COMMISSIONER OF INCOME TAX Vs. SUNDERLAL LATE

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Allahabad Bench, has referred the following questions :

(2.) THE assessee, Sunderlal, had filed a return for the assessment year 1959-60 on September 5, 1959, in response to a notice under Section 22(2) dated May 2, 1959. In the return, he showed a net loss of Rs. 4,229. In Section D of the return, the assessee claimed that a sum of Rs. 1,02,500, received by him on retirement from the firm styled Messrs. Ram Kishore Sunder Lal and Co. (sic) and was, therefore, not includible in his income. THE assessee died on February 11, 1961, but the Income-tax Officer completed the assessment on February 6, 1964. THE Income-tax Officer did not include the amount of Rs. 1,02,500 in the income of that year on the ground that it was received in April, 1959, and as such was to be considered in the assessment year 1960-61 only. THE Income-tax Officer thereafter, assessed this amount as capital gain in the assessment year 1960-61. An appeal was filed by the assessee against the aforesaid inclusion and the Appellate Assistant Commissioner deleted the addition on the ground that the amount was assessable as capital gain in the assessment year 1959-60 and not in the assessment year 1960-61. THE Commissioner of Income-tax being of the view that the order of the Income-tax Officer for the year 1959-60 was prejudicial to the interest of the revenue, issued a notice under Section 33B of the Act to Bankey Behari Lal, the legal heir of the deceased assessee, to show cause why action under Section 33B of the Act should not be taken. In the meantime, it appears that the department had filed an appeal before the Tribunal for the assessment year 1960-61. THE Commissioner, however, passed the following order:

(3.) THIS section empowers the Commissioner to call for and examine record of any proceedings and to pass any order which he thinks fit, in case he is satisfied that the Income-tax Officer has passed an order which is prejudicial to the interest of the revenue. It will be seen that the Commissioner can exercise his power under this section only in case he considers the order passed by the Income-tax Officer to be "prejudicial to the interest of the revenue ". The revisional power conferred on the Commissioner is undoubtedly a quasi-judicial power (See Dwarka Nath v. Income-tax Officer, 1965 57 ITR 349. Although the case deals with the nature of the powers conferred on the Commissioner under Section 33A(2) of the Act, we see no difference in that power and the one exercised under Section 33B of the Act. THIS being so, he must give his own reasons for being satisfied that the order passed by the Income-tax Officer is prejudicial to the interest of the revenue. THIS conclusion is further strengthened by the use of the words " if he considers " used in the sub-section which postulates a scrutiny by the Commissioner of all the relevant facts for holding that the order is prejudicial to the interest of the revenue. A perusal of the order of the Commissioner of Income-tax shows that after referring to the fact that the Appellate Assistant Commissioner had held that the amount in question was taxable in the assessment year 1959-60 and not in the assessment year 1960-61, and stating the reasons which led the Appellate Assistant Commissioner to come to this conclusion, the Commissioner of Income-tax held as under :