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PETITIONER: TIWARI KANAHAIYALAL ETC.

       Vs.

RESPONDENT: THE COMMISSIONER OF INCOME TAX, DELHI

DATE OF JUDGMENT13/03/1975

BENCH: UNTWALIA, N.L. BENCH: UNTWALIA, N.L. ALAGIRISWAMI, A.

CITATION:  1975 AIR  902            1975 SCR  (3) 927  1975 SCC  (4) 401

ACT: Income-tax  Act (11 of 1922), ss. 28 and 52, Income-tax  Act (43  of 1961), ss. 271, 277 and 297 and General Clauses  Act (10  of 1897) s. 6 (c)--False declaration filed by  assessee under 1922 Act--Penalty imposed under 1961  Act--Prosecution for false declaration under s. 52 of 1922 Act--If valid.

HEADNOTE: Section  297(2)(f)  of  the  Indian  Income-tax  Act,  1961, provides  that notwithstanding the repeat 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  31,  1962, or any  earlier  year,  which  was completed on or after April 11. 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 Linder 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  assessed 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 also filed complaints on  the same  facts for offences under s. 52 of the [922  Act.   The trial  court  held  that the launching  of  prosecution  was ’illegal in view of s. 28(4) of the 1922-Act and Art.  20(1) of  the Constitution.  The High Court, in appeal, held  that since no penalty was imposed under s. 28 of the 1922 Act, s. 28  (4) was not a bar to the institution of prosecution  not was  it hit by Art. 20(1), and directed the trial  court  to proceed with the trial. Dismissing the appeal to this Court, HELD : (1) All the assessments although they related to  the years  earlier than the year ending on March 31,  1962,  and were completed after the coming into force of the  1961-Act.

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(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 imposed under s. 28,and there  is  no provision similar to s. 28(4) in the 1961 Act. [930 A-B] Jain  Bros & Others v. The Union of India & others [1970]  3 S.C.R. 253. followed. (2) Article 20(1) does not help the appellant.  It is not  a post  facto legislation that is being pressed  against  him. Section  28(4)  did  not obliterate the  commission  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 D] Rao  Shiv Bahadur Singh and another v. The State of  Vindhya Pradesh [1953] S.C.R. 1188. followed. (3)  (a) On the facts alleged, if true, the appellant  would be  guilty  of  an offence tinder s.  52  of  the  1922-Act. Section 297(1) of the 1961-Act repealed the 1922Act.  In  s. 297(2) there is no saving for launching a prosecution  under s.  52  of the 1922-Act.  But since no  intention  different from that in s. 6 of the General Clauses Act, 1897,  appears in  s.  297(2) of the 1961-Act, the criminal  liability  in- curred tinder s. 52 of the 1922 Act remains unaffected under s. 6(c) of the General 928 Clauses  Act.  The Prosecution can only be for  the  offence under  s.  52 of the 1922-Act and s. 277 of  the  1961  Act, which  corresponds  to  s. 52 of  the  1922-Act,  cannot  be invoked. [931 G-H] (b)  The  appellant would also be entitled to  rely  on  the second part of Art. 20(1) that he Should not 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,  (s.  52 of the 1922 Act), because, s. 277  of  the 1961-Act, corresponding to s. 52 of the 1922 Act, provides a greater punishment. [931 E-F]

JUDGMENT: CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.  28-39 of 1971. Appeals  by Special Leave from the Judgment and order  dated the  18th  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. Ramachandran S. P. Nayar, and R. N. Sachthey, for  the respondent. The Judgment of the Court was delivered by UNTWALIA, J. These are 12 appeals filed by the appellant  on grant  of  special  leave  by this  Court  from  the  common judgment  of 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  of his partnership  firm  filed  (1) Income Tax Returns for various assessment years-the last one being assessment year 1959-1960.  The Returns were filed  by the appellant between 26-3-1958 and 16-10-1961 in accordance with  section 22(2) of the Income  Tax  Act,1922-hereinafter referred to as the 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.

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During the course of the 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.  In 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 initiated  and penalty  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 Position,  as  a matter of abundant precaution 12 more complaints were  filed on the same facts to remake out commission of offence by the appellant under section 52 of the 1922 Act.  The City Magis- trate,  Jaipur  in whose court all the  24  complaints  were filed ordered 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 Act 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 the  could  not  be prosecuted  after  imposition of penalty  under  the  taxing statute  and acquitted the appellant in all the cases.   The High Court has held that since no penalty was imposed 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 1922 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  is 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  as 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 provisions 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 (in) 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 Income-tax Act, 1922 (Xi of 1922) (hereinafter referred to as the repealed Act),-

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       *     *      *      *       *      *      *         *     *      *      *       *      *      *               (f)  any  proceeding for the imposition  of  a               penalty in respect of any assessment completed               before  the  1st day 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  year, 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." 930 All  the 12 assessments although they related to  the  years earlier than the year ending on the 31st day of March,  1962 were  completed  after coming into force of  the  1961  Act. Hence a proceeding for the imposition of penalty 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 section 271 or in any other 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 of 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 263 :               "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.   Whatever               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 harmony and so read the  only               conclusion possible is that for the imposition               of a penalty in respect of any assessment  for               the  year  ending  on March 31,  1962  or  any               earlier  year which is completed  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." Even  clause (1) of Article 20 of the Constitution does  not help  the  appellant.  It is not a  post  facto  legislation

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which is being pressed 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 Vindhya Pradesh(2) at page 1198 :               "This  article  in its broad import  has  been               enacted to prohibit convictions and  sentences               under  ex  post  facto  laws.   The  principle               underlying    such   prohibition   has    been               elaborately (1) [1970] (3) S.C.R. 253. (2) [1953] S.C.R. 1188. 931               discussed and pointed out in the very  learned               judgment  of Justice Willes in the well  known               case of Phillips v. Eyre(1870) 6 Q.B.D. 1,  at               23  and  25 and also by the Supreme  Court  of               U.S.A. in Calder v. Bull-3 Dallas 386; 1  Law.               Edition 648 at 649.  In the English case it is               explained  that  ex post facto 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." 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,  it  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) of  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) of  the Constitution.  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  under  section 277 of that Act.   The  punishment provided  in this section 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 Constitution  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  bring the hearing of these appeals.  Sub-section  (1) of, section 297 the 1961 Act repealed the 1922 Act including section 52.  In sub-section (2) no saving seems to have been provided  for  the launching of the  prosecution  under  the repealed section 52 of the 1922  It does not seem correct to take  recourse to clause (h) of Section 297(2) to  make  the offences  come  under  section 277 of the  1961  it  as  was endeavoured  to  be  done by the  respondent  in  the  first

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complaint  petitions.   But then from no clause  under  sub- section  a different intention appears in this  regard  from what has been I in section 6 of the General Clauses Act.  On the facts alleged criminal liability incurred under  section 52  of the 1922 Act reasons unaffected under clause  (c)  of section 6 of the General Clauses 932 Act.   In  the case of T. S. Baliah v. T.  S.  Rangachari(1) Ramaswami, J. delivering the judgment of this Court has said at page 71 :               "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 down 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 any 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 different  intention.               The  question  is  not  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. 933