Repeal-and-saving rule preserved the old tax exemption for one pending year, but the new co-operative society provision ended it thereafter.

A pending assessment for 1961-62 remained governed by clause 13(v) of the Merged States (Taxation Concessions) Order, 1949 because section 297(2)(a) of the Income-tax Act, 1961 preserved proceedings already commenced under the 1922 Act; the exemption therefore continued for that year. For assessment years 1962-63 onwards, however, section 80P of the 1961 Act made specific provision for co-operative societies and occupied the same field, so the earlier concession ceased to operate from 1 April 1962 under the repeal-and-saving scheme. The old exemption survived only for the pending year and not for later years after the new Act came into force.

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Issues: (i) Whether the assessee was entitled to the exemption under clause 13(v) of the Merged States (Taxation Concessions) Order, 1949, for the assessment year 1961-62; and (ii) whether that exemption continued for the assessment years 1962-63 onwards in view of section 297(2)(a) of the Income-tax Act, 1961 and the provision made for co-operative societies under section 80P of that Act.

Issue (i): Whether the assessee was entitled to the exemption under clause 13(v) of the Merged States (Taxation Concessions) Order, 1949, for the assessment year 1961-62.

Analysis: The return for that year had been filed before the commencement of the Income-tax Act, 1961, and the assessment was completed under the Indian Income-tax Act, 1922. By virtue of section 297(2)(a), the assessment proceedings for that year were to continue as if the 1961 Act had not been passed. The exemption contained in clause 13(v) therefore remained available for that year.

Conclusion: The exemption was available for assessment year 1961-62, in favour of the assessee.

Issue (ii): Whether that exemption continued for the assessment years 1962-63 onwards in view of section 297(2)(a) of the Income-tax Act, 1961 and the provision made for co-operative societies under section 80P of that Act.

Analysis: Section 80P of the Income-tax Act, 1961 made specific provision for the assessment of the income of co-operative societies and thus covered the same field as clause 13(v) of the Merged States (Taxation Concessions) Order, 1949. Since provision had been made under the 1961 Act, the earlier exemption order ceased to have effect from 1 April 1962 under the saving and repeal scheme of section 297(2)(a).

Conclusion: The exemption was not available for assessment years 1962-63 onwards, in favour of the Revenue.

Final Conclusion: The reference was answered partly for the assessee and partly for the Revenue, by holding that the old concession survived only for the pending assessment year 1961-62 and not for the later years after the 1961 Act came into force.

Ratio Decidendi: Where a pending assessment is saved by the repeal-and-saving provision, the earlier law continues for that year; but once the new Act makes provision covering the same field, the prior concession ceases to operate from the commencement of the new Act.

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