COMMISSIONER OF INCOME TAX Vs. SABITRI DEVI AGARWALLA

JUDGEMENT

(1.) THIS reference involving two applications, one under Section 66(1) of the Indian Income-tax Act, 1922 (hereinafter referred to as "the old Act") and the other under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the new Act"), is made by the Income-tax Appellate Tribunal, "A" Bench, Calcutta, in respect of the assessment years 1960-61 and 1961-62. The questions which have been referred to us may be set out:

(2.) THE facts material for coming to a decision on the above questions may be briefly stated. THE assessee, Smt. Sabitri Devi Agarwalla, filed voluntary returns of income for the assessment years 1949-50 to 1958-59 before the Income-tax Officer, "A" Ward, Special Survey Circle IV, Calcutta, on September 30, 1958, and the assessment for those years was completed by the Income-tax Officer on the same date. THE returns for the years 1960-61 and 1961-62 are also said to be filed on the dates of the assessment orders. THE assessee gave two addresses in her returns, one at P-17, B.L. Pal Avenue, Calcutta, and the other at HA. Haralal Das Street, Calcutta. THE Commissioner of Income-tax, Calcutta, considered that the assessment orders for the years 1960-61 and 1961-62 passed by the Income-tax Officer were erroneous and were prejudicial to the interests of the revenue and he issued a letter dated July 24, 1968, calling upon the assessee to show cause why the order for those assessment years should not be revised under Section 33B of the old Act and Section 263 of the new Act, respectively. THEse notices were attempted to be served by post as well as through an officer of the department, but none could be served on the assessee as it was reported that the assessee was untraced and not known in the addresses given. In this context, the Income-tax Officer in charge, of judicial matters in the office of the Commissioner of Income-tax passed an order on July 25, 1963, to the following effect:

(3.) THE matter came up before the Commissioner on 5th of August, 1963, which was the date fixed for hearing in the notices which had been issued to the assessee, and as none appeared on that date, the case was posted for the next day when the Commissioner passed his order cancelling both the assessment orders and directing the Income-tax Officer to make fresh assessment according to law after due enquiry. THE assessee preferred appeals against these two orders to the Income-tax Appellate Tribunal and the latter allowed both the appeals holding that there was no proper service of notice under Section 33B, and hence, the entire proceeding was invalid and illegal. THE Tribunal also refused to accede to the prayer of the department for a direction to the Commissioner to take up the matter after issuing proper notices from the stage where the illegality has been found to occur.