Repeal and saving clause preserves penalty proceedings for pre-1962 advance tax defaults under the old Income-tax Act.

Section 297(2)(f) of the Income-tax Act, 1961 was read as a saving provision preserving penalty proceedings for default in advance tax demanded under section 18A(1) of the repealed 1922 Act, where the demand notices had been issued before 1 April 1962. Section 6 of the General Clauses Act, 1897 was treated as inapplicable because section 297 was a complete repealing code with contrary intention. The demand notice stage was regarded as part of the assessment process, so penalty under section 46(1) of the 1922 Act could validly continue as if the 1961 Act had not been enacted.

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Issues: Whether, after the repeal of the Indian Income-tax Act, 1922 by the Income-tax Act, 1961, penalty proceedings for default in payment of advance tax demanded under section 18A(1) could still be initiated and penalty imposed under section 46(1) of the 1922 Act by virtue of section 297(2)(f) of the 1961 Act.

Analysis: Section 6 of the General Clauses Act, 1897 was held inapplicable because section 297 of the Income-tax Act, 1961 constituted a complete repealing code and evidenced an intention to the contrary. The expression "any assessment completed before the 1st day of April, 1962" in section 297(2)(f) was construed in the context of the scheme of the 1922 Act and the wide connotation of "assessment" adopted in income-tax law. The process of assessment was treated as comprising distinct stages, and the demand notice under section 18A(1) was regarded as one completed stage in that process. Since the demand notices had been issued before 1 April 1962, the penalty proceedings related to a completed stage of assessment and could validly proceed as if the 1961 Act had not been enacted.

Conclusion: The penalty orders were valid and legal, and the question was answered in the affirmative in favour of the Revenue.

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