- (1.) THE petitioner, Sheo Nath Prasad Sharma, has been assessed to income-tax for the assessment years 1944-45, 1945-46 and 1946-47 by assessment orders, all made on July 31, 1950. He challenges the validity of those assessment orders and of the recovery proceedings taken consequent thereto. He proceeded in revision under section 33A(2) to the Commissioner of Income-tax against the assessment orders, and he has also challenged the orders of the Commissioner declining to interfere. Pandit Deo Sharma, elder brother of the petitioner, was a working partner in the firm Messrs. L. N. Gadodia Cawnpore Cotton Mills Agency, which had been appointed as the sole selling agent of the Cawnpore Cotton Mills, Kanpur. As a working partner he was entitled to a one-fourth share in the profits of the firm. Pandit Deo Sharma was also employed to manage a retail cloth shop of the Cawnpore Cotton Mills and was paid a one-fourth share in the net profits accruing to the retail shop. On November 14, 1942, Pandit Deo Sharma and the petitioner entered into an agreement under which the petitioner undertook to look after the work of the two business, the partnership firm and the retail cloth shop, and in consideration therefor he was entitled to a half share of the income received after deduction of tax by Pandit Deo Sharma. For the assessment years 1944-45, 1945-46 and 1946-47, Pandit Deo Sharma claimed a deduction of the amount to be paid by him to the petitioner under the agreement of November 14, 1942. The deduction was not allowed by the Income-tax Officer, and Pandit Deo Sharma appealed without success to the Appellate Assistant Commissioner and thereafter to the Income-tax Appellate Tribunal. He was denied a reference to this court by the Tribunal under section 66(1) of the Indian Income-tax Act, 1922, and then preferred a reference application under section 66(2) to this court. The court allowed the reference application and directed the Tribunal to refer the case.
(2.) MEANWHILE , the petitioner filed his returns for the assessment years 1944-45 and 1945-46. He entered the amount received by him under the agreement of November 14, 1942, as part of his total income. He was assessed accordingly. In his return for the assessment year 1946-47, he showed this income as nil and appended a note stating that, as the entire income earned by Pandit Deo Sharma had been assessed in his hands, any receipt by the petitioner out of that income was not liable to tax in the hands of the petitioner. The Income-tax Officer, however, treated the receipt as taxable and assessed the petitioner. It appears that the petitioner filed appeals against the assessment orders before the Appellate Assistant Commissioner. The appeals were dismissed. He then proceeded in appeal to the Tribunal, but while filing an appeal in respect of the assessment years 1944-45 and 1945-46, he did not file any appeal in respect of the assessment year 1946-47. When the two appeals were called on for hearing before the Tribunal, the petitioner applied for adjournment, but the Tribunal refused to adjourn the appeals and dismissed them. After the assessment had been made against the petitioner by the Income-tax Officer, proceedings were taken for recovery of the tax assessed thereby but it seems that, subsequently the Income-tax Officer requested the Collector to stay the recovery proceeding because "the assessment was made in this case as a protective measure in order to safeguard the revenue in case some income is let off in appeal in allied cases." This position was taken by the Income-tax Officer in respect of the recovery proceedings for all the three assessment years. Now after the dismissal of his appeals by the Tribunal, the petitioner applied in revision under section 33A(2) to the Commissioner of Income-tax against the assessments for the three assessments years 1944-45, 1945-46 and 1946-47. Those applications were dismissed on October 11, 1957, on the ground that, "As the assessee has himself shown the incomes on which he has been assessed, there is no force in the present petition filed by the assessee."
(3.) THE Commissioner further added: "However, if as a result of the decision of the hon'ble High Court, the assessment of Pandit Deo Sharma gets confirmed and the incomes which have been assessed in the hands of the petitioner are also assessed in the hands of Pandit Deo Sharma, the petitioner will be allowed necessary relief under section 33A(2) if he applied for the same within one year from the date of the High Court's orders." Upon this, it is said, Pandit Deo Sharma took no steps to prosecute the reference pending in this court and on February 15, 1962, an order was made returning the reference unanswered to the Tribunal. Then, on January 20, 1963, within one year from the order of the court, the petitioner filed a fresh revision application before the Commissioner, purporting to be in pursuance of the observations of the Commissioner mentioned in his earlier order. Unfortunately for the petitioner the Commissioner now took a different view of the matter and dismissed the revision application by his order dated April 3, 1965, on the ground that, as a final order had been made under section 33A(2), he could not pass another order in revision on a point which had already been covered by the earlier order in revision. The petitioner contends that the Commissioner was bound to decide his second revision application on the merits when it had been made because of the observation of the Commissioner in the order disposing of the earlier revision application, which, specifically stated that if the assessment of Pandit Deo Sharma was confirmed as a result of the decision of this court and the income assessed in the hands of the petitioner was assessed in the hands of Pandit Deo Sharma, the petitioner would be allowed relief under section 33A(2) if he applied within one year of the date of this court's order. The contention is without force. The Commissioner had no power to decide the same matter over again upon a fresh revision application and I am not satisfied that the view taken by him in that behalf is erroneous. Any observation made by the Commissioner in the order dismissing the earlier revision application could not confer a right upon the petitioner to have his subsequent revision application on the same point considered on the merits by the Commissioner. If there is no jurisdiction in the Commissioner to consider the matter again, any observation made by him in an earlier order cannot confer jurisdiction upon him in that behalf.;