Pending assessment under repealed tax law must continue under that law; reassessment under the later Act lacked jurisdiction.

Where assessment proceedings had validly commenced under the repealed Indian Income-tax Act, 1922, section 297(2)(a) required them to continue as if the 1961 Act had not been enacted. An assessment framed under section 143(3) of the 1961 Act, with notices issued under that Act, was treated as an exercise of jurisdiction under the wrong statute rather than a mere misdescription of the enabling provision. On that basis, the reassessment was held to be without jurisdiction and was cancelled in favour of the assessee.

---

---

Issues: Whether reassessment could validly be framed under section 143(3) of the Income-tax Act, 1961 when the return and original assessment arose under the Indian Income-tax Act, 1922, having regard to section 297(2)(a) of the Income-tax Act, 1961.

Analysis: The assessment proceedings had commenced under the 1922 Act pursuant to a notice under section 22(2), and the original assessment was completed under section 23(3) of that Act. Section 297(2)(a) preserved such pending proceedings to be continued as if the 1961 Act had not been enacted. The reassessment, however, was framed under the 1961 Act and notices were issued under section 143(2) of that Act. This was treated as a case of proceeding under the wrong Act, not merely quoting a wrong provision. The distinction drawn was between a misdescription of the source of power and assumption of jurisdiction under a statute that was not applicable to the pending proceedings.

Conclusion: The reassessment under section 143(3) of the Income-tax Act, 1961 was invalid and was cancelled, which was in favour of the assessee.

Ratio Decidendi: Where assessment proceedings had validly commenced under the repealed income-tax law, section 297(2)(a) required them to be continued under that law, and an assessment framed under the later Act in such proceedings is without jurisdiction.

---