The power of re-assessment is given expressly only by Section 34, and the Commissioner has no right to initiate or independently start re-assessment proceedings.

Srinivasa Aiyangar, J.

1. By order of this Court, dated the 9th day of November, 1925, the Commissioner of Income-tax has referred for the decision of this Court the following questions:

(a) Whether a Commissioner is empowered by way of review or revision to impose the assessment and penalty levied by him by his order, dated 8th September, 1925, against the firm of Sheikh Abdul Khader Marakayar and Company;

(b) Whether in the circumstances of this case the powers of review under Section 33 of the Income-tax Act, 1922, could be exercised by the Commissioner with a view to re-open and enhance an assessment made under the old Income-tax Act of 1918;

(c) Whether Sections 33 and 28 of the Income-tax Act, 1922, are not controlled by the provisions of Section 34 of the same Act;

(d) Whether the Commissioner in exercise of the powers under Section 33 can re-open and enhance an assessment more than one year old and levy penalty under Section 28 in respect of such an assessment.

2. All the facts necessary for the reference have been set out in the letter of reference to this Court and for purposes of the answer the facts may be briefly set out.

3. A firm called Messrs. Sheikh Abdul Khader Marakayar and Company who were liable to pay income-tax for the assessment year 1923-24 based on the accounts for the year 1922-23 escaped income-tax on a portion of their income by reason of certain sources of their income being withheld. Under the provisions of Section 34 of the Income-tax Act XI of 1922 the Income-tax Officer was entitled to proceed before the end of year 1924-25 to re-assess such income. It is admitted that action was taken by the Income-tax Officer under Section 34 of the Act and notice also issued before the 31st of March, 1925. As the assesses did not make any response to the notice, the Income-tax Officer proceeded to reassess and as the result thereof an additional tax amounting to Rs. 1,856-11-0 was imposed on the assesses. The notice of demand was served on them on the 13th of March, 1925. The assesses thereupon filed before the Income-tax Officer a petition under Section 27 of the Act on the ground that the original notice of re-assessment had not been properly served on them, but the Income-tax Officer dismissed that petition holding that there was proper service.

4. The petitioner thereupon filed an appeal to the Assistant Commissioner and he set aside the order of re-assessment holding that there has been no valid service of the notice of re-assessment. What is required to be done under Section 34 of the Act to entitle the Income-tax Officer to re-start proceedings and re-assess the parties is the service of a notice of such assessment according to the prescribed form.

5. Thus, after the order of the Assistant Commissioner in appeal setting aside the order of re-assessment made by the Income-tax Officer, there was an end of all the proceedings lawfully started for re-assessment. It was thereupon that the Commissioner of Income-tax purported to take proceedings under Section 33 of the Act. That section enables the Commissioner of his own motion to call for the records of any proceeding under the Act and after any enquiry to pass subject to the provisions of the Act such orders as he thinks fit. Though this is called "the power of review" in the marginal note to the section, it is clear that the real jurisdiction given under this section is not by way of review but by way of what is generally known as revision or superintendence. Proceeding under that section in effect what the Commissioner said and did was really this:

The Income-tax Officer started proceedings under Section 34 and reassessed the parties, but the order of re-assessment was set aside by the Assistant Commissioner on appeal on the ground that there had been no proper service of notice. I will assume that there was no proper service of notice, but as the Income-tax Officer really commenced proceedings, I shall under Section 33 take up that proceeding at the st