Accrued tax liability survives omission of a charging provision where no contrary intention appears, preserving reassessment power.

The omission of section 35(10) of the Indian Income-tax Act, 1922, by the Finance Act, 1959, did not by itself extinguish liabilities that had already accrued when dividends were declared out of profits previously allowed rebate. Because the provision was not shown to be a temporary enactment and there was no contrary legislative intention, section 6 of the General Clauses Act, 1897, preserved the accrued liability and the power of the Income-tax Officer to recompute the assessment. The authority to act remained available so long as proceedings were initiated within the prescribed four-year period, and the reassessment action was therefore valid.

---

---

Issues: Whether the omission of section 35(10) of the Indian Income-tax Act, 1922, by the Finance Act, 1959, deprived the Income-tax Officer of jurisdiction to initiate and complete reassessment proceedings under that provision, or whether section 6 of the General Clauses Act, 1897, preserved the liability and the power to act.

Analysis: Section 35(10) was introduced by the Finance Act, 1956, to permit recomputation of tax where rebates earlier allowed on undistributed profits were later neutralised by dividend declarations. The provision did not contain any indication that it was temporary in the sense of expiring automatically after a fixed period. The omission made by the Finance Act, 1959, was treated as a repeal with effect from 1 April 1959. On that basis, the Court held that the general rule in section 6 of the General Clauses Act, 1897, applied, because the omission did not evince any contrary legislative intention. Once dividends were declared out of the earlier rebated profits within the statutory period, the liability under section 35(10) had accrued and the corresponding power of the Income-tax Officer to recompute the assessment was preserved, provided action was taken within four years.

Conclusion: The omission of section 35(10) did not extinguish the accrued liability or the officer's jurisdiction to act within the limitation period; the reassessment proceedings were valid and the challenge failed.

Ratio Decidendi: Where a provision is repealed or omitted without a contrary intention, section 6 of the General Clauses Act, 1897, preserves accrued liabilities and the authority to enforce them, and the mere fact that the provision had earlier operated in a changing fiscal scheme does not make it a temporary enactment.

---