COMMISSIONER OF INCOME TAX Vs. RAM DAYAL VARMA

JUDGEMENT

(1.) THE question referred to us by the Income-tax Appellate Tribunal at the instance of the Commissioner of Income-tax is whether, " on the facts and in the circumstances of the case, the Tribunal was correct in holding that the order under Section 154 of the Income-tax Act, 1961, was null and void for the assessment year 1957-58 ? "

(2.) THE assessment against Ram Dayal Varma, assessee, was made under the provisions of the Indian Income-tax Act, 1922, and was completed on 23rd March, 1962. THE Income-tax Officer, alter the enforcement of the Income-tax Act of 1961, issued a notice to the assessee under Section 154 of the said Act and passed an order under Section 154 on 17th February, 1966. THE assessee, feeling aggrieved, went up in appeal but the appeal was dismissed by the Appellate Assistant Commissioner. THE assessee filed a second appeal which was allowed by the Tribunal. THE Tribunal held that the proceedings in respect of the assessment in question for the assesssment year 1957-58 could not be commenced under Section 154 of the Income-tax Act, 1961. It came tq the conclusion that the order passed by the Income-tax Officer was, in the circumstances, null and void and accordingly allowed the appeal without going into the merits of the case. It also held that in the view it was taking it was not necessary to consider the merits of the assessee's claim. At the instance of the Commissioner of Income-tax the question stated above has been referred to us.

(3.) EVEN though it may be that the order could not be passed under Section 154 of the 1961 Act, yet the order will not become null and void if the Income-tax Officer had authority to pass the order he did. Mere mention of a wrong provision of law would not make the order null and void. The proceedings, by virtue of Section 297(2)(a), had to be governed by the provisions of the 1922 Act and by disregarding the provisions of the 1961 Act. The provisions of Section 35 of the 1922 Act, when compared with the provisions of the 1961 Act, do not disclose any material difference. Substantially, the provisions of the two sections are the same and the power of the Income-tax Officer to make the rectification is also the same. There is no doubt that the Income-tax Officer could have passed the order he did on February 17, 1966, under Section 35 of the 1922 Act.