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TMI Blog1947 (10) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 1932-33 it raised an objection on the ground that it was exempt from taxation by virtue of Section 4(3)(i) of the Income-tax Act already mentioned, which provides:― "This Act shall not apply to the following classes of income:(i) any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes...." This claim led to a reference to the High Court of Judicature at Lahore under Section 66 of the Act. That Court, on the 4th June, 1935, held, contrary to the contention of the respondent, that its income was not exempt from tax. The respondent appealed to His Majesty in Council, and this Board, after referring the matter back to the Commissioner for further findings of fact, on the 13th June, 1939, reversed the judgment of the High Court and held that the income, in respect of which the respondent had been assessed for the year in question, was exempt from tax. Their Lordships' decision is reported in The Trustees of Tribune Press v. Commissioner of Income-tax, Punjab, Lahore*. The assessments of the respondent's income for the years subsequent to 1932-33 were held in abeyance pending the judgment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessments above mentioned should be cancelled. The material part of his letter is as follows:― "In this connection I have further to submit that in view of the same order our assessment for the years referred above should also stand cancelled. You will, therefore, very kindly review those orders and grant us the refund due to us. All these assessments with the exception of supplementary one made under Section 34 for the year 1931- 32, relate to the years subsequent to the year for which our appeal has been accepted by the Privy Council. The supplementary assessment for the year 1931-32 was also made after the year 1932-33 and as such that too was illegal and has to be set aside. For your convenience I have prepared a statement showing the refund due to us for the remaining years." This letter was followed by a letter dated the 25th October, 1939, from the respondent's advocate in which he requested that the appellant would treat the earlier letter "as a joint petition under Section 33 of the Indian Income-tax Act" and praying that the assessments in question might be quashed. At this stage it is relevant to note precisely what course the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s alive for the purposes of demanding a refund under Section 33? (B) Whether the matter of the assessability of the assessee was not res judicata by reason of the Privy Council decision...? (C) Whether, in view of the matter between the parties being assessability of the assessee, assessments made subsequent to the year 1932-33 are not ultra vires and therefore no assessment in the eye of the law at all?" Pursuant to this direction the Commissioner on the 1st April, 1943, stated a case and in effect gave his opinion upon the several questions as follows:―(A) Yes; (B) Not as regards any assessment except that for the year 1932-33; (C) the assessments were not ultra vires. He also made some further observations upon the question whether in the circumstances of the case a reference lay, and made a preliminary submission that it did not lie. The reference was duly heard by the High Court and on the 3rd March, 1944, judgment was delivered by Din Mohammad, J., with whom Sale, J., agreed. It is significant of the difficulties of the case that once more the questions were formulated and were re-stated in the following form:― "(1) Whether the assessments made subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 14 and 15, which also confer exemption, open with the words "The tax shall not be payable." In their Lordships' opinion the difference in language does not create a different legal result. Chapter IV, headed "Deductions and Assessments" and consisting of Sections 18 to 39 inclusive, deals elaborately with these two subjects. It prescribes in detail the duties of the Income-tax authorities and the obligations and rights of the assessee and in particular by Section 30 defines the right of appeal to the Assistant Commissioner against an assessment and the limit of time within which an appeal may be brought, and by Section 31 defines the powers and duties of the Assistant Commissioner upon the hearing of an appeal. This section contains a proviso that the Assistant Commissioner shall not enhance an assessment unless the appellant has had a reasonable opportunity of showing cause against such an enhancement. Section 32 provides that any assessee objecting to an order passed by an Assistant Commissioner under Section 28 or to an order enhancing his assessment under sub-section (3) of Section 31 may appeal to the Commissioner within 30 days of the date on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an assessee for any year exceeds the amount with which he is properly chargeable for that year, he shall cause a refund to be made by the Income- tax Officer of any amount found to have been wrongly paid or in excess. But there is an important proviso, viz., Section 48A(3) [which in the amending Act was replaced by Section 48(4)], that nothing in the section shall operate to validate any objection or appeal which is otherwise invalid or to authorise the revision of any assessment or other matter which has become final and conclusive or the review by any officer of a decision of his own which is subject to appeal or revision or where any relief is specifically provided elsewhere in the Act, to entitle any person to any relief other or greater than that relief. Chapter VIII deals with offences and penalties, Chapter IX with super-tax and Chapter IXA with certain special matters. Chapter X is headed "Miscellaneous" and contains the important Section 66 under which upon a case stated reference can be made to the High Court. This Section 66 provides, (1) that if in the course of any assessment under the Act or any proceeding in connection therewith other than a proceeding u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oper exercise of his duty. If this Board had otherwise decided the appeal which came before it in 1939, they would have stood unquestionable and unquestioned. It does not appear to their Lordships that they were a "nullity" in any other sense than that if they had been challenged in due time they might have been set aside. But the same thing is true of every assessment which is open to successful challenge and it is just because convenience of administration demands that the validity of an assessment shall be tested in a particular way, that the Income-tax Act provides that way and at the same time enacts by Section 67 that it shall be tested in no other way. Their Lordships in the course of reviewing the Act observed upon the language of the section conferring the exemption now in question. They would repeat that they do not find in it any justification for the view that an assessment, which may ultimately be held to be invalid in that it does not give effect to the provision for exemption, is thereby rendered a "nullity." In coming to this conclusion they find strong support in the recent decision of this Board in Raleigh Investment Co. v. Governor-General in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the tax received in good faith. Their Lordships cannot accept this argument. They have reviewed the Code of Income-tax law for the purpose of showing that it exhaustively defines the obligations and remedies of the taxpayer. It would be wholly incompatible with this that he should have a collateral right, necessarily vague and ill-defined, founded on the principles of equity and good conscience. Their Lordships are of opinion that the only remedies open to the taxpayer, whether in regard to appeal against assessment or to claim for refund, are to be found within the four corners of the Act. This view of his rights harmonises with the provision of Section 67, to which reference has already been made, that no suit shall be brought in any Civil Court to set aside or modify any assessment made under the Act. It is the Act which prescribes both the remedy and the manner in which it may be en- forced. It has, however, as a subsidiary argument been urged on behalf of the respondent that it appears upon the face of the order of the Commissioner of the 23rd November, 1939, that he exercised improperly the discretion assumed to be vested in him and that his order should, therefore, be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anguage of the section does not support the contention, which lies at the root of the third question and is vital to the respondent's case, that it affords a claim to relief. As has been already pointed out, appropriate relief is specifically given by other sections: it is not possible to interpret Section 33 as conferring general relief. Their Lordships, therefore, can only answer the third question by saying that it is wholly misconceived and that, if the respondent claimed relief under Section 33, his claim was rightly rejected. Their Lordships have felt much doubt whether they should refer to the procedural point which arises under Section 33 and 66(2), i.e., whether, where the Commissioner acting under Section 33 makes an order refusing to set aside an assessment, his order is "otherwise prejudicial" to the assessee, so that the latter can under Section 66(2) require him to refer any question of law arising from such order to the High Court. This question was raised before the High Court at an earlier stage in these proceedings and the decision of that Court was not appealed. On the present appeal the learned counsel for the appellant has placed in the forefron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Section 33. In the case in which a reference is permitted, there is a new point of law which could not be otherwise the subject of appeal; in the case in which it is excluded, the point of law was one that could already have been appealed under the appropriate section. For these reasons their Lordships are of opinion that a reference does not lie from an order under Section 33 unless that order is prejudicial to the assessee in the sense that he is in a worse position than before the order was made. Applying that principle to the present case their Lordships are of opinion that, as the Commissioner did not enhance the assessments made upon the respondent or otherwise alter his position for the worse, the reference was from the outset incompetent. They would only add that the respondent could not make an otherwise incompetent reference competent by adducing a reason for setting aside the assessment which was not available to it at the date of the assessment. For the reasons above stated their Lordships are of opinion that this appeal must be allowed and the judgment of the High Court of Judicature at Lahore of the 23rd March, 1944, set aside and they will humbly advise Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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