Saving clause includes reassessment, and a mere misdescription of the statutory source does not invalidate tax notices.

The saving clause in section 7 of the Taxation Laws (Extension to Merged States and Amendment) Act, 1949 was read in its plain and ordinary sense, so that "assessment" included reassessment. On that construction, the power to initiate reassessment proceedings under section 34 of the Indian Income-tax Act, 1922 was preserved and the notices were valid on that ground. The Court also held that omission of the words showing the Act as applied to Nandgaon State was only a misdescription: where the underlying authority to act exists and is identifiable, an incomplete statutory citation does not invalidate the notice. The reassessment notices were therefore upheld as valid in law.

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Issues: (i) Whether the saving clause in section 7 of the Taxation Laws (Extension to Merged States and Amendment) Act, 1949 preserved the power to initiate reassessment proceedings under section 34 of the Indian Income-tax Act, 1922; (ii) Whether notices issued by the Income-tax Officer were invalid because they referred to section 34 of the Indian Income-tax Act without stating that it was the Act as applied to the Nandgaon State.

Issue (i): Whether the saving clause in section 7 of the Taxation Laws (Extension to Merged States and Amendment) Act, 1949 preserved the power to initiate reassessment proceedings under section 34 of the Indian Income-tax Act, 1922.

Analysis: The expression "assessment" in the saving clause was held to bear its plain and ordinary meaning, which includes the process of reassessment. The Court treated reassessment as one of the processes by which tax is ascertained, demanded and realised, and held that the saving could not be read in a restricted sense so as to preserve only original assessments while excluding reassessments. The Court also noted that, where a statute is repealed and substantially reenacted, the unchanged provision may be treated as continuously in force.

Conclusion: The power to initiate reassessment proceedings was preserved, and the notices were valid on this ground.

Issue (ii): Whether notices issued by the Income-tax Officer were invalid because they referred to section 34 of the Indian Income-tax Act without stating that it was the Act as applied to the Nandgaon State.

Analysis: The omission of the qualifying words was treated as a mere slip. The Court held that where the authority to act exists, a wrong or incomplete description of the source of power does not invalidate the action if the appropriate legal power is identifiable. The notices could therefore be referred to the correct statutory authority without affecting their validity.

Conclusion: The notices were not invalid for incorrect citation of the statutory source.

Final Conclusion: The appeal failed, and the reassessment notices were upheld as valid in law.

Ratio Decidendi: In a saving clause, the term "assessment" may include reassessment, and a mere misdescription of the statutory provision does not vitiate a notice when the underlying power exists and is otherwise identifiable.

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