JAGADINDRA KUMAR Vs. REVENUE COMMR

JUDGEMENT

(1.) THIS Special Bench was constituted to hear the preliminary question as to whether the decision of a Division Bench of this Court in - -'Sri Rama Chandra v. Collector of Agricultural Income -tax', AIR 1962 Orissa 281 (A) regarding the construction of the words 'an order under Section 28 enhancing an assessment or otherwise prejudicial to him' occurring in Sub -section (2) of Section 29, Orissa Agricultural Income -tax Act, requires revision in view of the decision of the Privy Council in - -'Commr. of Income -tax West Punjab, North West Frontier and Delhi Provinces, Lahore v. Tribune Trust Lahore', AIR 1943 P. C. 102 (B) which unfortunately was not cited before the said Division Bench of this Court.

(2.) THE petitioner was assessed to agricultural income -tax by the Agricultural Income -tax Officer, Balasore. He appealed against the assessment to the Collector of Agricultural Income -tax under Section 25, Orissa Agricultural Income -tax Act. The Collector gave him partial relief and directed revision of the assessment in accordance with the instructions contained in his order dated 8 -12 -49. Against the appellate order of the Collector of Income -tax, the petitioner had two remedies (i) a petition in revision before the Revenue Commr. under Section 28 of the Act and (ii) a petition under Sub -section (2) of Section 29 before the Revenue Commissioner for stating a case on a question of law arising out of the appellate order of the Collector of Agricultural Income -tax for reference to the High Court. The petitioner, however chose the former remedy and applied to the Revenue Commissioner in revision. The Revenue Commissioner granted some relief to the petitioner as regards deduction charges on produce rent, but in other respects he maintained the order of the Collector of Agricultural Income -tax. Then the petitioner applied to the Revenue Commr. under Sub -section (2) of Section 29 for stating a case. But the Revenue Commissioner rejected the application observing that his order in revision was not prejudicial to the petitioner and that consequently a reference to the High Court against his order was incompetent.

(3.) THE construction of the expression 'otherwise prejudicial to him' in Sub -section (2) of Section 66 of the old Indian Income -tax Act was a matter of some difficulty and divergent views were expressed by the various Courts in India. The question was whether an order in review by the Commissioner of Income -tax under old Section 33 declining to interfere with the order of the Appellate Assistant Commissioner was an order prejudicial to the assessee. It is unnecessary to cite the various decisions reflecting the conflicting views. The Privy Council set the controversy at rest in - - 'AIR 1948 P. C. 102 at pp. 107 & 108 (B). While observing that a decision of this question was not necessary in the case actually before them their Lordships thought that they should express the clear conclusion to which they have come, especially in view of the conflicting decisions in the Courts of India. They held that an order by the Commissioner under Section 33 of the old Indian Income -tax Act would not be prejudicial to the assessee unless he was placed in a worse position than before the order was made. Thus an order under Section 33 which merely confirmed the order of the Appellate Assistant Commissioner or which gave some extra relief to the assessee which was not given by the Appellate Asstt. Commr. while maintaining his order in other respects would not be an order prejudicial to the assessee. It is unnecessary to repeat the reasons given by their Lordships for taking this view. It is sufficient to note that one of the main considerations which weighed with their Lordships was that the period of limitation to the Commissioner for review under Section 33 of the old Indian Income -tax Act could be enlarged by the voluntary act of the assessee in applying to the Commissioner for review under Section 33 of that Act. Their Lordships also took into consideration the first proviso to Sub -section (2) of Section 66 of the old Indian Income -tax Act.