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TMI Blog1981 (9) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... n the year under consideration. He, accordingly, issued a show-cause notice as to why an order under section 263 of the Income-tax Act, 1961 ('the Act'), as the circumstances justify including an order, or enhancing, or modifying the assessment order or cancelling the assessment and the making of the fresh assessment, be not made. After cause was shown, the Commissioner after referring to the Scheme of the 1923 Act, as was clear from sections 2, 3, 4, 4A, 10, 19, 22 and rules 20, 21, 23 to 28 and 32 of the Workmen's Compensation Rules, 1924, made under section 32 of the 1923 Act, and negativing the contentions of the assessee to the contrary, has observed in para 9 of the impugned order that "it is impossible to contend that a liability has accrued against the assessee. It is to be noted that an accrued liability is one where there is a specific person to whom the assessee is under an obligation to make a payment of a specific amount, even though payment may be made at a future date. It cannot be contended that an accrued liability arose merely because a claim has been made before the Commissioner in an application by a workman. The utmost that may be said is that at a future date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consequential steps. 5. Aggrieved by the said decision of the Commissioner, the assessee had filed the present appeal. Dr. Debi Pal, the learned counsel for the assessee, took us through the provisions of the Dock Workers (Regulation of Employment) Act, 1948, and the Scheme framed by the Central Government under sub-section (1) of section 4 of that Act. He also took us through the decision of the Supreme Court in Visakhapatnam Dock Labour Board v. Stevedores Association AIR 1970 SC 1626, wherein the said Act and the Scheme have been discussed at length. 6. In the light of the aforesaid enactment, the Scheme and the decision of the Supreme Court, it was urged by Dr. Pal that the assessee being a Stevedore working at Calcutta port, has registered himself as a registered employer with the Calcutta Dock Labour Board. The workers who were engaged by the assessee, in his capacity as a Stevedore for working at different ships, while they were in Calcutta Dock, could not be anybody else than the registered dock workers. These dock labour workers, as is clear from the aforesaid Act, the Scheme and the decision of the Supreme Court, are the employees of the assessee-employer, after the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... troverted by the senior departmental representative, Shri S. Majumdar, who took us through the decision of the Commissioner under section 263 of the Act. Relying on the said order, Shri Majumdar has strenuously urged that the liability of the assessee under the 1923 Act was contingent and not in praesenti until that liability was decided upon and quantified under section 19 of the 1923 Act. The Commissioner was, therefore, correct in holding that under the provisions of the 1923 Act and the rules thereunder, no liability whatever accrued against the assessee in case of injury sustained by the employees of the assessee in the course of employment, if the assessee does not admit his liability to pay any compensation, or if the Commissioner under the 1923 Act had not given his award under section 19 of the 1923 Act. 8. We have given consideration to the above arguments. As already stated, the assessee-company is carrying on the business of Stevedores at the Calcutta Dock. As required by the Dock Workers (Regulation of Employment) Act, 1948, and the Scheme made thereunder for the Calcutta Dock Labour Board, the assessee-company has to function as stevedores at the Calcutta Docks and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an autonomous body, competent to determine and prescribe the wages, allowances and other conditions of service of the dock workers. The purport of the Scheme is that the entire body of workers should be under the control and supervision of the Board. The registered employers are allocated monthly workers by the Administrative Body and the Administrative Body supplies, whenever necessary, the labour force to the Stevedores from the Reserve Pool. The workmen who are allotted to the registered employers are to do the work, under the control and supervision of the registered employers, and to act under their directions. The registered employers pay the wages due to the workers to the Administrative Body and the latter, in turn, as agent of the registered employers, pay them over to the concerned workmen. All these circumstances, in our opinion, prima facie, establish that the Board cannot be considered to be the employer of the dock labour workmen. In fact, various provisions referred to in the Scheme clearly show that the registered employer to whom the labour force is allotted by the Board is the employer whose work of loading or unloading of ships is done by the dock workers allott ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsonal injury is caused to a workman by accident arising out of and in the course of his employment'. Section 3(5) of the Act is not attracted in the present case, as none of the workmen-employees concerned, of the assessee, claimed compensation against the assessee in the year under consideration and had not instituted a suit in civil court for recovery of damages, in respect of the injury so caused. Section 4(1) of the Act prescribes the amount of compensation payable for the injury sustained by a workman, which is to be calculated on the basis stated therein. Section 4A of the 1923 Act is headed 'Compensation to be paid when due and penalty for default'. It reads as under: "(1) Compensation under section 4 shall be paid as soon as it falls due: (2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of the liability which he accepts, and such payment shall be deposited with the Commissioner or made to the workman, as the case may be, without prejudice to the right of the workman to make any further claim (3) Where any employer is in default in paying the compensa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration, arises when the claims on that behalf are preferred by the workmen to the Commissioner under the 1923 Act, as is the case of the assessee-employer before us, or the said liability crystallised only when the dispute in the matter of the compensation claimed, as is in the present case, the assessee having denied its liability to accept the claims, made by the workmen, totalling Rs. 7,56,236, is settled by the Commissioner, as is the case of the Commissioner in the impugned order. 12. To decide the above point at issue, we will first refer to the decision of the Bombay High Court in the case of Margardita Gomes. The facts in that case are that one Santoline Fernandes was employed by Mackinnon Mackenzie Co. (P.) Ltd. on their vessel 'M.V. Pandua' on 4-5-1960. In the course of his employment he suffered, while removing certain articles in the store-room of the ship, injury to his eyes by chilly powder. He washed his eyes and to some extent he felt some relief. But in about 4 to 5 days' time, a film developed in the eyes. The Chief Officer had no medicine for the eyes. As Kobe in Japan, the master of the ship took him to a Japanese doctor. At Ure he was taken to a hospital. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to entertain and adjudicate on the claim. He filed a memorandum of agreement on 10-4-1969 accepting the liability to pay compensation for a sum which was found by the Commissioner to be so grossly inadequate that he refused to register it. The Commissioner, thereafter, held in his order, dated 6-5-1969, that the injury had resulted in the amputation of the left arm of the respondent above the elbow; that the respondent was a carpenter by profession and by loss of his left hand above the elbow he has evidently been rendered unfit for the work of carpenter as the work of carpentry cannot be done by one hand only. He, therefore, adjudged him to have lost 100 per cent of his earning capacity. On that basis, he calculated the amount of compensation at Rs. 9,800 and ordered the payment of penalty to the extent of 50 per cent together with interest at 6 per cent per annum, making a total of Rs. 15,092. One of the points agitated by the appellant before the Supreme Court was that the Commissioner committed a serious error of law in imposing a penalty on the appellant under section 4A(3) of the 1923 Act, as the compensation had not fallen due until it was settled by the Commissioner under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the Commissioner for setting the claim, and even there the appellant raised a frivolous objection as to the jurisdiction of the Commissioner and prevailed on the respondent to file a memorandum of agreement settling the claim for a sum which was so grossly inadequate that it was rejected by the Commissioner. In these facts and circumstances, we have no doubt that the Commissioner was fully justified in making an order for the payment of interest and the penalty." 14. The aforesaid two decisions relied upon by the learned counsel for the assessee, Dr. Pal, therefore, establish that in the case of personal injury caused to a workman by an accident, which arises out of, and in the course of, his employment, unless the right to compensation is taken away under sub-section (5) of section 3, which is not the position in the present case, the employer becomes liable to pay compensation as soon as the aforesaid personal injury is caused to the workman. Section 19 only provides for settlement by a Commissioner of any question regarding liabilities of any person to pay compensation, or duration of compensation in default of any agreement, if any such question arises in any proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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