Saving clause preserves penalty for untrue advance-tax estimates where assessment was completed after 1 April 1962.

The saving provision in section 297(2)(g) of the Income-tax Act, 1961 preserves penalty proceedings for advance-tax estimates relating to assessment years ending on or before 31 March 1962 where the regular assessment was completed on or after 1 April 1962. In that situation, the new Act applies mutatis mutandis, so penalty for furnishing an untrue estimate may be initiated and imposed under section 273 of the 1961 Act rather than under section 18A of the 1922 Act. The question was answered in the affirmative, and the penalty was held competent under the new Act.

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Issues: Whether penalty for furnishing an untrue estimate of advance tax under the Indian Income-tax Act, 1922 could be imposed under section 273 of the Income-tax Act, 1961 where the regular assessment was completed after 1 April 1962 and section 297(2)(g) applied.

Analysis: Section 18A of the old Act governed advance payment of tax and penalised the furnishing of estimates known or believed to be untrue. Under the new Act, section 212 deals with estimates of advance tax and section 273 authorises penalty for an untrue estimate at the stage of regular assessment. Reading section 297(2)(g) with the penalty provisions of the new Act, the saving provision permits initiation and imposition of penalty under the new Act for assessments for the year ending 31 March 1962 or earlier, where the assessment is completed on or after 1 April 1962. The provisions of the new Act apply mutatis mutandis to such pending penalty matters.

Conclusion: The question was answered in the affirmative. Penalty under section 273 of the Income-tax Act, 1961 was competent, and the matter was decided in favour of the Revenue.

Final Conclusion: The saving provision preserved the penalty proceedings and enabled the new Act to govern their imposition for the relevant completed assessments.

Ratio Decidendi: Where the saving clause in the new income-tax legislation so provides, penalty proceedings relating to pre-1962 assessment years completed after 1 April 1962 are to be initiated and imposed under the new Act, applying the relevant provisions mutatis mutandis.

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