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High Court Of Calcutta
Sankar Prasad Mitra, S. C. Deb
SMT.BHAGIRATHI DEVI JALAN - Appellant
Versus
COMMISSIONER OF INCOME-TAX - Respondent
Income-Tax Reference 222 Of 1967
Decided On : 12/09/1976
INCOME TAX - REVISION OF ORDERS - POWER OF COMMISSIONER - LIMITATION - SECTION 33B OF THE INDIAN INCOME-TAX ACT, 1922 - WHETHER THE TRIBUNAL WAS CORRECT IN AUTHORISING THE COMMISSIONER TO PASS AN ORDER UNDER SECTION 33B AFTER THE PERIOD OF LIMITATION LAID DOWN IN THAT SECTION BY DIRECTING HIM TO DISPOSE OF THE MATTER AFRESH.
Fact of the Case:
The assessee filed voluntary returns for the assessment years 1953-54 to 1961-62 on May 12, 1961. The Income-tax Officer took cognizance of the above returns on November 17, 1961, and completed the assessments on December 4, 1961. The Commissioner of Income-tax upon going through the assessment records was of opinion that the assessment orders were erroneous in so far as they were prejudicial to the interests of the revenue. The Commissioner issued a show-cause notice to the assessee by a letter dated 18th October, 1963, for giving her an opportunity of being heard on 12th November, 1963. There was no appearance on 12th November, 1963, on behalf of the assessee. The assessee also did not send any written communication. The Commissioner took the view that the notice had been duly served. He proceeded to pass an ex parte order. He cancelled the assessment orders for the years 1953-54 to 1961-62 and directed the Income-tax Officer to make fresh assessments in accordance with law. The assessee went up on appeal under the provisions of Section 33b (3). Before the Tribunal the assessee submitted that no notice to show cause under Section 33b had been served on her either actually or constructively.
Finding of the Court:
The Tribunal was satisfied that there was prima facie ground for the Commissioner to take action under Section 33b but the Tribunal accepted the assessee's submission that there was no proper service and, as such, the assessee did not have knowledge of the show-cause notice and was not given an opportunity of being heard as required by Section 33b. The Tribunal held that it would be just and proper to send the matter back to the Commissioner of Income-tax and, accordingly, vacated the consolidated order under Section 33b. The Tribunal directed the Commissioner to pass appropriate orders afresh after giving due opportunity to the assessee of being heard.
Issues: Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in authorising the Commissioner to pass an order under Section 33b of the Indian Income-tax Act, 1922, after the period of limitation laid down in that section by directing him to dispose of the matter afresh.
Ratio Decidendi: The special period prescribed in Section 33b applies to the first order that the Commissioner had made in the instant reference. That order was passed within time. The subsequent order of the Tribunal has to be given effect to by the Commissioner irrespective of the period of limitation prescribed by Section 33b.
Final Decision: The question referred to the court is answered in the affirmative and in favor of the revenue.
( 1 ) IN this reference under Section 66 (2) of the Indian Income-tax Act, 1922, the question under consideration is :" Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in authorising the Commissioner to pass an order under Section 33b of the Indian Income-tax Act, 1922, after the period of limitation laid down in that section by directing him to dispose of the matter afresh. "
( 2 ) THE relevant provisions of Section 33b run thus ;" 33b. Power of Commissioner to revise Income-tax Officer's orders.- (1) The Commissioner may call for and examine the record of any-proceeding under this Act and if he considers that any order passed therein by the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such enquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. (2) No order shall be made under Sub-section (1)- -. . . . . . (b) after the expiry of two years from the date of the order sought to be revised. (3) Any assessee objecting to an order passed by the Commissioner under Sub-section (1) may appeal to the Appellate Tribunal within 60 days of the date on which the order is communicated to him. . . . . "
( 3 ) IN the instant reference the assessee filed voluntary returns for the assessment years 1953-54 to 1961-62 on May 12, 1961. The assessee gave her address as 13, Rameswar Malia Lane, Howrah, before the Income-tax Officer, "d" Ward, Howrah. For the assessment years 1960-61 and 1961-62 the assessee's name was described as M/s. Universal Trading Corporation.
( 4 ) THE Income-tax Officer took cognizance of the above returns on November 17, 1961, and completed the assessments on December 4, 1961.
( 5 ) THE Commissioner of Income-tax upon going through the assessment records was of opinion that the assessment orders were erroneous in so far as they were prejudicial to the interests of the revenue.
( 6 ) THE Commissioner issued a show-cause notice to the assessee by a letter dated 18th October, 1963, for giving her an opportunity of being heard on 12th November, 1963.
( 7 ) THERE was no appearance on 12th November, 1963, on behalf of the assessee. The assessee also did not send any written communication.
( 8 ) AS the notice was served first by registered post and then by affixation the Commissioner took the view that the notice had been duly served. He proceeded to pass an ex parte order. He cancelled the assessment orders for the years 1953-54 to 1961-62 and directed the Income-tax Officer to make fresh assessments in accordance with law.
( 9 ) THE assessee went up on appeal under the provisions of Section 33b (3 ). Before the Tribunal the assessee submitted that no notice to show cause under Section 33b had been served on her either actually or constructively. The Commissioner sent the show-cause notice by registered post addressed to the assessee at 13, Rameswar Malia Lane, Howrah, but it came back unserved with the postal remark " not known ".
( 10 ) THEREAFTER, personal service was attempted through process server at No. 5, Abdul Rasul Avenue. On 21st October, 1963, the Inspector reported that he went to No. 5, Abdul Rasul Avenue, but he was informed that the assessee was out of station and was expected to return within a week. The Inspector reported further that he received the notice on 19th October, 1963 ; he tried to contact the assessee for personal service on two dates, namely, 19th October, 1963, and 21st October, 1963, and having failed in these attempts he served the notice by affixation on 21st October, 1963.
( 11 ) THE Tribunal was satisfied that there was prima facie ground for the Commissioner to take action under Section 33b but the Tri
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