LAWS(KER)-1953-7-17

ABDUL KHADER Vs. COMMISSIONER OF INCOME TAX

Decided On July 14, 1953
ABDUL KHADER Appellant
V/S
COMMISSIONER OF INCOME TAX Respondents

JUDGEMENT

(1.) This is an application under S.109 (3) of the Cochin Income Tax Act, VI of 1117 (registered as an Original Petition) to call upon the Commissioner of Income Tax to state a case in respect of an order made by him in a suo motu revision and refer the same to this Court. The petitioner, who will hereafter in this order be referred to as the assessee, is the proprietor of a Tile Factory in the Trichur District. The assessee submitted the return of his income for the assessment year 1122 M.E. showing an income of Rs. 3179-13-8. The Income Tax Officer rejected the assessee's account books which were produced to support the return and made the assessment to the best of his judgment by estimating the income at Rs. 22,500/-. The assessee preferred an appeal before the Appellate Assistant Commissioner who allowed it to the extent of reducing the income to Rs. 11,061. The basis of this decision was that in the course of the assessment for the succeeding year the Income Tax Officer who made the previous year's assessment had himself found that in the previous year he had overestimated the productive capacity of the factory and accordingly fixed the income for the assessment year 1123 M. E. at Rs. 11,061, as against Rs. 22,500 fixed for 1122. The Appellate Assistant Commissioner considered that to be a safe guide for the disposal of the appeal. An appeal in respect of the assessment for the year 1123 M. E. was heard along with the appeal relating to the 1122 assessment and the assessee had conceded that, if the appeal for 1122 was allowed to the extent of reducing the income to that fixed for the assessment year 1123, he will have no complaint in respect of either year. Accordingly the appeal relating to 1123 was dismissed and the appeal with respect to the previous year (1122) was disposed of as indicated above. On the latter decision, that is, on the order disposing of the appeal in respect of the assessment for 1122, the Commissioner of Income Tax however started revision proceedings in exercise of the jurisdiction conferred on him under S.43 of the Cochin Income Tax Act. After due notice to the assessee and after hearing his representative the Commissioner fixed the income for that year at Rs. 30,184/-. The order is founded mainly on the ground that the Appellate Assistant Commissioner had not taken into account the special features pertaining to the assessment year 1122 and that he went wrong in brushing aside the grounds given by the Income Tax Officer to reject the accounts and make the assessment to the best of his judgment. Feeling aggrieved by this order the assessee moved the Commissioner under S.109(2) of the Cochin Income Tax Act requiring him to refer to this Court certain questions of law which according to him arose out of the order. As many as eight questions were formulated in the application presented to the Commissioner. After due hearing the Commissioner rejected the application, stating that though the question set out as No. 1 in the application raised a question of law the answer to it was so obvious that a reference was unnecessary and that the remaining questions did not raise any question of law. This order was passed on 27-12-1951 and a copy of it was communicated to the assessee on 11-1-1952. The present application was made on 9-7-1952, within the six months' period prescribed in S.109(3).

(2.) The assessee was represented before us by Shri T. S. Venkiteswara Iyer, Advocate, and Shri G. Rama Iyer, Advocate appeared for the Commissioner of Income Tax. At the outset of his arguments the learned counsel for the assessee submitted that it would suffice if we call upon the Commissioner to refer to this Court the question set out as No. 1 in the application made to the Commissioner under S.109(2) and in the present application and another. Question No. 1 read:-

(3.) Under S.43 of the Cochin Income Tax Act it is competent for the Commissioner to pass such orders in revision as he thinks fit. Unlike S.33A of the Indian Income Tax Act, 1922, dealing with revisional jurisdiction, there is no inhibition in it from passing an order prejudicial to an assessee the only limitation imposed by S.43 of the Cochin Act being that the Commissioner shall not pass any order prejudicial to an assesses without hearing him or giving him a reasonable opportunity of being heard. The question therefore whether the Cochin Income Tax Act remained effective law after the Indian Finance Act, 1950 amended the Indian Income Tax Act, 1922 and extended it to all Part B States, except Jammu and Kashmir, is really a material point in the case and as admitted by the Commissioner it raises a question of law. What we have therefore to decide is whether the Commissioner was justified in refusing to make a reference on the ground that the answer to it was so obvious as not to need a reference.