1955 (10) TMI 35 - HC - Income Tax

Summary

Issues Involved:
1. Jurisdiction of the Commissioner to review or modify a previous order under section 33A of the Indian Income-tax Act.
2. Validity of the 1953 order extending the payment date of assessed tax.
3. Applicability of section 35 of the Indian Income-tax Act for correcting mistakes.

Issue-Wise Detailed Analysis:

1. Jurisdiction of the Commissioner to Review or Modify a Previous Order under Section 33A:
The main point for decision was whether the 1953 order by the Commissioner could be reviewed, modified, or corrected by his successor. The petitioner argued that the 1953 order was final and could not be reviewed or modified by the successor. The respondent contended that the 1953 order was administrative or executive, and thus could be recalled by the successor. The court held that the 1953 order was made under section 33A of the Income-tax Act, which does not provide for review or modification by the Commissioner or his successor. The Commissioner becomes functus officio after passing an order under section 33A, and such an order is final. The court cited the Privy Council's decision in Commissioner of Income-tax v. Tribune Trust, which stated that the obligations and remedies of the taxpayer are exhaustively defined within the Income-tax Act. Therefore, the Commissioner or his successor has no inherent power to review or modify the order.

2. Validity of the 1953 Order Extending the Payment Date of Assessed Tax:
The respondent argued that the 1953 order was a nullity because the Commissioner had no jurisdiction to extend the payment date of the assessed tax beyond the decision of the Appellate Assistant Commissioner. The court disagreed, stating that section 45 of the Act allows the Income-tax Officer to not treat the assessee as in default during the pendency of the appeal. The court also referred to section 46(7), which suggests that the date of payment can be extended by an Income-tax authority. Therefore, the Commissioner had the power to extend the time for payment in the circumstances of the case. Even if the Commissioner had no such power, the order would not be a nullity but an improper or illegal exercise of discretion. The court also noted that the Income-tax Officer accepted the 1953 order as binding, and the taxpayer complied with its conditions. Thus, it was not open to the successor to ignore the order and demand immediate payment of tax.

3. Applicability of Section 35 of the Indian Income-tax Act for Correcting Mistakes:
The respondent suggested that the 1953 order contained a mistake that could be rectified under section 35 of the Act. The court held that a mistake under section 35 must be apparent from the record and not merely a different conclusion on the same set of facts. The 1953 order was not a mistake made by mischance but a deliberate decision. Therefore, section 35 could not be invoked to cancel the previous order. The court concluded that the notice dated 25th July 1955, demanding payment of tax by 15th September 1955, was in excess of the Commissioner's jurisdiction and set it aside.

Conclusion:
The court allowed the petition, setting aside the notice dated 25th July 1955, and awarded costs to the petitioner, assessing counsel's fee at Rs. 100. The application was accepted with costs.