Lawyers Directory Listing
Chat with us free on WhatsApp — tell us your city and legal matter and our team connects you with the right lawyer. No form, no fee.
Reference Case No. 11 of 1964, decided on 25th February 1966.
‑Assessment made in respect of particular period by Income‑tax Officer‑Cannot be reviewed by his successor‑Mere completion by successor of part of work left unfinished by predecessor‑Cannot constitute a revision of predecessor's order by successor.
Commissioner of Income‑tax, Burmah v. U L U N Y O, (1933) 1 I T R 373 and M. M. Muthuwappa v. Commissioner of Income‑tax, Madras (1962) 46 1 T R 1107 distinguished.
‑‑Point not arising from order of Tribunal‑Cannot be gone into by High Court.
M/s. Muhammad 1drees Barry & Co. v. The Commissioner of Income‑tax, Punjab and N.W. F. P. P L D 1959 S C (Pak.) 202 rel.
Asrarul Hussain, Rafiqul Huq and Altaf Hussain for Applicant.
Afzalul Huq for Respondent.
Dates of hearing : 27th and 28th January 1966.
.‑The Income‑tax Appellate Tribunal Dacca Bench has, at the instance of the assessee, referred the following question for our opinion:
"Whether on the facts and in the circumstances of the case the Tribunal was justified in law to maintain the assessment as made on 22‑9‑60 by Income‑tax Officer Mr. A. Taher in revision of the final assessment by his predecessor made on 29‑10‑58."
The reference has been made in the following circumstances
The Income‑tax Officer issued a notice on the Assessee under section 34 read with section 22 (2) of the Income‑tax Act, hereinafter called "the Act" asking for a return; in compliance whereof a return was submitted. In submitting the same, the Assessee protested that the accounting year ended on30‑6‑1951 and not on 30‑3‑1951, as forced on him by the Income‑tax Officer. The Income‑tax Officer, however, completed the assessment on 21‑12‑1956. Thereafter it was noticed by him that the income earned by the Assessee in respect of his jute business escaped the assessment and on 1‑2‑1957, a second notice under section 34 read with section 22(2) of the Act was served on the Assessee and no return having been filed in compliance thereof, the assess ment was made on 30‑3‑1957.
The Assessee preferred an appeal to the Appellate Assistant Commissioner against this order of assessment made on 31‑3‑1957, and this appeal having ended unsuccessfully for the Assessee, a further appeal was presented to the Income‑tax Appellate Tribunal. Here the Assessee succeeded in obtaining a better result and the Tribunal by its order dated 16‑8‑1958, allowed the appeal and directed revision of the impugned assessment. There after the Income‑tax Officer Mr. M. A. Nawab made an assess ment in which he took into account the income earned by the Assessee up to 31‑3‑1952, but did not take into account the previous year in respect of the jute business of the Assessee, that is, the period from 1‑4‑1951 to 30‑6‑1951. In the meantime Mr. Nawab left the Circle on transfer and was succeeded by Mr. A. Taher who found that the direction of the Tribunal given on 16‑8‑1958, had not been carried out in respect of the income from jute business of the Assessee. Mr. Taher thereafter served a notice under section 22(4) of the Act and fixed 6‑8‑1960, for hearing of the matter. He also asked a return to be filed on 31‑7‑1960.
Thereafter on 22‑9‑1960, the Income‑tax Officer made the assessment. No return was, however, filed by the Assessee. In this assessment order income of jute business of the Assessee for the period commencing on 1‑4‑1951 and ending on 30‑6‑1951, was taken into consideration. The Assessee was dissatisfied with this assessment order and preferred an appeal directly to the Tribunal which dismissed the same. Thereafter, at the instance of the Assessee the present reference has been made.
The learned counsel for the Assessee has argued before us that the Income‑tax Officer was wrong in thinking that there was a direction to make fresh assessment in the remand order of the Tribunal in the Income‑tax Appeal No. 1851 of 1957‑58. the appeal in question was preferred by the Assessee on the ground that the Income‑tax Officer forced him to submit his return in respect of the accounting year which was not the year followed by him for the purpose. The Tribunal's order, therefore, was that the accounting year as followed by the Assessee should be taken into account and the Tribunal expressed itself in the following terms
" . . . .In the circumstances we are of opinion that the Income -tax Officer's assessment on the basis of the special accounting year meant for 1951‑52 tax year to be the basis of the assess ment under section 34 for 1952‑53 is incorrect. The assessment under section 34 could be made under section 34 for a previous year as defined under section 2(11). This assessment is accordingly cancelled. The Income‑tax Officer may however proceed on the basis of any accounting year that the assessee may have followed. The appeal is allowed."
The Income‑tax Officer is not permitted to allow the Assessee to go without assessment for a particular period. The Assessment done on the basis of accounting period imposed on the Assessee was disapproved by the Tribunal at the instance of the assessee and the Income‑tax Officer was given opportunity to make the assessment "on the basis of any accounting year that the Assessee may have followed". This order, therefore, required the Income‑tax Officer to proceed in accordance with law, and to make an assessment taking into consideration the accounting year followed by the Assessee. We are, therefore, of opinion that this contention of the learned counsel is of no substance.
Next contention of the learned counsel is that in pursuance to the order of 16‑8‑1958, the Income‑tax Officer Mr. Nawab had already made the assessment and it was not open to his successor to sit on Judgment over his assessment and to revise the same. This argument of the learned counsel, divorced from the facts of this case and in so far as the point of law in the abstract is concerned is of some force. Once an assessment is made in respect of a particular period by an Income‑tax Officer, a successor cannot review the said order or modify the same. But in this case it is clear to us on a perusal of the materials placed before us' that Mr. Nawab did not make any assessment whatsoever in respect of the period, from 1‑4‑1951 to 30‑6‑51. So far as the business in jute is concerned, Mr. Taker on assumption of his responsibilities in respect of this Circle found that the order of the Tribunal made on 16‑8‑1958, has been partly carried into effect by Mr. Nawab and he merely completed the part which was not taken up by Mr. Nawab at all. This cannot, in our opinion constitute a revision of the order of Mr. Nawab. In our view Mr. Taker merely completed a part of the work left unfinished by his predecessor. That being so, we are of opinion that this contention of the learned counsel is also of no substance.
In this connection two decisions were cited by the learned counsel, in support of his contention that a successor cannot review an order of his predecessor. The first case relied on by him in this behalf is Commissioner of Income‑tax, Burmah v. U L U NYO ((1933) 1 I T R 373). In that case, it was held that the Income‑tax Officer had no jurisdiction to revise the assessment of the previous order which had become final merely because he disagreed with his predecessor's finding.
Next case relied on in this behalf is the case of M. M. Muthuwappa v. Commissioner of Income‑tax, Madras ((1962) 46 I T R 1107). In that case it was observed that where an Appellate Assistant Commissioner has made an order of remand giving certain directions to the Income‑tax Officer, it is not open to the succeed ing Appellate Assistant Commissioner who finally heats the appeal to question the jurisdiction of his predecessor.
We have already indicated that we are in agreement with the principle laid down in those decisions but in this case they have no application. Here in this case the Income‑tax Officer by his order merely made the assessment in respect of a period which was not taken into account by Mr. Nawab in his assessment order dated 29‑10‑58. This position will be clear from a perusal of the assessment order of Mr. Nawab which has been filed before us by the Assessee in this proceeding. In that order, we find no reference of the jute business of the Assessee for the period from 1‑4‑51 to 30 6‑51. To accept the argument of the learned counsel would be to leave the Assessee without payment of any tax for the period in question. That could not have been the order of the Appellate Tribunal in remanding the case.
The learned counsel has also argued that the Tribunal by its order dated 29‑8‑1961, 'has interpreted its earlier order in appeal No. 1851 of 1957‑58. We must frankly say that we have not been able to follow this contention of the learned counsel. In the Appeal No. 1851, there was a remand order. After the remand, certain steps were taken by the income‑tax Officers against which the Assessee moved the Appellate Tribunal. In disposing of the appeal it was indeed necessary for the Appellate Tribunal to consider what direction the Tribunal had given in the earlier appeal.
We have taken into consideration the interpretation given by the tribunal, and we find that it is in full accord with what the Tribunal had earlier observed in the Appeal No.' 1851 of 1957‑58. This contention, therefore, is also devoid of any force. In giving this interpretation the Tribunal has merely examined the previous direction and made it clear that the Income‑tax Officer complied with the directions given in appeal.
Next point urged by the learned counsel is that the impugned assessment was barred by limitation. In this case the question of limitation does not arise. It is not a new assessment. The impugned assessment was made in pursuance of a remand order and the whole proceeding was pending before the Income‑tax Officer, and as such time did not run against the Department.
Last point urged by the learned counsel is that the notice calling for a return to be complied with by 31‑7‑60, was short. This point does not appear to have been discussed in the order of the Appellate Tribunal and Mr. Afzalul Huq has rightly contended that this Court in considering the reference is to take into account a point that arises from the order of the Tribunal and in support of his contention Mr. Huq has placed his reliance on M/s. Muhammad Idrees Barry & Co. v. The Commissioner of Income‑tax, Punjab and N.W. F. P. (P L D 1959 S C (Pak.) 202). In that case it was held that the High Court is to confine itself to the order of the Tribunal and cannot go beyond the said order. The Supreme Court observed that "section 66 (1) is not a reference of any question arising on the facts of the case but only a reference of question or questions which arise out of the order of the Appellate Tribunal". The observation of the Supreme Court quoted above, clearly indicates that we cannot go into this question at this stage. This argument of the learned counsel, therefore, is of no avail to him.
For the reasons stated above, we are of opinion that the Tribunal was justified in law to maintain the assessment as made on 22‑9‑1960 by the Income‑tax Officer Mr. A. Taber, which is, in effect merely a completion of the unfinished work of his predecessor although inappropriately called as revision.
We accordingly answer the question in the affirmative. We direct the Assessee to pay the costs to the respondent.
.‑I agree.
S. Q.
Dealing with a matter like this? Connect with a verified advocate in your city — free on SJP Lawyers Directory.
🔍 Find a Lawyer