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TMI Blog1979 (11) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... pectively, the same having been made in the status of unregistered firm consisting of three partners, namely, Asha Devi Vaid, Santosh Devi Vaid and Sugni Devi Vaid with equal shares. On August 2, 1962, the CIT issued a notice to show cause why the said assessments should not be cancelled under s. 33B of the Act as he felt that the completed assessments were erroneous as being prejudicial to the interests of the revenue and that the ITO, ' E ' Ward, District II(1), Calcutta, had no territorial jurisdiction over the case of the assessee. The notice was served on the assessee on August 3, 1962, and the hearing was fixed by the Commissioner for August 6, 1962. On the ground that none appeared and that there was no application for adjournment, the Commissioner passed his order under s. 33B ex parte on that date. By his said order the Commissioner cancelled the assessments made by the ITO on August 12, 1960, on three grounds : (a) that some of the partners were minors and were not competent to enter into any partnership agreement with the result that the status of unregistered firm assigned to the assessee by the ITO was clearly wrong and as such the assessments deserved to be cancelled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee ? " The High Court disposed of the reference (I.T. Reference No.117 of 1967) by its judgment dated March 9, 1972, whereby it answered the first question in the affirmative, against the assessee, that is to say, on merits it held that the assessments made by the ITO required revision at the hands of the Commissioner. As regards the second question, the High Court was of the view that it comprised two aspects, one relating to the vacating of the Commissioner's order and the other relating to the giving of a direction to him to dispose of the case under s. 33B afresh after giving due opportunity to the assessee and the High Court held that in exercise of its appellate powers the Tribunal acted properly in vacating or cancelling the Commissioner's order but did not act properly in directing him to dispose of the case afresh under s. 33B(1) because the period of limitation of two years prescribed under s. 33B(2)(b) for him to act under s. 33B(1) had expired and answered the question accordingly (i.e., in the affirmative on the first aspect and in the negative on the second aspect). In doing so the High Court held that the provision of sub-s. (2)(b) was absolute and covered ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pass such orders thereon (i.e. on the appeal) as it thinks fit ". In Hukumchand Mills' case [1967] 63 ITR 232 this court has explained that the word " thereon " restricts the jurisdiction of the Appellate Tribunal to the subject-matter of the appeal which merely means that the Tribunal cannot adjudicate or give a finding on a question which is not in dispute and which does not form the subject-matter of the appeal but the words " pass such orders thereon as it thinks fit " include all the powers (except possibly the power of enhancement) which are conferred on the AAC by s. 31 and consequently the Tribunal has authority in exercise of its appellate powers to set aside the order appealed against and direct fresh assessment in the light of the observations made by it in its judgment. In other words, similar power is possessed by the Appellate Tribunal while dealing with the appeal under sub-s. (4) of s. 33B. The question that arises for our consideration is whether such a direction to dispose of the case afresh can be given to the Commissioner by the Appellate Tribunal when the period of limitation prescribed under sub-s. (2)(b) has expired ? In other words, whether subs. (2)(b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. (2)(b) was applicable to every order of the Commissioner irrespective of whether it was made suo motu or in pursuance of a direction issued by the appellate authority. According to him, since the bar of limitation as contained in sub-s. (2)(b) of s. 33B always operated for the benefit of the assessee and the same accorded finality to the assessment orders, the appellate powers of the Tribunal under sub-s. (4) must be regarded as having been curtailed to the extent that the Tribunal cannot remand the case to the Commissioner for making a fresh assessment if by then the limitation has expired. Two principles of construction--one relating to casus omissus and the other in regard to reading the statute as a whole--appear to be well settled. In regard to the former the following statement of law appears in Maxwell on the Interpretation of Statutes (12th edn.) at page 33 : " Omissions not to be inferred.--It is a corollary to the general rule of literal construction that nothing is to be added to or taken from a statute unless there are adequate grounds to justify the inference that the legislature intended something which it omitted to express. Lord Mersey said : ' It is a strong t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 92, 709 (HL) ) where at p. 577 he also observed : " This is not a new problem, though our standard of drafting is such that it rarely emerges. " In the light of these principles we will have to construe sub-s. (2)(b) with reference to the context and other clauses of s. 33B. Section 33B was introduced in the Indian I.T. Act, 1922, by the Income- tax and Business Profits Tax (Amendment) Act, 1948, with effect from March 30, 1948, and the object of introducing the same was obviously to confer revisional powers upon the Commissioner to correct the erroneous orders of an ITO in so far as they were prejudicial to the interests of the revenue. The language of sub-s. (1) clearly suggests that the said power was contemplated to be exercised suo motu by the Commissioner inasmuch as the opening words show that it was up to the Commissioner to call for and examine the record of any proceedings under the Act and on examination of the record if he were satisfied that any order passed by an ITO was erroneous as being prejudicial to the interests of the revenue he could revise the same after giving an opportunity to the assessee of being heard. It is true that sub-s. (2)(b) thereof prescribed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found favour with the High Court the answer was in the affirmative because sub-s. (2)(b), on its literal construction, was absolute. In our view such literal construction would lead to a manifestly absurd result, because in a given case, like the present one, where the appellate authority (Tribunal) has found, (a) the ITO's order to be clearly erroneous as being prejudicial to the interests of the revenue, and (b) the Commissioner's order unsustainable as being in violation of principles of natural justice, how should the appellate authority exercise its appellate powers ? Obviously, it could not withhold its hands and refuse to interfere with the Commissioner's order altogether, for, that would amount to perpetuating the Commissioner's erroneous order, nor could it merely cancel or set aside the Cornmissioner's wrong order without doing anything about the ITO's order, for, that would result in perpetuating the ITO's order which had been found to be manifestly erroneous as being prejudicial to the revenue. But such result would flow from the view taken by the High Court which has held that the Tribunal acted properly in vacating the Commissioner's order but did not act properly in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rove of it. In Sabitri Devi Agarwalla's case [1970] 77 ITR 934, the Assam High Court took a contrary view and held that under s. 33B(4) of the Act the Tribunal would not be justified in remanding the case to the Commissioner after the two years had expired from the date of the order sought to be revised. The decision seems to rest on three aspects : (a) it being a fiscal statute the same must be strictly construed, (b) the bar of limitation contained in sub-s. (2)(b) was absolute and unqualified and covered all types of orders, and (c) that unlike the second proviso to s. 34(3), there was no provision for removing or relaxing the bar of limitation on the power of the Commissioner under s. 33B(2)(b) and that since s. 33B as well as s. 34(3) with the second proviso had been introduced in the Act by the same Amending Act of 1948, there was a deliberate omission to make a provision removing or relaxing the bar of limitation in s. 33B and for such an omission the remedy lay with the legislature and not with the court. The Assam High Court also alluded to the fact that under the 1961 Act the legislature had made a provision removing or relaxing the bar of limitation in s. 263(3). As rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is court in Pooran Mall's case [1974] 96 ITR 390, where in a similar situation arising under s. 132 of the I.T. Act, 1961, a restricted construction was accorded by this court to sub-s. (5) thereof which prescribed certain period of limitation. In that case, pursuant to an authorisation issued under s. 132(1) of the 1961 Act, searches were carried out on October 15 and 16, 1971, at the residence and business premises of P, an individual, and at certain office premises of the firms in which he was a partner, and jewellery, cash and account books were seized. There was also a search of two banks and a restraint order was made under s. 132(3) in respect of 114 silver bars pledged with those banks on the ground that they were the property of P. On January 12, 1972, the ITO passed a summary order under s. 132(5) on the basis that all the assets seized and 114 silver bars belonged to P. Thereupon, P & Sons, one of the firms in which P was a partner, and P filed a writ petition in the High Court challenging the order dated January 12, 1972, and on April 6, 1977, on the basis of the consent of the parties, the High Court quashed the order and permitted the department to make a fresh enquir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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