S. B. JAIN, I.T.O. NAGPUR vs MAHANDERA on 7 September, 1971

(i)...............................

(ii) any income chargeable to tax had escaped

assessment

within

the meaning

of

that

expression in Section 147 and no proceedings

under section 34 of the repealed Act in

respect of any such

income are pending at the commencement of this

Act, a notice under Section 148 may, subject

to the provisions contained in Section 149 or

section 150, be issued with respect to that

assesment year and all the provisions of this

Act

shall apply

accordingly".

(Emphasis

supplied).

The only question for decision in these appeals is whether

the proceedings initiated by the notice under section 34(1)

(a) of the 1922 Act were pending at the time when the new

Act came into force. It is not denied that such proceedings

were factually pending. But what was contended by Mr. B.

Sen, learned counsel for the department was that that notice

being an invalid notice on the ground that that was barred

by limitation, the proceedings initiated on basis of that

notice should be considered as not pending in the eye of the

law. We are unable to accept this contention. What section

297 (2) (a) (ii) requires is the factual pendency of a

proceeding under section 34 of the repealed Act.

The

question whether that proceeding was barred by limitation or

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SUPREME COURT OF INDIA

not is irrelevant. It is not denied that those proceedings

were initiated by a competent authority. Those- proceedings

were quashed for the reason that notice under section 34 of

1922 Act was issued beyond the time prescribed by law.

Hence it cannot be said that no proceeding under section 34

of the 1922 Act either factually or legally was pending at

the time when the new Act came into force.

Our above conclusion receives support from the decision of

this Court in Raja Kulkarni and others v. The State of

Bombay(1). Therein the question that arose for decision was

whether an appeal under section 24 of the Industrial

Disputes Act, 1950 can be said to have been pending if that

appeal was incompetent or invalid for some reason.

This

Court ruled that what was necessary was the factual pendency

of the appeal and not that it should have been a valid or

competent one under the provisions of the limitation Act or

such other adjectival law.

The proceedings pending before a competent authority cannot

be said to be not pending merely because that no relief can

be granted in that proceedings because of the bar of

limitation.

In Mela Ram & Sons v. Commissioner of Income

Tax, Punjab(’:) it was contended before this Court that any

appeal which is barred by limitation cannot be considered as

an appeal properly presented under Section 30 of the Indian

Income Tax Act, 1922. This Court rejected that contention

observing :

(1) [1954] S.C.R. 384.

(2) 29 I.T.R. p. 607.

"it an appeal is not presented within that

time (within the prescribed time) does that

cease to be an appeal as provided under

section 30(1) ? It is well established that

rules of limitation pertain to the domain of

adjectival law, and that they operate only to

bar the remedy but not to extinguish the

right. An appeal preferred in accordance with

Section 30(1) must, therefore, be an appeal in

the eye of law, though having been presented

beyond the period mentioned in section 30(2)

it is liable to be dismissed in limine."

We have no doubt in our mind that the proceedings initiated

under Section 34(1) (a) of the 1922 Act were pending at the

time 1961 Act came into force and that being so the Incometax Officer was not competent to issue any fresh notice

under section 148 of the 1961 Act.

In the result Civil Appeal No. 1301 of 71 fails and the same

is dismissed with costs. Civil Appeal No. 1981 of 68 is

dismissed as not being maintainable. Parties to bear their

own costs in this appeal.

K.B.N.

Appeals

dismissed.

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