COMMISSIONER OF INCOME TAX Vs. KISHORESINH KALYANSINH SOLANKI

JUDGEMENT

(1.) THIS reference taken out at the instance of the CIT, Ahmedabad, raises a question of construction of provision in S. 33B of the IT Act. The assessment year is 1954 -55 and the assessment for that year was made on the assessee in the status of a registered firm on 31st Aug., 1954, The CIT was of the opinion that the order granting registration to the firm and the order of assessment made thereafter were prejudicial to the interest of the Revenue and he, therefore, took action under s. 33B(1) and on 5th July, 1956, revised the order of the ITO holding as under :

(2.) THE assessee went to the Tribunal in appeal against that order and contended inter alia that sufficient opportunity had not been given to him to show cause why the order of assessment and the order granting registration should not be vacated. The Tribunal decided the appeal on 22nd Jan., 1957, and reached its conclusion as under :

(3.) THE greatest stress was laid before the Tribunal on the provision contained in cl. (b) of Sub -S. (2) of S. 33B. It was urged that the plain and clear meaning of this provision was that no order revising an order passed by an ITO could be made by the CIT after the expiry of two years from the date of the order sought to be revised. On behalf of the CIT, it was urged that the order dt. 4th July, 1957, (the second order) that was passed by the CIT could not be regarded as an order made under s. 33B(1) simpliciter but must be regarded as one under S. 33B(1) read along with Sub -S. (4) of that section which provides for an appeal to the Tribunal and which appeal had to be dealt with in the same manner as if it were an appeal under Sub -S. (1) of S. 33. It was also urged that the original order under S. 33B(1) having been passed by the CIT on 5th July, 1956, within the prescribed period of limitation, the setting aside of such an order by the Tribunal did not have the effect of making it invalid for all purposes and his subsequent order was merely in continuation of the earlier order passed by him, which was within time. The Tribunal was of the opinion that the assessee's objection had force in it. It has stated in its order that there was a lacuna in the Act, as it did not provide for an extension of the period of limitation under S. 33B(1) in circumstance such as has arisen in the instant case. Then, it has observed in its judgment :