TIWARI KANAHAIYALAL ETC. vs. THE COMMISSIONER OF INCOME TAX, DELHI

CRIMINAL APPEAL No. 28/1971Supreme Court[1975] 3 S.C.R. 92713 March 1975Bench: 2 JudgesAuthor: A. ALAGIRISWAMI, N.L. UNTWALIA B6 pages
AI SummaryDismissed

What were the facts?

The appellant, TIWARI KANAHAIYALAL, filed income tax returns for various assessment years, the last being 1959-60, under the Income-tax Act, 1922. In 1964, he filed revised returns showing a significantly larger income. Assessments were completed under the Income-tax Act, 1961, and penalty proceedings were initiated, with penalties levied under Section 271 of the 1961 Act. Subsequently, the revenue filed complaints for offences under Section 277 of the 1961 Act and, as a precaution, also filed complaints for offences under Section 52 of the 1922 Act. The trial court acquitted the appellant, holding that prosecution was barred by Section 28(4) of the 1922 Act and Article 20(1) of the Constitution. The High Court reversed this, holding that Section 28(4) was not a bar as no penalty was imposed under the 1922 Act, and directed the trial court to proceed.

What did the Supreme Court hold?

The Supreme Court held that the prosecution for offences under Section 52 of the 1922 Act is valid. Firstly, the penalty was imposed under Section 271 of the 1961 Act, not Section 28 of the 1922 Act, rendering Section 28(4) of the 1922 Act inapplicable as a bar to prosecution. Secondly, Article 20(1) of the Constitution does not prohibit the prosecution because it is not post-facto legislation being applied, and the imposition of penalty under the 1961 Act makes prosecution permissible. The Court also clarified that while Section 297(1) of the 1961 Act repealed the 1922 Act, Section 6(c) of the General Clauses Act, 1897, saves the criminal liability incurred under Section 52 of the 1922 Act, as no contrary intention appears in the 1961 Act. However, the Court noted that the prosecution should only be for the offence under Section 52 of the 1922 Act, as Section 277 of the 1961 Act provides a greater punishment, and the appellant is entitled to the protection of the second part of Article 20(1) in that regard. The appeals were dismissed.

What were the issues?

1. Whether the prosecution for offences under Section 52 of the Income-tax Act, 1922, is valid, given that penalty proceedings were initiated and concluded under Section 271 of the Income-tax Act, 1961, and considering Section 28(4) of the 1922 Act and Article 20(1) of the Constitution. - Assessee's contention: Prosecution is barred by Section 28(4) of the 1922 Act and Article 20(1) of the Constitution, as penalty proceedings were initiated and concluded under the 1961 Act. - Revenue's contention: Section 28(4) of the 1922 Act is not a bar because no penalty was imposed under Section 28 of the 1922 Act, and Article 20(1) does not prohibit the prosecution. 2. Whether the prosecution for offences under Section 277 of the Income-tax Act, 1961, is valid, considering the repeal of the 1922 Act and the provisions of Section 297 of the 1961 Act and Section 6 of the General Clauses Act, 1897. - Assessee's contention: Not explicitly recorded, but impliedly that it is not valid. - Revenue's contention: Prosecution under Section 277 of the 1961 Act is permissible.

Which sections of the Income-tax Act were involved?

Section 28,Section 52,Section 271,Section 277,Section 297,Section 6

AI-generated summary — verify with the full judgment below

A B c D E F G H 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 de- c/aratio11 filed by assessee under 1922 Act-Penalty imposed under 1961 Act- Prmecution 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 not- withstanding the repeal of the Income-tax Act, 1922, any proceeding for the im- position 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

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