TMI Blog1972 (5) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... inancial years ending with the 31st of March, 1960, and the 31st of March, 1961. The returns of income for the respective years were filed on the 16th January, 1961, and the 30th of September, 1961, that is to say, that these returns were filed prior to the commencement of the Income-tax Act, 1961, hereafter to be referred to as "the new Act". The assessments were, however, made after the commencement of the new Act, namely, on the 8th of November, 1962, and on the 28th of November, 1962, respectively. Both these assessments were made under section 23(3) of the Indian Income-tax Act, 1922, hereafter referred to as "the old Act". As there was a revision under section 33B of the old Act for the assessment year 1959-60 by the Commissioner of Income-tax, the Income-tax officer considered it necessary to rectify the assessment orders passed in respect of the later two assessment years, viz., 1960-61 and 1961-62, which are now in question. He, accordingly, issued a notice under section 154 of the new Act, calling for objections, if any, from the assessee. After due formalities, the assessments were rectified under section 154 of the new Act. The assessee preferred appeals before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inafter referred to as the 'repealed Act'),-- (a) where a return of income has been filed before the commencement of this Act (the new Act) by any person for any assessment year, proceedings for the assessment of that person for that year may hp taken and continued as if this Act had not been passed." In the Supreme Court it was contended that the proceedings for rectification under section 35 of the old Act could not be held to be "proceedings for assessment" within the meaning of that expression occurring in section 297(2)(a) of the new Act. The Supreme Court did not accept the contention and said that the word "assessment" was used in the Income-tax Act in a number of provisions in a comprehensive sense and included all proceedings starting with the filing of the return or issue of notice and ending with the determination of the tax payable by the assessee. On that ratio the Supreme Court held that the proceedings for rectification of assessment of tax under section 35 of the Act were proceedings for "assessment ". It will be seen that in the case of S. Sankappa the notices for rectification were issued under section 154 of the new Act and no contention was advanced about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istant Commissioner the assessee had raised the objection as to the competence and jurisdiction of the Income-tax Officer to proceed under section 154 of the new Act. In Commissioner of Income-tax v. Scindia Steam Navigation Co. Ltd. the Supreme Court summed up at page 611 of the report the position while construing the scope of the power contained in section 66(1) of the old Act : " (1) When a question is raised before the Tribunal and is dealt with by it, it is clearly one arising out of its order. (2) When a question of law is raised before the Tribunal but the Tribunal fails to deal with it, it must be deemed to have been dealt with by it and is, therefore, one arising out of its order. (3) When a question is not raised before the Tribunal but the Tribunal deals with it, that will also be a question arising out of its order. (4) When a question of law is neither raised before the Tribunal nor considered by it, it will not be a question arising out of its order notwithstanding that it may arise on the findings given by it." According to their Lordships, it is only a question that has been raised before and decided by the Tribunal that could be held to arise out of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5(5) of the Patiala Income-tax Act. The single judge of the Calcutta High Court in Indra Co. Ltd. v. Income-tax Officer dealt with a case where a notice was issued by the Income-tax Officer under section 154 of the new Act. An application under article 226 of the Constitution for quashing the notice was filed, but, meanwhile, an appeal from an order of assessment was decided by the Appellaee Assistant Commissioner. It was held that where the assessment order had been the subject of an appeal the Income-tax Officer will not have jurisdiction to rectify such an order, because section 35 of the old Act does not empower him to rectify the order of the Appellate Assistant Commissioner. The case of Hazari Mal Kuthiala v. Income-tax Officer, Special Circle, Ambala was relied upon by a Division Bench of the Punjab High Court in Commissioner of Income-tax v. Hargopal Bhalla and Sons. There an assessment was made under section 143(3) of the new Act, when a return had been filed by the assessee on March 31, 1962, before the new Act came into force. Later on, the assessee filed a revised return on November 15, 1962. According to the provisions of section 297(2)(a) of the new Act, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35 of the old Act, it cannot be considered to be defective or invalid and the validity of the notice does not depend upon the number of the section referred to therein. The validity of the notice will depend upon its substance and it was not disputed that the notice issued in this case by the Income-tax Officer prior to the rectification contained all the essential requirements mentioned in section 35. In view of the language of section 297 (2)(a), the rectification order could be passed only under section 35 of the old Act and not under section 154 of the new Act. Shri Kirpal, however, based himself on a decision of the Supreme Court in Keshav Mills Co. Ltd. v. Commmissioner of Income-tax and submitted that when the matter goes to the High Court it has to be dealt with in the light of evidence which has been already brought on record. If the statement of the case does not refer to the relevant and material facts which are already on the record the High Court may call for a supplementary statement under section 66(4) but the power of the High Court can be exercised only in respect of material and evidence which has already been brought on record. He also referred to another decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d since the jurisdiction of the Tribunal and of the High Court is conditional upon there being an order of the Tribunal which may be said to be under section 33(4) of the old Act, there was no order that could be said to be an order under that section and as such no question of law could be said to arise out of an order of the Tribunal. The High Court could, therefore, decline to entertain the reference. In the present case since the rectification order could be passed only under section 35 of the old Act and the application of section 154 of the new Act was not called for, there could be no appeal before the Appellate Assistant Commissioner, nor could there be an appeal before the Appellate Tribunal. The only remedy of the assessee was by way of revision under section 33B of the old Act and if there was no appeal before the Appellate Tribunal, the Tribunal could not state the case for the opinion of this court. It is no doubt an intriguing situation. The appeal before the Tribunal was filed by the income-tax department and it is also the department that asked for a reference of the question of law to this court, and it is now the department itself that wants us to decline to a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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