1953 (2) TMI 45 - HC - Income Tax

Summary

Issues:
1. Appealability of an order made under Section 35 of the Indian Income-tax Act to the Appellate Assistant Commissioner.
2. Competency of a reference under Section 66(1) of the Act in light of the Supreme Court's decision.

Analysis:

1. The case involved a dispute regarding the appealability of an order made under Section 35 of the Indian Income-tax Act to the Appellate Assistant Commissioner. The assessees, who were managing agents of a mill, were assessed to tax as a registered firm for the year 1944-45. The Income-tax Officer rectified a mistake by deducting proportionate excess profits tax attributable to a commission paid to Nanjappa, resulting in an increase in the assessable income. The Appellate Assistant Commissioner initially dismissed the appeal as incompetent, but the Income-tax Appellate Tribunal held that the appeal was competent and remanded it back to the Appellate Assistant Commissioner for disposal on merits. The Commissioner of Income-tax sought a reference to the High Court under Section 66(1) of the Act, questioning the appealability of the order under Section 35.

2. The High Court, after considering the Supreme Court's decision in Commissioner of Income-tax, Madras v. Arunachalam Chettiar, concluded that no appeal lies against an order made under Section 35 of the Act to the Appellate Assistant Commissioner, as it does not fall within the purview of Section 30 of the Act. The High Court further determined that there is no appeal against the order of the Appellate Assistant Commissioner to the Tribunal. Citing the Supreme Court's ruling, the High Court held that the reference under Section 66(1) of the Act was incompetent. Consequently, the High Court refused to answer the reference and dismissed the application, emphasizing that no costs were to be awarded in this matter.

In summary, the High Court clarified the appealability of orders made under Section 35 of the Indian Income-tax Act and the competency of references under Section 66(1) in light of the Supreme Court's decision, ultimately ruling that such appeals to the Appellate Assistant Commissioner were not permissible, leading to the dismissal of the reference application.