Saving provision under the old Income-tax Act sustained transfer of pending assessments despite reference to the later Act.

Assessment proceedings based on returns filed before the commencement of the Income-tax Act, 1961, were treated as continuing under section 297(2)(a), so the earlier Act remained applicable to those pending matters. On that footing, the Commissioner's transfer power under section 5(7A) of the Income-tax Act, 1922, survived for such cases, and a transfer order was not invalid merely because it referred to section 127 of the 1961 Act. The challenge based on want of reasons and hearing under section 127 therefore did not succeed where the Commissioner otherwise had authority to transfer the proceedings.

---

---

Issues: Whether the Commissioner had jurisdiction to transfer assessment proceedings relating to returns filed before 1 April 1962 to the Special Investigation Circle, and whether the transfer order was invalid for want of an effective opportunity of hearing and recorded reasons.

Analysis: Proceedings relating to returns filed before the commencement of the Income-tax Act, 1961, were held to be governed by the saving provision in section 297(2)(a), under which they were to be taken and continued as if the 1961 Act had not been passed. On that basis, the transfer power available under section 5(7A) of the Income-tax Act, 1922, survived for such pending assessments. The fact that the order recited section 127 of the 1961 Act did not destroy its validity where the Commissioner otherwise had authority to transfer the cases. The challenge based on absence of reasons and hearing under section 127 therefore did not assist the assessee.

Conclusion: The transfer order was valid and the assessment proceedings at Lucknow were not without jurisdiction.

Final Conclusion: The writ petitions failed because the reassessment and transfer of the pending matters were sustained under the saving operation of the repealed Act, and no jurisdictional infirmity was established.

Ratio Decidendi: Where assessment proceedings commenced on returns filed before the commencement of the 1961 Act, they continue under the saved regime of the 1922 Act, and a transfer made with authority under the earlier Act is not invalid merely because it was described as having been made under the later Act.

---