MAHARANI GYAN MANJARI KUARI, DOWAGER MAHARANI OF HATHWA Vs. COMMISSIONER OF INCOME TAX BIHAR AND ORRISA

JUDGEMENT

(1.) This is a reference by the Income-tax Appellate Tribunal under Section 66 (1) of the Indian Income-tax Act for the opinion of the Court of the following questions :- (1) Whether the order of the Appellate Assistant Commissioner dated the 31 August 1941 in this case was an order under Section 30 or 31 of the Income-tax Act ? (2) If the order was under Section 30 of the Income-tax Act, whether the Income-tax Appellate Tribunal could assume jurisdiction to consider it ? (3) Whether the Appellate Tribunal could consider the merits of the order passed under Section 30 of the Income-tax Act ?

(2.) The facts of the case lie in a very narrow compass. For the accounting period 1937 and 1938 the assessee was assessed on the 1 of August 1940 for a sum of Rs. 65,300. The very short order of the Income-tax Officer states that the assessee was served with the notice under Section 22 (2) and 34 on the 24th January 1940, but she did not comply with the notice. Against this order the assessee preferred a memorandum of appeal on the 18 January 1941 to the Appellate Assistant Commissioner of Income-tax. But he refused to admit the appeal and rejected it on the ground that the appeal was not in the Form 16 prescribed in Rule 21 of the Boards Rules. He says that paragraph 2 of the prescribed form which requires that the notice of demand attached to the memorandum was served upon the assessee on a certain date had been altered to the notice of demand was not served on the petitioner. Upon this, assessee claimed, as stated by the Assistant Commissioner, that she had a right to appeal against an amount of tax charged even though there should be defect in the form of the appeal which she was unable to remedy because she never received the demand notice at all and only came to know of the tax charged by the Income-tax Officer in the course of the proceedings under Section 46 (2) of the Income-tax Act. It was also submitted to him by the assessee that in the special or extraordinary circumstances this requirement of attaching the demand notice to the appeal form must be waived. The Assistant Commissioner took the view that this requirement of the Boards Rule was imperative and that the appeal filed in the altered form and without the demand notice being attached thereto was not maintainable - the Assistant Commissioner did not find that the notice of demand had actually been served on the assessee. He thus refused to entertain the appeal by his order dated the 31 of August 1941. Against this decision the assessee appealed to the Appellate Income-tax Tribunal under Section 33, Indian Income- tax Act. That Tribunal apparently were in sympathy with the assessee but found that they were unable to assume jurisdiction over this appeal for the simple reason that this order of the Appellate Assistant Commissioner complained against was not an order under Section 31 and observed that it was no doubt unfortunate that in respect of orders passed under Section 30 even though capricious the legislature had not provided any right of appeal to the higher authority. At page 11 they also made these observations : Without expressing any opinion regarding the finding of the Appellate Assistant Commissioner that the appeals were not in the proper form we should state that it may not be possible in certain cases for the person to file the notice of demand as it may have been destroyed or lost and to give the date of service of the notice of demand as it might not have been actually served on him.

(3.) The question whether the order of the Assistant Commissioner rejecting an appeal in limine was an order under Section 30 or 31 of the Indian Income-tax Act was expressly decided in the Full Bench case of Kunwarji Ananda V/s. Commissioner of Income-tax, Bihar and Orissa. The learned Chief Justice observed at page 202 that it was undoubtedly the duty of the Assistant Commissioner when the order of the Income-tax Officer came before him on appeal to decide whether or not he was precluded by the Act from going into the amount or rate of the assessment or the liability of the assessee, and if he was so precluded, he must reject the appeal - in that case the appeal was rejected summarily as being barred by the proviso to Section 30 which says that no appeal shall lie against an assessment under Section 23(4). The learned Chief Justice proceeds in so rejecting the appeal he is, in my opinion, under Section 31 disposing of an appeal and such disposal is a proceeding in connection with an assessment under this Act.