1. This reference raises a very short question as to the procedure to be followedby the Excess Profits Tax Officer when he exercises the power conferred upon him under Section 10A of the Excess Profits Act. The assessee was carrying on three businesses. On May 19, 1911, he started a new business in the name and style of National Cotton Products. On October 16, 1943, a company called National Cotton Products, Ltd., was incorporated which took over the business previously done by the National Cotton Products. The assessee also started a partnership business in the name of Yusuf Bros. Yusuf Bros, were the managing agents of the National Cotton Products, Ltd. The shareholders in the limited company and the partners in the managing agents' firm were all close relations of the assessee. The Excess Profits Tax Officer held that the floating of the limited company and the setting up of the partnership business were all done with a view to avoid or reduce his liability to excess profit tax. This finding is not challenged by the assessee but what is challenged is that he came to this decision by two orders that he passed: one in respect of the National Cotton Products, Ltd., and the other in respect of Yusuf Bros. The first order deals with the profits of the limited company and the second with the profits of the managing agency firm. What is contended before us by the assessee is that the Excess Profits Tax Officer can make only one order in respect of the profits of both the concerns, and inasmuch as he has made two orders, these orders are in excess of jurisdiction.
2. Now Section 10A refers to the power conferred upon that Officer in the following terms:
' .... he may. . . . make such adjustments as respects liability to excess profits tax as he consideration appropriate so as to counteract the avoidance or reduction of liability to excess profits tax which would otherwise be effected by the transaction or transations.'
'Therefore, in incorporating the profits of the National Cotton Products, Ltd., and Yusuf Bros. in the assessment of the assessee the officer made adjustments in order to counteract the attempts of the assessee to avoid or reduce his liability to excess profits tax. Now Sub-section (3) of Section 10A makes this decision appealable to the Appellate Tribunal and the first question that arises is whether there is any obligation upon the Excess Profits Tax Officer to pass an order at all. It is true that Section 10A (3) refers to a decision and not to an order. But, when a tribunal gives a decision, that decision must be embodied in an order. The decision of a tribunal can only take the form of an order passed by it, and therefore when Section 10A contemplates a decision being given, and that decision being subject to an appeal, it is clear that the section contemplates the making of an order by the Excess Profits Tax Officer which can be challenged in the Appellate Tribunal. But it is difficult to appreciate the point made by Mr. Palkhiwalla that the section further eon-templates the making of one order in respect of adjustments to be made by him under Section 10A.
Now the Legislature has conferred a certain power upon the Excess Profit Tax Officer and it does not indicate in the section how that power is to be exercised nor has it laid down the procedure that must be followed by the officer in exercise of the power conferred upon him. So long as the Officer exercises the power so conferred upon him and does not travel outside the power, it is left to him to follow such procedure as he thinks proper. Till the order of assessment is made by the Officer under Section 14, he is seized of the assessment of the assessee, and in the course of the assessment it is competent to him to make such adjustments as he thinks proper provided they fall within the purview of Section 10A. Both the orders complained of were made while the officer was seized of the assessment of the assessee and therefore in passing the two orders the officer was exercising his power to make adjustments which he undoubtedly possessed. Therefore what is really complained of is not the exercise of power but the mode of that exercise, and we see no reason why we should lay down a particular mode of the exercise of the power by the officer, when the Legislature itself has not done so. It is suggested that Sub-section (3) which deals with appeals refers to a decision and from that it is sought to be argued that the officer can give only one decision and not more. That contention is obviously untenable. 'A decision' can only mean 'any decision' in this context. There might have been some force in this contention if the Legislature had used the definite article 'the' rather than the indefinite article 'a', bat the very use of the indefinite article leads us to an inference contrary to the one put forward by Mr. Palkhiwalla. It is also argued that in this particular case there was only one transaction, viz., incorporation of the limited company and the starting of the partnership firm. Mr. Palkhiwalla says that the Excess Profits Tax Officer may issue two orders when there are two separate transactions but when there is only one transaction he can deal, with the transaction only by making one order relating to it. I am not prepared to accept the contention that the incorporation of the National Cotton Products, Ltd., and the setting up of. Yusuf Bros. constituted one transaction. But even assuming that both these acts did constitute one transaction there is no reason to hold that even with regard to one transaction the power of the officer is restricted to passing only one order. If one were to come to that conclusion, it would mean that the power to make adjustments with regard to a particular transaction would be restricted to one adjustment only on one occasion and in one instance. The section gives unrestricted power to make adjustments with regard to one or more than one transactions and that power continues unabated until the Excess Profits Tax Officer is functus officio when he makes an assessment order under Section 14. Therefore, whether thefacts before us constitute one transaction or morethan one, it makes no difference to the power ofthe officer to pass such orders as he thinks properin order to give effect to the provisions of Section 10Aand in order to exercise the power conferred uponhim by the Legislature. We, therefore, answerthe questions referred to us as follows:--QuestionNo. 1: in the negative. The second question doesnot arise. Assessee to pay the costs of the reference.