THE CHIEF JUSTICE. - The question which has been referred is whether the case of N. A. S. V. Venkatachalam Chettiar v. The Commissioner of Income Tax, Madras was rightly decided. The answer depends on the meaning to be given to the word "prejudicial" in Section 66(2) of the Indian Income Tax Act. Section 66 (2) states that within sixty days of the date on which he is served with notice of an order under Section 33 enhancing an assessment or otherwise prejudicial to him the assessee may require the Commissioner of Income Tax to refer to the High Court any question of law arising out of the order. Section 33 authorises the Commissioner of Income Tax of his own motion to call for the record of a proceeding under the Act which has been taken by an authority sub-ordinate to him or by himself when exercising the power of an Assistant Commissioner under sub-section (4) of Section 5, and having called for the record he is empowered, subject to the provisions of the Act, to pass such order as he thinks fit, but he may not pass an order prejudicial to an assessee without hearing him or giving him a reasonable opportunity of being heard. The section makes no mention of the right of an assessee to move the Commissioner to take action but as the Commissioner may take action of his own motion the assessee must have the right of calling his attention to a prejudicial order and of asking that action be taken. This is fact frequently happens.

In Venkatachalam Chettiars Case the petitioner applied to the Income Tax Officer for a refund of Income Tax under Section 48 of the Act, but his application was refused. The petitioner then filed an application asking the Commissioner to revise the order of the Income Tax Officer under Section 33. Having heard the application the Commissioner refused to interfere. The petitioner then required the Commissioner to refer the matter to the High Court under Section 66(2) of the Act as involving a question of law. The Commissioner dismissed the application on the ground that it was incompetent. His reason was that his order under Section 33 was not one enhancing the assessment or otherwise prejudicial to the applicant. In accepting this interpretation Beasley, C.J. observed :-

"What Section 33 clearly contemplates is an order made by the Commissioner which alters the position of an assessee or an applicant to that persons prejudice. In this particular case, his position had been prejudiced already by the refusal of the Income Tax Officer to grant him the refund which he required. The Commissioners order did no more than leave him in that position and, it is quite clear to us, was not an order which was prejudicial to the petitioner in the sense intended, namely, that his position at that time, that is, the date of the Commissioners order, was altered by that order to one of prejudice to him."

With these observations the other Judges (Ramesam and King, JJ.) - agreed.

With great respect I am unable to accept this interpretation. It means that the Commissioners order must be more prejudicial than the order complained of before it can come within the purview of Section 66(2). The section does not say so. All that it contemplates is a prejudicial order. It seems to me that if an order of the Income Tax Officer is prejudicial an order which confirms it or rejects an application asking that it be revised is also prejudicial. It could not be said that a decree of an appellate Court dismissing an appeal from a Court of first instance is not prejudicial to the appellant. It is just as prejudicial as the original decree. There is no difference in this respect between a dismissal of an appeal and the dismissal of an application for revision when the law permits such an application to be made.

In expressing this opinion I have not lost sight of the first proviso to Section 66(2), which reads as follows :-

"Provided that a reference shall lie from an order under Section 33 only on a question of law arising out of that orde