TaxTMI 
TaxTMI 
1961 (2) TMI 1
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.... 1950, he assessed their total income at Rs. 1,63,131. The Income-tax Officer had, before finalising the assessment, issued on December 22, 1949, a notice to the assessees under section 40 of the Hyderabad Income-tax Act requiring them to show cause why penalty should not be imposed upon them and by order dated October 31, 1951, directed the assessees to pay by way of penalty Rs. 42,000 in addition to the tax. This order was confirmed in appeal by the Appellate Assistant Commissioner. In appeal, the Income-tax Appellate Tribunal observed that by virtue of the provisions of section 13(1) of the Indian Finance Act, 1950, the Hyderabad Income-tax Act had ceased to have effect and as the power to impose penalty under section 40 of the Hyderabad....
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....y a competent authority ? " The High Court answered the first and the third questions in the negative and the second question in the affirmative. The High Court observed that the Appellate Assistant Commissioner had power to entertain the appeal in which the question of the power of the Income-tax Officer to impose a penalty was challenged, and the decision of the Appellate Assistant Commissioner was not without jurisdiction. The High Court also proceeded in a petition separately filed by the assessees to direct the Income-tax Appellate Tribunal to set aside the order of the Income-tax Officer imposing a penalty as a logical consequence of the view the Tribunal had taken regarding the absence of power in the Income-tax Officer to levy a p....
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....far as it is material provided : " If immediately before the 1st day of April, 1950, there is in force in any Part B State.... any law relating to income-tax or super-tax.... that law shall cease to have effect except for the purposes of the levy, assessment and collection of income-tax and super-tax in respect of any period not included in the previous year for the purposes of assessment under the Indian Income-tax Act, 1922 ...... " Manifestly, by section 13, the Hyderabad Income-tax Act ceased to have effect as from April 1, 1950. But the operation of that Act in respect of levy, assessment and collection of income-tax and super-tax in respect of periods prior thereto for which liability to income-tax could not be imposed under the I....
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....all purposes including the levy of penalty with respect to any particular year or years of assessment, it could have said so in terms clear and unambiguous instead of limiting the operation only to " levy, assessment and collection ". In the view of the High Court, imposition of penalty was not a necessary concomitant or incident of the process of assessment, levy and collection of tax. The High Court proceeded upon. the view that by saving the Hyderabad Income-tax Act for the purposes of levy, assessment and collection of income-tax, the entire procedure for imposing liability to pay tax and for collection of tax was saved, but penalty not being tax, provisions relating to imposition of and collection of penalty did not survive the repea....
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....toms Act, 1924, the Central Excise and Salt Act, 1944, and the Indian Post Offices Act, 1898, which were extended to the whole of India by section 11 of the Finance Act, 1950, and the provisions corresponding thereto were repealed by the proviso, and it was expressly provided that the previous operation of the corresponding law or any penalty, forfeiture or punishment ordered in respect of an offence committed against any such law or any investigation, legal proceeding or remedy in respect of such penalty, forfeiture or punishment or any such investigation, legal proceeding or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed as if the Act had not been passed, that under sub-sectio....