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TMI Blog1961 (2) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... Agency-was completed. The said firm, however, was not treated as a registered firm and it was assessed to the total loss of ₹ 1,57,802 and the petitioner's share of loss therein was determined at ₹ 13,150. Intimation, accordingly, was communicated by the Income-tax Officer, A-V Ward, to the respondent regarding the share of the loss of the petitioner from the firm. On receiving the intimation, the respondent again acting under section 35 of the Act rectified the petitioner's assessment by adding the entire amount of ₹ 22,185 to the total income of the petitioner. The petitioner's total income was thus increased from ₹ 1,00,830 to ₹ 1,23,015. The petitioner was thereafter called upon to pay income-tax and super-tax on the aforesaid total income of ₹ 123,015 and a notice of demand to pay the said taxes was issued on February 11, 1957. Against this order of the respondent the petitioner moved the Commissioner of Income-tax under section 33A to get the order of the respondent revised. One of the contentions raised by the petitioner before the respondent and the Commissioner of Income-tax was that on a correct interpretation of section 14( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the Commissioner in revision was not one varying or modifying the order of the Income-tax Officer, but the order made is one of rejecting the application. The substance of the order of the Commissioner of Income-tax thus being one refusing to interfere with the order of the Income-tax Officer that order still remains as an operative order and has not merged in the order of the Commissioner of Income-tax. This petition is, therefore, maintainable even though the Commissioner of Income-tax is not joined as a respondent to this petition and the relief asked is not to get his order of August 28, 1959, quashed. Reliance is placed by Mr. Palkhivala on Lata Mangeshkar v. Union of India [1959] 36 ITR 527. In that case an identical objection was raised and was overruled by a Division Bench of this court. It was pointed out that there is a clear distinction between an order made in appeal and an order made in revision rejecting the application in revision. At page 532 it is observed: First of all I would like to accentuate only one point of differentiation between an appeal and a revisional application, which to my mind is sufficient to bring out this distinction. An appeal i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere by way of a writ under article 226 or 227 of the Constitution of India. This argument was countered by another argument on behalf of the constable that though the order of dismissal was made prior to the date the Constitution came into force, the appellate order and the order made in revision were made subsequent to the date the Constitution came into force. The original order of dismissal had got merged first in the order of the appellate authority and later in the order of the revisional authority. The final operative order thus being of the revisional authority and that having been passed subsequent to the date the Constitution came into force, the High Court had jurisdiction to issue a writ under articles 226 and 227 of the Constitution of India. The contention raised on behalf of the constable was rejected by their Lordships of the Supreme Court. In dealing with this contention at page 611 of the report Das, C.J., has observed: There appear to be two answers to the foregoing contention. As we have already observed an order of dismissal passed on a departmental enquiry by an officer in the department and an order passed by another officer next higher in rank dism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moved the Calcutta High Court by way of a writ petition under article 226 of the Constitution to get quashed the order of the Collector of Customs and an order preventing the customs authorities from taking any action against the petitioner under the law. An objection was raised to the tenability of the petition on the ground that the order of the Collector had merged in the order of the appellate authority; that the order of the appellate authority was the effective order and the appellate authority being located outside the jurisdiction of the Calcutta High Court, that court could not issue a writ against the appellate authority and, therefore, no relief could be granted to the petitioner. This contention was not accepted by the learned judges deciding that case. After referring to the decision of the Supreme Court and the observations, which we have already reproduced above, they observed that the pronouncement of the Supreme Court furnished a conclusive answer to the question they had to decide. Their answer was that after the appeal is dismissed and the original order is confirmed, the formal existence of the order made by the appellate authority is no reason why the court sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For these reasons in our view the first preliminary objection raised by Mr. Joshi should fail. It is next contended by Mr. Joshi that, even if it be open to the petitioner to challenge the original order made by the respondent, the petitioner has come to this court after an inordinate delay and on that ground alone the petition is liable to be dismissed in limine. It is true that the order of the respondent was made against the petitioner on February 11, 1957, and the petitioner has moved this court under article 226 of the Constitution on October 21, 1959, that is, nearly after two years and 8 months and it is an inordinate delay. But it is to be noticed that during the interim period the petitioner had not been remaining quiet without challenging the order of the respondent but was availing himself of another remedy open to him. He had, within the period allowed to him, moved the Commissioner of Income-tax in revision. The Commissioner decided the case on August 28, 1959. The order was communicated to the petitioner on September 4, 1959. Within a month and a half thereafter the petitioner has approached this court. These facts, in our view, afford an adequate and satisfa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd? Learned counsel on either side were unable to suggest any clear cut rule by which the boundary between the two classes of errors could be demarcated. Mr. Pathak for the first respondent contended on the strength of certain observations of Chagla, C.J., in Batuk K. Vyas v. Surat Municipality AIR 1953 Bom. 133, that no error could be said to be apparent on the face of the record if it was not self-evident, and if it required an examination or argument to establish it. This test might afford a satisfactory basis for decision in the majority of cases. But there must be cases in which even this test might break down, because judicial opinions also differ, and an error that might be considered by one judge as self-evident might not be so considered by another. The fact is that what is an error apparent on the face of the record cannot be defined precisely or exhaustively, there being an element of indefiniteness inherent in its very nature, and it must be left to be determined judicially, on the facts of each case. Considering this aspect in another decision, Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale [1960] 1 SCR 890, it has been observed that an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or not is not relevant to the construction of these sections. In our opinion it cannot be positively said that the contentions raised by Mr. Joshi are without force. It is not in dispute and Mr. Joshi does not dispute that the expression profits in sections 8, 10 and 12 would include the losses incurred by an assessee but that, in our opinion, would be of no assistance to the petitioner if on the terms of sections 14(2)(a) and 16(1)(a) it is not possible to include losses in the expression profits used in section 14(2)(a). Section 16(1)( a) enumerates exemptions and exclusions in determining the total income. Clause (a) of sub-section (1) of section 16 material for the purpose of this case would read: In computing the total income of an assessee any sums exempted under...sub-section (2)...of section 14,... shall be included,.........for the purpose of determining the rates at which income-tax (but not super-tax) is payable by the assessee to whom the exemption is given. On the terms of this clause it is clear that what can be included in the total income for purposes of determining the rates at which income-tax is payable are the sums referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f or carried forward and set off in accordance with the provisions of section 24. The terms of the proviso to this clause directs that the share of loss of a partner of an unregistered firm has to be dealt with in a particular manner as provided in section 24. The relevant part of section 24 reads: Where any assessee sustains a loss of profits or gains in any year under any of the heads mentioned in section 6, he shall be entitled to have the amount of the loss set off against his income, profits or gains under any other head in that year: Provided further that where the assessee is an unregistered firm which has not been assessed under the provisions of clause (b) of subsection (5) of section 23 in the manner applicable to a registered firm any such loss shall be set off only against the income, profits and gains of the firm and not against the income, profits and gains of any of the partners of the firm; and where the assessee is a registered firm, any loss which cannot be set off against other income, profits and gains of the firm shall be apportioned between the partners of the firm and they alone shall be entitled to have the amount of the loss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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