1. This is a petition under Article 226 of the Constitution by an assessee against whom an order of assessment under Section 23B, Indian Income-tax Act has been made. The assessee is a Hindu undivided family carrying on business at Kanpur. The assessments for the years 1943-44 to 1949-50 were duly completed but there was an appeal and the assessment orders were set aside and the Income-tax Officer was directed to make fresh assessments after taking into consideration certain objections whichwere raised by the assessee in respect of the assessments made by the Income-tax Officer.
After the remand while these cases were pending before the Income-tax Officer, he proceeded to make a provisional assessment under Section 23B, Indian Income-tax Act. This section provides that the Income-tax Officer may, make a provisional assessment in advance of the regular assessment on the basis of the returns filed by the assessee and the accounts and documents supplied by him.
The provisional assessment under this section was made on 16-1-1956 in respect of the years 1944-45 to 1949-50 and then 1951-52 to 1954-55. The section vesting gower in the Income-tax Officer to make a provisional assessment was introduced for the first time by the Taxation Laws (Extension to Alerged States and Amendment) Act, 1949.
2. It is urged on behalf of the applicant that the provisional assessment under Section 23B could not be made by the Income-tax Officer in respect of the years prior to the commencement of the aforesaid Act. In support of this contention the learned counsel has relied upon a decision of the Nagpur High Court in Niranjan Lal v. Commr. of Income-tax, Madhya Pradesh, 1953 Nag 185 (AIR V 40) (A).
We are of opinion that the contention has no force. Section 23B merely gives power to the Income-tax Officer to make a provisional assessment on the basis of the return filed by the assessee and the accounts and documents filed accompanying the return.
The Income-tax Officer was not making a final assessment. The provisional assessment made by him was obviously intended by the Legislature in avoid the delay in making the final assessments which may take a long time. The provisional assessment was practically to be made on the own admissions of the assessee as shown by him in the return and the accounts and documents supplied by him.
From the nature of the provisions, it appears to us to be applicable to all cases which were not disposed of before the commencement of the Act and which were pending or might come into existence after the commencement of the Act. In the Nagpur case relied upon on behalf of the applicant. Section 33B which was added by Section 7 of the Income-Lax and Business Profits Tax (Amendment) Act, 1948, empowering the Commissioner to revise the order made by the Income-tax Officer was the subject matter of the decision.
There was a provision in the amending Act relating to the newly introduced section which clearly showed that the new section was to be deemed to be operative in respect of certain assessments made subsequent to a particular date. It was held by the Nagpur High Court that the section was not retrospective enough to cover the assessments made prior to the date mentioned in the Act. There is no such provision in the Taxation Laws (Extension to Merged States and Amendment) Act, 1949. The principle applied in the decision of the Nagpur case does not apply to the facts of the present case.
3. It was urged by the learned counsel for the applicant that in the present case it could not be said that no regular assessment had been made. He pointed out that a regular assessment had been made in the case and it was set aside by the appellate officer.
When the assessment order was set aside by the appellate officer and the case was remanded to the Income-tax Officer for re-assessment the position was the same as if no assessment had been made and in our opinion in such a case under the powers vested in the Income-tax Officer by virtue of Section 23B he could make a provisional assessment on the basis of the returns furnished by the assessee and the accounts and documents supplied by him before he made a regular assessment as directed by the appellate officer.
4. The next point urged on behalf of the applicant was that since certain other assessments in which there was a likelihood of the assessee getting refund were still pending and had not been decided by the Income-tax Officer, the provisional assessments should not have been made by the Income-tax Officer before the refund cases were decided.
We do not think that this ground is sufficient to prevent him from exercising his powers under Section 23B. It has also not been shown to us that the other cases in which the applicant expects to get a refund have been deliberately allowed to remain pending. In these circumstances it is not possible to issue any directions to the Income-tax Officer restraining him from realising the amount of tax provisionally assessed by him or imposing a penalty for the non-payment of the tax in time.
5. We do not see any force in this petitionwhich is accordingly dismissed.