VITHALJI MADHAVJI Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) This is a case stated, at the instance of the assessees, by the Income-tax Appellate Tribunal pursuant to Section 21 of the Indian Excess Profits Tax Act, 1940, (hereinafter called " the Act") which incorporated in the Act the provisions of Section 61 of the Indian Income-tax Act, 1922. Two questions, of law are referred to the Court, namely. (1) Whether in the circumstances of the case the Bench was right in holding that the appeal from an order by the Excess Profits Tax Officer lay to the Tribunal only? (2) Whether the tribunal was right in the circumstances of this case in holding that the appeal filed by the Appellants against the order of the Appellate Assistant Commissioner was misconceived and whether the consequent dismissal of the appeal by the Tribunal was right in law?

(2.) The case requires elucidation of the meaning and effect of some provisions of the Act, the relevant portions of which it is convenient to set out. They are the following: Section 10-A (1).--Where the Excess Profits Tax Officer is of opinion that the main purpose for which any transaction or transactions was or were effected...was the avoidance or reduction of liability to excess profits tax, he may...make such adjustments as respects liability to excess profits tax as he considers appropriate so as to counteract the avoidance or reduction of liability to excess profits tax which would otherwise be effected by the transaction or transactions. (2) Without prejudice to the generality of the powers conferred by Sub- section (1), the powers. Conferred thereby extend (a) to the charging with excess profits tax of persons who, but for the adjustments, would not be chargeable with any tax or would not be chargeable to the same extent; (b) to the charging of a greater amount of tax than would be chargeable but for the adjustments. (3) Any person aggrieved by a decision of the Excess Profits Tax Officer under this section/may appeal in the prescribed time and manner to the Appellate Tribunal. Section 14(1).--The Excess Profits Tax Officer shall, by an order in writing...assess to the best of his judgment the profits liable to excess profits tax, and the amount of excess profits, tax payable on the basis of such assessments.... Section 17(1).--Any person aggrieved by a decision made in pursuance of Section 8 or objecting to the amount of excess profits tax for which he is liable as assessed by the Excess Profits Tax Officer...may appeal to the Appellate Assistant Commissioner: Provided that no appeal shall lie against a determination of the amount of the profits of any standard period where those profits have been determined in accordance with the second proviso to Rule 1 of the First Schedule except in respect of adjustments made under the provisions of that schedule. Provided further that no appeal shall lie under this section against any apportionment made by. the Excess Profits Tax Officer under the proviso to Sub-section (5) of Section 8, against any refusal to make modifications or against any modifications made by the Excess Profits Tax Officer under Sub-section (8) of Section 8, against any decision of the Excess Profits Tax Officer under Rule 11 of the First Schedule or against any decision of the Board of Referees or the Central Board of Revenue. Section 19(2).--Any Excess Profits Tax Officer or any person in respect of whose business an order under Section 14 has been passed who objects to an order passed by an Appellate Assistant Commissioner under... Section 17 may... appeal against such order to the Appellate- Tribunal constituted under the Indian Income-tax Act, 1922.

(3.) Section 8 is of some length, it is unnecessary to set out all the terms and it suffices to state that it deals with dealing of, and decision upon, matters preparatory to an assessment to be made: Sub-sections (5) and (8) relate to apportionments and modifications being made by the Excess Profits Tax Officer and each provides for an appeal to the Board of Referees against such apportionments or against the refusal to make or the making of modifications respectively. No special appeal is conferred" in any other parts of Section 8 and appeals from decisions uponmatters arising in those parts is conferred by Section 17(1). When the Excess Profits Tax Officer makes a decision, pursuant to the section, he passes an order recording it and postpones making an assessment until either the period has expired during which an appeal against his decision can be preferred or, if there is such appeal, the appealhas received disposal by the Appellate authority.