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Commissioner of Income-tax Vs. Th. Mohan Singh - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference No. 421 of 1972
Judge
Reported in[1976]105ITR746(All)
ActsIncome Tax Act, 1922 - Sections 31
AppellantCommissioner of Income-tax
RespondentTh. Mohan Singh
Appellant AdvocateDeokinandan, Adv.
Respondent AdvocateKameshwar Prasad, Adv.
Excerpt:
- - 1. on 24th august, 1957, the income-tax officer passed an assessment order under section 23(4) of the income-tax act, 1922, as the assessee had failed to comply with certain notice. the above order was, therefore, bad in law. the appellate assistant commissioner was, in our opinion, justified in law in not fixing a date and place for hearing of the appeal when he was satisfied that the appeal could not be disposed of on merits because due to cancellation of the assessment order under appeal the appeal has become infructuous......the tribunal held that under section 31, it was incumbent upon the commissioner to have fixed a date and place for hearing of the appeal. without fixing such a date and place he had no jurisdiction to dispose of the appeal. the above order was, therefore, bad in law. it was also urged that the assessee had challenged the assessment order on grounds in addition to those taken in the application under section 27 and for this reason also the appeal could not be said to have become infructuous. the tribunal did not record any finding on this submission, but found that since it was referring the case back to the commissioner this objection can be taken before him. on this view the appeal was allowed and the matter was sent back to the commissioner. in consequence of a direction issued by.....
Judgment:

Satish Chandra, J.

1. On 24th August, 1957, the Income-tax Officer passed an assessment order under Section 23(4) of the Income-tax Act, 1922, as the assessee had failed to comply with certain notice. On September 14, 1957, the assessee filed an application under Section 27 praying for cancellation of the ex parte assessment order. On September 21, 1957, the assessee filed an appeal against the original assessment order. On January 21, 1967, the Income-tax Officer accepted the application under Section 27, set aside the assessment order as a whole and reopened the assessment proceedings. On January 31, 1967, the Appellate Assistant Commissioner passed an order saying that the income-tax Officer had intimated to him that be had cancelled the original assessment under Section 27. The Commissioner held that the appeal had, therefore, become infructuous and it was dismissed as such. This order was passed without fixing a date for the hearing of the appeal and affording any opportunity of hearing to the assessee. Aggrieved, the assessee filed an appeal before the Tribunal. The Tribunal held that under Section 31, it was incumbent upon the Commissioner to have fixed a date and place for hearing of the appeal. Without fixing such a date and place he had no jurisdiction to dispose of the appeal. The above order was, therefore, bad in law. It was also urged that the assessee had challenged the assessment order on grounds in addition to those taken in the application under Section 27 and for this reason also the appeal could not be said to have become infructuous. The Tribunal did not record any finding on this submission, but found that since it was referring the case back to the Commissioner this objection can be taken before him. On this view the appeal was allowed and the matter was sent back to the Commissioner. In consequence of a direction issued by this court the Tribunal has referred the following question of law for the opinion of this court:

'Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the Appellate Assistant Commissioner of Income-tax could not have dismissed the appeal as infructuous but should have fixed a date and place for the hearing of the appeal ?'

2. It is not disputed that by the order passed under Section 27, the Income-tax. Officer had completely cancelled the assessment order and reopened the entire assessment proceedings. No part of the original assessment order remained in force thereafter.

3. Section 31 of the Indian Income-tax Act, 1922, provides as follows :

'(1) The Appellate Assistant Commissioner shall fix a day and place for the hearing of the appeal, and may, from time to time, adjourn the hearing.

(2) The Appellate Assistant Commissioner may, before disposing of any appeal, make such further enquiry as he thinks fit, or cause further inquiry to be made by the Income-tax Officer.

(2A) The Appellate Assistant Commissioner may, at the hearing of an appeal, allow an appellant to go into any ground of appeal not specified in the grounds of appeal, if the Appellate Assistant Commissioner is satisfiedthat the omission of that ground from the form of appeal was not wilful or unreasonable.'

4. It is apparent that this section provides the procedure for hearing and disposal of the appeal on merits. It contemplates that the appeal may be heard on merits, even on grounds not specified in the grounds of appeal. In our opinion, the procedure for fixing a date and place of hearing of the appeal or for adjourning the hearing apply when the appeal has to be disposed of on its merits. But, if an extraordinary situation arises in which on all hands it is admitted that by the disappearance of the assessment order which was the subject-matter of appeal, the appeal cannot possibly be disposed of on merits, no matter what ground is taken in the memo, of appeal, then in such a situation the procedure mentioned in Section 31 will become inapplicable. The Appellate Assistant Commissioner was, in our opinion, justified in law in not fixing a date and place for hearing of the appeal when he was satisfied that the appeal could not be disposed of on merits because due to cancellation of the assessment order under appeal the appeal has become infructuous. By insisting that even in such a situation the Commissioner must have fixed a date and place for hearing of the appeal, the assessee would have been put to unnecessary harassment by having to appear before the Commissioner without any useful purpose being achieved.

5. In our opinion the Tribunal was not right in holding that the Appellate Assistant Commissioner should not have dismissed the appeal as infructuous without fixing a date and place for hearing of the appeal.

6. In the result the question referred to us is answered in the negative, in favour of the department and against the assessee. No order as to costs.


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