Statutory saving clauses can preserve reassessment powers where assessment language is read to include reassessment proceedings.

Statutory saving clauses were construed to preserve the power to initiate reassessment under section 34 of the Indian Income-tax Act, 1922. The saving in section 13(1) of the Finance Act, 1950, was read broadly because levy, assessment and collection of income-tax were held to include reassessment proceedings, and the prior financial agreement did not invalidate them. The Mysore saving provisions were also held to keep the former Indian Act alive for income chargeable before 1 July 1948 through assessment and determination of tax, with assessment including reassessment. Reassessment notices and orders were therefore within jurisdiction.

---

---

Issues: (i) Whether the saving provisions in section 13(1) of the Finance Act, 1950, and the corresponding Mysore enactments preserved the power to initiate re-assessment proceedings under section 34 of the Indian Income-tax Act, 1922. (ii) Whether the Mysore saving provisions preserved section 34 of the Indian Income-tax Act, 1922, in its entirety, including reassessment of income already assessed.

Issue (i): Whether the saving provisions in section 13(1) of the Finance Act, 1950, and the corresponding Mysore enactments preserved the power to initiate re-assessment proceedings under section 34 of the Indian Income-tax Act, 1922.

Analysis: The expression used in section 13(1), namely, levy, assessment and collection of income-tax, was held wide enough to include proceedings for reassessment under section 34. The financial agreement of 28 February 1950 did not render the proceedings unconstitutional or void. Those questions were treated as concluded by the earlier decision relied upon by the Court.

Conclusion: The saving contained in section 13(1) of the Finance Act, 1950, did preserve the reassessment power under section 34.

Issue (ii): Whether the Mysore saving provisions preserved section 34 of the Indian Income-tax Act, 1922, in its entirety, including reassessment of income already assessed.

Analysis: The Court construed the saving clauses in section 5(b) of the Mysore Act of 1948 and paragraph (2)(b) of Schedule A to the Mysore Retroceded Area (Application of Laws) Act, 1948, as keeping alive the prior Indian Income-tax Act for income chargeable before 1 July 1948 until the stage of assessment and determination of tax. The word assessment was held to include reassessment as well, and the saving was not limited to cases where no original assessment had been made. The limitation period under section 34 was therefore the period applicable under the Act as it stood in the retroceded area before 1 July 1948.

Conclusion: Section 34 of the Indian Income-tax Act, 1922, was saved in its entirety and the reassessment proceedings were validly initiated.

Final Conclusion: The reassessment notices and orders were within jurisdiction, the High Court's quashing of the proceedings could not stand, and the assessee's writ petitions failed.

Ratio Decidendi: A statutory saving of the prior income-tax law for the purposes of assessment and determination of tax includes reassessment proceedings under section 34 unless the language clearly excludes them.

---