1. The Income Tax Appellate Tribunal has referred the following two questions at the instance of the assessee for the opinion of this Court.
'1. Whether for the assessment year1946-47 the Income Tax Officer was justified in initiating the proceedings and completing the assessment under Section 34(1)(a) or he should have taken recourse to Section 34(1A) or 34(1)(a)?
2. Whether for the assessment years1947-48 and 1948-49 the Income Tax Officer was justified in initiating action under Section 34(1)(a) or he should have taken recourse to Section 34(1)(b) of the Act?'
2. The assessee is a partnership firm consisting of Rai Bahadur Ram Ratan and his son Prem Nath. It carried on the business of canteen contractors. The statement of the case submitted by the Tribunal mentions that the account books maintained by the assessee were never accepted by the Income Tax Officer and the income was assessed by applying a flat rate over the turnover disclosed by the assessee.
3. For the assessment year 1946-47 the assessment was completed on July 12, 1947. Subsequently on November 11, 1955 the Income Tax Officer issued a notice under section 34(1)(a) for the assessment year 1946-47 and re-opened the assessment proceedings. Despite the notice requiring the assessee to produce its account books, they were not produced on the plea that they were not available. The Income Tax Officer made an assessment order including a sum of Rs. 2,00,000 in the total income of the assessee on the ground that the sum represented the secret profits of the assessee.
4. For the assessment years 1947-48 and 1948-49 the assessments had already been completed. In respect of those assessment years also the Income Tax Officer took proceedings under Section 34(1)(a) and upon the assessee failing to produce his account books the Income Tax Officer made assessment orders including an amount of Rs. 98,450/- in the total income for the assessment year 1947-48 and an amount of Rs. 2,20,754/- in the total income for the assessment year 1848-48.
5. The assessee challenged the orders of re-assessment for the aforesaid three years in appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner directed the Income Tax Officer to give the assessee a further opportunity to adduce evidence, and thereafter to submit a report. Upon the final hearing of the appeals, the Appellate Assistant Commissioner reduced the additions made by the Income Tax Officer. This occasioned a number of appeals before the Income Tax Appellate Tribunal, by the assessee as well as the Income Tax Officer. By separate orders in respect of the three assessment years the Tribunal allowed the assessee's appeals in part and dismissed the appeals filed by the Income Tax Officer. Thereafter the instant reference has been made.
6. The assessee contends that the Income Tax Officer had no jurisdiction to take proceedings under Section 34(1)(a) inasmuch as the entire material necessary for the assessment of the assessee's income had been fully and truly disclosed at the time when the original assessments were made. It referred to a statement made by Prem Nath during the original assessment proceedings for the assess-ment years under consideration, the sub--stance of the statement being that overdrafts had been taken by the assessee from the Bharat Bank Ltd., Dehradun against the Call Deposit Account of his wife Padmawati in that Bank. It is urged that the Income Tax Officer was thereby informed of the existence of that account and of the fact that certain sums stood in deposit in the said account during the relevant periods. The Income Tax Officer had proceeded on the basis that the Call Deposits of Rs. 2,00,000/-, Rs. 98,450 and Rs. 2,20,754/- for the three years represented deposits made by the assessee in the name of Padmawati and in fact represented the concealed income of the assessee. This, it is urged, could not be said to constitute information which came to the knowledge of the Income Tax Officer after the conclusion of the original assessment proceedings. It is said that the Income Tax Officer had accepted the explanation tendered originally by the assessee and there was nothing new which came to his knowledge subsequently.
7. There has been considerable debate before us on the question whether the case falls under Section 34(1)(a), and the assessee has placed great reliance upon the observations of the Supreme Court in Calcutta Discount Co. Ltd. v. Income Tax Officer : 41ITR191(SC) . In that case the Supreme Court laid down that the assessee was only bound to disclose the primary facts necessary for his assessment and he was not bound to indicate to the Income Tax Officer what should be the inferences to be derived from those primary facts. It seems to us that the law laid down in the Calcutta Discount Company's case : 41ITR191(SC) is of no assistance to the assessee upon the facts before us. All that the assessee disclosed before the Income Tax Officer during the original assessment proceedings was that it had taken overdrafts against the Call Deposit Account standing in the name of Padmawati in the Bharat Bank Ltd. This is clear from the statement of Prem Nath appended to the statement of the case. The assessee did not indicate what were those deposits, nor did it explain their original. Indeed, there is nothing to indicate that an enquiry was pending at the time as regards the nature and source of the deposits in the account of Padmawati. The inquiry in connection with which the declaration was made by Prem Nath was apparently related to the overdrafts taken by the assessee in respect of its business. The two inquiries were quite distinct from each other and involved distinct investigations. Merely because in the inquiry as to the overdrafts there was a declaration mentioning that the overdrafts were obtained against the CallDeposit Account of Padmawati will not justify the conclusion that the deposits in that account had been placed before the Income Tax Officer and that an explanation as to their nature and source had been advanced before him.
8. The Tribunal has observed in its appellate order that the acceptance of the statement of Prem Nath in the original assessment proceedings that the assessee took overdrafts against the Call Deposit Account of Padmawati did not mean that the assessee had truly and fully disclosed all material facts necessary to the assessment of the amounts contained in that account. We are of the same opinion, and hold that the Income Tax Officer was justified in initiating the proceedings and completing the assessment under section 34(1)(a) against the assessee.
9. As regards the first question referred by the Tribunal, there is the further point whether the Income Tax Officer should have resorted to proceedings under Section 34(1A) instead of Section 34(1)(a). The assessee says that Section 34(1A) is a special provision framed todraw into its net cases such as the instant one, where the income which has escaped assessment amounts to one lakh rupees or more and that, therefore, the general provision incorporated in Section 34(1)(a) cannot be invoked. The submission is that when section 34(1A) was enacted it excepted from the scope of Section 34(1)(a) that class of assessees which fell within the terms of Section 34(1A), and inasmuch as Section 34(1A) could be employed for taking proceedings relating to the assessment year 1946-47, the Income Tax Officer had no jurisdiction to take proceedings for that year under Section 34(1)(a).
10. The doctrine invoked Is the doctrine of implied repeal. That doctrine is available when two conditions are present; one, that the two enactments operate on the same field, and two, that the provisions of the latter enactment are so inconsistent with or repugnant to the provisions of the earlier that the two can-not stand together. While considering the maxim 'Leges posteriores priores contra-rias abrogant' in Kutner v. Phillips, 1891-2 QB 267, 271, A. L. Smith, J., explained that a repeal will not be implied unless the two Acts are so plainly repugnant to each other that effect cannot be given to both at the same time.
11. If we examine the provisions of Sections 34(1)(a) and 34(1A) it is clear that upon the language in which each provision is framed proceedings can be taken for the assessment year 1946-47 under either provision. In Commissioner of Income Tax Patiala v. Shahzada Nand and Sons : 60ITR392(SC) theSupreme Court, pronouncing upon the validity of proceedings under section 34(1)(a) for the assessment year 1945-46, held that during the period between the amendments of the Income Tax Act in 1954 and 1956 and subsequently Sections 34(1)(a) and 34(1A) occupied different fields, but apparently proceedings for the assessment year 1946-47 were excepted from the scope of that conclusion. The Court pointed out:
'In this case, both during the period between the amendments of 1954 and 1956 and thereafter they occupied different fields. By July 17, 1954, when Sub-section (1A) was introduced in Section 34, no proceedings under section 34(1)(a) could be initiated except for the assessment year 1946-47 in respect of the previous years that fell within the period beginning on September, 1, 1939, and ending on March 31, 1946, for they were barred under the unamended section. Sub-section (1A), therefore, practically governed a situation that was not governed by the provisions of Section 34(1)(a). It was intended to catch escaped income of the war years which were out of the reach of Section 34(1)(a).'
12. There is nothing in the language of Section 34(1)(a) to suggest that the income relevant for the assessment year 1946-47 could not be caught within the net of section 34(1)(a), and indeed that is not disputed before us. That the jurisdiction under Section 34(1)(a) and that under Section 34(1A) did overlap in relation to that assessment year, appears also to have been contemplated by the Supreme Court in K. S. Rashid and Sons v. Income Tax Officer : 52ITR355(SC) . We are satisfied that Section 34(1)(a) and Section 34(1A) operate on the same field for the assessment year 1946-47.
13. The question remains whether section 34(1)(a) and Section 34(1A) are so repugnant to each other that the second condition requisite for invoking the doctrine of implied repeal can be said to be satisfied. Upon careful consideration, we are unable to say that the two provisions betray such mutual inconsistency or repugnancy. We may refer to the observations of the Supreme Court in K. S. Rashid & Sons : 52ITR355(SC) (Supra) where, considering that Section 34(1)(a) and section 34(1A) overlapped in respect of one assessment year, it pointed out that:
'. . . . .it makes no difference whether action Is taken under Section 34(1) or Section 34(1A) in respect of the year. Once a notice is served under Section 34(1)(a) or Section 34(1A) the rest of the procedure is just the same and all the remedies available to the assessee are also just the same.'
In respect of the assessment year 1946-47, therefore, the statute provided two parel-lel jurisdictions, one under Section 34(1)(a) and the other under Section 34(1A). It was open to the Income-tax Officer to take recourse to either jurisdiction for that assessment year. We are of opinion that the Income-tax Officer acted within, his powers in taking assessment proceedings under Section 34(1)(a). That is also the view expressed by the Bombay High Court in Laxminarayan R. Rathi v. Income-tax Officer : 52ITR254(Bom) although upon somewhat different reason-ing.
14. The assessee urges that if we hold that it is open to the Income-tax Officer to proceed either under Section 34(1)(a) or under Section 34(1A) we must be driven to the conclusion that Section 34(1A) is violatlve of Article 14 of the Constitution. That submission proceeds on the assumption that Section 34(1A) discriminates against the assessee. We are unable to see how that assumption is warranted. We have already referred to the observations of the Supreme Court in K. S. Rashid & Sons : 52ITR355(SC) (supra) that it makes no difference whether action is taken under Section 34(1)(a) or under Section 34(1A).
15. In our judgment, the Income-tax Officer was justified in taking assessment proceedings against the assessee under Section 34(1)(a) for the assessment years 1946-47, 1947-48 and 1948-49.
16. We answer accordingly the two questions referred to this Court by the Income tax Appellate Tribunal. The Commissioner of Income-tax is entitled to his costs which we assess at Rs. 200/-. Fee of counsel is also assessed at Rs. 200/-.