TMI Blog1957 (10) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 1 in the affirmative. As to question No. 2, only a few words are necessary. A similar expression occurs in the rule : "In any case in which the Income-tax Officer is of opinion etc." For the same reasons which we have given with regard to question No. 1, the answer to question No. 2 is also in the affirmative. Appeal allowed. The judgment and order of the High Court of Bombay dated 4th March, 1953, is set aside and the two questions referred to the said High Court are answered in favour of the Revenue - - - - - Dated:- 16-10-1957 - Judge(s) : BHAGWATI., KAPUR., S. K. DAS. Court: SUPREME Court JUDGMENT [S. K. DAS, J., delivered the judgment of S. K. DAS and KAPUR, JJ. BHAGWATI, J., delivered a separate dissenting judgment.] S. K. DAS, J.---This is an appeal by special leave from the judgment and order of the High Court of Judicature at Bombay, dated 4th March, 1953, in Income-tax Reference No. 27 of 1952, by which the said High Court answered certain questions of law referred to it in the negative. The answer to those questions depends upon the true scope and effect of certain provisions of the Indian Income-tax Act (XI of 1922), hereinafter referred to as the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xed percentage of the marked price adopted by the assessee company as the production cost for its publications sold in India did not correctly represent the actual cost of production, the method of accounting regularly employed is such that a true figure of income, profits and gains is not deducible therefrom. He fixed the income of the assessee company on the basis of the net world profit of the assessee on its world turnover, and applying that basis to its Indian business came to the conclusion that the income the assessee was Rs. 1,11,616. He did so presumably under the proviso to section 13 and rule 33 of the Indian Income-tax Rules, 1922. The assessee company then appealed to the Appellate Tribunal. The Appellate Tribunal remanded the case to the Appellate Assistant Commissioner, but before the remand could be decided came the decision of the Bombay High Court in K. F. Vakeel v. Commissioner of Income-tax. The Tribunal then held that in view of that decision, the appellate Assistant Commissioner had no jurisdiction to enhance the income to Rs. 1,11,616. Thereafter, the Commissioner of Income-tax, Bombay City, the appellant before us, asked the Tribunal to submit certain ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons 13 and 31 of the Act. We shall first read section 13 of the Act : " 13. Income, profits and gains shall be computed, for the purposes of sections 10 and 12, in accordance with the method of accounting regularly employed by the assessee : Provided that, if no method of accounting has been regularly employed, or if the method employed is such that, in the opinion of the Income-tax Officer, the income, profits and gains cannot properly be deduced therefrom, then the computation shall be made upon such basis and in such manner as the Income-tax Officer may determine. " The section enacts that for the purposes of section 10 (profits of business, profession or vocation) and section 12 (income from other sources) income, profits and gains must be computed in accordance with the method of accounting regularly employed by the assessee. The choice of the method of accounting lies with the assessee ; but the assessee must show that he has followed the method regularly for his own purposes. The section and the proviso read together clearly make such a method of accounting regularly employed by the assessee a compulsory basis of computation unless, in the opinion of the Income-tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tentions, there is a further divergence of opinion as to whether the determination of the Income-tax Officer under the proviso to section 13, in so far as such determination depends on his opinion, is final or not. On behalf of the appellant it is contended that it is not final---whether the determination is in favour of the assessee or not---provided an appeal is preferred by the assessee and the Appellate Assistant Commissioner gets seizin of the assessment. For the respondent, the argument is that it is final when the determination is in favour of the assessee, even if the assessee prefers an appeal on any other ground; but it is not final if the determination is against the assessee and the assessee appeals against that determination. These are the rival contentions which now fall for consideration. Learned counsel for the respondent has drawn a distinction between what he called at one stage of his arguments (i) an objective determination by the Income-tax Officer---a determination based on certain objective facts and leading to certain consequences for or against the assessee---and (ii) a small category of cases where the determination is purely subjective and results in ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent has referred ; but we are unable to agree with him that the language used therein supports the very subtle distinction that he has drawn. Let us take, for example, section 23 which deals with assessment. Under sub-section (3), the Income-tax Officer assesses the total income of the assessee and determines the sum payable on the basis of such assessment; under sub-section (4) the Income-tax Officer makes the assessment to the "best of his judgment" an expression much stronger than "in the opinion of the income-tax Officer." It is not disputed that in an appeal from an assessment under section 23, the Appellate Assistant Commissioner can interfere with the determination or judgment of the Income-tax Officer, and in such an appeal the Appellate Assistant Commissioner can make his own assessment and, exercise the power which the Income-tax Officer could exercise. Since 1939 an appeal lies from a "best of judgment" assessment made under sub-section (4) of section 23, but the right is restricted to "the amount of income assessed or the amount of tax determined." Why can he not then interfere with the opinion of the Income-tax Officer under the proviso to section 13 ? It is con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or arbitrary decision by the Income-tax Officer. It cannot, however, be said that a power so exercised is clothed with finality and would be excluded from review by the Appellate Assistant Commissioner; and in reviewing the order the appellate authority can exercise the same powers which the Income-tax Officer could exercise. Our attention has been drawn to the difference in language in which the two conditions for the application of the proviso have been expressed; the first condition is fulfilled if no method of accounting is regularly employed; the second condition, however, requires an opinion, viz., the opinion of the Income-tax Officer that the income, profits and gains cannot be properly deduced from the method of accounting regularly employed. It is pointed out that the first condition involves an objective determination---not by any named authority but by any and every authority which may have to consider whether the condition as to the regularity of the method employed has been fulfilled or not; whereas the second condition involves a determination by a named authority. The argument is that by reason of the aforesaid difference in language, the Legislature clearly intend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s drawn in order to get over the anomaly that follows in holding that in one case the determination is final and in another case it is not so. We are not at all impressed by this distinction. For one thing the distinction is much too subtle ; then again, looked at from the proper standpoint, a non exercise of the power under the proviso is also a decision inasmuch as it amounts to an acceptance of the method of accounting on the ground that the income, profits and gains can be properly deduced therefrom. In the instant case the Income-tax Officer has looked into the accounts and the computation on the basis of the method employed has been adopted by him. Lastly, it seems to us clear that the answer to the question is provided by the language of section 31. As observed by Chagla, C.J., in Narrondas Manordass v. Commissioner of Income-tax, the language is wide enough to enable the Appellate Assistant Commissioner to "correct the Income-tax Officer not only with regard to a matter which has been raised by the assessee but also with regard to a matter which has been considered by the Income-tax Officer and determined in the course of the assessment." We are unable to accept the argum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion or assessment. Two other points also require notice at this stage. In the course of the arguments before us, a reference was made to section 33B, which was inserted by the Income-tax and Business Profits Tax (Amendment) Act, 1948. There can be no doubt that, in view of the language used in section 33B, the Commissioner of Income-tax may interfere with any order of the Income-tax Officer, including a determination under the proviso to section 13, provided the other conditions of the section are fulfilled. Section 33B runs counter to the contention that a determination under the proviso to section 13 is a subjective determination or a determination of a named authority, which is inviolate in character. Any such construction as is contended for by the respondent will render this section nugatory. The other point is this : assume that a determination under the proviso to section 13 in favour of the assessee can be gone into by the Appellate Assistant Commissioner when the assessee prefers an appeal on some other ground, and assume also that the Appellate Assistant Commissioner can set aside the assessment if he finds that the Income-tax Officer has not applied his mind to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case, provided he acts within the ambit of his power under section 31 of the Act. Section 31(3) does not in terms say that the power to vary the assessment including the power to enhance it is subject to any limitation. We have so far dealt with the questions at issue untrammelled by any authorities. We now turn to such authorities as have been placed before us. We take up first the decision in K. F. Vakeel v. Commissioner of Income-tax. The facts of that case were these : the assessee carried on a business of loading and unloading ships from 1st January, 1943, to 30th June, 1944. On 1st July, 1944, the assessee entered into a partnership with his brother. The assessee maintained his accounts on the cash basis and his accounting year was the calendar year. For the calendar year 1943 he was assessed to income-tax on his accounts which as stated were maintained on cash basis. On 1st July, 1944, when the firm of the assessee and his brother came into existence the position was that there were outstandings to the extent of Rs. 2,13,306 and there were liabilities to the extent of Rs. 86,650. Between 1st July and 31st December, 1944, the assessee recovered Rs. 2,02,209 and he dischar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n on that question at all ; secondly, there was nothing before the Tribunal which could justify it in coming to the conclusion that the Income-tax Officer was not in a position to deduce the income, profits and gains from the method of accounting adopted by the assessee. The actual decision can be easily supported on the second ground itself, because the Tribunal committed an error of law in coming to a finding on no material or evidence. Indeed, the learned Advocate-General appearing for the Revenue, conceded in that case that in view of the state of the record it was not possible for him to contend that the Tribunal's decision was correct and further the Tribunal was in error in holding that the assessee could be compelled to adopt the accrual basis in keeping his accounts and give up the cash basis which he had regularly maintained in the past. While, therefore, the actual decision in the case was undoubtedly correct, we are unable to accept as correct the following further observations in connection with the first ground : " There were the appellate powers and those powers could be exercised on the opinion formed by the Income-tax Officer. But it is for the Income-tax Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not disputed that the finding as to whether the method of accounting is regularly employed or not is an objective determination which the appellate authority can revise. Both the Appellate Assistant Commissioner and the Appellate Tribunal have wide powers to go into questions of fact and law, the Appellate Assistant Commissioner under section 31(3) and the Appellate Tribunal under section 33(4). Even the Commissioner can revise an order of the Income-tax Officer under section 33B in certain circumstances stated therein. We see no justification for holding that these powers, so widely expressed by the statute, become ineffective in one particular case only, namely, when the determination or opinion is in favour of the assessee as respects the propriety of the method of accounting. It is true that the Revenue has no right of appeal under section 30, but that is not a decisive circumstance. The assessee can make any order of assessment by the Income-tax Officer final by not appealing therefrom---whether the order is based on a subjective or objective determination. The point is not what happens when there is no appeal ; but the point is when the appellate authority is lawfully in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. The decision is clear authority for the view that where there has been a failure to perform the statutory duty imposed on the Income-tax Officer under section 13 of the Act, his order is liable to be set aside, even though he may have accepted the accounts and held the assessee bound by the figure of profit shown in the accounts. There are a number of decisions where it has been held that an order of the Income-tax Officer under the proviso to section 13 against an assessee is liable to be set aside on appeal. We need only mention some of them here: see Lala Sarju Prasad, In re ; Pearey Lal Shukla of Cawnpore, In re, and Commissioner of Income-tax v. Kameshwar Singh of Darbhanga. In these cases, it was held that the determination of the Income-tax Officer under the proviso to section 13 did not exempt his computation from examination on appeal, and the Appellate Assistant Commissioner had jurisdiction, in an appeal against an assessment under the proviso to section 13, to substitute a different method of computation. Lastly, we refer to a few only of the decisions in which the power of the Appellate Assistant Commissioner under section 31 has been held to be confined to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espects the questions of law involved, we think that the parties must bear their own costs throughout. BHAGWATI, J.---This appeal with special leave from the judgment and order of the High Court of Judicature at Bombay raises an interesting question as to whether the power under the proviso to section 13 of the Indian Income-tax Act (XI of 1922), hereinafter referred to as "the Act", of rejecting the method of accounting regularly employed by the assessee can be exercised by the Appellate Assistant Commissioner while hearing an appeal of the assessee under section 31 of the Act, if the Income-tax Officer had not done so in the first instance. The respondent is a limited company registered in England having its registered office at St. Martin Street, London. In India it has its branches at Calcutta, Bombay and Madras. The respondent publishes as well as sells books and magazines in various parts of the world. The head office and branches outside India invoice publications to the Indian branches not at cost but at a valuation which is 25 per cent. of the marked price for sterling publications and 30 per cent. of the marked price for currency publications. For the purposes of comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent the margin of net world profits could not be applied to the Indian business. By its order dated 29th April, 1950, the Tribunal remanded the case to the Appellate Assistant Commissioner with a direction that he should allow the respondent to prove the actual cost of the goods invoiced to and sold in India. The Appellate Assistant Commissioner submitted his remand report in due course. In the meanwhile, however, the High Court had delivered its judgment in K. F. Vakeel v. Commissioner of Income-tax to the effect that no authority other than the Income-tax Officer had jurisdiction to act under the proviso to section 13 of the Act. Relying upon that judgment, the respondent raised two contentions before the Tribunal and they were (a) that it was not competent to the Appellate Assistant Commissioner on appeal to reject the respondent's method of accounting which had been accepted by the Income-tax Officer and (b) that it was not competent to the Appellate Assistant Commissioner on appeal to compute the Indian business profits of the respondent under rule 33 of the Indian Income-tax Rules, the Income-tax Officer not having done so. The Tribunal accepted these contentions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside the assessment and direct the Income-tax Officer to make a fresh assessment after making such further enquiry as the Income-tax Officer thinks fit or the Appellate Assistant Commissioner may direct, and the Income-tax Officer shall thereupon proceed to make such fresh assessment, and determine where necessary the amount of tax payable on the basis of such fresh assessment ....... : Provided that the Appellate Assistant Commissioner shall not enhance an assessment or a penalty unless the appellant has had a reasonable opportunity of showing cause against such enhancement. Rule 33 of the Indian Income-tax Rules, 1922: " In any case in which the Income-tax Officer is of opinion that the actual amount of the income, profits or gains accruing or arising to any person residing out of the taxable territories whether directly or indirectly through or from any business connection in the taxable territories or through or from any property in the taxable territories, or through or from any asset or source of income in the taxable territories, or through or from any money lent at interest and brought into the taxable territories in cash or in kind cannot be ascertained, the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fits and gains cannot properly be deduced therefrom is within the exclusive province of the named authority, viz., the Income-tax Officer, and such determination by the named authority is the condition precedent to a certain consequence following thereupon, viz., the rejection of the method of accounting regularly employed by the assessee. Such determination then cannot be substituted by that of another authority, though while entertaining an appeal at the instance of the assessee such authority might consider whether the named authority has correctly determined the question. Once the named authority has determined that the case does not fall within the proviso, no other authority has jurisdiction to determine that question and the main provision of section 13 operates and the income, profits and gains of the assessee can only be computed for the purpose of sections 10 and 12 in accordance with the method of accounting regularly employed by the assessee. Not only is the Income-tax Officer bound in such a case to compute the income, profits and gains in accordance therewith by reason of the mandate contained in the main provision of section 13 but the Appellate Assistant Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee was not satisfactory. It was the Tribunal that suo Motu came to the conclusion that cash basis was not the proper basis from which income, profits and gains could be properly deduced. The High Court was of opinion that the Tribunal was clearly wrong in forming that opinion, forgetting that it was not for it to form an opinion on that question at all. The Tribunal had vested in it the appellate powers and those powers could only be exercised on the opinion formed by the Income-tax Officer. There was nothing before it which could justify it in coming to the conclusion that, the Income-tax Officer was not in a position to deduce the income, profits and gains from the method of accounting regularly employed by the assessee or that the Income-tax Officer had formed any opinion whatever on that question. The High Court accordingly set aside the decision of the Tribunal on this point. As against this decision of the High Court of Bombay, the appellant relied upon a decision of the Punjab High Court at Simla in Oriental Building and Furnishing Co. v. Commissioner of Income-tax, Delhi. In that case the Income-tax Officer while acting under section 13 read with section 23(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of accounting regularly employed by the assessee, then it is not for any other authority to come to a different conclusion. The Income-tax Officer is really the authority entrusted under the Act with the duty of computing the income, profits and gains of the assessee under the relevant provisions of the Act. It is for him to form an opinion whether the method of accounting regularly employed by the assessee is such that the income, profits and gains cannot properly be deduced therefrom and it is only if he forms such an opinion that the proviso comes into operation and the computation of the income, profits and gains of the assessee is to be made upon such basis and in such manner as the Income-tax Officer may determine. The appellant also referred to a decision of the High Court of Allahabad in Pearey Lal Shukla of Cawnpore, In re, where it was held that the basis and manner of assessment applied by the Income-tax Officer under the proviso to section 13 of the Act was liable to interference on appeal by the Assistant Commissioner and the Commissioner. This decision however throws no light on the question which arises for determination in this appeal for the simple reason that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court under section 66(2) of the Act. The Commissioner declined to review the order and also to make the reference. Thereupon, the High Court on an application made by the assessees under section 66(3) of the Act required the Commissioner to make a reference and he accordingly made the reference in question. The High Court amended the referred question as follows : " Whether in the circumstances of the case the Income-tax Officer was entitled to compute the income, profits and gains of the assessees upon the basis of the printed copy of the profit and loss account sent with the letter of the assessees of 18th July, 1931, without regard to any under-valuation of the stock which may have been or may be proved to have been made. " The High Court was of opinion that the covering letter formed part of the method of accounting employed by the assessees within the meaning of section 13 of the Act and that the Income-tax Officer was not entitled to split up the method of accounting and to regard the profit and loss account apart from the covering letter ; that the Income-tax Officer had only accepted a portion of the method, without taking the method as a whole, which he was not enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ressed and reach a proper decision with reference thereto. This case discards the view that it is prima facie duty of Income-tax Officer concerned to accept the profits shown by the assessee's accounts where there is a method of accounting regular employed by the assessee and it lays down that it is his duty where there is such a method of accounting to consider whether the income, profits and gains can be properly deduced therefrom. It is incumbent on the Income-tax Officer to come to a determination on that question and if he forms the opinion that the method of accounting is such that the income, profits and gains of the assessee cannot properly be deduced therefrom he is bound to reject such method of accounting and make a computation upon such basis and in such manner as he may determine. The Income-tax Officer has to apply his mind to this aspect of the question and come to his own determination in that behalf and if he does not do so and merely accepts the profits shown by the accounts even though in fact the method of accounting regularly employed by the assessee does not show the true income, profits and gains, he is in error and his action in thus accepting the method o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a representative, who appears before the Appellate Assistant Commissioner to justify the assessment order passed by him. The Legislature in its wisdom has not given a substantive right to the Revenue to carry an appeal against the order of the Income-tax Officer. The decision of the Income-tax Officer is qua the Revenue invested with a finality and the Income-tax Officer is not regarded as a party aggrieved against his own decision. He, in fact, represents the Revenue and there is no question therefore of his ever being able to question his own decision which is considered to all intents and purposes a proper decision given by him having regard to all the circumstances of the case. The assessee is the only person who is given the right of appeal against the decision of the Income-tax Officer. If the assessee does not choose to exercise this right of appeal, the decision of the Income-tax Officer acquires a finality both qua the Revenue and himself but if the assessee chooses to exercise the same, the appeal is heard by the Appellate Assistant Commissioner. The Income-tax Officer is, as afore-stated, then given the right to be heard either in person or by a representative. There a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer has the right to be heard either in person or by a representative, and the very point which the Commissioner has taken and on which he has given his decision under section 33B could have been urged under the directions of the Commissioner before the Appellate Assistant Commissioner. It is only when no remedy is open to the Commissioner to revise the order of the Income-tax Officer that this jurisdiction under section 33B arises. But when a legal remedy is given to him to get the orders of the Income-tax Officer revised, he cannot requisition to his aid the power conferred upon him under section 33B. Once the appeal with regard to the year 1949-50 was pending before the Appellate Assistant Commissioner, the Commissioner was given the full right to get the order of the Income-tax Officer revised in any manner he thought necessary in the interest of public revenue. " These are however observations only with regard to the construction of section 33B of the Act and do not throw any light on the nature and scope of the powers vested in the Appellate Assistant Commissioner under section 31 of the Act, much less do they throw any light on the nature and scope of the power vested i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party, and in view of this peculiar position occupied by the Appellate Assistant Commissioner, the Legislature, as we shall presently point out, has conferred very wide powers upon the Appellate Assistant Commissioner once an appeal is preferred to him by the assessee. If the assessee chooses to remain content with the order of the Income-tax Officer there is nothing that the Appellate Assistant Commissioner can do, however erroneous the assessment may be. But if the assessment is opened up by the action of the assessee himself, then the powers conferred upon the Appellate Assistant Commissioner are much wider than the powers of an ordinary court of appeal. The statute provides that once an assessment comes before the Appellate Assistant Commissioner, his competence is not restricted to examining those aspects of the assessment which are complained of by the assessee; his competence ranges over the whole assessment and it is open to him to correct the Income-tax Officer not only with regard to a matter raised by the assessee but also with regard to a matter which has been considered by the Income-tax Officer and determined in the course of the assessment ....... " It is clear tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been made by the Income-tax Officer. " After considering the various authorities cited above the learned Judges finally came to the conclusion: " We do not think it can be seriously disputed that those powers are very wide and unfettered, but the only question before us is whether there is any limitation upon those powers, and if there is any limitation upon those powers, what is the nature and character of that limitation ......... It is not as if the Appellate Assistant Commissioner has completely unqualified powers; his powers are limited to the subject-matter of the assessment and we have attempted to define what the subject-matter of the assessment is." It follows from the above that even though the powers of the Appellate Assistant Commissioner in the matter of enhancement of the assessment provided in section 31(3) of the Act are not circumscribed by any limitation thereupon and are as wide as wide can be, there are well-recognized limitations on the same, one of which has been rightly accepted by the learned Judges of the High Court of Bombay in their unreported decision above referred to. It now remains to consider whether there is any other limitation on such powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... method of accounting though regularly employed by the assessee is however not invested with a sacrosanct character and is subject to the proviso enacted in section 13 and it is that if no method of accounting has been regularly employed or if the method employed is such that in the opinion of the Income-tax Officer the income, profits and gains cannot properly be deduced therefrom, then the computation shall be made upon such basis and in such manner as the Income-tax Officer may determine. Two conditions are thus attached to the rejection of the method of accounting regularly employed by the assessee and they are expressed in different phraseology: (i) if no method of accounting has been regularly employed; and (ii) if the method employed is such that in the opinion of the Income-tax Officer the income, profits and gains cannot properly be the deduced therefrom. It is to be noted that these two conditions are couched in quite different terms. In the case of the first condition, the mere fact of no method of accounting having been regularly employed is enough to bring the proviso into operation but in the case of the second condition the Income-tax Officer has to form an opinion th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term "Appellate Assistant Commissioner" defined in section 2(3) of the Act. The Income-tax Officer, the Appellate Assistant Commissioner and the Inspecting Assistant Commissioner are separate entities each with a jurisdiction of its own and the one cannot by any chance be interpreted to mean the other. If, therefore, the proviso to section 13 of the Act talks of the Income-tax Officer, it is the Income-tax Officer alone as defined in section 2(7) of the Act and not the Appellate Assistant Commissioner as defined in section 2(3) of the Act or any other officer in the hierarchy of Income-tax Officers. Such an interpretation would involve the deletion not only of the term "Income-tax Officer" from the proviso to section 13 but also the absolute negation of the expression "in the opinion of the Income-tax Officer" mentioned therein. I for one cannot ascribe to the Legislature any negligence or oversight, nor can I impute to it any intention to use these words as though they were superfluous or redundant. The words used by the Legislature must be given their full effect and significance and the only way in which these words can be construed is to ascribe to the Legislature the intention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only can, in the circumstances, therefore be given the right of appeal against the decision of the Income-tax Officer. Even when the assessee files an appeal before the Appellate Assistant Commissioner, the Revenue is represented by the Income-tax Officer himself who appears before the Appellate Assistant Commissioner either in person or by a representative. So, there also the Revenue is fully represented and has its full say at the hearing of the appeal before the Appellate Assistant Commissioner and the only say which it can ever have would be to support the decision which has been given in the first instance by the Income-tax Officer who is its representative in the assessment proceedings. No grievance can therefore be made that the Revenue has been conferred no right of appeal and that if the assessee does not choose to appeal against the decision of the Income-tax Officer, it has no redress whatever. It has, in fact, no grievance at all which can ever be redressed by the Appellate Assistant Commissioner and if the Revenue cannot by any chance be treated as an aggrieved party the whole of this argument is robbed of significance. It is futile on the part of the appellant therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployed by the assessee and computation of the income, profits and gains of the assessee upon such basis and in such manner as the Income-tax Officer himself may determine is only vested in the Income-tax Officer as defined in section 2(7) of the Act. The power of enhancement of the assessment conferred upon the Appellate Assistant Commissioner under section 31(3)(a) cannot be construed to mean that the Appellate Assistant Commissioner can on his own exercise such power within the meaning of the proviso to section 13 even though the Income-tax Officer himself has not done so in the first instance. The powers conferred upon the Appellate Assistant Commissioner under section 31(3)(a) have got to be read with this further limitation that even though he can enhance the assessment, he cannot do so by exercising the power which is vested not in him but is vested only in the Income-tax Officer concerned under the proviso to section 13 of the Act. Section 31(3) of the Act has got to be read harmoniously with the provisions of section 13 and the proviso thereto and if they are so read the only conclusion to which one can arrive is that even though the Appellate Assistant Commissioner exercis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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