1957 (2) TMI 81 - HC - Income Tax

Summary

Issues Involved:
1. Whether the Commissioner must hear the party before making an order under Section 33-A (2) of the Indian Income Tax Act.
2. The nature of the Commissioner's powers under Section 33-A (2).
3. Alleged infringement of Article 14 of the Constitution of India.

Issue-wise Detailed Analysis:

1. Whether the Commissioner must hear the party before making an order under Section 33-A (2) of the Indian Income Tax Act:
The petitioner argued that the Commissioner, acting under Section 33-A (2), is akin to a Court and must therefore hear the party before making an order. The petitioner cited Section 37 of the Act, which grants the Commissioner powers similar to a Court under the Code of Civil Procedure, and referenced the Supreme Court decision in Surajmall Mohta and Co. v. A. V. Visvanatha Sastri, which held that proceedings before the Income Tax Officer are judicial. However, the Court noted that the Indian Income Tax Act is a self-contained code, and where it provides for a particular procedure, that procedure must be followed. The Court emphasized that the Act does not expressly require a hearing for the assessee under Section 33-A (2), unlike Sections 31 and 33, which explicitly provide for a hearing.

2. The nature of the Commissioner's powers under Section 33-A (2):
The Court examined the scheme of the Act for appeals and revisions, noting that Section 33-A (2) allows the Commissioner to act either suo motu or upon application by the assessee. The Court referenced the Judicial Committee of the Privy Council's interpretation of the original Section 33, which was administrative in nature and did not create a right for the assessee. The Court concluded that the introduction of Sub-section (2) did not transform the administrative nature of the Commissioner's powers into a judicial one. The Commissioner may call for records and make enquiries but is not compelled to hear the assessee. The Court highlighted that the procedure under Section 33-A (2) is summary and not intended to be as elaborate as judicial proceedings, and that the order made under this section must not be prejudicial to the assessee.

3. Alleged infringement of Article 14 of the Constitution of India:
The petitioner argued that the lack of a hearing under Section 33-A (2) infringed upon Article 14, which guarantees equality before the law. The Court dismissed this argument, stating that the Income Tax Act provides alternative remedies and procedures, and it is the assessee's option to choose one. Having chosen a particular remedy, the assessee cannot later claim discrimination. The Court found no infringement of Article 14.

Conclusion:
The Court dismissed the petition, holding that the Commissioner is not required to hear the assessee under Section 33-A (2) of the Indian Income Tax Act. The Court found that the nature of the Commissioner's powers under this section remains administrative, and there was no violation of Article 14. The Rule was discharged, and interim orders were vacated, with no order as to costs. The operation of the order was stayed for a fortnight.