TaxTMI 
TaxTMI 
1964 (4) TMI 19
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....op the proceeding. The Income-tax Officer, B-III Ward, Bombay, issued on March 27, 1957, a notice under section 34 of the Indian Income-tax Act for assessment of the assessee as an agent of the twenty-five named non-resident parties. The assessee submitted a return showing his income as " nil ". The Income-tax Officer held that the transactions disclosed from the books of account of the assessee clearly showed that the assessee " had regular business connection with " non-resident parties, that through the, assessee those non-resident parties were receiving income, profits and gains and section 43 was clearly applicable to the assessee, there being definite business connection between the assessee and the named non-residents. He, therefore, treated the assessee as agent of the non-resident parties under section 43 of the Act. The Income-tax Officer also rejected the contention of the assessee that action under section 34 was barred at the date of the notice issued to the assessee. Relying upon the first proviso to section 34(1)(b)(iii) inserted by the Finance Act, 1956, the Income-tax Officer held that the legislature had by amendment extended the " time-limit in clear and express....
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.... eight years and in cases falling under clause (b) at any time within four years of the end of that year, serve on the assessee, x x x a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 22 and may proceed to assess or re-assess such income, profits or gains or recompute the loss or depreciation allowance; X X X Provided that - (i) x x x (ii) x x x (iii) Where the assessment made or to be made is an assessment made or to be made on a person deemed to be the agent of non-resident person under section 43, this sub-section shall have effect as if for the periods of eight years and four years a period of one year was substituted." By section 18 of the Finance Act, 1956, section 34 was extensively amended and clause (iii) of the proviso was substituted by the following proviso : " Provided further that the Income-tax Officer shall not issue a notice under this sub-section for any year after the expiry of two years from that year if the person on whom an assessment or reassessment is to be made in pursuance of the notice is a person deemed to be the agent of a non-resident person under section 43. " Initially a....
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....was no scope for issuing a notice unless the legislature expressly gave power to the Income-tax Officer to issue notice under the amended section notwithstanding the expiry of the period under the unamended provision or unless there was overlapping of the period within which notice could be issued under the old and the amended provision. But counsel for the Commissioner submitted that at no time was the Income-tax Officer bereft of authority to issue a notice under section 34 of the Indian Income-tax Act, 1922. He submitted that till the midnight of March 31, 1956, notice could be issued in exercise of the powers conferred by section 34 proviso (iii), before it was amended and notice of assessment or reassessment could also be issued under the amended provision immediately thereafter in exercise of the powers conferred by section 18 of the Finance Act, 1956. Counsel relied upon the rule contained in section 5(3) of the General Clauses Act that, unless the contrary is expressed, a Central Act or Regulation shall be construed as coming into operation immediately on the expiration of the day preceding its commencement. It was submitted that this is merely a statutory recognition of th....
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....mitation. The right to issue a notice under the earlier Act came to an end before the new Act came into force. There was undoubtedly no determinable point of time between the expiry of the earlier Act and the commencement of the new Act ; but that would not, in our judgment, affect the application of this rule. Reliance was also placed by counsel for the Commissioner upon the rule which has prevailed in the Supreme Court of the United States of America that " a new statute should be construed as a continuation of the old one with the modifications contained in the new one, although it formally repeals the old statute, when it re-enacts its substantial provisions and the two statutes are almost identical " (Bear Lake and River Water Works and Irrigation Company and Jarvis Conklin Mortgage Trust Company v. William Garland and Corey Brothers and Co.). It appears to have been recognised in the Supreme Court of the United States of America in Pacific Mail S. S. Co. v. Jolifee, that repeal in terms of a former statute does not necessarily indicate an intention of the legislature thereby to impair rights which had arisen under the Act which was repealed. As the provisions of the new Act ....
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....cribed, a right to institute an action for possession of property is extinguished. Counsel relies in support of the plea on Baleswar v. Latafat. It is unnecessary to dilate upon this argument in any detail, or to enter upon an analysis of the numerous cases which were mentioned at the Bar to determine whether the rule that without an express provision, or a clear implication arising from the amending statute, rights acquired under the repealed statute by the determination of the period of limitation prescribed thereby cannot be deemed to be revived, applies to suits for possession only. It may be sufficient to make two comments on the argument. The rule has in fact been applied to suits other than suits for possession : e.g., Mahomed Mehdi Faya v. Sakinabai (a suit for restitution of conjugal rights) ; M. Krishnaswami Naicker v. A. Thiruvengada Mudaliar (a suit for recovery of a debt) ; Shumbhoonath Saha v. Guruchurn Lahiri (an application for execution) ; and Nepal Chandra Roy Chowdhury v. Niroda Sundari Ghose (an application for setting aside an ex parte decree). Again soon after it was delivered the authority of Baleswar's case was weakened by the judgment in Jagdish v. Sali....
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....our of the assessee or grant an absolution on the expiry of the period. The liability is not enforceable but the tax may again become exigible if the bar is removed and the taxpayer is brought within the jurisdiction of the said machinery by reason of a new power. This is, of course, subject to the condition that the law must say that such is the jurisdiction, either expressly or by clear implication. If the language of the law has that clear meaning, it must be given that effect and where the language expressly so declares or clearly implies it, the retrospective operation is not controlled by the commencement clause. " Counsel for the Commissioner sought to derive some support from Income-tax Officer Companies District, Calcutta v. Calcutta Discount Company Ltd. in which Chakravartti C.J., dealing with the effect of the Income-tax and Business Profits Tax (Amendment) Act, 1948, observed : " The plain effect of the substitution of the new section 34 with effect from March 30, 1948, is that from that date the Income-tax Act is to be read as including the new section as a part thereof and if it is to be so read, the further effect of the express language of the section is that so....