The court upheld the validity of penalty provisions under the new Act, stating they do not violate constitutional rights.

1Proceedings were initiated against the petitioner under S.34 of the Indian Income Tax Act, 1922 in respect of the assessment year 1955-56 by the 1st respondent on the ground that the income of the petitioner escaped assessment. The petitioner submitted a return under S.34 of the Income Tax Act, 1922. The return showed an income of Rs. 2,700/-. The 1st respondent found that the income returned by the petitioner was low and estimated the income at Rs. 8,000/-. Ext. P.1 is a copy of the order of assessment. Penalty proceedings were also initiated against the petitioner and three notices were issued to him. Exts. P. 2, P.3 and P.4 are the notices. These notices required the petitioner to show why penalties should not be imposed upon him. In the reply to the said notices the petitioner submitted that the provisions of the new Act, so far as they relate to the imposition of penalty on the act or omission of an assessee prior to the coming into force of the new Act, were ultra vires the powers of the Central Legislature in view of the provisions of the Constitution of India. The 1st respondent negatived the contentions of the petitioner and imposed penalties under three separate provisions of the new Act, namely, an amount of Rs. 191/- under S.271(1)(a), an amount of Rs. 76/- under S.271(1)(c) and an amount of Rs. 27/- under S.273. The three orders are Exts. P.5, P.6 and P.7 respectively.

2 The petitioner contends that the provisions of S.297(2)(g) of the new Act are bad in that they offend the provisions of Art.20(1) of the Constitution of India. The petitioner also contends that that Section is violative of Art.14 of the Constitution. S.297(2)(g) is as follows:
"(2) Notwithstanding the repeal of the Indian Income Tax Act, 1922 (XI of 1922) (hereinafter referred to as the repealed Act),
(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;"
As regards the contention of the petitioner that the provisions of this Section are violative of Art.20(1) of the Constitution, I have considered that question in O. P. 236/1964. There, I came to the conclusion that S.297(2)(g) is not violative of the provisions of Art.20(1) of the Constitution. In view of that conclusion I think the contention must fail. As regards the contention that S.297(2)(g) is violative of Art.14 of the Constitution, petitioners counsel urged that only the assessees, whose assessments were completed on or after the 1st day of April 1962, are made subject to the provisions of the new Act in the matter of imposition of penalty and that assessees whose assessments were completed before that date are not so subjected, and therefore the provision of the section is discriminatory. Petitioner's counsel argued that the choice of this date is arbitrary and that there is absolutely no intelligible reason why a distinction should be founded on the fact that the assessments were completed on or after the first of April 1962, for the applicability of the new Act. It may be stated that the new Act came into force on 1st April 1962: that is the reason why the Legislature said that in so far as assessments which are completed on or after the 1st day of April 1962, the provisions of the new Act will govern as regards the imposition of penalty is concerned. Apart from that I am not able to find that the petitioner is really aggrieved by the application of the new Act. Petitioner's counsel was not able to point out to me how the petitioner would have stood in a better position if the provisions of the old Act were applied in the matter of the levy of penalty on him. In these circumstances I am not able to appreciate the contention that the provisions of the new Act are more onerous than the provisions of the old one so far as the petitioner is concerned. No doubt, there