COMMISSIONER OF INCOME TAX Vs. BISHWAMBHARLAL MAHESHWARI

JUDGEMENT

(1.) THIS is a reference made by the Commissioner of Income-tax under Section 66(2) of the Indian Income-tax Act, 1922, raising three questions. The first question is :

(2.) SO far as the first question is concerned, the Income-tax Officer made his assessment, and there was an appeal to the Assistant Commissioner, who agreed with the Income-tax Officer s order. Then an application was made to the Commissioner to refer a case under Section 66(2) of the Act, but he refused to do so. The assessee did not then apply to the Court to direct the Commissioner to refer a case under Section 66(5), as he might have done, but applied to the Commissioner to revise the order of the Assistant Commissioner under Section 33. The Commissioner heard the parties at length, and made an order declining to interfere with the Assistant Commissioner s order.

(3.) THE matter then came before the Rangoon High Court in Amulakharai Chhotalal v. Commr. of Inc.-Tax (1940) 8 I.T.R. 382, and the learned Chief Justice, who gave the judgment of the Court, professed to distinguish the decision of the full bench of the Madras High Court, but he held, and the other Judges agreed with him, that there was no ground for a reference under Section 66(2) inasmuch as the order of the Commissioner was not an order prejudicial to the assessee as it in no way altered the position as it existed before the Commissioner chose to review the case. I think the Court there really agreed with the earlier view of the Madras High Court, and not with the Voora Sreeramulu case, but it is suggested that the cases can be reconciled since in the Madras full bench case the Court dismissed the revision application, whereas in the Rangoon case he merely declined to take action. I agree that if the Commissioner calls for the record and decides to take no action, he has not made an order, prejudicial or otherwise. But if he hears the parties and rejects the application, it does not, in my opinion, matter whether he rejects it in express terms, or declines to interfere, as he did in this case. That is merely a matter of form. However in none of those cases was it necessary to consider the effect of the proviso.