# THE COMMISSIONER OF INCOME-TAX, BIHAR & ORISSA v. MAHARAJA PRATAPSINGH BAHADUR OF GIDHAUR

- **Citation:** [1961] 2 S.C.R. 760
- **Court:** Supreme Court of India
- **Decided:** 1961
- **Bench:** J. L. Kapur, M. Hidayatullah, J.C. Shah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-commissioner-of-income-tax-bihar-orissa-v-maharaja-pratapsingh-bahadur-of-2036
- **Pages:** 5

## Headnote

Income Tax-Escaped income-Notice issued by Income-tax
Officer without approval of Commissioner-Subsequent amendment
of enactment providing for Commissioner's approval-Assessment
based on original notice-Validity-General Cla,,ses Act, z897 (IO
of r897), s. 6-Income-tax and Business Profits Tax (Amendment)
Act, r948 (48 of r948), ss. I, 8-Indian Income-tax Act, r922 (II
of z922), s. 34, as amended by Act 48 of r948.
The appellant who had agricultural income from his Zamindari was assessed to income-tax for the four assessment years,
1944-45, to 1947-48. The income-tax authorities did not include
in his assessable income, interest received by him on arrears of
rent, in view of a decision of the Patna· High Court, but subsequently this view of law was reversed by the Privy Council. On
August 8, 1948, the Income-tax Officer issued notices under s. 34
of the Indian Income-tax Act, ·1922, for assessing the escaped
income. Before the notices were issued the Income-tax Officer
had not put the matter before the Commissioner for his approval as the. section then did not require it and the assessments
were completed on those notices.
In the meantime, certain
amendments were made to the Indian Income-tax Act by Act 48
of 1948, which received the assent of the Governor-General on
September 8, 1948. The Amending Act substituted a new section in place of s. 34, which among other changes, added a proviso to the effect that "the Income-tax Officer shall not issue a
notice ...... unless he has recorded his reasons for doing so and
the Commissioner is satisfied on such reasons that it is a fit case
for the issue of such notice", and also made it retrospective by
providing that the new section "shall be deemed to have come
into force on the 30th day of March, 1948". The question was
whether the notices issued by the Income-tax Officer on August 8,
1948, without the approval of the Commissioner, were rendered
void by reason of the opera ti on of the amended s. 34. The Commissioner claimed that s. 6 of the General Clauses Act, i897,
saved the assessments as well as the notices.
Held, that s. 6 of the General Clauses Act, l8g7, was inapplicable as the Amending Act of 1948 indicated a different
intention within the meaning of that section, inasmuch as the
amended s. 34 of the Indian Income-tax Act, 1922, provided that
it shall be deemed to have come into force on March 30, 1948
Lemm v. Mitchell, (1912] A.C. 400, distinguished.
2 s.c.R. SUPREME COURT REPORTS
761
r960
Held, further, that the notices issued by the Income-tax
Officer on August 8, 1948, and the assessm1mts based on them
·
J"d
The Commissioner
were rnva 1 •
1
I
.
o
ncome.tax,
Venkatachal~m v. Bombay Dyeing 0- Mfg. Co., Ltd., [1959) Bihar & Orissa
S.C.R. 703, apphed.
v.
CIVIL
APPELL.ATE
JURISDICTION:
Civil AppealMaharaja PrntapN o. 650 of 1957.
.
singh Bahadur 01
Appeal from the judgment dated July 13, 1956, of
the Patna High Court in Miscellaneous Judicial Case
No. 665 of 1954.
R. Ganapathy Iyer and R.H. Dhebar, for the appellant.
A. V. Viswanatha Sastri and R. C. Prasad, for the
respondent.
1960. November 29.
The Judgment of the Court
was delivered by
Gidltaur
HID.AY.ATULL.AH, J.-This is an appeal by the ComHidayatullt•h J.
missioner of Income-tax with a certificate against the
judgment and order of the. High Court· at Patna
answering two questions of law referred to it under
s. 66(1) of the Income-tax Act by the Tribunal, in the
negative. Those questions were :
"(l) Whether in the circumstances of the case
assessment proceedings were validly initiated under
s. 34 of the Indian Income-tax Act?
(2) If so, whether in the circumstances of t.he case
the amount received from interest on arrears of agricultural rent was rightly included in the income of the
assessee ?"
The assessee, the Maharaja Pratapsingh Bahadur
of Gidhaur, had agricultural income from his zamindari for the four assessment years 1944-45 to 1947-48.
In assessing his income to income-tax, the authorities
did not include in his

## Text

. November ag.
760
SUPREME COURT REPORTS
[1961]
THE COMMISSIONER OF INCOME-TAX,
BIHAR & ORISSA .
v.
MAHARAJA PRATAPSINGH BAHADUR OF
GIDHAUR.
(J. L. KAPUR, M. HIDAYATULLAH and J.C. SHAH, JJ.)
Income Tax-Escaped income-Notice issued by Income-tax
Officer without approval of Commissioner-Subsequent amendment
of enactment providing for Commissioner's approval-Assessment
based on original notice-Validity-General Cla,,ses Act, z897 (IO
of r897), s. 6-Income-tax and Business Profits Tax (Amendment)
Act, r948 (48 of r948), ss. I, 8-Indian Income-tax Act, r922 (II
of z922), s. 34, as amended by Act 48 of r948.
The appellant who had agricultural income from his Zamindari was assessed to income-tax for the four assessment years,
1944-45, to 1947-48. The income-tax authorities did not include
in his assessable income, interest received by him on arrears of
rent, in view of a decision of the Patna· High Court, but subsequently this view of law was reversed by the Privy Council. On
August 8, 1948, the Income-tax Officer issued notices under s. 34
of the Indian Income-tax Act, ·1922, for assessing the escaped
income. Before the notices were issued the Income-tax Officer
had not put the matter before the Commissioner for his approval as the. section then did not require it and the assessments
were completed on those notices.
In the meantime, certain
amendments were made to the Indian Income-tax Act by Act 48
of 1948, which received the assent of the Governor-General on
September 8, 1948. The Amending Act substituted a new section in place of s. 34, which among other changes, added a proviso to the effect that "the Income-tax Officer shall not issue a
notice ...... unless he has recorded his reasons for doing so and
the Commissioner is satisfied on such reasons that it is a fit case
for the issue of such notice", and also made it retrospective by
providing that the new section "shall be deemed to have come
into force on the 30th day of March, 1948". The question was
whether the notices issued by the Income-tax Officer on August 8,
1948, without the approval of the Commissioner, were rendered
void by reason of the opera ti on of the amended s. 34. The Commissioner claimed that s. 6 of the General Clauses Act, i897,
saved the assessments as well as the notices.
Held, that s. 6 of the General Clauses Act, l8g7, was inapplicable as the Amending Act of 1948 indicated a different
intention within the meaning of that section, inasmuch as the
amended s. 34 of the Indian Income-tax Act, 1922, provided that
it shall be deemed to have come into force on March 30, 1948
Lemm v. Mitchell, (1912] A.C. 400, distinguished.
2 s.c.R. SUPREME COURT REPORTS
761
r960
Held, further, that the notices issued by the Income-tax
Officer on August 8, 1948, and the assessm1mts based on them
·
J"d
The Commissioner
were rnva 1 •
1
I
.
o
ncome.tax,
Venkatachal~m v. Bombay Dyeing 0- Mfg. Co., Ltd., [1959) Bihar & Orissa
S.C.R. 703, apphed.
v.
CIVIL
APPELL.ATE
JURISDICTION:
Civil AppealMaharaja PrntapN o. 650 of 1957.
.
singh Bahadur 01
Appeal from the judgment dated July 13, 1956, of
the Patna High Court in Miscellaneous Judicial Case
No. 665 of 1954.
R. Ganapathy Iyer and R.H. Dhebar, for the appellant.
A. V. Viswanatha Sastri and R. C. Prasad, for the
respondent.
1960. November 29.
The Judgment of the Court
was delivered by
Gidltaur
HID.AY.ATULL.AH, J.-This is an appeal by the ComHidayatullt•h J.
missioner of Income-tax with a certificate against the
judgment and order of the. High Court· at Patna
answering two questions of law referred to it under
s. 66(1) of the Income-tax Act by the Tribunal, in the
negative. Those questions were :
"(l) Whether in the circumstances of the case
assessment proceedings were validly initiated under
s. 34 of the Indian Income-tax Act?
(2) If so, whether in the circumstances of t.he case
the amount received from interest on arrears of agricultural rent was rightly included in the income of the
assessee ?"
The assessee, the Maharaja Pratapsingh Bahadur
of Gidhaur, had agricultural income from his zamindari for the four assessment years 1944-45 to 1947-48.
In assessing his income to income-tax, the authorities
did not include in his assessable income interest received by him on arrears of rent. This was presumably
so in view of the decision of the Patna High Court.-
When the Privy Council reversed the view of Ia w
taken by the Patna High Court in Commissioner of
Income-tax v. Kamakhya Narayan Singh (1), the. Income-tax Officer issued notices under s, 34 of the
(1} [1948] 16 I. T.R. 325.
762
SUPREME COURT REPORTS
[1961]
i96o
Indian Income-tax Act for assessing the escaped inTh C -. .
come.
These notices were issued on August 8, 1948.
e
ommsssi.oner
of Income-•••
The assessments after the returns were filed, were
Bihar &- Oriss: completed on August 26, 1948.
Before the notices
v.
were issued, the Income-tax Officer had not put the
Maha1·aJa Pratap- matter before the Commissioner for his approval, as
srngh Bahadur 01 the section then did not require it, and the assessG1dha10·
•
l
d
.
.
_
ments were comp ete
on those notices. Section 34
Hidayatullah J. was amended by the Income-tax and Business Profits
Tax (Amendment) Act, 1948 (No. 48of1948), which
received the assent of the Governor-General on September 8, 1948. The appeals filed by the assessee were
disposed of on September 14 and 15, 1951, by the
Appellate Assistant Commissioner, before whom no
question as regards the validity of the notices under
s. 34 was raised. The question of the validity of the
notices without the approval of ~!ie Commissioner
appears to have been raised before the Tribunal for
the first time. In that appeal, the Accountant Member and the Judicial Member differed, one holding
that the notices were invalid and the other, to the
contrary. The President agreed with the Accountant
Member that the notices were invalid, and the assessments were ordered to be set aside.
The Tribunal then stated a case and raised and
referred the two questions, which have been quoted
above. The High Court agreed with the conclusions
of the majority, and the present appeal has been filed
on a certificate granted by the High Court.
'
Section 34, as it stood prior to the amendment Act
No. 48 of 1948, did not lay any duty upon the Incometax Officer to seek the approval of the CommiBBioner
before issuing a notice under s. 34. The amending Act
by its first section made 88. 3 to 12 of the amending
Act retrospective by providing "sections 3 to 12 shall
be deemed to have come into force on the 30th day
of March, 1948 ...... " Section 8 of the amending Act
substituted a new section in place of s. 34, and in
addition to textual changes with which we are not
concerned, also added a proviso to the following
effect:
"Provided that-
2 S.C.R. SUPREME COURT REPORTS
763
(1) the Income-tax Officer s}lall not issue a notice
z96o
under this sub-section unless he has recorded his rea- Th c -. .
c
d ·
d h C
· ·
·
t' fi d
e
ommisssoner
sons 1or omg so an t e omm1ss10ner lS sa lS e on
of Income-ta:r
such reasons that it is a fit case for the issue of such Bihar & Oriss~
notice."
v.
The question is whether the notices which were issued Makaraja Pratapwere rendered void by the operation of this proviso. singh ~ahadur of
The Commissioner contends that s. 6 of the General
Gidhaur
Clauses Act, particularly. els. (b) and (c) saved the HidayatuZZah J.
assessments as well as the notices. He relies upon a
decision of the Privy Council in Lemm v. Mitchell (1),
Eyre v. Wynn-Mackenzie (2) and Butcher v. Henderson (3) in support of his proposition. The last two
cases have no bearing upon this matter; but strong
reliance is placed upon the Privy Council case. In that
case, the earlier action which had been commenced
when the Ordinance had abrogated the right of action
for criminal conversation, had already ended in favour
of the defendant and no appeal therefrom was pending, and it was held that the revival of the right of
aution for criminal conversation did not invest the
plaintiff with a right to begin an action a.gain and thus
expose the defendant to a. double jeopardy for the
same act, unless the statute expressly and by definite
words gave him that right. The Privy Council case is
thus entirely different.
No doubt, under s. 6 of the General Clauses Act it is
provided that where any Act repeals any enactment,
then unless a different intention appears, the repeal
shall not affect the previous operation of any enactment so repealed or anything duly done thereunder
or affect any right, obligation or liability acquired,
accrued or incurred under any enactment so repealed.
It further provides that any legal proceedings may
be continued or enforced as if the repealing Act had
not been passed. Now, if the amending Act had repealed the original s. 34, and merely enacted a new
section in its place, the repeal might not have affected
the operation of the original section by virtue of s. 6.
But the amending Act goes further than this. It
{I) [1912] A.C. 400.
(a) (1896) I Ch. 135.
(3) (1868) L.R. 3 Q. B. 335·
764
SUPREME COURT REPORTS
(1961)
r96o
repeals the original s. 34, not from the day on which
T ' c -. .
the Act received the assent of the Governor-General
rle
omnussioner b
•
b
of Income-tax
ut from a stated day, viz., March 30, 1948, and su -
Bihar & oriss~ stitutes in its place another section containing the
v.
proviso above mentioned. The amending Act proviM aha>aja Pratap- des that the amending section shall be deemed to
singh Bahadur of have come into force on March 30, 1948, and thus by
Gidhaur
th'
t' 't
. d'
t
•·cc
t , t
,
_
1s retrospec 1 v1 ·y, m 1ca es a mueren m ·ent10n
Hidayatullah J. which excludes the application of s. 6. It is to be
noticed that the notices were all issued on August 8,
1948, when on the statute book must be deemed to be
existing an enactment enjoining a duty upon the Income-tax Officer to obtain prior approval of the Commissioner, and unless that approval was obtained,
the notices could not be issued. The notices were thus
invalid. The principle which was applied by this
Court in Venkatachalam v. Bombay Dyeing & Mfg. Go.
Ltd. (1) is equally applicable here.
No question of law was raised before us, as it could
not be in view of the decision of this Court in Narayana Ghetty v. Income-tax Officer('), that the proviso
was not mandatory in character. Indeed, there was
time enough for fresh notices to have been issued, and
we fail to see why the old notices were not recalled
and fresh ones issued.
]'or these reasons, we are in agreement with the
High Court in the answers given, and dismiss this
appeal with costs.
Appeal dismissed.
(1) [1959] $.C.R. 703.
(2) (1959] 35 I.T.R. 388.