ISHWAR DAS KUNGOOMAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal has referred the following two questions for the opinion of this court:

(2.) THE assessee-firm was assessed by the Income-tax Officer as an unregis-tered firm for the years 1960-61 and 1961-62, respectively. THE Commissioner of Income-tax, having satisfied that the assessments made were prejudicial to the interests of the revenue and that Section 23(5)(b) of the Indian Income-tax Act, 1922, was attracted, purported to take proceedings under Section 33B of that Act to revise those orders. On August 6, 1962, he issued a notice under Section 263 of the Income-tax Act, 1961, calling upon the assessee to appear on August 16, 1962. THE notice was served on the assesses on August 9, 1962. THE assessee filed a writ petition in this court and obtained an interim order on August 24, 1962, staying the proceedings. THE stay order was communicated to the Commissioner of Income-tax by the assessee's counsel. THE income-tax department, being apprehensive that the proceedings under Section 33B, so far as they related to the assessment year 1960-61, would shortly be barred by limitation, applied to this court for a modification of the stay order so as to enable it to complete the proceedings. THE order was modified by the court on August 22, 1962. THE Commissioner was allowed to complete the revisional proceedings but was directed by the court not to take any step to enforce any adverse order against the assessee, Meanwhile, sn order dated August 8, 1962, was issued by the Central Government under Section 298 of the Income-tax Act, 1961. Paragraph 4 of the order provided that proceedings by way of appeal, reference or revision in respect of. any order made under the Income-tax Act, 1922, should be instituted and disposed of as if the Act of 1961 had not been passed, and further any such proceedings instituted under the Act of 1961 after March 31, 1962, and before August 8, 1962, should be deemed to have been instituted under the Act of 1922 and should be disposed of as if the Act of 1961 had not been passed. THE Commissioner issued a fresh notice on August 27, 1962, this time under Section 33B of the Act of 1922. THE notice required the assessee to appear on August 29, 1962. It was served on one Sundar Das on August 28, 1962. THE department also attempted to serve the notice on one of the partners, Mangal Das, but he, it appears, was avoiding the service of the notice and it was served by affixation. When the proceedings were taken up by the Commissioner on August 29, 1962, one Pokar Das, representing himself to be an employee of one of the partners, attended before the Commissioner along with a letter stating that the proceedings had been stayed. A copy of the order dated August 24, 1962, was also filed. THE Commissioner pointed out that that order had been modified by this court and he was entitled to complete the proceedings. He inquired of Pokar Das whether he had anything to say on the merits but it seems that Pokar Das was unable to present the assessee's case. THE Commissioner, in the view that limitation was shortly expiring, found himself unable to adjourn the proceedings. THE Commissioner made an order on the merits of the case, and in the view that it would be beneficial to the revenue to register the firm under Section 23(5)(b) he directed the Income-tax Officer to modify the assessments of the firm and its partners accordingly. THE assessee appealed to the Income-tax Appellate Tribunal. THE Tribunal has dismissed the appeals. At the instance of the assessee, this reference has been made.

(3.) THE next contention of learned counsel for the assessee is that an adequate opportunity was not given to the assessee when the, proceedings were taken up on August 29, 1962. It is pointed out that the notice dated August 27, 1962, was served on the next day, and there was hardly any time for the assessee to prepare his case.