TMI Blog1958 (3) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... The facts giving rise to this reference are very few. The assessee was assessed to tax for the assessment year 1947-48 by the Income-tax Officer. The assessee appealed to the Appellate Assistant Commissioner, and while the appeal was pending, the Income-tax Officer wrote to the Appellate Assistant Commissioner drawing his attention to the fact that a certain sum of ₹ 40,000 had not been included in the assessment of the assessee. In consequence of this letter the Appellate Assistant Commissioner included the sum of ₹ 40,000 in the assessment of the assessee and brought it to tax. This sum of ₹ 40,000 was received by the assessee on the 20th of July, 1946, under the following circumstances. He had entered into an agreement with one Zito on the 20th of May, 1942, and under this agreement he had lent certain monies to Zito on the mortgage of Zito's properties and a part of the consideration for this loan was that the assessee was to receive a certain share in the business of Ritz Hotel for the working of which this loan had been taken by Zito. A suit was filed by the assessee to enforce this claim against Zito and that suit was compromised and in respect of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or item, once the appeal was before the Appellate Assistant Commissioner his power extended not merely to the subject-matter of the appeal, but to the whole subjectmatter of assessment. What gave the power to the Appellate Assistant Commissioner was the fact that a particular item or source had been subjected to the process of assessment. Now, the process of assessment would include, not only the subjecting of an item or source to tax, but equally holding that the particular source or item was not subjected to tax; and from that point of view, it would make no difference whether a particular source or item was under one or the other head of income. From that view it would also follow that, if a particular source or item had not been subjected to the process of assessment and even though the Income-tax Officer may have subjected to tax a particular head of income in which that item or source fell, then it would not be open to the Appellate Assistant Commissioner to take into consideration the particular source or item which had not been considered by the Income-tax Officer. Therefore, from both points of view, the question whether a particular item or source fell under a particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the subject-matter of the appeal, not in the sense of revising those matters about which the assessee makes a grievance, but a revising authority in the sense that once the appeal is before him he can revise not only the ultimate computation arrived at by the Income-tax Officer but he can revise every process which led to the ultimate computation or assessment. In other words, what he can revise is not merely the ultimate amount which is liable to tax, but he is entitled to revise the various decisions given by the Income-tax Officer in the course of the assessment and also the various incomes or deductions which came in for consideration of the Income-tax Officer. So the power of the Appellate Assistant Commissioner is confined to considering the matter which has been considered by the Income-tax Officer and determined in the course of the assessment; and matter is used, not in the sense of a head of income, but in the sense of a specific source of income. So the question that has to be asked when deciding whether the Appellate Assistant Commissioner has the power or not is: Is this the matter which was considered and decided by the Income-tax Officer? If it was, irres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... close and which had never been subjected to the process of assessment. That surely is not the power which section 31 gives to the Appellate Assistant Commissioner when it refers to the power of enhancing an assessment. We must, therefore, answer the first question in the negative. An application has been made by Mr. Joshi that we should proceed to answer question No. 2 which is Whether on the facts and in the circumstances of the case, the said sum of ₹ 40,000 is a revenue receipt and assessable to tax in the assessment year 1947-48? Mr. Joshi says that, once a question has been raised, it is obligatory upon the court under section 66(5) to answer the question, and Mr. Joshi very frankly tells us that he has a definite object in asking us to answer this question and that object is that, by reason of the second proviso to section 34(3), if we were to answer this question, it may be open to the taxing department to proceed against the assessee under section 34. Now, unless the law requires the answering of a question and the exercising of the advisory jurisdiction of the court, the court should not permit itself to be made a handle of the revenue department. It is perfe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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