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TMI Blog1959 (8) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of ₹ 32,759 representing loss in the Durgapur Tea Estate and after this deduction was made, the total income calculated was ₹ 18,656 on which the income-tax was levied for the assessment year 1953-54. The assessee filed an appeal against the assessment to the Appellate Assistant Commissioner on August 28, 1954, which was decided on September 15, 1956. While the above appeal was pending decision, the Commissioner of Income-tax on examination of the record found that the above Income-tax Officer's order was prejudicial to revenue and accordingly, after due hearing, he passed his order dated June 4, 1956, that it to say, during the pendency of the appeal and by that order, he directed the Income-tax Officer that the assessment should be enhanced by ₹ 32,759 being the share from the aforesaid unregistered firm, Durgapur Tea Estate, because, in is opinion, such a loss should not have been set off in the assessment under the second proviso to sub-section (1) of section 24. The assessee thereupon filed an appeal to the Appellate Tribunal contending that the Commissioner of Income-tax had no jurisdiction to pass the aforesaid order, inasmuch as at the time of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer is prejudicial to the interests of the revenue, inasmuch as he had knocked off a sum of ₹ 32,759, which represented the loss of one of the firm of which the assessee had shares, although the firm was an unregistered one; that there was no order of re-assessment under the provisions of section 34 and that the order passed by the Commissioner was well within two years from the date of the order of assessment. The question, however, which is raised by the learned counsel, Mr. Ghose, appearing on behalf of the assessee, is that when an appeal was pending from the assessment order itself, the Commissioner could not have exercised the powers under section 33B for the reason that under section 31(3)(a), the Appellate Assistant Commissioner may confirm, reduce, enhance or annul the assessment , and as provided for by section 31(3)(h), second proviso, the Income-tax Officer shall have the right to be heard either in person or by a representative . In other words, it is said that as in an appeal from assessment, the appellate authority has the power to enhance the assessment and the Income-tax Officer has also the right to be heard either in person or by a representative, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of an appeal to the Appellate Tribunal; or (3) the order has been made more than one year previously; or (4) where an appeal against the order lies to the Appellate Assistant Commissioner or to the Appellate Tribunal, but has not been made, the time within which such appeal may be made has not expired, or, in the case of an appeal to the Appellate Tribunal, the assessee has not waived his right of appeal; or (5) where an appeal against the order has been made to the Appellate Assistant Commissioner, the appeal is pending before him; or (6) the order has been made the subject of an appeal to the Appellate Tribunal. The restrictions to the exercise of the power of revision mentioned in section 33A are conspicuous by their absence in exercising the power of revision under section 33B except, of course, the limited restrictions to which I have already made reference. In my opinion, therefore, the difference in the provisions of the two sections also makes it abundantly clear that merely because an appeal is pending against the order of the Income-tax Officer, that is no bar to the exercise of power under section 33B by the Commissioner, as it is to the exercise of power under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard to the first two years of assessment under reference, the Appellate Assistant Commissioner reduced the estimate of profit and the Appellate Assistant Commissioner had not disposed of the appeal in respect of the assessment year 1949-50. At this time, the notice of the Commissioner of Income-tax was attracted to the fact that the firm, which had been granted renewal of registration was not a firm, which could be registered under the Income-tax Act, as one of the partners was a minor. He, therefore, took action under section 33B(1) and issued a notice to the assessee to show cause why assessment made under section 23(3) and the registration granted under section 26A should not be cancelled. After giving the parties a hearing, the Commissioner of Income-tax passed an order cancelling the orders passed by the Income-tax Officer under section 23(3) and 26A of the Income-tax Act and directed the Income-tax Officer to refuse to renew registration of the firm for the three respective years. In regard to the orders passed under sections 23(3) and 55, the Income-tax Officer was directed to make a fresh assessment according to law for each of these years. As a result of the above orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st reference, the object of enacting section 33B was to confer a power upon the Commissioner in the interest of revenue to revise orders of the Income-tax Officer which could not be revised under any circumstances if the assessee did not appeal from those orders. However erroneous the order of the Income-tax Officer may be, however prejudicial to the revenue, the assessee by refusing to exercise his right of appeal could make that order conclusive. In order to fill up this obvious lacuna, the Legislature enacted section 33B. But once the assessee has appealed, there is no difficulty whatsoever in the way of the department in agitating any question before the Appellate Assistant Commissioner which in its opinion should be agitated and decided in the interest of public revenue. Now, it is clear that when an appeal is pending before the Appellate Assistant Commissioner, the Income-tax Officer had the right to be heard either in person or by a representative, and the very point which the Commissioner has taken and on which he has given his decision under section 33B could have been urged under the directions of the Commissioner before the Appellate Assistant Commissioner. It is only wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0, the Income-tax Officer had renewed registration of the firm and on that basis made assessment of the income of the partnership firm under section 23(5) of the Act. An appeal was preferred by the assessee to the Appellate Assistant Commissioner against the quantum of the assessment. The appeal was decided by the Appellate Assistant Commissioner on 2nd of August, 1950, and the assessments were either modified or affirmed. Thereafter, the Commissioner of Income-tax, exercising his powers under section 33B of the Act, called for the records of the assessment and after giving notice to the assessee cancelled the registration of the firm made by the Income-tax Officer. The Commissioner of Income-tax held that there was no firm in the eye of law, which could be registered, and he directed the Income-tax Officer to determine the tax payable by the firm on the basis that no registration had been granted to the firm. The assessee preferred an appeal to the Appellate Tribunal against the order of the Commissioner of Income-tax. The Tribunal dismissed the appeal and affirmed the order of the Commissioner of Income-tax and at the instance of the assessee, the Tribunal submitted certain quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chagla, C.J., but I regret that I differ from the view expressed in this passage. As a matter of construction, there is nothing in the language of section 33B or in the context in which it is placed to suggest that the power of revision given to the Commissioner cannot be exercised when an appeal is pending against the order of an Income-tax Officer. I think that the meaning of section 33B must be gathered by examining the language of the section and not by a priori consideration of what the Legislature possibly intended. It may be right to say that the Commissioner should not pursue two concurrent remedies at the same time for the result may be anomalous. But how does it necessarily follow from this that the concurrent remedies do not exist? The Bombay case went up in appeal to the Supreme Court and is reported as Commissioner of Income-tax v. Amritlal Bhogilal Co. [1958] 34 I.T.R. 130, (S.C.), and the view taken by the Bombay High Court was not approved. Even in regard to the assessments of the years 1947-48 and 1948-49 in which the appellate authority had passed orders and the appeal had been disposed of, their Lordships held that the High Court was in error in taking the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt was also in error in holding that the Commissioner was not authorised in cancelling the order of the respondent's registration for the year 1949-50. The important words have been underlined [1958]34 I.T.R.130,140(S.C.) by me. It is thus clear on a review of all these authorities that the view, which I have ventured to take, is supported by the decision of the Supreme Court in the above case, which in effect upheld the view taken by Mr. Justice Ramaswamy, as he then was, in the Patna case and set aside the view taken by Chagla C.J., in the Bombay case. In my judgment, therefore, the question referred to by the Tribunal must be answered in the affirmative. The respondent is entitled to his cost, which I assess at ₹ 100. DEKA J.- This is a reference under section 66(1) of the Income-tax Act and the point referred to us for decision is whether in the circumstances of the case the Commissioner of Income-tax's order dated 4th June, 1956, purporting to be one under section 33B of the Income-tax Act was valid in the eye of law. I have had the chance of reading the judgment prepared by my Lord the Chief Justice--wherein facts have been dealt with in deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Income-tax Officer merges in the order of the Appellate Commissioner and it has no separate existence for the purpose of interference under section 33B in exercise of the power of revision. This power of an appeal to the Tribunal does not exist in regard to cases where the order of the Income-tax Officer does not merge in the appellate order. The only decision that favours the assessee is the case reported in Commissioner of Income-tax v. Amritlal Bhogilal and Co.* There the identical point was specifically raised and answered by the learned judges in favour of the assessee. The reason for holding that view was that once the assessee had appealed against the assessment, there was no difficulty whatsoever in the way of the department in agitating any question before the Appellate Assistant Commissioner which in its opinion should be agitated and decided in the interest of public revenue. Their Lordships further held that it is only when no remedy is open to the Commissioner to revise the order of the Income-tax Officer, that his jurisdiction under section 33B arises, but when a legal remedy is given to him to get the order of the Income-tax Officer revised, he cannot requis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the date of the order; and thirdly the order to be revised by the Commissioner must be the order of the Income-tax Officer and of no one else. Here these three conditions are satisfied. Mr. Ghose has in his argument adopted the reasonings given by the High Court in Amritlal Bhogilal's case [1953] 23 I.T.R. 420 (Bom.) to the effect that if the department could raise the same objection in the appellate court, namely, before the Assistant Commissioner, the Commissioner had no power under section 33B to take out the case from his jurisdiction and try it himself. We find no substance in this contention. We must interpret the statute as it stands as observed by the Supreme Court and there is no restriction imposed on the power of the Income-tax Commissioner under section 33B except the ones I have already referred to. In section 33A of the Income-tax Act which as well deals with the power of revision exercisable by the Commissioner, it is provided that the Commissioner cannot exercise this power of revision if--(a) where an appeal against the order lies to the Appellate Assistant Commissioner or to the Appellate Tribunal, the time within which such appeal may be made has not expir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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