1958 (4) TMI 3 - SC - Income Tax

Whether on the facts and circumstances of the case the Commissioner of Income-tax acting under section 33B(1) can set aside the orders passed by the Appellate Assistant Commissioner, for the assessment years 1947-48 and 1948-49 ?

Whether on the facts and circumstances of the case the order passed by the Commissioner of Income-tax dated 5th June, 1951, is bad in law as it directs the Income-tax Officer to pass an order in a particular manner ?

Whether on the facts and circumstances of the case orders passed by the Income-tax Officer dated June 21, 1952, are bad in law, as fresh notices as required by sections 22 and 23 of the Income-tax Act were not given by the Income-tax Officer to the assessee ?

Held that:- The High Court was also in error in holding that the Commissioner was not authorised in cancelling the order of the respondent's registration for the year 1949-50. The result is that the view taken by the High Court must be reversed and the first question framed by the Tribunal as well as the additional question framed by the High Court must be answered in favour of the appellant.

It is clear from the order read as a whole that, having cancelled the respondent's registration, the Commissioner wanted to direct the Income-tax Officer to make suitable consequential amendment in regard to the machinery or procedure to be adopted to recover the tax payable by the respondent. In fact it is conceded that, in his subsequent order, the Income-tax Officer has accepted the figure of the taxable income of the respondent as determined by the appellate authority for the relevant years and has proceeded to act under section 23(5)(b) on the basis that the respondent is an unregistered firm. Therefore we cannot hold that the order passed by the Commissioner is bad in law on the ground that "he directed the Income-tax Officer to pass the order in a particular manner". The answer to question No. 2 would accordingly be in the negative.

Question 3 challenges the validity of the procedure adopted by the Income-tax Officer in passing fresh orders against the respondent. This proceeding is clearly subsequent to the impugned order of the Commissioner under section 33B(1) and so we are unable to see how the Tribunal allowed the respondent to raise this contention in appeals which had been filed by the respondent against the Commissioner's order under section 33B(1). Besides, it has been fairly conceded by Mr. Ayyangar before us that, when the Income-tax Officer merely proceeded to adopt a different machinery to recover the tax due from the respondent in consequence of the cancellation of the respondent's registration, there was no occasion or need to issue another notice against the respondent. We must accordingly answer question No. 3 also in the negative - all the questions framed in this case are answered in favour of the appellant - Appeal allowed.