Skip to content


Be Be Rubber Estate Ltd. Vs. Inspecting Assistant Commissioner (Special) and anr. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKerala High Court
Decided On
Case NumberO.P. Nos. 1299 of 1978-D and 3369 of 1980-A
Judge
Reported in[1982]136ITR675(Ker)
ActsKerala Agricultural Income Tax, 1950 - Sections 15, 15(1), 15(2) and 31
AppellantBe Be Rubber Estate Ltd.
Respondentinspecting Assistant Commissioner (Special) and anr.
Appellant Advocate K.P. Radhakrishna Menon,; K.K. Ravindranath and; V.V. Ra
Respondent AdvocateGovt. Pleader
Excerpt:
- - the impugned notification has been issued by virtue of the power under sub-section (2) as well as under sub-section (3). the argument is, as i stated earlier, that the 1st respondent in o. except the power under section 31, as well as the powers of an agrl......by the government. their powers and duties shall be specified by the government. sub-section (3) empowers the government to authorise any officer other than an authority mentioned under sub-section (1) to perform such powers and duties as the government may notify. sub-section (3) is meant to empower an officer other than an authority. sub-section (2), on the other hand, refers to the functions of an authority appointed by the government. the impugned notification has been issued by virtue of the power under sub-section (2) as well as under sub-section (3). the argument is, as i stated earlier, that the 1st respondent in o.p. no. 3369/80 (the respondent in o.p. no. 1299/78) being already an officer exercising the powers of an iac cannot be appointed as an authority. he can, if at all, be.....
Judgment:

Kochu Thommen, J.

1. The petitioner-company is an assessee under the Kerala Agrl. I.T. Act, 1950, It was assessed for the assessment year 1972-73 by Ex. P-1 (in O. P. No. 1299/78) and for the assessment year 1974-75 by Ex. P-2 (in O.P. No. 3369/80). These orders are not challenged in these proceedings as appeals against them are pending. What is challenged here is the notification, G.O. MS. No. 806/Rev./61 dated August 30, 1961 (produced as Ex. P-5 in O.P. No. 3369/80 and as Ex. P-2 in O.P. No, 1299/78). It is by virtue of this notification that the 1st respondent, the I AC (Special), Kottayam, assumed power to make an assessment upon the assessee. The assessee was assessed for the year 1972-73 under Section 35 pursuant to a notice issued on March 16, 1977. For the year 1974-75, the assessment was made under Section 18 pursuant to a notice dated November 5, 1979, issued under Section 17. The complaint of the assessee is that the 1st respondent was not competent to make the assessment, for he had no proper authority under the Act to exercise that power. It is contended by the assessee that the notification under which the assessment has been made is ultra vires the provisions under which it is purported to have been made by the Government; that Section 15 does not postulate the appointment of an IAC who is an officer of the department, as an authority under Section 15(1) to exercise the powers of an Agrl. ITO, and that the only manner in which an IAC can be authorised to exercise the power of an authority is not by appointing him under Section 15(2), but by empowering him under Section 15(3) with the limitations mentioned therein as to classes of persons or income and the areas.

2. Section 15 reads as follows :

'15. Income-tax authorities.--(1) There shall be the following classesof income-tax authorities for the purposes of this Act, namely--

(a) The Board of Revenue.

(b) The Commissioner of Agricultural Income-tax.

(c) Assistant Commissioners of Agricultural Income-tax. (,d) Agricultural Income-tax Officers.

(2) The authorities specified in Sub-section (1) shall be appointed by the State Government and shall exercise and perform in such areas, such powers and duties as the State Government may by notification in the Kerala Government Gazette determine.

(3) The State Government may, by notification in the Kerala Government Gazette, empower any other officers than the authorities specified in Sub-section (1) to exercise such powers and perform such functions and duties under this Act in respect of such classes of persons or classes of income and in such areas, as may be specified in the notification...........'

3. The authorities under the Act are those mentioned under Sub-section (1). Sub-section (2) says that these authorities shall be appointed by the Government. Their powers and duties shall be specified by the Government. Sub-section (3) empowers the Government to authorise any officer other than an authority mentioned under Sub-section (1) to perform such powers and duties as the Government may notify. Sub-section (3) is meant to empower an officer other than an authority. Sub-section (2), on the other hand, refers to the functions of an authority appointed by the Government. The impugned notification has been issued by virtue of the power under Sub-section (2) as well as under Sub-section (3). The argument is, as I stated earlier, that the 1st respondent in O.P. No. 3369/80 (the respondent in O.P. No. 1299/78) being already an officer exercising the powers of an IAC cannot be appointed as an authority. He can, if at all, be only empowered under Sub-section (3). If he is empowered under Sub-section (3), it can only be subject to the limitation mentioned therein, viz., classes of persons or classes of income and the areas of his jurisdiction. If Ex. P-5 is construed to be a notification under Sub-section (3), petitioner's counsel says, it will be hit by the lack of limitation as to persons or income. On the other hand, if the notification is construed to be one under Sub-section (2), counsel says, it is hit by reason of the defect already stated, viz., appointing an officer of the department as an authority.

4. The earlier notifications issued in 1951, 1952 and 1957 show that the IAC had been appointed as an authority under the Act. Under the present notification also what is done is to appoint an officer functioning as an IAC as an authority mentioned in col. (1) of the notification. The person who is appointed is the IAC exercising the powers of that office. He is additionally appointed to the post of an authority stated under col. (2) of the notification, that is, as an Asst. Commr. of Agrl. I.T., being one ofthe four authorities specified under Sub-section (1) of Section 15. By virtue of this appointment the officer is given all the powers mentioned under col. (3) of the notification, i.e., the powers of the Asst. Commr. of Agrl. I.T. except the power under Section 31, as well as the powers of an Agrl. ITO. The district in which he shall function as an authority is mentioned in col. (4), Accordingly, under the notification, the 1st respondent in O.P. No. 3369/ 80 (the respondent in O.P. No. 1299/78) assumed the powers of an ITO and made the assessments in question.

5. Section 15 is clear in terms. The Government have the power to appoint any person as an authority. The Government may appoint a person who is one of the officers in the department to the office of an authority. There is nothing in the section which prohibits such additional appointment being made in favour of the same person. An IAC can at once function as an Asst. Commissioner and exercise the powers ofthe authority specified in the notification. This is what has been done. I see no anomaly in this appointment. If the 1st respondent has been appointed as an authority, and he has exercised the powers specified in col. (3) of the notification, the assessment made by him in exercise of such power cannot be impeached by reason of any defect in his jurisdiction. In my view, ex. P-5 is impeccable for the reason that it has been made in terms of Sub-section (2) of Section 15. If Sub-section (2) sufficiently authorises the Government to issue the notification, as it has done, it is unnecessary to consider whether Sub-section (3) was rightly invoked. Perhaps, it was thought, by way of abundant caution, that it was wiser to include Sub-section (3) as one of the sources of power in issuing the impugned notification. Whatever that be, as far as I can see, Sub-section (2) has conferred enough power upon the Government to issue the notification. Accordingly, the challenge against ex. P-2 in O.P. No. 1299/78 and ex. P-5 in O.P. No. 3269/80 fails.

6. It is further contended that the assessment ought to have been made by the Agrl. ITO, Kottarakkara, and the transfer of the file from him to the 1st respondent without notice to the petitioner was invalid. For the year 1972-73, the order of assessment had already been made by the Agrl. ITO, Kottarakkara, on June 23, 1976. However, the first-respondent issued a notice on March 16, 1977, under Section 35. The assessee filed objections to that notice on July 17, 1977. But its objections did not include an objection to jurisdiction. The case was posted for hearing on March 9, 1978. On that day none appeared on behalf of the assessee. In the circumstances, it cannot be heard to contend that any principle of natural justice had been violated by reason of the transfer of the file for the year 1972-73. In regard to the year 1974-75, the assessee filed its returns on October 24, 1974, before the 1st respondent. Only when notice was issued to the assessee under Section 17 did it raise any objection to the jurisdiction. This objection which was raised belatedly was rejected by the assessing authority. In so far as the assessee had filed the returns before the 1st respondent, it cannot now be heard to contend that any principle of natural justice has been violated by reason of the transfer of the file to the 1st respondent. None of the objections raised by the assessee-petitioner against the impugned notification is, in my view, sustainable.

7. The O.Ps. are accordingly dismissed. No costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //