Section 297(1) repealed the Indian Income-tax Act, 1922. Sub-section (2) saved matters arising under the repealed Act: assessments where a return was filed before the commencement of the 1961 Act continued under the old law; pending appeals, references and revisions were disposed of as if the 1961 Act had not been passed; proceedings under section 34 of the repealed Act could continue, and escaped income could be reached by notice under s. 148 subject to s. 149 or s. 150.
It also preserved penalty proceedings for assessments completed before 1 April 1962, and allowed penalties for assessment year 1961-62 and earlier, completed on or after that date, to be imposed under the 1961 Act. Elections, options, agreements, approvals, notifications, orders and rules under the old law continued, so far as consistent, as if made under the corresponding provision of the 1961 Act.
Operative consequences
Interest on refunds and interest for default arising after commencement in respect of assessments completed before it is governed by the 1961 Act.
Any sum payable under the 1922 Act may be recovered under the 1961 Act, without prejudice to recovery action already taken.
Where the period for an application, appeal, reference or revision under the 1922 Act had already expired, the longer periods of the 1961 Act do not revive it.
Status
Section 297 remains on the statute book for assessment year 2026-27, though its practical operation is confined to matters from the 1922 Act. It is not time-limited. The Finance Act, 2026 did not amend this section.
The 1961 Act governs assessment year 2026-27 and earlier; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject there is no 2025 Act provision dealing with the 1922 Act; the repeal and savings of the 1961 Act itself are in s. 536.
Function in the statutory architecture
Section 297(1) repealed the Indian Income-tax Act, 1922. Sub-section (2) saved matters arising under the repealed Act: assessments where a return was filed before the commencement of the 1961 Act continued under the old law; pending appeals, references and revisions were disposed of as if the 1961 Act had not been passed; proceedings under section 34 of the repealed Act could continue, and escaped income could be reached by notice under s. 148 subject to s. 149 or s. 150.
It also preserved penalty proceedings for assessments completed before 1 April 1962, and allowed penalties for assessment year 1961-62 and earlier, completed on or after that date, to be imposed under the 1961 Act. Elections, options, agreements, approvals, notifications, orders and rules under the old law continued, so far as consistent, as if made under the corresponding provision of the 1961 Act.
Operative consequences
Status
Section 297 remains on the statute book for assessment year 2026-27, though its practical operation is confined to matters from the 1922 Act. It is not time-limited. The Finance Act, 2026 did not amend this section.
The 1961 Act governs assessment year 2026-27 and earlier; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject there is no 2025 Act provision dealing with the 1922 Act; the repeal and savings of the 1961 Act itself are in s. 536.