SETH KISHAN LAL Vs. COMMISSIONER OF INCOME TAX C P U P
INCOME TAX APPELLATE TRIBUNAL
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This is an application made by Seth Kishanlal under Sec. 66(3) of the Income-Tax Act. -
(1.) THE facts are that on the 23rd July 1933, the applicant Kishanlal was served with a notice under Sec. 22(2) of the Income Tax Act requiring him to furnish a return of his income in the prescribed form. On the 15th August 1933, his agent applied to the Income Tax Officer for 4 months time; and he was granted time till 23-9-33. On the 3rd October, it was noted in the order sheet of the case by the Income Tax Officer that his agent had been asked to file the return at once and the order "Await till 2-11-33" passed. An application for extension dated the 26th October 1933 was then sent by registered post to the Income Tax Officer who received it. No reply was given to this application and on the 2nd November 1933, the Income Tax Officer made an assessment under Sec. 23(4) of the Act. THE assessee then applied to the Income Tax Officer under Sec. 27 of the Act for cancellation of the assessment. THE application was rejected though without proper inquiry by the Income Tax Officer. THE applicant filed an appeal to the Assistant Commissioner of Income Tax. THE Assistant Commissioner considered that sufficient inquiry had not been made but instead of remanding the case proceeded with consent of the appellants counsel to enquire into the matter himself and he dismissed the appeal after such inquiry. An application for review of his order to the Commissioner of Income Tax was unsuccessful. Simultaneously with his application for review to the Commissioner made under Sec. 33 of the Act the assessee asked the Commissioner under Sec. 66(2) of the Act to refer to the High Court four question of law alleged to arise out of the appellate order passed by the Assistant Commissioner under Sec. 31 of the Act. THE 1st question which the Commissioner refused to refer is framed as follows :- "In absence of any evidence indicating that any invitation was received by the assessee or that he ever appeared in Court, was the Income Tax Officer justified in proceeding to assess him ex parte without duly intimating to the assessee the order passed on his application and obtaining acknowledgment of the intimation. THE 2nd question is "was there no sufficient cause for setting aside the ex parte order in the circumstances of the case ?" THE view of the Commissioner was that these questions raised points of procedure and facts and not a substantive question of law. THE form of the question when read with the statement of facts made in the application to this Court is based on 3 allegations : (1) inability to prepare the accounts owing to illness and his munim leaving service. This is a question of fact. (2) Receiving no intimation on the 1st application as to the extension of time till 23-9-33. This is a question of fact which has been found against the applicant. (3) Not attending the Court of the Income-Tax Officer. It has been found in the appeal that an intimation of the 1st extension was issued to the petitioner by an intimation card (I.T. 106). It has been found that the story regarding illness is a tissue of falsehood. It has been found that the petitioner had ample time to engage another munim even if his munim had left. THEse questions raised before the Commissioner when read with the allegations made in the present application were rightly considered by the Commissioner not to be questions of law and we hold that the Commissioners decision refusing to state a case on the ground that no question of law arose was correct. In argument much has been made of the fact that no reply was sent to the second application received by post the sending of which is incompatible with the allegations of the applicant that his application of 4 months extension was thought by him to have been granted. If he applied on 15-8-33 and believed his application to have been granted for a four months extension for 23-7-33, by registered post "for one months time" ? THE question immediately before us is not whether the Commissioner should have regarded the making of an assessment without replying to this application as a question of law but whether the Commissioner is tight in treating the four points as questions of fact and questions of procedure. We are satisfied that the Commissioners decision was correct and that the questions propounded are nothing more nor less than questions as to whether the Assistant Commissioner rightly or wrongly decided the facts raised in appeal. We would refer to the decision of their Lordships of the Privy Council in Commissioner of Income Tax, U.P. & C.P. v. Badridas Ramrai Shop, Akola (I.L.R. 1937 Nag. 191) and point out that as regards point no. (ii) in that case where a matter was distinctly raised regarding the communication of an order on request for adjournment, their Lordships stated that they were unaware of any rules under which the Income Tax Officer was bound or ought to announce beforehand how he proposed to deal with an application for an adjournment. THEir Lordships evidently regarded that question as part of the general question of facts as is clear from the passage at page 200 and from the passage at page 203 in which the words "if answered at all" appear. THE third question was whether the Income Tax Officer was justified in assessing the assessee on an income of Rs. 51,000 when the assessment for the year preceding was insignificant, on an income just over Rs. 100. This question did not arise out if the appeal and it is not open to the applicant to request the Commissioner to state a case on this point. THE fourth question is as follows : "Is not the assessment arbitrary, unjust and illegal in the circumstances of the case, where there is no evidence on record or no other material on record to justify the same ?" Here again the applicant had no right to ask the Commissioner to state a case as this did not arise out of the appellate order. No appeal lay on these last 2 points to the Assistant Commissioner of Income Tax in an appeal from the Income Tax Officers order refusing to set side and ex parte assessment. THE case has been argued on merits before us as though we had a case stated in front of us. At present the only question which falls for decision is whether we should require the Commissioner to state a case. THE application is an application for mandamus. We desire however to add lest it should be thought we are shutting out the application from a full consideration of this case on any narrow grounds, that we are fully satisfied of the correctness of the order of the Commissioner passed on review of the Assistant Commissioners appellate order by which the order was confirmed. We see no reason whatsoever to believe that the assessment made on the income of Rs. 51,000, was made by the Income Tax Officer without honest exercise of his judgment. It has not been shown in the long argument addressed to us on the merits of the case that the Income Tax Officer made the assessment "dishonestly or vindictively or capriciously or without honest exercise of his judgment" (vide I.L.R. 1937 Nagpur 131). Compliant has been made that the Commissioner in the review proceedings verified the propriety of the assessment by studying the assessment of previous years. Yet in the decision quoted above this is one of the matters to which an Income Tax Officer should have regard when making assessment under Sec. 23(4) of the Act to the best of his judgment". We would also observe that the Commissioner in his order in the review application has fully explained the law as to assessment of the previous year. We would also observe as the point has been raised in argument that the order made by the Commissioner in review was not in any way prejudicial to the assessee in the sense in which those words are used in the proviso to Sec. 33 of the Act or in Sec. 66(2) thereof, and the complaint made that the Commissioner looked to the previous years assessments without further hearing the applicant for review has no legal foundation. What happened was that the Commissioner desired to satisfy himself that no injustice has been caused as regards the method of assessment made by the Income Tax Officer to the best of his judgment and for this purpose referred to the assessments of the previous years after the arguments arising out of the application for review had been concluded. THE application that we should require the Commissioner to state a case on the ground that it was wrongly held that no question of law arises, therefore, fails and is dismissed with costs. Pleaders fee Rs. 75.;
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