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PETITIONER:

MAHADEO PRASAD BAIS (DEAD)

Vs.

RESPONDENT:

INCOME-TAX OFFICER 'A' WARD, GORAKHPUR AND ANR.

DATE OF JUDGMENT12/09/1991

BENCH:

RANGNATHAN, S.

BENCH:

RANGNATHAN, S.

RAMASWAMI, V. (J) II

OJHA, N.D. (J)

CITATION:

1991 AIR 2278 1991 SCR Supl. (1) 9

1991 SCC (4) 560 JT 1991 (6) 150

1991 SCALE (2)541

ACT:

Income Tax Act, 1961--Sections 148, 150 and

297(2)(d)(ii) Reassessment--Limitation Removal of bar of

limitation---When arises.

HEADNOTE:

The appellant (since deceased) was being assessed as the

Karta of the Hindu Undivided Family consisting of himself,

his mother, his wife and three sons until the assessment

years 1948-49. For the assessment year 1949-50 and subse-

quent years upto 1961-62 he filed a return in his individual

capacity claiming that there had been a total partition of

the family and that he was assessable in respect of the

income from the properties of the family that fell to his

share on partition; in the alternative he claimed partial

partition. Both of his claims having been negatived, the

entire income was assessed in the hands of the Hindu Undi-

vided Family and the returns filed by the appellant in his

individual capacity were finalised on the footing that there

was no income assessable in his individual capacity. The

Hindu Undivided Family went up in appeals and ultimately the

Tribunal accepted the claim of partial partition in respect

of some of the properties. The conclusion of the Tribunal

was affirmed by the High Court, with the result that the

income from some of the erstwhile family properties stood

excluded from the assessment of the Hindu Undivided Family

and became liable to be included in the hands of the appel-

lant. The original assessments made on the appellant as an

individual for the assessment upto 1961-62 had been complet-

ed under the Income-tax Act, 1922 and in these assessments

no income from the erstwhile joint family properties had

been included as the Income Tax Officer was of the view, as

in 1949- 50, that it was assessable in the hands of the

family. There were no proceedings initiated or pending under

Section 34 of the 1922 Act in respect of these assessment

years as on 1.4.1962, when the 1922 Act was repealed by the

1962 Act. The Income Tax Officer therefore, served a notice

for reassessment on the appellant, invoking the provisions

of Section 297(2)(d)(ii) of the Act. The appellant resisted

the reassessment proceedings on the ground that notice was

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barred by limitation while the department contended that the

reassessment proceedings in this case were saved by the

provisions of Section 150(1) of the 1961 Act. The High Court

accepted the contention of the department.

10

Dismissing the assessee's appeal, this Court,

HELD: The provisions of Section 150(1) have been spe-

cially made applicable and operative in respect of a notice

under section 148 issued in pursuance of Section

297(2)(d)(ii). The application of the provisions of Section

297(2)(d)(ii) gives rise to two sets of situations to one of

which the language of Section 150(1) would squarely apply.

Section 150(1) will operate to lift the time bar in cases

where the reassessment is initiated under section 148 to

give effect to an order passed under the 1961 Act. Section

297(2) is a provision enacted with a view to provide for

continuity of proceedings in the context of repeal of one

Act by a fresh one broadly containing analogous provisions

and the transitory provisions should as far as possible, be

construed so as to affect such continuity and not so as to

create a lacuna. It will therefore be appropriate to so read

the words of section 297(2)(d)(ii) as to permit the applica-

bility of section 150 (or section 153) with the necessary

modifications. [18 G, 19A-B, D-E]

The last words of Section 297(2)(d)(ii) should be read

to mean that where the proceedings initiated under Section

148, subject to the relaxations and limitation of Sections

149 and 150, all the provisions of the Act shall apply

accordingly: that is to say, in the same manner as they

would apply in case of proceedings normally initiated under

these provisions. Since reassessment proceedings so initiat-

ed to give effect to orders on appeal, revision or reference

will not be subject to a time limit, the proceedings like-

wise initiated under Section 297(2)(d)(ii) read with Section

149 will also not be subject to any limitations save to the

extent mentioned in Section 150(2). [19 E-F]

Income Tax Officer v. Eastern Coal Co. Ltd., (1975) 101

I.T.R. 477; Commissioner of Income Tax' v. Kamalapat Moti-

lal, (1977) 110 I.T.R. 769; Ambaji Traders v. Income Tax

Officer, (1976) 105 I.T.R. 273; Commissioner of Income Tax

v.T.P. Asrani, (1980) 122 I.T.R. 735; Jain v. Mahendra,

(1972) 83 I.T.R. 104; Govinddas v. Income Tax Officer,

(1976) 103 I.T.R. 123; Seth Gujannal Modi v. Commissioner of

Income Tax, (1972) 84 I.T.R. 261; Third Income Tax Officer

v. Damodar Bhat, (1969) 71 I.T.R. 806; Jain Bros. v. Union

of India, (1970) 77 I.T.R. 107, referred to.

JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1934 of

1978.

From the Judgment and Order dated 21.12.1977 of the Allaha-

bad

11

High Court in Civil Misc. Writ Petition No. 227 of 1977.

Ms. Rachna Gupta for the Appellant.

S.C. Manchanda and K.P. Bhatnagar for the Respondents.

The Judgment of the Court was delivered by

RANGANATHAN, J. The Income-tax Act, 1961 replaced the

Indian Income-tax Act, 1922 w.e.f. 1.4.1962. The repeal of

the earlier Act necessitated the enactment of transitional

provisions to facilitate the change over. Perhaps the sim-

plest course would have been to provide that the new Act

would apply to all proceedings for the assessment year

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1962-63 and thereafter. The legislature, however, evolved a

more complicated procedure. While section 297(1) of the new

Act declared that the Indian Income-tax Act, 1922 stood

repealed by the new Act, sub-section (2) of the above sec-

tion made detailed and meticulous provisions in clauses (a)

to (m) as to whether the new Act or the old Act will govern

in the various situations dealt with therein. These provi-

sions have led to a lot of litigation and the controversy in

this appeal also arises out of one such provision. We are

concerned here with the scope of proceedings for reassess-

ment in respect of assessment years prior to 1962-63 and the

answer to the question before us turns on the provisions of

the following two sections of the 1961 Act:

Section 297

"297(1) xxx xxx xxx

(2) Notwithstanding the repeal of the Indian

Income-tax Act, 1922 (11 of 1922) (hereinafter

referred to as 'the repealed Act')

xxx xxx xxx xxx

(d) where in respect of any assessment year

after the year ending on the 31st day of March

1940

(i) a notice under section 34 of the re-

pealed Act had been issued before the com-

mencement of this Act, the proceedings in

pursuance of such notice may be continued and

disposed of as if this Act had not been

passed;

12

(ii) any income chargeable to tax had es-

caped assessment within the meaning of that

expression in section 147 and no proceedings

under section 34 of the repealed Act in re-

spect 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 assessment year

and all the provisions of this Act shall apply

accordingly."

Section 150

"150(1) Notwithstanding anything contained in

section 149, the notice under section 148 may

be issued at any time for the purpose of

making an assessment or reassessment or recom-

putation in consequence or, or to give effect

to, any finding or direction contained in an

order passed by any authority in any proceed-

ing under this Act by way of appeal, reference

or revision."

(underlining ours)

We may proceed now to set out how the question arises in

the present case: The appeal arises out of an order of the

High Court in a writ petition filed by one Mahadeo Prasad

Bais (since deceased, represented by his legal representa-

tives) challenging reassessment proceedings initiated

against him for the assessment years 1953-54 to 1963-64. The

appeal is, however, restricted to the assessment years

1953-54 to 1961-62. Upto assessment year 1948-49, the appel-

lant was being assessed as the Karta of a Hindu Undivided

Family consisting of himself, his mother, his wife and three

sons. For the assessment year 1949-50 and subsequent years

upto 1961-62 he had filed a return in his individual capaci-

ty on the footing that there had been a total partition of

the family within the meaning of Section 25A of the Indian

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Income-tax Act, 1922 and that he was assessable in respect

of the income from the properties of the family allotted to

him at the partition. In the alternative, he claimed partial

partition of some of the joint family properties.f Both

these claims were initially negatived and the entire income

was assessed in the hands of the Hindu Undivided Family. The

returns filed by the appellant in his individual capacity

were finalised by holding that there was no income assessa-

ble in his individual capacity. The Hindu Undivided Family

went up in appeals and ultimately the Tribunal accepted the

claim of partial partition in respect of some of the proper-

ties with effect from different dates. This conclusion of

the Tribunal was also affirmed by the High Court in the

decision reported as Mahadeo Prasad Bais v. Income-

tax Officer, (1972) 84 ITR 48 which related .

13

to the assessment years 1956-57 to 1958-59. Consequent on

these decisions of the Tribunal and the High Court, the

income from some of the erstwhile family properties stood

excluded from the assessment of the Hindu Undivided Family

and became liable to be included in the hands of the present

appellant. The assessment for 1949-50 and subsequent years

upto 1961-62 on the family had been completed and the ap-

peals and reference disposed of under the Indian Income-tax

Act, 1922.

The original assessments made on the appellant as an

individual for the assessment years 1953-54 to 1961-62 had

been completed under the Indian Income-tax Act, 1922. In

these assessments no income from the erstwhile joint family

properties had been included as the officer was of the view,

as in 1949-50, that it was assessable in the hands of the

family. There were no proceedings initiated or pending under

Section 34 of the 1922 Act in respect of these assessment

years as on 1.4.1962. Quite sometime after the High Court

had decided the reference for 1949- 50 in the case of the

family, the Income-tax Officer thought of steps to include

the income assessable in the hands of the appellant conse-

quent on the decisions of the Tribunal and the High Court

which he had failed 10 assess earlier. He, therefore, served

on the appellant on 19.3.1977 notices for reassessment, as

required by section 297(2)(d)(ii), under section 148 of the

1961 Act. The appellant resisted these proceedings, inter

alia, on the ground that the notices were barred by limita-

tion. The department, however, contended that, though nor-

mally reassessment proceedings had to be initiated within a

period of four, eight or sixteen years as the case may be,

under the then provisions of Section 149 of the 1961 Act,

the reassessment proceedings in this case were saved by the

provisions of Section 150(1) of the 1961 Act set out earli-

er. This contention of the department has been accepted by

the High Court in the decision under appeal before us which

is reported in (1980) 125 ITR 49.

The issue involved in this appeal is basically a short

one turning on the language of section 150(1). Before con-

sidering the interpretation of this section, we may, howev-

er, point out that, on this question, there appears to be a

conflict of judicial opinion between the several High

Courts. The Allahabad High Court, in the decision presently

under appeal (1980)125 I.T.R. 49 and the Calcutta High Court

in I.T.O. v. Eastern Coal Co. Ltd., (1975) 101 ITR 477 have

taken the view that a reassessment in such circumstances is

saved by the provisions of Section 150(1) of the 1961 Act.

An earlier Allahabad decision in C.I.T. v. Kamalapat Moti-

lal, (1977)110 I.T.R. 769 and an earlier Bombay decision in

Ambaji Traders v. 1.T.O., (1976)105 I.T.R. 273 took a simi-

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lar view on the analogous provision contained in section

153(3) of the 1961 Act but a contrary view was taken by the

latter

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High Court in the latter case reported as CIT v.T.P. Asrani,

(1980) 122 ITR 735. Both sets of decisions have placed

reliance on certain observations of this Court in differing

contexts. But it will be best to have a look at the statuto-

ry provisions first, in the context of the facts of the

present case.

To start with, there is no dispute that reassessment

proceedings were rightly initiated under section 148 of the

Act. It is also common ground that on the language of sec-

tion 148, as it stood at the relevant time, no notice under

section 148 could have been issued in March 1977 for the

assessment years in question. The Revenue can successfully

support the validity of this notice only by reference to

section 150 (1). Two questions then arise: (i) Are the

provisions of section 150 (1) attracted ? (ii) If yes, do

they save the impugned proceedings ? The answer to the first

question is furnished by section 297 (2) (d) (ii), the very

clause which authorises the issue of the notice of reassess-

ment under section 148. It permits the issue of the notice

under section 148, "subject to the provisions contained in

section 149 or section 150". Though the words "subject to"

may be appropriate in the context of section 149 and section

150 (2) (which place restrictions on the issue of the notice

u/s 148), they are somewhat inappropriate a propos section

150 (1) which relaxes the conditions for issue. But there is

no doubt that the statute clearly intends that the benefit

of enlargement of the time limited under section 149 should

be available in respect of the notice issued under s. 148

read with s. 297 (2) (d) (ii). The answer to the second

question is furnished by s. 150 (1).itself. It removes the

bar of time when the reassessment proceedings are initiated

in consequence of or to give effect to a finding contained

in an order passed by any authority in any proceeding by way

of appeal, reference or revision. There is no difficulty

here for the orders of the Tribunal and the High Court for

the several years between 1949-50 and 1961-62 were passed in

proceedings by way of appeals and reference and there is no

dispute that the reassessment proceedings have been initiat-

ed to give effect to findings in such orders. There is,

however, a catch in applying the terms of s. 150(1) ' to

this case. There is no doubt that the whole idea of the

sub-section was to lift the embargo placed on initiation of

reassessment proceedings and to remove the time limit where

the notice of reassessment is issued with a view to give

effect to a direction or finding contained in an appellate

order or an order passed on revision or on reference. Unfor-

tunately, however, in expressing its above intention, the

legislature has worded the exemption from time limit so as

to cover only cases where the finding or direction is con-

tained in an order passed by any such authority in any such

proceeding "under this Act" i.e. the 1961 Act. In the

present case the assessments for 1949-50 and subsequent

years in the case of the family were made under the old Act

and were the subject matters of appeal to the

15

Appellate Assistant Commissioner and Tribunal and of refer-

ence to the High Court under the provisions of the 1922 Act.

In other words, the finding in consequence of which the

assessments presently under consideration are being sought

to be reopened is a finding contained in orders passed not

'under this Act' but in orders passed under the 1922 Act.

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Literally applied, therefore, the language of section 150

(1) does not help the department to overcome the bar of

limitation otherwise imposed by Section 149.

Pressing for the literal construction of the sub-sec-

tion, it is contended for the appellant that there are good

reasons why this construction should be accepted:

(1) To accept the contention of the depart-

ment would mean the virtual deletion of the

words "under this Act" from s. 150 (1);

(2) It seems clear that the above words have

not been inadvertantly used in the statute. If

one turns 10 s.153 (3), which is an extension

of s. 150 (1 ) removing the time ban for the

completion of reassessments initiated for the

same purpose, the legislature goes further

than section 150 (1) and makes specific refer-

ence to particular provisions of the new Act;

(3) The provisions of s. 150 (1) will not

become redundant if read in the manner con-

tended for by the assessee. While no doubt the

proceedings are initiated, in all cases cov-

ered by section 297 (2) (d) (ii), under the

new Act, the orders, for giving effect to a

finding or direction in which such proceedings

are initiated, may belong to either category -

they may be orders passed under the old Act or

they may be orders passed under the new Act.

The terms of section 150 (1) will be effective

in the latter category of cases; and

(4) The provisions contained in Ss. 150 (1)

and 153 (3) are provisions exempting the

applicability of a normal rule of limitation

otherwise applicable to actions for reassess-

ment and such provisions should be construed

strictly.

On the other hand, it is contended for the department

that the object of the provision being very obvious, namely,

that where reassessment proceedings are initiated to give

effect to orders on appeal, reference or

16

revision, there should be no time limit tying down the hands

of the Revenue as such orders are seldom likely to be passed

within the limits of time mentioned in s. 149, we should

give effect to the clear intention of the legislature and

should not frustrate its object. It is, therefore, necessary

to examine the provisions of s. 297 (2) (d) (ii) and s. 150

(1) a little more closely and examine which of the two

interpretations is preferable.

Taking up the appellant's interpretation first, it has

no doubt the attractiveness of simplicity. It is a strict

and literal interpretation of s. 150 (1). This apart,

learned counsel drew our attention to the fact that the

decided cases have referred to certain decisions of this

Court in this context. We do not, however, think that the

decisions of this Court in Jain v. Mahendra, (1972) 83 ITR

104 and Govinddas v. I.T.O, (1976)103 ITR 123 cited by

appellant's counsel arc of any assistance to them. In the

former case, a notice u/s 34 had been issued before 1.4.1962

but it had been quashed as without jurisdiction as it was

barred by time. The question was whether the proceedings

initiated by the notice can be said to have been pending as

on 1.4.1962. The Court answered the question in the affirma-

tive. It held that, for purposes of s. 297 (2) (d) (ii), all

that had to be seen was whether proceedings under s. 34 of

the 1922 Act were factually pending on 1.4.1962. That the

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notice issued before that date was barred by time and was

held so later was immaterial. The notice had in fact been

quashed by the High Court in a writ only much later, on

6.3.1963, and so proceedings under s. 34 were pending as on

1.4.1962. We are unable to see how this decision is of any

help here. In the second case, the claim by the assessee, a

Hindu undivided family, that there had been a partial parti-

tion on 15.11.1955 (as a result of which the share income

from two firms had ceased to be the income of the family

from that date) was accepted by the Income-tax Officer.

Subsequently, the assessments of the two firms for the

assessment years 1950-51 to 1956-57 had been reopened and

reassessments were made on them enhancing their income.

Consequently action was also taken to reopen the assessments

of the family (which, for the relevant previous years had a

share in the firms' income). These assessments were initiat-

ed under the new Act in accordance with the provisions of s.

297 (2) (d) (ii). The assessee had no grievance thus far.

But, while completing the reassessment, the officer, in

addition to reassessing the family, also took advantage of

the provisions enacted in Ss. 171(6) and (7) of the 1961 Act

- which had no counter part in the 1922 Act - and passed

orders apportioning the tax assessed on the family amongst

its members. This was objected to by the assessee. The

department, referring to the language of s. 297 (2) (d)

(ii)-"that all the provisions of this Act shall apply ac-

cordingly", contended that the I.T.O. could legitimately

invoke the provisions of Ss. 171 (6) and (7) as well while

17

making the reassessments. This contention was negatived. The

Court observed:

"These words merely refer to the machinery

provided in the new Act for the assessment of

the escaped income. They do not import any

substantive provisions of the new Act which

create rights or liabilities. The word "ac-

cordingly" in the context means nothing more

than "for the purpose of assessment" and it

clearly suggests that the provisions of the

new Act which are made applicable are those

relating to the machinery of assessment."

It will be at once clear that this line of approach can

have no validity in the context of section 297 (2) (d) (ii).

Here there is no need to guess or speculate on which provi-

sions of the new Act are to apply. The section itself, in so

many words, provides that Ss. 148, 149 and 150 will apply to

the initiation of a reassessment proceeding under s. 297 (2)

(d) (ii) and this cannot be negatived by the last few words

of that clause. On the contrary, as pointed out earlier,

they place it beyond all doubt that the provisions of the

1961 Act have to be applied to the reassessment on the basis

that Ss. 148 to 150 apply. This case also does not, there-

fore, advance the case of the assessees.

It is next contended by the appellant's counsel that the

very issue before us had been considered in the decision of

this Court in Seth Gujarmal Modi v. CIT, (1972) 84 ITR 261

and this concludes the issue in his favour. The second

headnote at page 261 seems to bear out this contention. It

reads:

" ..... Since the Appellate Assistant Com-

missioner's order was not passed under the

1961 Act, the department could not take any

support from section 150 (1) of the Act."

A perusal of the decision shows, indeed, that this was

the ground on which a separate contention urged on behalf of

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the department on the basis of section 150 (1) was repelled.

It is no doubt seen from the facts of the case that it was a

case of reassessment under section 297 (2) (d) (i) of the

Act and the Court specifically held that reassessment pro-

ceedings should have been initiated under section 34 of the

1922 Act and not under section 148 of the 1961 Act. In view

of this conclusion no question of drawing any support from

section 150 (1) could at all arise. Still an argument was

addressed and was repelled on the basis of the words "under

this

18

Act" used in section 150 (1) thus upholding the literal

construction argument now addressed on behalf of the asses-

see. We shall consider this decision later after considering

the department's contentions.

As against the above contentions, Sri Manchanda submits

that the provisions of section 150 (1) should be applied not

blindly but with necessary modifications to suit the situa-

tion. In support of this plea, he relies strongly on the

last few words of s. 297 (2) (d) (ii). It is urged that the

expression :"all the provisions of this Act shall apply

accordingly" should be so construed as to enable the Revenue

to invoke reassessment proceedings on the footing that the

orders on appeal or reference were ones passed "under this

Act" within the meaning of s. 150 (1). Sri Manchanda cited

two decisions in support of his contention. In Third I.T.O.

v. Damodar Bhat, (1969) 71 I.T.R. 806 the question was

whether proceedings under s. 226 (3) of the new Act would

apply with respect to a tax liability incurred under the

1922 Act. The answer to this question, in the affirmative,

turned on the language of s. 297 (2) (j). which provided

that any tax or other dues payable under the 1922 Act may,

notwithstanding the repeal of the 1922 Act, be recovered

under the Act. The contrary interpretation accepted by the

High Court in that case would have had the effect of nulli-

fying the provisions of s. 297 (2)(j). Again, in Jain Bros.

v,. Union of India, (1970) 77 ITR 107, it was held that

penalty could be imposed under s. 271 (1) of the 1961 Act in

respect of returns filed before 1.4.1962 and assessments

completed after 1.4.1962 but under the 1922 Act. This was

because of s. 297 (2) (g), the special transitory provision

in this behalf, which provided that "any proceeding for the

initiation 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." Here again s. 297 (2) (g) had been enacted

to provide for the exact situation in question and to have

held to the contrary would have rendered the provisions of

s. 297 (2) (g) meaningless and redundant.

The position is no doubt a little different here. The

provisions of s. 150 (1) have been specially made applicable

and operative in respect of the notice under s. 148 issued

in pursuance of s. 297 (2) (d)(ii) and, as pointed out

earlier, the application of the provisions of s. 297

(2)(d)(ii) gives rise to two sets of situations to one of

which the language of s. 150(1) would squarely apply and so

the interpretation sought for by the appellant does not

render the words of s. 150 (1) redundant. Despite this point

of difference in the two situations, we think that the

principle of the above decisions that the mutatis mutandis

rule should be invoked in interpreting

19

s. 297 (2) has application here also. Not to do so would no

doubt not make section 150(1) redundant but it will bring

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about an unintended and inequitable situation. It is clear

that section 150 (1) will operate to lift the time bar in

cases where the reassessment is initiated under section 148

to give effect to an order passed under the 1961 Act. Equal-

ly, where assessments had been reopened under section 34 of

the 1922 Act before 1.4.1962 to give effect to orders passed

under the 1922 Act and are continued after that date by

virtue of section 297 (2) (d) (i), the provisions of the

second proviso to section 34 (3) of that Act would preclude

the operation of the normal rule of limitation for reassess-

ments. In this situation, it will be a great anomaly to

reach the conclusion that the time limit will operate in

cases where proceedings under section 148 are initiated to

give effect to an order on appeal, revision and reference

merely because such order is one passed under the 1922 Act.

Neither reason nor rhyme can explain how the statue could

have intended such anomaly or why it should be so interpret-

ed as to result in a discriminatory treatment only to this

class of cases. An interpretation which will result in such

anomaly or absurdity should be avoided. It is also necessary

to remember that s. 297 (2) is a provision enacted with a

view to provide for continuity of proceedings in the context

of repeal of one Act by a fresh one broadly containing

analogous provisions and the transitory provisions should,

as far as possible, be construed so as to effect such conti-

nuity and not so as to create a lacuna. For these reasons we

think that it will be appropriate to so read the words of

section 297 (2)(d)(ii) as to permit the applicability of

section 150 (or section 153) with the necessary modifica-

tions. To paraphrase, the last words of s. 297(2)(d)(ii)

should be read to mean that where the proceedings initiated

under s. 148, subject to the relaxations and limitation of

Ss. 149 and 150, all the provisions of the Act shall apply

accordingly: that is to say, in the same manner as they

would apply in case of proceedings normally initiated under

these provisions. Since reassessment proceedings so initiat-

ed to give effect to orders on appeal, revision or reference

will not be subject to a time limit, the proceedings like-

wise initiated under s. 297(2)(d)(ii) read with s. 148 will

also not be subject to any limitations save to the extent

mentioned in s. 150(2).

We would like to add that, even if section 150(1) is to

be read literally and considered as posing a hurdle as

contended for by the appellant, we think this result can be

overcome by a liberal interpretation of section 297(2)(k).

This clause reads:

"any agreement entered into, appointment made,

approval given, recognition granted, direc-

tion, instruction, notification,

20

order, or rule issued under any provision of

the repealed Act shall, so far as it is not

inconsistent with the corresponding provision

of this Act, be deemed to have been entered

into, made, granted, given or issued under the

corresponding provision aforesaid and shall

continue in force accordingly;"

This is principally a provision intended to save admin-

istrative steps taken under the 1922 Act by deeming them to

be steps taken under the 1961 Act. Strictly construed, the

words "order issued" also would seem, prima facie, to carry

only a similar connotation. But we see no objection, for our

present purposes, in the way of our construing these words

liberally and consequently deeming the orders passed and

issued by the Tribunal and the High Court in this case for

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the assessment year 1949-50 and subsequent assessment years

as orders passed or issued under the corresponding provi-

sions of the new Act. Once this deeming is made, there is no

difficulty in the way of accepting the Revenue's contention.

We think that the circumstances justify a slight straining

of the language of this clause and applying it so interpret-

ed to the problem before us so as to avoid a meaningless

anomaly. Thus construed, the statute can be said not to have

misfired in its application to the situation in the present

case.

We should, before we conclude, refer to the decision of

this Court in the Gujar Mat Modi case. As we have pointed

out earlier, the principal conclusion reached in that case

was that proceedings under section 148 could not have been

initiated as the case fell under the provisions of section

297(2)(d)(i). It was, therefore, unnecessary to deal with

the contention based upon section 150. Moreover, this part

of the decision was only based on a prima facie reading of

section 150(1) and contains no discussion of the various

aspects that need consideration and have been touched upon

above. We do not, therefore, think that the above decision

can be treated as conclusive on the issue before us which,

for the reasons discussed above, we think, should be an-

swered differently.

We affirm the conclusion of the High Court and dismiss

the appeal. No costs.

Y.L. Appeal dismissed.

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