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Issues Involved:
1. Jurisdiction of the Commissioner under Section 34 to revise the order of the Appellate Assistant Commissioner. 2. Applicability of Section 34 when the order of the Appellate Assistant Commissioner is appealable under Section 32. 3. Authority of the Commissioner to act under Section 34 in cases of escaped income in light of Section 35. 4. Justification of the Commissioner in concluding that the income estimate should be made. 5. Determination of whether income has escaped assessment. 6. Jurisdiction of the Commissioner to interfere with the order of the Agricultural Income-tax Officer. Issue-wise Detailed Analysis: 1. Jurisdiction of the Commissioner under Section 34 to revise the order of the Appellate Assistant Commissioner: The court examined whether the Commissioner had the jurisdiction to revise the order passed by the Appellate Assistant Commissioner under Section 34 of the Agricultural Income-tax Act. The court referred to the precedent set in Anantha Mallan v. Commissioner of Agricultural Income-tax, which held that the Commissioner should not exercise his revisory powers when he himself has objections to the assessment. Instead, he should follow the procedure indicated in Section 32(2) to have the matter adjudged by the Appellate Tribunal. The court concluded that the Commissioner ought not to have sat in judgment on the Assistant Commissioner's assessment and should have followed the particular procedure indicated in Section 32(2). Therefore, the court answered this issue in the negative, indicating that the Commissioner did not have the jurisdiction to revise the order. 2. Applicability of Section 34 when the order of the Appellate Assistant Commissioner is appealable under Section 32: This issue was taken together with the first issue. The court reiterated the principle that when two courses of action are indicated by the statute, one general and the other particular, the latter should be followed, especially when it is consistent with the principles of natural justice. The court held that the Commissioner should have followed the procedure under Section 32(2) rather than exercising his revisory powers under Section 34. Thus, the court answered this issue in the negative as well. 3. Authority of the Commissioner to act under Section 34 in cases of escaped income in light of Section 35: The court analyzed whether the Commissioner could act under Section 34 in cases of escaped income given the specific provisions in Section 35. The court found that the Commissioner's actions were not justified as he did not follow the proper procedure or provide sufficient evidence to reject the assessee's accounts. The court emphasized that the rejection of accounts must be based on positive evidence of their unreliability, not mere suspicions. The court concluded that the Commissioner had no justification to reject the assessee's accounts or set aside the assessment made by the Agricultural Income-tax Officer. Therefore, the court answered this issue in the negative. 4. Justification of the Commissioner in concluding that the income estimate should be made: The court scrutinized the Commissioner's conclusion that the income estimate should be made. The court found that the Commissioner's observations were not supported by the facts or evidence on record. The court highlighted that the Commissioner overlooked material facts and unjustifiably set aside the orders of assessment. The court emphasized that the accounts maintained in the ordinary course of business should be accepted unless there is positive evidence to the contrary. The court concluded that the Commissioner's actions were not justified and answered this issue in the negative. 5. Determination of whether income has escaped assessment: The court examined whether the income had escaped assessment for the years 1956-57 and 1957-58. The court found that the Commissioner's reasoning for setting aside the assessments was not warranted by the circumstances of the cases. The court reiterated that the rejection of accounts must be based on positive evidence and not mere suspicions. The court concluded that the Commissioner had no justification to reject the assessee's accounts or to set aside the assessment made by the Agricultural Income-tax Officer. Therefore, the court answered this issue in the negative. 6. Jurisdiction of the Commissioner to interfere with the order of the Agricultural Income-tax Officer: The court analyzed whether the Commissioner had the jurisdiction to interfere with the order of the Agricultural Income-tax Officer. The court found that the Commissioner's disapproval of the Income-tax Officer's acceptance of the assessee's accounts was not justified. The court emphasized that the rejection of accounts must be based on positive evidence of their unreliability. The court concluded that the Commissioner had no jurisdiction to interfere with the order of the Agricultural Income-tax Officer. Therefore, the court answered this issue in the negative. Conclusion: The court concluded that the Commissioner did not have the jurisdiction to revise the order of the Appellate Assistant Commissioner under Section 34, should have followed the procedure under Section 32(2), and had no justification to reject the assessee's accounts or set aside the assessments made by the Agricultural Income-tax Officer. The court did not make any order as to costs in these references and directed that a copy of the judgment be forwarded to the Commissioner as required by Section 60(6) of the Agricultural Income-tax Act, 1950.
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