# TIWARI KANAHAIYALAL ETC v. THE COMMISSIONER OF INCOME TAX, DELHI March 13, •I 975

- **Citation:** [1975] 3 S.C.R. 927
- **Court:** Supreme Court of India
- **Decided:** 1975
- **Bench:** A. Alagiriswami, N. L. Untwalia
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/tiwari-kanahaiyalal-etc-v-the-commissioner-of-income-tax-delhi-march-13-i-975-6424
- **Pages:** 6

## Headnote

927
i11co111e-tax Act ( 11 of 1922), ss. 28 w1d 52, Income-tax Act (43 of 1%1),
ss. 271, /77 and 297 ancl Gmera/ C/(111.\<'s Act (10 of 1897) s. 6 (c)-False dec/aratio11 filed by assessee under 1922 Act-Penalty imposed under 1961 ActPrmecution for false declaration under s. 52 of 1922 Act-ft valid.
.
Sec lion 297 (2) (f) of the Indian Income-tax Act, 1961, provides that notwithstanding the repeal of the Income-tax Act, 1922, any proceeding for the imposition of a penalty in respect of any assessment completed before April 1,
1962, may be initiated 'as if the 1961 Act had not been passed; and Clause (g)
provides that any proceeding for the imposition of a penalty in respect of any
assessment for the year ending March 3 l, 1962, or any earlier year, which was
completed 011 01 after April 1, 1962 may be initiated under the 1961 Act. Section
28(4) of the 1922 Act provides that no prosecution for an offence against the
1922 Act shall be instituted in respect of the same facts on which a penalty has
been imposed undCJ the section.
The appellant, filed returns under s. 22(2), Income-tax Act, 1922, the last of the
returns being for the assessment year 1959-60. In 1964, he filed revised returns
for the same assessment years showing a larger income.
The income-tax was
~1ssessed under the 1961 Act on the revised returns and penalty proceedings were
instituted and penalty was levied.under s. 271 of the 1961 Act. The respondent,
thereafter, filed complaints for offences under s. 277 of the 1961 Act. By way
of abundant caution he alsc filed complaints on the same facts for offences under
s. 52 of the f922 Act. The trial court held that the launching of prosecution was
illegal in view of s. 28 ( 4) of th~ 1922-Act and Art. 20 ( l) of the Constitution.
The High Court, in appeal~ held that since no penalty was imposed under 6. 28
of the 1922 Act, s. 28 ( 4) was not a bar to the institution of proserntion nor \\'as
it hit by Art. 20(1), and directed the trial court to proceed with the trial.
Dismissing the appeal to this Court,
HELD : (l) All the assessments although they related to the years .::arlier
than the year ending on March 31. J 962, and were completed after the coming
into force of the 1961-Act. (April, 1962). Hence the proceeding for the imposition of penalty had to be and was initiated under the 1961 Act under s. 297(g).
Therefore, s. 28(4) of the 1922 Act cannot be a bar as no penalty was imp.1sed
under s. 28o1and there is no provision similar to s. 28(4) in the 1961 Ad. [5>30
A-Bl
Jain Bros & Others v. The U11io11 of llldia & others [1970] 3 S.C.R. 253.
followed.
(2) Article 20(1) docs not help the appetlant. lt is not a post facto legi~lation
that is being pressed against him. Section 28 ( 4) did not obliterate the commissivn of the offence or convert the offence into an innocent act.
Under the section, the imposition of penalty merely barred the prosecution. But in the present
case, the penalty having been imposed under s. 271 of the 1961 Act the launching
of prosecution became permissible and was not hit by Art. 20(1). [931 DJ
Rao Shir Balrndur Singh and a11otlicr v. Tile State of Vi11clllya Prade>il {1953]
S.C.R. 1188. followed.
(3) (a) On the facts alleged, '.f true. the appellant would be guilty of an offence
under s. 52 of the 1922-Act. Section 297(1) of the 1961-Act repealed the 1922Act. Jn s. 297(2) there is no saving for launching a prosecution under s. 52
of the 1922-Act. But since no intentinn different frnm that in s. 6 of the General
Clauses Act, 1897, appears ins. 297(2) of the 1961-Act, the criminal liability incurred under s. ~2 of the 1922 Act remains unaffected under s. 6(c) of the General
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SUPREME COURT REPORTS
f1975J 3 s.c.R.
Clauses Act. The prosecution c'an only be for tlie offence under s. 52 of the
1922-Act ands. 277 of the 1961 Act, which corresponds to s. 52 of the 1922-Act,
cannot be invoked, [93 J G-H]
c b) The ;ippcllant would also be entitled lo rely on the second part of Art.
20 (I ) that he sho

## Text

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TIWARI KANAHAIYALAL ETC.
v.
THE COMMISSIONER OF INCOME TAX, DELHI
March 13, •I 975
[A. ALAGIRISWAMI AND N. L. UNTWALIA, JJ.]
927
i11co111e-tax Act ( 11 of 1922), ss. 28 w1d 52, Income-tax Act (43 of 1%1),
ss. 271, /77 and 297 ancl Gmera/ C/(111.\<'s Act (10 of 1897) s. 6 (c)-False dec/aratio11 filed by assessee under 1922 Act-Penalty imposed under 1961 ActPrmecution for false declaration under s. 52 of 1922 Act-ft valid.
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Sec lion 297 (2) (f) of the Indian Income-tax Act, 1961, provides that notwithstanding the repeal of the Income-tax Act, 1922, any proceeding for the imposition of a penalty in respect of any assessment completed before April 1,
1962, may be initiated 'as if the 1961 Act had not been passed; and Clause (g)
provides that any proceeding for the imposition of a penalty in respect of any
assessment for the year ending March 3 l, 1962, or any earlier year, which was
completed 011 01 after April 1, 1962 may be initiated under the 1961 Act. Section
28(4) of the 1922 Act provides that no prosecution for an offence against the
1922 Act shall be instituted in respect of the same facts on which a penalty has
been imposed undCJ the section.
The appellant, filed returns under s. 22(2), Income-tax Act, 1922, the last of the
returns being for the assessment year 1959-60. In 1964, he filed revised returns
for the same assessment years showing a larger income.
The income-tax was
~1ssessed under the 1961 Act on the revised returns and penalty proceedings were
instituted and penalty was levied.under s. 271 of the 1961 Act. The respondent,
thereafter, filed complaints for offences under s. 277 of the 1961 Act. By way
of abundant caution he alsc filed complaints on the same facts for offences under
s. 52 of the f922 Act. The trial court held that the launching of prosecution was
illegal in view of s. 28 ( 4) of th~ 1922-Act and Art. 20 ( l) of the Constitution.
The High Court, in appeal~ held that since no penalty was imposed under 6. 28
of the 1922 Act, s. 28 ( 4) was not a bar to the institution of proserntion nor \\'as
it hit by Art. 20(1), and directed the trial court to proceed with the trial.
Dismissing the appeal to this Court,
HELD : (l) All the assessments although they related to the years .::arlier
than the year ending on March 31. J 962, and were completed after the coming
into force of the 1961-Act. (April, 1962). Hence the proceeding for the imposition of penalty had to be and was initiated under the 1961 Act under s. 297(g).
Therefore, s. 28(4) of the 1922 Act cannot be a bar as no penalty was imp.1sed
under s. 28o1and there is no provision similar to s. 28(4) in the 1961 Ad. [5>30
A-Bl
Jain Bros & Others v. The U11io11 of llldia & others [1970] 3 S.C.R. 253.
followed.
(2) Article 20(1) docs not help the appetlant. lt is not a post facto legi~lation
that is being pressed against him. Section 28 ( 4) did not obliterate the commissivn of the offence or convert the offence into an innocent act.
Under the section, the imposition of penalty merely barred the prosecution. But in the present
case, the penalty having been imposed under s. 271 of the 1961 Act the launching
of prosecution became permissible and was not hit by Art. 20(1). [931 DJ
Rao Shir Balrndur Singh and a11otlicr v. Tile State of Vi11clllya Prade>il {1953]
S.C.R. 1188. followed.
(3) (a) On the facts alleged, '.f true. the appellant would be guilty of an offence
under s. 52 of the 1922-Act. Section 297(1) of the 1961-Act repealed the 1922Act. Jn s. 297(2) there is no saving for launching a prosecution under s. 52
of the 1922-Act. But since no intentinn different frnm that in s. 6 of the General
Clauses Act, 1897, appears ins. 297(2) of the 1961-Act, the criminal liability incurred under s. ~2 of the 1922 Act remains unaffected under s. 6(c) of the General
928
SUPREME COURT REPORTS
f1975J 3 s.c.R.
Clauses Act. The prosecution c'an only be for tlie offence under s. 52 of the
1922-Act ands. 277 of the 1961 Act, which corresponds to s. 52 of the 1922-Act,
cannot be invoked, [93 J G-H]
c b) The ;ippcllant would also be entitled lo rely on the second part of Art.
20 (I ) that he should nol be subjected to a penalty ::;realer than that which might
have been inflicted under the Jaw in force at the time of the commission of the
offence. Is. 52 of the 1922 Act), because, s. 277 of the 1961-Act, corresponding
to s. 52 of the 1922 Ac:t, provides a greater punishment. [931 E-F]
· CR!:V!INAL APPELLATE JuRrsorcnoN : Criminal Appeal No. 2839 of 1971.
Appeals by Special Leave from the Judgment and Order d,}ted
the J 8th August, 1970 of the Rajasthan High Court in SB. Criminal
Revision Nos. 102-113 of 1968.
M. M. Tewari, and S. M. Jain, for the appellant.
T. A. Ra111achandran, .~. P. Nayar, and R. N. Sachthey, for the
rcpondent.
The Judg~ent of the Court was delivered by
L:o;TWALL\, J.
These are 12 appeals filed by the appellant on grant
of special leave by this Court from the common judgment o.f
the
Rajasthan High Court allowing 12 Criminal appeals filed by the respondent in accordance with section 417(3) of the Code of Criminal
Procedure, 1898.
The appellant as partner ol' his partnership firm
filed 12 Income Tax Returns for various assessment years-the last
one being assessment year 1959-1960.
The Returns were filed by
the appellant between 26-3- l 95g and 16-10-1961 ;n accordance with
section 22(2) of the Income Tax Act, 1922-ncreinafter referred to
~s th.: 1922 Act.
The said act was repealed and replaced by the
Income Tax Act, 1961-hereinafter called .the 1961 Act.
The 1961
Act came into force on or from 1-4-1962.
During the course of #le
assessment proceedings when account books were produced for examination by the Income-tax Officer, Special Investigation Circle-
'B'. Jaipur, he suspected their genuineness or correctness.
In May,
1963 the appellants premises were searched and a number of other
books of account and documents were seized. Thereupon the appellant filed revised Returns on 1-3-1964 in respect of all the 12 periods.
fn the revised Returns the total income shown was far greater than
what was shown in the earlier Returns. Income-tax was assessed after
the filing ·of the revised Returns in respect of all the periods in accordance with the 1961 Act.
Penalty proceedings were foitiated and
penalfy was levied in respect of each Return under section 271(1)
(c)(iii) of the 1961 Act.
The respondent filed 12 complaints against
the appellant alleging commission of offence by him under section
277 of the 1961 Act.
Since the respondent was not quite sure of
the legal jJOSition, as a matter of abundant precaution 12 more complaints were filed on the same facts to make out commission of offence
by the appell~nt under section 52 of the 1922 Act. The (ity Magistrate, Jaipur 111 whose court all the 24 complaints were filed ordered
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TIWARI K. L. v. c.r.r. (Untwalia, !.)
929
the tagging of the 12 complaints filed later ·under section 52. of the
1922 Act with the complaints filed earlier under section 277 of the
1961 Act.
To all intents and purposes therefore the numerically 24
complaints became 12 complaints for trial of the appellant under
section 277 of the 1961 Act or section 52 of the 1922 .i<;.t as the case
may be.
After the commencement of the trial the appellant in each case
filed a petition before the City Magistrate that the launching of the
prosecution against him was bad and void in view of the provisions
of section 28(4) of the 1922 Act read with Article 20(1) of the Constitution of India. The Magistrate felt ,persuaded to accept the stand
taken on behalf of the appellant and held that he could not
be
prosecuted after imposition of penalty under the taxing statute and
acquitted tho appellant in all the cases.
The High Court has held
that since no penalty was impose~ on the petitioner or his firm under
section 28 of the 1922 Act, section 28(4) was not a bar to the institution of the prosecution nor was it hit by Article 20(1). The High
Court did not express any view whether the offence, if any, committed
by the appellant fell under section 277 of the 1961 Act or section
52 of the 1'922 Act.
The appeals were allowed and the Magistrate
was directed to proceed with the trials in accordance with the law.
Hence these appeals.
The only question falling for our determination in these appeals
js whether institution of the prosecution against the appellant for the
alleged commission of offences by him under either the 1961 or the
1922 Act was bad in law !lS being violative of section 28(4) of the
1922 Act or Article 20(1).
Section 297(1) of .the 1961 Act repealed the 1922 Act. Certain
savings were provided in sub-section (2) some of which even without
those express 12rovisions would have been covered by section 6 of the
General Clauses Act, 1897.
But for the sake of precision and certainty those provisions were made.
Some of the clauses (a) to (m)
in sub-section (2) of section 297 are such that a different intention
appears from them and they over-ride or supplement the provisions
contained in section 6 of the General Clauses Act.
Section 297 (2)
provides "Notwithstanding the repeal of the Indian Incomr-tax Act,
1922 (XI of 1922) (hereinafter referred to as the repealed Act),-
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(f) any proceed'ing for the imposition of a penalty in respect of any assessment completed before the 1st jay
of April, 1962, may be initiated and any such penalty
may be imposed as if this Act had not been passed;
(g) any proceeding for the imposition of a penalty in
respect of any assessment for the year ending on the
31st day of March, 1962, or any earlier vear, which
is completed on or after the 1st day of April, 1962,
may be initiated and any such penalty may be
imposed under this Act."
13-564SupCI/75
930
SlJPREME ( JURT RF.PORTS
[19751 3 s.c.R.
All the 12 assessments altlrough they related to the years earlier than
the year ending on the 31st day of March, 1962 were ?ompleted a~ter
coming into force of the 1961 Act.
Hence a proceedmg for the imposition of p1~nalty in respect of any one of those years had to be and
was initiated under the 1961 Act in accordance with clause
(g).
Clause (f) did not come into play and no penalty was imposed under
section 28 of the 1922 Act.
That being so, as rightly pointed out
by the High Court, section 28(4) was not a .bar to the launching of
the prosecution as no such provision is to be found either in secfoJn
271 or in any othe1~ section of the 1961 Act.
Section 28(4) says
"No prosecution for an offence against this Act shall be instituted in
respect of the same facts on which a penalty has been imposed under
this section."
The said provision is not available to the appellant
to bar the institution or the prosecution for an offence against either
of the two Acts when a penalty has been imposed not under section
28(1) of the 1922 Act but under section 271(1) of the 1961 Act.
Grover, J delivering the judgment on behalf of the Constitution
Bench of this Court in the case of Jain Bros & others v. The Union
of India others( 1) has pointed out at page 2'63 :
"It is obvious that for the imposition of penalty it is not the
assessment year or the date of the filing of the return which
is important but it is the satisfaction of the income tax authorities· that a default has been committed by the
assessee
which would attract the provisions relating to penalty. What-·
ever the stage at which the satisfaction is reached,
the
scheme of ss.274(1) and 275 of the Act of 1961 is that the
order imposing penalty must be made after the ·completion
of the assessment. The crucial date, therefore, for purposes
of penalty is the date of such completion."
At page 264 says the learned Judge further :
•
"Both ss. 271(1) and 297(2)(g) have to be read together
and in hanpony and so read the only conclusion possible is
that for the imposition of a penalty in respect of any assessmentfor the year ending on March 31, 1962 or any earlier
year which is complete_d after first day of April 1962 the
proceedings have to be initiated and the penalty imposed
in accordance with the provisions of s.271 of the Act of
1961."
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Even clause (1) of Article 20 of the Constitution does not help the
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appellant.
It is not a pas~ facto legislation which is being gressed
into· service against him.
As pointed out by a Constitution Bench
of this Court in Rao Shiv Bahadur Singh and another v. The State of
Vin~hya Pradesh(2 ) at page 1198:
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"This article in its broad import B.as been enai:ted to prohibit
convictions and sentences under ex post facto laws. The
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principle underlying such prohibition has been elaborately
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(1} (1970] (3) S.C.R. 253.
(2) (1953] S.C.R. 1188.
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TIWARI K. L. v. c.r.r. (Untwalia, !.)
discussed and pointed out in th:: very_ learned judgment of
Justice Willes in the well known case of Phz'!lips v. Eyre-
(1870) 6 Q.B.D. I, at 23 and 25 and also by the Supreme
Court of U.S.A. in Calder v. Bull-3 Dallas 386; I Law.
Edition 64~ at 649. In the English case it is explained that
ex post jdt~o laws are laws which voided and punished what
had been lawful when done.
There can be no doubt as to
the paramount importance of the principle that such ex post
facto laws, which retrospectively create offences and punish
them are bad as being highly inequitable and unjust."
931
Article 20(1) also prohibits_ the subjecting 'Of any person to a penalty
greater than that which might have been inflicted under the law in
force at the time of the commission of the offence.
On the facts
alleged against the appellant, if found to be true, at the time he made
the false statements in the declarations he did commit an offence
under section 52 of the 1922 Act.
Sub-section (4) o~ section 28 did
not obliterate the factum of the commission of the offence and did not
transmute the offence into an innocent act because of the imposition
of penalty under section 28.
Such imposition merely
barred
the
prosecution for the trial and conviction of the commission ·of the
offence.
The penalty having been imposed under section 271 of the
1961 Act the launching of the prosecution became permissible and
was not hit by Article 20(1) on the Constitufron.
We are inclined
to think that the offence, if any, committed by the appellant was under
section 52 of the 1922 Act as the allegedly false statements in declarations were made at a time when the said Act was in force.• No
false statement in any declaration seems to have been made under
the 1961 Act to form the basis of a charge against the appellant
11der section Z77 of that Act.
The punishment provided in tliis
.;ection is greater than the one engrafted in section 52 of the 1922
Act. To that extent only the appellant would be entitled to press into
service the second part of clause (1) of Article 20 of the Constltution
which says that no. _person shall:
"be subjected to a penalty greater than that which might have
been inflicted under the law in force at the time of the commission of the offence."
It is advisable to discuss and dispose of a new point which arose
during the hearing of these appeals. Sub-section (1) of section 297
of the 1961 Act repealed the 1922 Act including section 52.
In
sub-section (2) no saving seems to have been provid_ed for the launching of the prosecution u_nder the repealed section 52 of the 1922
Act. It does not seem correct to take recourse to clause (h) of Sec-
. tion 297(2) tQ make the offences come under section 277 of the 1961
Act as was endeavoured to be done by the respcindent in the first
12 comP,!aint petitions. But thea from no clause under sub-section
(2). a different intention appears in this regard from what has been
said in section 6 of. the General elauses Act. On the facts alleged
the criminal liability incurred μnder sectfun 52 of the 1922 Act re-
~ains, unaffected under clause (c) of section 6 of the General Clauses
' .
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932
SUPREME COURT REPORTS
l19751 3 s.c.R.
Act. In the case of T. S. Baliah v. T. S. Rangachari(l) Ramaswami, J.
delivering the judgment of this Court has said at page /1 :
"The principle of this section is that unless a different intention appears in the repealing Act, any legal proceeding can
be instituted and continued in respect of any matter pending
under the repealed Act as if that Act was in; force at the
time of repeal.
In other words, whenever there is a repeal
of an enactment the consequences laid d'Own in s.6 of the
General Clauses Act will follow unless, as the section itself
says, a different intention appears in the repealing statute.
In the case of a simple repeal there is· scarcely aqy room
for expression of a contrary opinion.
But when the repeal
is followed by fresh legislation 'On the same subject the Court
would undoubtedly have to look to the provisions of the
new Act, but only for the purpose of determining whether .
they indicate a ~!f'l'erent intention.
The question is
n'Ot
whether the new Act expressly keeps alive old rights and
liabilities but whether it manifests an intention to destroy
them.
Section 6 of the General Clauses Act therefore will
be applicable unless the new legislation manifests an intention incompatible with or contrary to the provisions of the '
section.
Such incompatibility would have to be ascertained
from a consideration of all the relevant _provisions of the
new statute and the mere absence of a saving clause is by
itself not material."
In the result all the appeals fail and are dismissed.
V.P.S.
Appeals dismissed.
(1) [1969] (3) S.C.R. 65.
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