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Pulipati Subbarao and Co. Vs. Appellate Asstt. Commissioner of Income-tax, Vijayawada and anr. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petn. No. 531 of 1956
Judge
Reported inAIR1959AP505; [1959]35ITR673(AP)
ActsIncome-tax Act, 1922 - Sections 31(3)
AppellantPulipati Subbarao and Co.
RespondentAppellate Asstt. Commissioner of Income-tax, Vijayawada and anr.
Appellant AdvocateK. Ranganadha Chari, Adv.
Respondent AdvocateN.V. Ranganadham, Adv. for ;V. Vedantachari, Standing Counsel
Excerpt:
.....of income-tax act, 1922 - income tax officer (ito) assessing firm as unregistered - subsequently appellate assistant commissioner directing ito to consider application for registration - ito conducting fresh enquiry and asking petitioner to submit to fresh assessment - ito can only consider application for registration of firm - held, ito has no jurisdiction to make de novo assessment and subject firm to fresh assessment. - all india services act, 1951.sections 8 & 11 & a.p. buildings (lease, rent and eviction) control rules, 1961, rule 5: [v.v.s. rao, g. yethirajulu & g. bhavani prasad, jj] refusal by landlord to receive rent - deposit of rent in court - held, a tenant has the option to take recourse to section 8 in case of refusal or evasion by landlord to receive rent and if..........the petitioner to submit himself to a fresh assessment, is without jurisdiction. the learned counsel for the department has not been able to place before me any authority which would warrant the action sought to be taken against the petitioner by the 2nd respondent. 8. pursuant to the order passed by the appellate assistant commissioner, it is open to the income-tax officer to consider the one and the only question referred to him, viz., whether the firm's application for registration should be allowed. there is no other question before the income-taxofficer and he would certainly be transgressing the limits set down by law if he were to embark upon a fresh enquiry as to the quantum of the income or the loss incurred by the petitioner. 9. as there is a clear and patent want of.....
Judgment:
ORDER

Satyanarayana Raju, J.

1. This is an application for the issue of a writ of prohibition restraining the Income-Tax Officer, Vijayawada, from making a de novo assessment.

2. In order to appreciate the contentions raised in this petition, it is necessary to state the material facts. The petitioner is a firm consisting of five partners and carrying on commission and other kinds of business at Vijayawada. It was previously assessed in the status of a registered firm. For this assessment year 1952-53, the Income-tax Officer, Vijayawada, assessed the petitioner on the 28th June, 1953, and determined its loss in a sum of Rs. 100980/-. In making the assessment the officer treated the petitioner as an unregistered firm on the ground that it did not file an application for registration. Aggrieved by the said order, the petitioner preferred an appeal before the Appellate Assistant Commissioner of Income-tax who by his order dated the 17th September, 1954, set aside the assessment and directed the Income-tax Officer to receive a duplicate application for registration from the petitioner and to deal with it according to law. By the time the appeal was disposed of, the officer who made the assessment was succeeded by another. The succeeding incumbent of the office issued a memo to the petitioner on the 19th May, 1956, calling upon it to produce its account books by the 28th May, 1956. The petitioner objected to this procedure. It contended that the assessment order passed by the Appellate Assistant Commissioner did not envisage a de novo assessment and that the only matter which the Income-tax Officer had to consider was the application for registration. In this writ petition, the petitioner has contended that the Income-tax Officer has no jurisdiction to make a de novo assessment.

3. In the counter-affidavit filed by the Income-tax Officer, it is stated that the earlier order of assessment passed by his predecessor in office having been set aside by the Appellate Assistant Commissioner the earlier assessment is non est in law and that therefore he has a duty to make a fresh assessment on the material before him.

4. The petitioner was assessed by the predecessor in office of the 2nd respondent who determined the loss incurred by the firm at Rs. 1,00,980/-. The petitioner preferred an appeal to the Appellate-Assistant- Commissioner. In this connection it is important to note that in the appeal the petitioner made no grievance against the actual assessment. A perusal of the memorandum of appeal filed by the petitioner before the Appellate Assistant Commissioner clearly shows that the ground was not with regard to the determination of the quantum of the loss but with regard to the refusal of the Income-tax Officer to treat the firm as a registered firm.

5. In his order, at the very outset, the Appellate Assistant Commissioner stated:

'The appeal is against the non-registering of the firm.'

6. It was alleged before him that an application for registration of the firm was actually filed on the 28th February 1953 but that it was not considered. On a consideration of the circumstances-placed before him, the Appellate Assistant Commissioner was satisfied that there was an application for registration and the completion of the assessment without considering that application was illegal. He, therefore, set aside the assessment and directed the Income-tax Officer to receive a duplicate application for registration and to deal with it according to law.

7. The question then is :-- Is it open to the Income-tax Officer to treat the earlier assessment as non est and to make a de novo assessment ignoring the previous assessment altogether? It is no doubt true that the Appellate Assistant Commissioner's powers under Section 31 of the Act are of wide-amplitude. Section 31(3) (b) confers a specific power on the Appellate Assistant Commissioner to make a direction to the Income-tax Officer, whereupon the Income-tax Officer should proceed to make such fresh assessment and determine where necessary the amount of tax payable on the basis of such assessment. Section 31 (3) (c) empowers the Appellate Assistant Commissioner to confirm an order of assessment, or cancel it and direct the Income-tax Office: to register the firm or to make a fresh assessment, as the case may be. But the order passed by the Appellate Assistant Commissioner did not contain a direction as is envisaged under Section 31(3) (b). What alt he directed the Income-tax Officer to do was to receive a duplicate copy of the application and to dispose it of in accordance with law. The order of the Appellate Assistant Commissioner being specific, it is not open to the Income-tax Officer to conduct a fresh enquiry and proceed to make a fresh assessment inasmuch as he was not directed to do so and there being no other provision in the Act empowering him to do so, I am satisfied that the notice issued by the 2nd respondent, calling upon the petitioner to submit himself to a fresh assessment, is without jurisdiction. The learned counsel for the department has not been able to place before me any authority which would warrant the action sought to be taken against the petitioner by the 2nd respondent.

8. Pursuant to the order passed by the Appellate Assistant Commissioner, it is open to the Income-tax Officer to consider the one and the only question referred to him, viz., whether the firm's application for registration should be allowed. There is no other question before the Income-taxOfficer and he would certainly be transgressing the limits set down by law if he were to embark upon a fresh enquiry as to the quantum of the income or the loss incurred by the petitioner.

9. As there is a clear and patent want of jurisdiction on the part of the 2nd respondent to make a de novo assessment on the petitioner, a writ of prohibition shall be issued directing the 2nd respondent not to make a de novo assessment. The petitioner will have his costs from the respondents. Advocate's fee Rs. 100/-.


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