that the time of 8 years had expired before the Finance Act, 1956, came into force.

We may at this stage notice the arguments advanced by learned counsel on the interpretation of the said provisions.

The arguments of Mr. S. T. Desai, learned counsel for the

evenue, may be summarized thus : The terms of s. 34(l)(a), after its amendment by the Finance Act, 1956, are clear and unambiguous and the scope of the expression "at any time" cannot be curtailed by construction. So construed, proceedings for re-assessment in respect of escaped income contemplated by the said clause can be initiated without any restriction of time. The legislative history of the fasciculus of sub-sections, namely, sub-ss. (l)(a), (IA), (lB), (1 C) and (ID) of s. 34, supports the said construction and explains the relative scope of s. 34(l)(a) and s. 34(1A)-the former, as amended by the Finance Act, 1956, operated after s. 34(1A) ceased to operate so far as the escaped concealed income of war years was concerned. The amendment of s. 34(1B) by the said Act and the introduction of s. 34(4) by the Income-tax (Amendment) Act, 1959, reinforces the said construction, namely,

that the amended s. 34(1)(a) lifted the ban of limitation also in respect of the escaped income of the war year,. The retention of s. 34(1A) on the statute became necessary as proceedings taken thereunder were pending at the time the Finance Act, 1956, came into force and the consequentiai provisions, such as, s. 34(1 B) etc .•

ith whlch s. 34(1A) "as integrally connected could not be applied 1f the latter was omitted.

Further, the said sub-sections still applied to incomes falling under s. 34( l)(b) in respect of war years.

In any view. it must have been retained in superabundant caution and that fact could not restrict the scope of an otherwise clearly expressed provision, ri::., s. 34(1)(a). The construction accepted by the High Court led to the anomalous position of the Legislature prescribing a shorter period of limitation in the case of tax-evaders during the war years and no p!riud of limitation for evaders of such income during the pre-war and post-war years.

This could not have been the intention of the Legislature, as the evasion of tax during the war years was comparatively of larger amounts than during the other periods and for that very reason it has passed the Taxation of Income (Investigation Commission) Act, 1947, which was declared to be void by this Court. This contention was accepted by the Bombay and Calcutta High Courts in Laxminarayan R. Rachi v. Income-tax Officer, Poona (') and Mandanlal Jajodia v. Income-tax Officer, Dist. IT(l), Calcutta (2) respectively,

Mr. Palkhivala, learned counsel for the respondents, answered this criticism thus.

In a taxing Act one has to look merely what is clearly stated and, if the interpretation is open to doubt, the construction most beneficial to the subject must be adopted. Section 34(l)(a), before it was amended in 1956, provided for the genus out of which, hy the Income-tax (Amendment) Act, 1959, the species of ' 34(1A) was carved out. Whiles. 34(1 )(a) was a general provision. s. 34(1A) was a special provision. On the principle of genera/ia specia/ibus 11011 deroganr, the field covered by s. 34(1A) should be excluded from that covered by s. 34(1)(a). If that was the legal position before the 1956 amendment, the argument proceeded. the same position would continue thereafter, as Parliament retained s. 34(1A), along with ih provisos. as it stood before the amendment and amended only s. 34(1)(a). The lifting of the han of limitation, therefore, sh<>uld, on the basis of the said dnctrine, he confined to the field co1ered bys. 34(1)(a) hcfore the amendment. If Parliament intended to do away with the period of limitation in respect of the escaped incomes during the \\ar period, it would not h:ive retained s. 34(1A) on the statute hook; for, in that event, it would serve no purpose. It "ould be wrong to say that it ceased to be operative after April I, 1956, for the period of limitation would still apply to proceedings in respect of escaped incomes of the war years.

Sub-s. (4) added ins. 34 in the year 1959 ands. 34(16), as amended

(I) (1964) s2 r:r.R. 2s4.

(2) (1965) 58 I.T.R. 693.

' .

in 1956, would not throw any light on the question, but in a way would support the view that they were concerned only with the escaped incomes covered by s. 34(\)(a), excluding thereform those covered bys. 34(1A). The argument based on the alleged anomaly led nowhere and indeed the retention of s. 34(1A) on the statute book was intentionally done, as the Parliament, having already placed a particular class of assessees under a special and heav.y burden, did not think fit to make any provision which was likely to harass them further. The ambiguity in the section, if any, should go for the benefit of the tax-payer and not the tax-gatherer.

This argument was accepted by the Madhya Pradesh and Gujarat High Courts in Rustomji v. Income-tax Officer, Special Investigation Circle, lndore(I), and Mathurdas Govinddas v. G. N. Gadgil, Income-tax Officer, Special Investigation Office, Ahmedabad (2).

Before we advert to the said arguments, it will be convenient to notice the relevant rules of construction. The classic statement of Rowlatt, J., in Cape Brandy Syndicate v. I.R.C. (3). still holds the field. It reads :

"In a Taxing Act one has to look merely at what is clearly said. There is no room for any intendment.

There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used."

To this may be added a rider : in a case of reasonable doubt, the construction most . beneficial to the subject is to be adopted.

But even so, the fundamental rule of construction is the same for all statutes, whether fiscal or otherwise. "The underlying principle is that the meaning and intention of a statute must be collected from the plain and unambiguous expression used therein rather than from any notions which may be entertained by the court as to what is just or expedient." The expressed intention must guide the court.

Another rule of construction which is relevant to the present enquiry is expressed in the maxim, generalia specialibus non derogant, which means that when there is a conflict between a general and a speciai provision, the latter shall prevail. The said principle has been stated in Craies on Statute Law, 5th Edn., at P. 205, thus :

"The rule is, that whenever there is a particular enactment and a general enactment in the same statute, and the latter, taken in its most comprehensive sense, would overrule the former, the particular enactment must be operative, and the general enactment must be taken to 1 affect only the other parts of the statute to which it may . properly apply."

(I). [1964] 54 I.T.R. 461

(2) [1965] 561.T.R. 6;!1!

(3) [1921] I K.B. 64, 71.

But this rule of construction is not of universal application. It A is subject to the condition that there is nothing in the general provision, expressed or implied, indicating an intention to the contrary : see Maxwell on Interpretation of Statutes, I Ith Edn., at pp. 168-169. When the words of a section are clear, but its scope is sought to be curtailed by construction, the approach suggested by Lord Coke in lleydons case('), yield better results : B "To arrive at the real meaning, it is always necessary to get an exact conception of the aim, scope, and object of the whole Act : to consider, according to Lord Coke :

(1) What wasthelawbeforetheAct was passed; (2) What was the mischief or defect for which the law had not provided ; (3) What remedy Parliament has appointed : and c

(4) Thereasonoftheremedy."

With these rules of construction in mind, let us now tackle the problem raised in this case.

Under s. 34{1)(a), after it was amended by the Finance Act, 1956, a notice in respect of an escaped concealed income could be issued at any time. The terms of cl.

(a) and the expression "at any time" are clear and unambiguous and, if there is nothing in the Act detracting from the width of the said terms, it is clear that a notice can be issued at any time in respect of the concealed income of any year not being a year ending before March 31, 1941. But s. 34(1A) provides for the issue of notice in respect of escaped income of the previous years within the period beginning on September I, 1939, and ending on March 31, 1946.

Does this sub-section detract from the generality of s. 34(l)(a) ? The history of the said provision may usefully be noticed. As we have stated earlier, the Parliament passed the Taxation of Income (Investigation Commission) Act, 1947, mainly to catch the escaped incomes of the war profiteers. This Court in Suraj Mall Moh ta and Co. v. A. V. Viswanatha Sastri (2) and Muthiah v. C.1.T. (l) held that s. 5(4) and 5(1) of the said Act became void on the commencement of the Constitution as offending Art. 14 thereof. The first decision led to the insertion of sub-ss. (lA) to (lD) ins. 34 by the Income-tax (Amendment) Act, 1954, with effect from July 17, 1954. The object of the Amending Act was to provide for the assessment or re-assessment of persons who had, to a substantial extent, evaded payment of taxes during the war years and for matters connected therewith. But at the time sub-s. (IA) was inserted in s.34, the period of limitation provided with regard to issue of notices under s. 34(l)(a) was 8 years and for cases falling under s. 34(1)(b) it was 4 years; but, as the Income-true (Amendment) Act, 1954, came into force only on July 17, 1954, tk said periods of limitation prescribed in respect of escaped concealed incomes during the said period had run out except in respect

(1) [!584! 3 Rep. 7b.

(2) [1955) t S.C.R. 448.

(3) (1955] 2 S.C.R. 1247.

• ,,.,

I .. \

E - F

of one or two years. So, with the twin object of extending the time and expediting the assessment, the second proviso was introduced therein to the effect that no such notice should be issued after March 31, 1956. But, notwithstanding the said Act, presumably notices could not have been issued against all the evaders of tax with incomes of rupees one lakh or more during the said period. Parliament also wanted to bring to tax escaped concealed incomes during the period not covered by the said years. With that object, in 1956 s. 34 was amended by the Finance Act, 1956, by which it was provided that notice under s. 34(l)(a) can be issued at any time. But sub-s. (IA) was retained, including the second proviso. This amendment, along with the other amendments, made by the said Act came into force on April I, 1956. In 1959, the said section was again amended by the Indian Income-tax (Amendment) Act, 1959.

Under sub-s. (4), as amended by the 1959 amendment Act, notice under sub-s. (!)(a) might be issued at any time notwithstanding that at the time of the issue of notice the period of 8 years specified in that sub-section before its amendment by the Finance Act, 1956, had expired in respect of the year to which the notice related. This amendment was necessitated by the judgments of the Bombay and ca!cutta High Courts in Debi Dutt v. T. Belan(I) and S. C. Prashar v. Vasantsen (2) respectively holding that if the right of the Income-tax Officer to reopen an asessment was barred under the law for the time being in force, no subsequent enlargement of the time could revive such right in the absence of express words or necessary intendment. Sub-section ( 4) was added to s. 34 to make it abundantly clear that notice under s. 34(1)(a) could be issued at any time notwithstanding that the said right was barred before the Amendment Act of 1956. This history of the legislation leaves no room for doubt that the intention of the Legislature was to bring the escaped concealed income of rupees one lakh and more to tax without any time limit. Before the 1956 Act was passed, the period of limitation prescribed for proceeding against concealed incomes of rupees one lakh and more during the war years and the earlier years had expired. The Legislature stepped in to prevent evasion of taxes on such incomes and lifted the ban of limitation in respect thereof, subject to certain conditions.

But the crucial question is, whether the Legislature by making the relevant amendments has succeeded to effectuate its intention.

To state it differently, do the amended provisions carry out its intention ?

Section 34(l)(a), as it now stands on the statute book, expressly states that in cases falling under cl. (a) of sub-s. (I) notice can be served thereunder on an assessee at any time. The terms of s. 34(a) read with the 2nd proviso, take in the concealed incomes of all the

(I) [1959] 35 I.T.R. 781.

(2) [1956] 29 I.T.R. 857

years commencing from the year ending on March 31, 1941. It does not exclude the incomes of the war years, but the said incomes are sought to be excluded on the principle of genera/ia specia/ibus non derogant.

As we ha\'e pointed out earlier, the said doctrine embodies a rule of construction, but it has no universal application.

To invoke it, the general and special provisions shall occupy the same field.

In this case, hoth during the period between the amendments of 1954 and 1956 and thereafter they occupied different fields.

By July 17, 1954, when sub-s. (IA) was introduced ins. 34, no proceedings under s. 34(l)(a) could be initiated except for the assessment year 1946-47 in respect of the previous years that fell within the period beginning on September J, 1939, and ending on March 31, 1946, for they were barred under the unamended section. Sub-section (IA), therefore, practically governed a situation that was not governed by the provisions of s. 34\l)(a).

It was intended to catch escaped incomes of the war years which were out of the reach of s. 34(1 )(a). It is not, therefore, appropriate to describe suh-s. (IA) as one carved out of sub-s. (l)(a) or to call it a species of which sub-s. (a)(!) is the genus.

Sub-section (IA) operated where sub-s. (l)(a) practically ceased to function.

Now, coming to the period after the Finance Act, 1956, was passed, i.e., after April I, 1956, a different situation arose. The extended period given under the second proviso to sub-s. (IA) expired on March 31, 1956. Thereafter, sub-s. (IA) ceased to be operative in the sense that no notice could thereafter be given thereunder. It worked itself out. The Legislature could have extended the period under the second proviso to sub-s. (IA), but it did not do so. It did not give a further lease of life to it; instead it removed the period of limitation under sub-s. (l)(a), as sub-s. (IA) had become practically defunct. The wide phraseology of sub-s. (l)(a) takes in all the escaped concealed incomes during all the years commencing from 1941 and confers a power on the Income-tax Officer to give notice thereunder in respect of the said income~ without any bar of limitation. There is, therefore, no conflict after April I, 1956, between sub-s. (l)(a) and sub-s. (IA), as the latter ceased to be operative.

There is another way of looking at the problem. Sub-section (IA) does not really prescribe any period of limitation. It enables the Income-tax Officer to take proceedings within a particular time, though the period of limitation had expired. Jn this view, no question of carving out a species out of a genus arises. It conferred a special power on the Income-tax Officer and the said power expired on April I. l 956.

There is yet another way of looking at the problem. The nonobstante clause in sub-s. (IA) indicates that it was enacted to operate notwithstanding that the period of 8 years had expired. The said

>-- ---.. ,

sub-section served its purpose only when the period of 8 years governed a notice under sub-s. (!)(a). But when that bar of limitation was removed, sub-s. (IA) had become otiose .

Sub-section (IB), as amended by the Finance Act of 1956, also throws some light on the interpretation of s. 34. Before it was amended, an assessee to whom a notice had been issued under sub-s. (l)(a) could apply to the Central Board of Revenue for settlement of the amount of tax payable by him. After the amendment, an assessee to whom a notice was given under sub-s. (!)(a) and under sub-s. (IA) for any of the years ending on March 31, 1941 to 1948 could apply for such a relief to the Central Board of Revenue. The years 1941 to 1948 are the war years. This sub-section, therefore, assumes that notice could be issued in respect of the war years under sub-s. (l)(a). The notice contemplated by sub-s. (IB) could only be a notice after the amendment of 1956, for such notice could not have been issued earlier under sub-s. (!)(a) in respect of the said years. The notice under sub-s. (IA) obviously refers to the notice issued before the amendment of 1956 and pending disposal.

Sub-section (4) added by the Indian Income-tax (Amendment) Act, 1959, also reinforces the said construction. As indicated earlier, that sub-section was added to get over the legal objection that proceedings barred before 1956 were not revived underthe 1956 Act.

It is true that sub-s. (4) refers only to sub-s. (!)(a), but the subsection indicates that the Legislature assumed that proceedings after 1956 could only be taken under sub-s. (!)(a).

It was asked, with some plausibility, if the Legislature assumed that sub-s. (IA) ceased to be operative, why it was retained along with its proviso prescribing a period of limitation in the amended section. Though no new notices could be issued under that sub-· section after April I, 1956. notices aleady issued before that date were pending. They would be disposed of in the manner prescribed by sub-ss. (IA), (IB), (IC) and (ID) of s. 34. All the said sub-sections formed an integral code. The Legislature, presumably, intended to keep the said-sub-sections whereunder proceedings had already been initiated and make available to the said proceedings the procedure prescibed under the said provisions.

It may also be that sub-s. (IA) was kept iq super-abundant caution.

Whatever that may be, it cannot, in the circumstances mentioned by us, detract from the clear provisions of sub-s. (l)(a).

--1 We have carefully gone through the judgments of the various H High Courts, namely, Bombay, Madhya Pradesh, Gujarat and Calcutta, cited at the Bar.

We received considerable help from the reasonings contained in the said judgments. As we have in the course of the judgment dealt \vith the conflicting reasons given by M 10 Sup. C.1./66-12.

the High Courts, \\e do not think it necessary to consider each of the A four judgments in detail.

For the reasons mentioned above, we agree with the conclusion arrived at by the Bombay and Calcutta High Courts in preference to those reached by the Madhya Pradesh and Gujarat High Courts.

In the result, the order of the High Court is set aside and the 8 petition filed under Art. 226 of the Constitution is dismissed. The appeals are allowed with costs one hearing fee.

Appeal" allowed.

M/s. SHAHZADA NAND & SONS & ORS

K. SUBBA RAO. M. HIDAYATULLAH

R. S. BACHAWAT

Indian Income-tax Act, 1922

s. 34(l)(a)

Finance Act 1956

S. 34(1A)

s. 34(1A)

s. 34(1)

s. 34(1)

Indian Income-tax Act, 1922

s. 34(1)(a)

s. 34

March 31,

1946

By the Finance Act 1956

April 1, 1956

s. 34(1)

July 25, 1958

Centrll Board of Revenue

Art. 226

s. 34(l)(a)

March 31, 1956

s. 34(1)(a)

s. 34( IA)

s. 34(1)(a)

s. 34(1)(a)

s. 34( IA)

s. 34(1A)

s. 34(1)(a)

S 34(1)(a)

s. 34(1A)

March 31, 195 6

s. 34(1)

s. 34

F S. T. Desai

R. Ganapathy Tyer

R. N. Sachthey

N. A. Palkhiva

M. Nanavati

T. A. Ramachandran

C. Mathur

Ravinder Narain

G N. A. Palkhivala

M. Nanavali

B. Dadachanji

Ravirtder Narain

N. A. Palkhivala

R. J. Ko

J.B. Dadachanji

C. Mathur H

Rll'linder Narain

D. N. Mukherjee

Sobba Rao

s. 34(1)(a)

Finance Act, 1956

Indian Income-tax Act, 1922

s. 34(1A)

Shahzada and Sons

March 26, 1954

s. 34(1)(a)

s. 34(1)(a)

s. 34(1)(a)

Central Board of Revenue

Art. 226

High Court of Punjab

s. 34(l)(a)

s. 34(1A)

section 34

25th July 1958

s. 34(1A)

s. 34(1)(a)

s. 34(1A)

s. 34(1)(a)

Dua

September 8, 1961

s. 34

Act as amended by the Finance Act, 1956

section 22

section 22

31st day of March, 1941

3 Ist day of March, 1941

st day of September, 1939

31st day of March, 1946

section 22

3.lst day of March, J 956

Central Government

section 18

Finance Act, 1956

s. 34

July 17, 1954

s. 34

Finance Act, 1956

s. 34

Finance Act, 1956

s. 34(l)(a)

Finance Act, 1956

March 31, 1941

s. 34

Finance Act, 1956

September I, 1939

March 31, 1946

s. 34

s. 34(1)(a)

Finance Act, 1956

S. T. Desai

s. 34(l)(a)

Finance Act, 1956

s. 34

s. 34(l)(a)

s. 34(1A)

Finance Act, 1956

s. 34(1A)

s. 34(1B)

s. 34(4)

s. 34(1)(a)

s. 34(1A)

Finance Act, 1956

s. 34(1 B)

s. 34(1A)

s. 34( l)(b)

s. 34(1)(a)

Bombay and Calcutta High Courts

Palkhivala

Section 34(l)(a)

s. 34(1A)

s. 34(1A)

s. 34(1)(a)

Parliament

s. 34(1A)

s. 34(1)(a)

s. 34(1A)

s. 34(\)(a)

s. 34(1A)

Madhya Pradesh and Gujarat High Courts

Rowlatt

Coke

s. 34

Finance Act, 1956

s. 34(1A)

s. 34(l)(a)

s. 5(4) and 5(1)

Art. 14

s. 34(l)(a)

s. 34(1)(b)

(1955] 2 S.C.R. 1247

s. 34

Finance Act, 1956

s. 34(l)(a)

April I, 1956

Finance Act, 1956

Bombay and ca!cutta High Courts

s. 34

s. 34(1)(a)

Section 34(l)(a)

s. 34(a)

s. 34(l)(a)

September J, 1939

s. 34

s. 34(1 )(a)

Finance Act, 1956

April I. l 956

s. 34

March 31, 1941 to 1948

s. 34

Gujarat

Calcutta

Art. 226