The judgment of the court was delivered by
RAMAMURTI J. - The petitioner in this case made a claim before the Agricultural Income-tax Officer, Ootacamund, for recognition and acceptance of a partition amongst members of his family. But the Agricultural Income-tax Officer for reasons(the correctness of which it is unnecessary to consider now) declined to accept the case of partition. Thereupon the petitioner, without filing an appeal as provided in the Agricultural Income-tax Act, 1955 (hereinafter referred to as the Act), straightaway preferred a revision petition to the Commissioner for Agricultural Income-tax under section 34 of the Act and he too dismissed the petition. The petitioner has thereupon preferred this revision petition under section 54 of the Act.
The learned Government Pleader raised a preliminary objection that no revision lies in the instant case under section 54 of the Act as the order passed by the Commissioner rejecting the revision application filed before him under section 34 is not an order 'enhancing the assessment or otherwise prejudicial to him (the assessee)'. On an examination of the relevant provisions of the Act and decisions bearing on the question, we are of opinion that this preliminary objection should be upheld.
We shall now examine the relevant provisions of the Act. Section 29 provides for an assessment based upon a claim for partition. Section 31 provides amongst other things that an assessee can prefer an appeal to the Assistant Commissioner against an order of the Agricultural Income-tax Officer passed under section 29 of the Act. Section 32 provides a right of appeal to the Appellate Tribunal against any order passed by the Assistant Commissioner under section 31 aforesaid. Section 32(7) provides that save as provided in section 54 the orders passed by the Appellate Tribunal on appeal shall be final. Side by side there is also the provision in section 34 under which the Commissioner can call for the records of any proceeding under the Act and revise the same either on his own motion or on an application by the assessee. Section 34, in so far as it is relevant for the present purpose, runs as follow :
'34. (1) The Commissioner may, of his own motion or on application by an assessee, call for the record of any proceeding under this Act which has been taken by any authority subordinate to him and may make such enquiry or cause such enquiry to be made and subject to the provisions of this Act, may pass such orders thereon as he thinks fi :
Provided further that an order passed declining to interfere shall not be deemed to be an order prejudicial to the assessee....
(4) Any order passed under sub-section (1) shall, subject to revision by the High Court under section 54, be final.'
(Sub-sections (2) and (3) are omitted as they are not relevant for the present purpose). Section 54 which provides for the right of revision to the High Court runs as follow :
'(1) Within sixty days of the date on which he is served with a notice of the order, the assessee or the Commissioner, in the case of an order under sub-section (5) of section 32, and the assessee, in the case of an order under section 34 enhancing the assessment or otherwise prejudicial to him, may prefer an application to the High Court against the order on the ground that the Appellate Tribunal or, as the case may be, the Commissioner has either decided erroneously or failed to decide any question of la :
Provided that the High Court may admit an application preferred after the period of sixty days aforesaid if it is satisfied that the applicant has sufficient cause for not preferring the application within that period.'
The contention of the learned Government Pleader is that the second proviso to section 34 expressly provides that an order by the Commissioner declining to interfere in a revision petition filed by the assessee shall not be deemed to be an order prejudicial to the assessee, and that, therefore, by reason of the express language of section 54, a revision petition by the petitioner is incompetent inasmuch as there is no order under section 34 enhancing the assessment or an order otherwise prejudicial to the assessee.
Learned counsel for the petitioner contended that section 34 and section 54 are two separate provisions and the second proviso to section 34 should not be imported into sub-section (1) of section 54. In other words, it was contended on behalf of the petitioner that if a revision petition is filed under section 34 and the Commissioner dismissed the same, it would certainly be an order prejudicial to the assessee within the meaning of section 54 as the Commissioner has declined to entertain the same. It was further contended that the second proviso to section 34 has only a limited operation on the first proviso to section 34 and apart from that, it has no other purpose, and cannot be used as a guide for determining the ambit of the right of revision provided under section 54 of the Act. We see no substance in this contention. In our opinion, the point is directly covered by the decision of the Privy Council in Commissioner of Income-tax v. Tribune Trust, a case which arose under the analogous provisions of the Indian Income-tax Act of 1922, sections 33 and 66, which contained language similar to the provisions of sections 34 and 54 of Agricultural Income-tax Act. The matter is also directly covered by several decisions of the various High Courts dealing with the analogous provisions of the Agricultural Income-tax Act in those States.
We shall now refer to the decisions which had arisen under the Indian Income-tax Act. Section 33 of the Indian Income-tax Act of 1922 conferred a suo motu power of revision upon the Commissioner. Section 66 of the Act contained the provision that the assessee can ask the Commissioner to refer the case to the High Court arising out of an order of the Commissioner under section 33 'enhancing an assessment or otherwise prejudicial to him (the assessee)'.
In Venkatachalam Chettiar v. Commissioner of Income-tax the assessee applied to the Income-tax Officer for a refund and when it was dismissed he filed a revision petition to the Commissioner under section 33 and the Commissioner too rejected the same. Thereupon there was an application by the assessee to the Commissioner to state a case and refer the question to the High Court but the Commissioner to state a case and refer the question to the High Court but the Commissioner declined to do so on the ground that the order under section 33 dismissing the revision petition was not an order 'enhancing the assessment or otherwise prejudicial to the assessee' and therefore the assessee had no right of reference to the High Court. This court held that the view taken by the Commissioner that the order of the Commissioner dismissing the revision petition under section 33 is not 'otherwise prejudicial to the assessee' was correct on the ground that the order of the Commissioner under section 33 has not prejudiced the assessee, that the order did no more than leave the assessee in the position which he occupied as a result of the order of refusal by the Income-tax Officer and that the further order of the Commissioner affirming the order of the Income-tax Officer was not an order prejudicial to the assessee within the meaning of section 66. It is unnecessary to refer to the other cases under the Income-tax Act and it is sufficient to refer to the judgment of the Privy Council referred to above.
In Commissioner of Income-tax v. Tribune Trust the assessee, a trust, raised an objection for the assessment year 1932-33 that its income was exempt from income-tax under section 4(3)(i) of the Act. Up to the stage of the High Court, the assessee failed in its contention. But the Privy Council upheld its claim. In the meanwhile in view of the decision of the High Court, assessment for subsequent years were made and completed in accordance therewith. After the decision of the Privy Council, the assessee filed an application to the Commissioner of Income-tax under section 33 that the assessment for the subsequent years might be quashed but the Commissioner rejected the same. Thereupon, the assessee applied to the Commissioner of Income-tax to state a case and refer the same to the High Court under section 66(2) of the Income-tax Act. The Commissioner declined to do so and the assessee moved the High Court for directing the Commissioner to state a case. This was allowed by the High Court and the Commissioner took up the matter to the Privy Council. The Privy Council held that the Commissioner was not bound to state a case within the meaning of section 66(2) of the Act as the order of the Commissioner dismissing the assessees petition was not 'an order enhancing the assessment or prejudicial to the assessee' within the meaning of section 66(2). The Privy Council did not accept the view of the High Court that when the assessees application has been dismissed by the Commissioner declining to grant the relief prayed for by the assessee it amounted to an order prejudicial to the assessee. The Privy Council put the matter thus at page 22 :
'It appears to them that an order made by the Commissioner under section 33 can only be said to be prejudicial to the assessee when he is, as a result of it, in a different and worse position than that in which he was placed by the order under review. If the assessee has a complaint against any assessment or order made by the subordinate officer, he has the appropriate and specific remedy which the Act provides. The Commissioner may act under section 33 with or without the invitation of the assessee; if he does so without invitation, it is clear that, if he does nothing to worsen the position of the assessee, the latter can acquire no right; the review may be a purely departmental matter of which the assessee knows nothing. If, on the other hand, the Commissioner acts at the invitation of the assessee and again does nothing to worsen his position, there is not justification for giving him a new right of appeal. He has a specific right of appeal against the assessment or order of the subordinate officer, which is subject to its own time-limit. That he cannot enlarge by taking a course which is on his part purely voluntary. This view of the section is confirmed by the exception.'
In Senairam Dungarmall v. Assam Board of Agricultural Income-tax, the Bench of the Assam High Court had to deal with a similar situation arising under the Assam Agricultural Income-tax Act (Act IX of 1939). It was held that an order of Commissioner under section 27 of the said Act declining to interfere with an order of assessment by the Agricultural Income-tax Officer cannot be said to be an order prejudicial to the assessee within the meaning of section 28(2). There too the assessee did not avail himself of the right of appeal against the order of the Income-tax Officer under section 24 of the Act but filed an application under section 27 by which he sought to set aside the assessment order and the Commissioner of Income-tax declined to interfere. The High Court took the view that the observations of the Privy Council regarding the proper meaning to be given to the words 'order prejudicial to the assessee' would apply to the analogous provisions of the Assam Agricultural Income-tax Act.
A Bench of the Kerala High Court took the same view with regard to the analogous provision of the Cochin Income-tax Act in Parvathi Sankaran v. Commissioner of Income-tax. The Bench held that an order of the Commissioner dismissing a revision petition filed before him cannot be said to be an order prejudicial to the assessee with in the meaning of section 109(2) of the Cochin Income-tax Act so as to entitle the assessee to obtain a reference to the High Court. It is sufficient to mention that in this case reliance was placed upon a later judgment of a Full Bench of five judges of the Madras High Court in Voora Sreeramulu Chetty v. Commissioner of Income-tax, overruling the earlier Full Bench decision of three judges in Venkatachalam Chettiar v. Commissioner of Income-tax, already referred to, as authority for the position that an order of dismissal itself amounts to refusal to grant the relief prayed for by the assessee. The Kerala High Court took the view that in view of the decision of the Privy Council in the Tribunal case, the view of the later Full Bench of the Madras High Court cannot be followed as good law.
In Onkarmal Jwalaprosad v. Commissioner of Taxes, Assam, the matter arose before the Full Bench of the Assam High Court in a case arising under the analogous provisions of the Assam Sales Tax Act, section 32(2). Section 31 of the Assam Sales Tax Act provided that the Commissioner may call for the record of the proceedings of assessment either on its own motion or on a petition filed by the assessee and pass any order after revising the proceedings. Section 32(2) provided that the assessee can file an application requiring the Board or the Commissioner to refer the case to the High Court from the order of the Commissioner enhancing the assessment or otherwise prejudicial to the dealer. Dealing with the identical objection, the learned judges stated the position in these term :
'This dictum of the Privy Council categorically supports the contention of the learned Advocate-General as to the meaning of the words prejudicial order; and applying this test, it is impossible to hold that the orders in the present cases fulfilled the requirements of section 32(2) of the Sales Tax Act, as analysed by me earlier. I do not think it necessary to refer to some of the other cases cited on the point. That being so, the contention must be upheld that these applications under sub-sections (5) and (6) of section 32 are also incompetent, there being no valid application under sub-section (2) of that section.'
In the Assam case an argument was advanced to distinguish the decision of the Privy Council on the ground that under section 33 of the Income-tax Act of 1922, the Commissioner alone has a power of revision while under the Assam Sales Tax Act the power of revision can be exercised by the Commissioner either on his own motion or on an application of the assessee, and that when a statutory right of revision is given and the revision petition of the assessee is dismissed such an order should be deemed to be an order prejudicial to the assessee. This argument was rejected as follow at page 68 of the decisio :
'It is next argued that section 33 of the Act, as quoted in the judgment of the Judicial Committee, did not concede any statutory right to the assessee to move the Commissioner of Income-tax to revise the order of assessment; it only gave an authority to the Commissioner to call for the record or any case on his own motion and pass such orders after enquiry as he thought fit. Therefore, if after calling for the record, the Commissioner refused to interfere, the assessee had evidently no statutory right on the authority of which he could apply for a reference to the High Court. It must be conceded that section 33, as it then was, did not give any right to the assessee to move the Commissioner, or impose any obligation upon the assessee to move the Commissioner, or impose any obligation upon the latter to do so. Accordingly, their Lordships took the view that it was intended to provide merely an administrative machinery by which a higher executive officer might review the acts of his subordinates and take necessary action on such review. This point did not and could not affect their decision as to the interpretation of the words prejudicial order which was quite independent of the consideration, whether the petitioner had or had not any statutory right to move the Commissioner for review. In fact, their Lordships clarified the position in no ambiguous terms as their following observation show : The Commissioner may act under section 33 with or without the invitation of the assessee; if he does so without invitation, it is clear that, if he does nothing to worsen the position of the assessee, the latter can acquire no right; the review may be a purely departmental matter of which the assessee knows nothing. If, on the other hand, the Commissioner acts at the invitation of the assessee and again does nothing to worsen his position, there is no justification for giving him a new right of appeal. The distinction, therefore, pointed out by the learned counsel for the petitioners is of no moment at all.'
We are clearly of the opinion that the words 'otherwise prejudicial to the assessee' have acquired, so to say, a clear, well-defined meaning in the manner mentioned above and they are used in the Madras Agricultural Income-tax Act in the same context and with the same object.
In this connection it may also be mentioned that the view of the Privy Council in the Tribune case which was rendered under the unamended section 33 of the Act has been given statutory effect by the second proviso to sub-section (2) of section 33A of the Income-tax Act, which enacts that 'an order by the Commissioner declining to interfere shall not be deemed to be an order prejudicial to the assessee.'
However much this view might cut down the right of revision of the assessee to the High Court, it has to be upheld in view of the clear language of the section.
We, therefore, uphold the preliminary objection and dismiss the revision petition as not maintainable under section 54. There shall be no order as to costs.