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M.M. Muthuwappa Vs. the Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Reported in(1962)1MLJ180
AppellantM.M. Muthuwappa
RespondentThe Commissioner of Income-tax
Cases ReferredIn Brij Mohn Rameshwar Das v. Commissioner of Income
Excerpt:
- - accordingly, the income-tax officer proceeded to make an assessment under section 23(4), that is a best of judgment assessment. according to the learned counsel, the appellant in such an event could only canvass the basis of the assessment on the ground that in making the best of judgment assessment, the income-tax officer had failed to exercise his individual judgment properly and that no other ground of attack of such an assessment would be open to the assessee. 6. there can be no denying the fact that in the present case the income-tax officer was justified in making a best of judgment assessment under section 23(4) of the act. it is beyond dispute that a special notice as required under section 22(2) had been served upon the assessee in compliance with which he failed to submit.....srinivasan, j.1. the assessee carries on business in ceylon. for the assessment year 1950-51, a notice under section 22 (2) was served on him on 21st june, 1950. no return was furnished. a further notice under section 22(4) was served on 18th january, 1951. the assessee applied for time to comply with the notice. though the assessee's auditors promised to file a return before the end of january, there was no compliance with either of the notices issued by the department. accordingly, the income-tax officer proceeded to make an assessment under section 23(4), that is a best of judgment assessment.2. the assessee took the matter up in appeal to the appellate assistant commissioner. he objected to the quantum of the assessment. he also raised the plea that during the relevant accounting.....
Judgment:

Srinivasan, J.

1. The assessee carries on business in Ceylon. For the assessment year 1950-51, a notice under Section 22 (2) was served on him on 21st June, 1950. No return was furnished. A further notice under Section 22(4) was served on 18th January, 1951. The assessee applied for time to comply with the notice. Though the assessee's auditors promised to file a return before the end of January, there was no compliance with either of the notices issued by the Department. Accordingly, the Income-tax Officer proceeded to make an assessment under Section 23(4), that is a best of judgment assessment.

2. The assessee took the matter up in appeal to the Appellate Assistant Commissioner. He objected to the quantum of the assessment. He also raised the plea that during the relevant accounting period, he was resident but not ordinarily resident, and that the assessment made on him on the basis of a resident and ordinarily resident was wrong. The Appellate Assistant Commissioner made an order under Section 31(2) of the Act directing the Income-tax Officer to make a further enquiry with regard to the residence of the assessee and directed him further to re-compute the income after examination of the evidence and accounts to be produced by the assessee. Apparently, even at the stage when, the Appellate Assistant Commissioner made this order, the Income-tax Officer objected to the letting in of fresh evidence at that stage, but that objection was overruled by the Appellate Assistant Commissioner. In due course, the Income-tax Officer made his remand report. The appeal came to be heard by another Appellate Assistant Commissioner before whom the assessee again pressed the grounds taken by him, one relating to his liability to assessment as resident and ordinarily resident, and the other, the quantum of the assessment. The Appellate Assistant Commissioner examined the merits of these contentions and found against the assessee on the question of residence. With regard to the quantum, as against the total income of Rs. 88,000 estimated by the Income-tax Officer, the Appellate Assistant Commissioner fixed the amount at Rs. 77,546.

3. There was a further appeal to the Appellate Tribunal by the assessee. The principal question that was canvassed before the Tribunal was whether the Appellate Assistant Commissioner, who finally heard the appeal after the receipt of the remand report, had any authority to question the order of remand made by his predecessor and the directions given by him to the Income-tax Officer, and to dispose of the appeal without any reference to the remand report that was submitted. The Tribunal came to the conclusion that the Appellate Assistant Commissioner had no power to pass a remand order and that, at the stage of the hearing of the appeal, the Appellate Assistant Commissioner was entitled to refuse permission to the assessee to raise the question of liability to tax for the reason that that question had not been raised before the Income-tax Officer. Accordingly the appeal was dismissed.

4. On the application of the assessee, the Tribunal referred the following questions for the determination of this Court:

(1) Whether it was open to the assessee to raise the question of non-liability to be assessed under the Act at the appellate stage when no such contention was raised before the Income-tax Officer who made the assessment under Section 23(4).

(2) Whether the Appellate Assistant Commissioner had power to pass a remand order?

(3) Whether the Appellate Assistant Commissioner, who heard the appeal, after the remand report had been made in compliance with the remand order duly made by the Appellate Assistant Commissioner had the power to ignore that report on the ground that the remand was not preperly made, as it was beyond the jurisdiction of the Appellate Assistant Commissioner who made it?.

5. The questions stated above call for a determination of the scope of the powers of the Appellate Assistant Commissioner in regard to an appeal before him. We shall deal with that aspect of the matter presently. The learned Counsel for the Department however purports to argue that in an appeal against an assessment under Section 23(4) of the Act, the right of the appellant is considerably restricted. According to the learned Counsel, the appellant in such an event could only canvass the basis of the assessment on the ground that in making the best of judgment assessment, the Income-tax Officer had failed to exercise his individual judgment properly and that no other ground of attack of such an assessment would be open to the assessee. Apparently, it is suggested that it is not even open to the assessee to deny his liability to assessment at the appellate stage if he had not taken that ground at the stage of the assessment. It is further contended that any ground of attack upon such an order, which would bring in any relief which it was open to the assessee to ask for in an application under Section 27, would not be open to the assessee in an appeal directed against the assessment only. These contentions call for close examination.

6. There can be no denying the fact that in the present case the Income-tax Officer was justified in making a best of judgment assessment under Section 23(4) of the Act. It is beyond dispute that a special notice as required under Section 22(2) had been served upon the assessee in compliance with which he failed to submit a return. It is again undisputed that the notice issued under Section 22(4) of the Act calling upon the assessee to produce accounts and documents failed to evoke any response. It is under these circumstances that the Income-tax Officer had necessarily to make a best of judgment assessment. Section 27 provides that in such a case, it is open to the assessee to move the Income-tax Officer himself by application and satisfy him that he was prevented by sufficient cause from making the return, or that he had no reasonable opportunity to comply, or was prevented by sufficient cause from complying with the notice issued to him. If the Income-tax Officer is satisfied with the cause shown, he is competent and indeed bound, to cancel the assessment and proceed to make a fresh assessment. The order of the Income-tax Officer refusing to cancel the assessment is subject to appeal to the Appellate Assistant Commissioner under Section 30 of the Act. Under this provision, an assessee objecting to the amount of income assessed on a re-assessment under Section 27, or the amount of tax determined under that Section, or on the refusal of the Income-tax Officer to make a fresh assessment under Section 27, can appeal to the Appellate Assistant Commissioner. Prior to the amendment of the Act in 1939, the best of judgment assessment could be canvassed only by an application under Section 27 and by an appeal therefrom under Section 30. The Act before its amendment contained no provision in Section 30 permiting an appeal by an assessee against the order of the Income-tax Officer making assessment under Section 23(4). Such a best of judgment assessment could be brought up in appeal only by way of proceedings taken under Section 27. After the amendment, however, the right of the assessee has been enlarged in this regard. He could, if he so chose, move the Income-tax Officer himself under Section 27 and obtain the necessary relief from him. The order of the Income-tax Officer refusing to cancel the assessment under Section 27 could be brought up in appeal to the Appellate Assistant Commissioner. In the alternative, he could directly take an appeal under Section 30 of the Act to the Appellate Assistant Commissioner objecting to the amount of income assessed under Section 23 or the amount of tax determined under that Section. It would at first sight therefore appear as if the assessee has two rights of appeal open to him, one an appeal to the Appellate Assistant Commissioner from an order made adverse to him under Section 27, and the other, an appeal directed against the quantum of income or tax assessed. Decisions have however laid it down that the scope of an appeal directed against the assessment under Section 23(4) is somewhat different from an appeal arising from a proceeding under Section 27 of the Act. We shall now consider the exact extent in which the two rights of appeal differ from each other.

7. In Naba Kumar Singh Dudhuria v. Commissioner of Income-tax : AIR1945Cal104 it was pointed out by the Calcutta High Court, while dealing with the claim of the assessee that he had two independent rights of appeal, that there is an inherent limitation with regard to the scope of appeal from an order under Section 27. The learned Judges say:

Coming now to the provisions of the Income-tax Act, Section 30 gives the assessees the right to object to the amount of income assessed under Section 23 or 27. They may also object to the amount of tax determined under these Sections and they may appeal if they object to the refusal of the Income-tax Officer to make a fresh assessment under Section 27. To that extent only has the proviso in the same Section of the Act prior to the amendment been limited. What the assessees are apparently trying to do now, as it appears to me, is to raise an objection not merely to the amount of assessment or to the amount of tax determined under any provision of Section 23 but to object to the validity of the assessment. Although Section 30 as amended grants them the right to object to the quantum of assessment, it does not, in my view, give them a right to leave aside the machinery which has been provided by Section 27 and to come to the Court and ask that the Court should deal with it without having had the matter dealt with, as provided by the Act, by the Income-tax Authorities. It appears to me that on repealing the proviso in the old Section, the Legislature has expressly limited the manner in which the appeals may be allowed against decisions under Section 23 or Section 37, and by inserting the words applicable to Section 23 or Section 27 with the word 'amount', they have definitely intended that the assessee's right of appeal under Section 30 should be limited as regards those Sections to the quantum of assessment or tax.

The learned Judges proceeded further to deal with the powers of the Appellate Assistant Comissioner and observe:

Section 31 then provides that in the case of an order refusing to make a fresh assessment under Section 27, the Appellate Assistant Commissioner may confirm such an order or cancel it and direct the Income-tax Officer to make a fresh assessment. Section 31 supports the contention that the Appellate Assistant Commissioner should deal with orders which had been made under Section 27 specifically. Sub-sections (a) and (b) of Section 31(3) are not appropriate to a case such as that which is now under consideration which has been specifically provided for in Sub-section (c).

The principal point determined in the above decision is that the validity of a best of judgment assessment could be canvassed only by means of an application under Section 27, and that it would not be open to the assessee in an appeal against the quantum of assessment or of tax, to challenge the validity of the proceedings that led to a best of judgment assessment.

8. The question was specifically considered in Sir Padumpat Singhania v. Commissioner of Income-tax : [1953]24ITR141(All) That was a case where for failure to comply with the notice issued under Section 22(4), a best of judgment assessment was made. The assessee did not move in the matter under Section 27 of the Act but filed an appeal to the Appellate Assistant Commissioner against the order of assessment under Section 23(4). It was argued before the learned Judges that even in a quantum appeal, the assessee had the right to urge before the appellate authority that there were good reasons for his not having been able to comply with the notice under Section 22(4). This argument was repelled. The learned Judges observe:

In some cases, it might be that all the facts were already before the Income-tax Officer and it was not likely that he would change his mind. But, in the majority of cases, it would be useful for an assessee to have the opportunity to place the facts afresh so that if the Income-tax Officer was not prepared to change his mind, the Appellate Assistant Commissioner or the Tribunal might be able in the light of the facts to consider whether there was justification for non-compliance with the notice under Section 22(4). Before the amendment of Section 30 of the Income-tax Act, the position was that the order of the Income-tax Officer making the assessment under Section 23(4) was final, but if the assessee had made an application under Section 27 that he should not have been assessed under Section 23(4) and the Income-tax Officer had rejected that application, he could file an appeal beofore the Appellate Assistant Commissioner, go up in appeal to the Appellate Tribunal and even ask for a reference to this Court if a question of law arose. After the amendment of Section 30, the assessee has now got two rights: (1) attack the validity of an assessment under Section 23(4) in the same way as before, that is, by an application under Section 27 appeal to the Appellate Assistant Commissioner and further appeal to the Appellate Tribunal, or (2) if he did not challenge his liability to be assessed under Section 23(4), he could appeal against the quantum of tax imposed to the Appellate Assistant Commissioner and the Tribunal.

The conclusion reached was accordingly that in a quantum appeal, it was not open to the Appellate Assistant Commissioner to examine the grounds upon which a best judgment assessment under Section 23 (4) came to be made.

9. The matter has been viewed from a different angle by the Bombay High Court in Girdhar Javar & Co. v. Commissioner of Income-tax I.L.R. (1953) Bom. 390 : 55 Bom. L.R. that was a case where a best of judgment assessment had been made for failure to submit the return and to produce accounts. But in that case there had been an application under Section 27 which had been dismissed by the Income-tax Officer. The assessee preferred two appeals, one against the order dismissing his application under Section 27 and the other with regard to the quantum assessed under Section 23(4). Though the Appellate Assistant Commissioner dismissed the first of the above appeals and confirmed the validity of the best of judgment assessment, in the quantum appeal he directed the Income-tax Officer to examine the books properly and make a report. After considering the remand report, he dismissed that appeal. On further appeal, the Appellate Tribunal took the view that the Appellate Assistant Commissioner was not competent in law to direct the Income-tax Officer to examine the assessee's books and therefore they refused to look into the report. On a reference the learned Judges upheld the view of the Tribunal that the order of remand was not in accordance with law and therefore there was no obligation upon the Tribunal to consider the report made on that order. Though the final conclusion was as stated above, the observations made by the learned Judges are of some importance as indicating the reasons for limiting the scope of the jurisdiction of the Appellate Assistant Commissioner to make a remand, and in particular the limitations upon such an order of remand. They observed:

Now, the power of the Appellate Assistant Commissioner arises under Section 31(2) and that power is that before disposing of any appeal he may make such further enquiry as he thinks fit or cause further enquiry to be made by the Income-tax Officer. It is contended on behalf of the assessees that the Legislature has not thought fit to put any limitation upon the power of the Appellate Assistant Commissioner to make or cause to be made any further enquiry and if in order to dispose of an appeal against a best of judgment assessment, the Appellate Assistant Commissioner thinks it necessary to have the books of account of the assessees examined, he has the power to do so and his jurisdiction cannot be challenged. On the other hand, it is contended and with considerable force, that conferring such power upon the Appellate Assistant Commissioner would really be stultifying the whole scheme of the Act and bypassing the provisions of Section 27 of the Act. It is pointed out that in this particular case, the assessees did not produce the books of account in answer to the notice served upon them under Section 22(4). They made an application under Section 27 to cancel the assessment under Section 23(4) and to be given an opportunity to produce their books. That application was dismissed by the Income-tax Officer and the order was confirmed in appeal and no further appeal was preferred to the Appellate Tribunal. Ex hypothesi therefore, the Income-tax Officer must make the assessment under Section 23(4) in the absence of the books of the assesees. The books cannot and should not be before him because they were not produced at the proper time and the attempt of the assessees to produce them later has been rejected. It is therefore pointed out that the Appellate Assistant Commissioner cannot direct the Income-tax Officer to do what in law he could not do and should not do....

Under Section 23(4) the assessment is according to the judgment of the Income-tax Officer, and even though the book of account may be looked at by him under the direction of the Appellate Assistant Commissioner, they would be looked at for an entirely different purpose from the purpose for which he would look at them if he was proceeding to assess the assessees under Section 23(3), Therefore, if the Appellate Assistant Commissioner directed the Income-tax Officer to look at the books of account, it can only be for the purpose of arriving at his best judgment. It is true that the further enquiry contemplated by Section 31(2) must bean enquiry for the purpose of disposing of the appeal and the question in appeal before the Appellate Assistant Commissioner must be whether the judgment of the Income-tax Officer was properly exercised under Section 23(4) and whether the quantum arrived at by the Income-tax Officer was properly and fairly arrived at. But can it be said that under no circumstances is the Appellate Assistant Commissioner permitted to direct the Income-tax Officer to look a the books of account which books have not been and cannot be produced for the purpose of ordinary assessment? We fully appreciate the point of view put forward on behalf of the Departmentt that the assessees should not be allowed to sit on the fence, take the chance of a best of judgment assessment without producing the books and if they find that the best of judgment assessment is not in their favour, and the production of their books of account, which they have suppressed, may result in an assessment more favourable to them, then ask for an examination of the books. We also appreciate the point of view of the Department that the weight to be attached to the books of account which have not been produced at the proper time must always be very slight. But what we are considering in this reference is not the right of the assessees to produce their books but it is the power and jurisdiction of the Appellate Assistant Commissioner to direct the Income-tax Officer to look into these books of account. The right that the assessee had to produce their books of account was taken away when their appeal under Section 27 was dismissed. They could not insist on the assessment being made on the basis of their books of account. But the question of jurisdiction and the power of the Appellate Assistant Commissioner is entirely a different one. Even though in practice it may be in extremely rare cases that the Appellate Assistant Commissioner would direct the Income-tax Officer to look into the books of account of the assessee which the assessee had failed to produce, however rare the cases may be, we have got to answer the question of law on the provisions of the statute and not from the point of its practical application. In this particular case with which we are dealing, there can be no doubt that the order of the Appellate Assistant Commissioner is entirely erroneous. He points out that the order under Section 27 clearly shows that the default committed by the assessee was clear and complete and then he expresses the opinion that as the assessees are not habitual defaulters and regret the default which has been committed and give an oral assurance that in future all the notices will be complied with regularly and properly, he wishes to give the assessees one more opportunity to produce their books of account. Therefore, in this particular case, the Appellate Assistant Commissioner has not made his order of remand in order to assist him in deciding the quantum or in deciding whether the judgment exercised by the Income-tax Officer was a proper judgment. The order of remand made by the Appellate Assistant Commissioner is solely based on the ground that a further opportunity should be given to the assesses to produce their books of account. In other words, the Appellate Assistant Commissioner, with respect to him, has really stultified his own previous order. Having held that there was no sufficient cause for not producing the books of account and having dismissed their application under Section 27, he proceeds to give to the assessees an opportunity to produce those very books of account. In effect, he is really making an order under Section 27 and not an order under Section 31(2).

10. With respect we may say that the above passage clearly indicates the scope of the jurisdiction of the Appellate Assistant Commissioner. It certainly does not support the contention of the Department that under no circumstances is the Appellate Assistant Commissioner, competent to make an order of remand and to direct the scrutiny of the account books though such account books might not have been produced earlier. The learned Judges point out that even in cases of best of judgment assessment, it is not improper to look into the books of account of the assessee in order that the judgment of the Assessing Officer may be properly directed and that a capricious and unjustified assessment should not be made. To that extent the decision is in favour of the assessee. But what happened in that particular case was that the assessee had moved by way of Section 27 and had appealed against the order of the refusal of the Income-tax Officer to cancel the assessment under that Section. In that appeal, the Appellate Assistant Commissioner took the view that the assessee had not shown any satisfactory reasons for the non-compliance with the notices and that therefore the best of judgment assessment made on the materials before the Income-tax Officer was validly made. Having come to that conclusion in appeal from an order under Section 27, it was, to say the least, inconsistent on the part of the Appellate Assistant Commissioner to come to a contrary view in the appeal against the quantum of assessment, where he thought fit to afford an opportunity to the assessees to produce their accounts and to direct the Income-tax Officer to make an assessment on the basis of those accounts, that is to say, on assessment not under Section 23(4) but under Section 23(3). It was under those peculiar circumstances that the learned Judges of the Bombay High Court had to consider the particular orders made by the Appellate Assistant Commissioner in the two appeals before him. But the general principle they lay down is nevertheless that the Appellate Assistant Commissioner has jurisdiction to make an order of remand under Section 31(2) and that he can in such an event direct the examination of the books of account even in the case of a best of judgment assessment, but only for the purpose of enabling a proper best of judgment assessment being made. That the Appellate Assistant Commissioner has jurisdiction to make a remand limited in that manner is well established by this decision.

11. We referred earlier to the fact that in a quantum appeal against the best of judgment assessment it was not open to the assessee to question the validity of the assessment under Section 23(4), which could be canvasst d only by an application under Section 27 and in an appeal arising therefrom. Now, it is obvious that when a best of judgment assessment is made for non-compliance with the notices under Section 22(2) or Section 22(4) or Section 23(2), the assessee has the right to move the Income-tax Officer and satisfy him that he was prevented by sufficient cause from complying with the notices, or that he had no reasonable opportunity to comply with those notices. Added thereto, he could also raise the plea that the notices themselves were invalid for one or more reasons. For instance, the special notice under Section 22(2) might have been issued beyond the year of assessment or the assessee might not have been given the statutory time to comply with the conditions of the notice. These defects in the notices issued to the assessee would go to the root of the matter and might afford a proper defence to the assessee in an application under Section 27. As noticed in Naba Kumar Singh Dudhuria v. Commissioner of Income-tax : AIR1945Cal104 in so far as the quantum appeal is concerned, the right of the assessee is limited specifically to objections to the amount of income assessed or the amount of tax determined. The learned Judges in that case point out that the language in which this part of Section 30 is embodied clearly indicates that it is not open to the assessee to raise grounds canvassing the validity of the proceedings that led to the best of judgment assessment or such grounds as would be germane to an application under Section 27. It is true that the wording of Section 31 defining the powers of the Appellate Assistant Commissioner in dealing with an appeal before him is not limited in any manner. But nevertheless, Section 31 cannot be read divorced from Section 30, which creates the right of appeal. An appeal is a creature of statute and if one is not provided, there can be no inherent right of appeal in an assessee. But, at the same time, we cannot imagine that the Legislature has chosen to give not one but two appeals in respect of the same subject-matter to an assessee. That was undoubtedly at the back of the minds of the learned Judges who decided Girdhar Javar and Co. v. Commissioner of Income-tax : [1953]24ITR540(Bom) when they pointed out the scope of an appeal arising from Section 27 and an appeal directed against the assessment under Section 23(4). Though a reading of Section 31 defining the jurisdiction of the Appellate Assistant Commissioner would appear to give an unfettered right to deal with all matters that would arise in the appeal before him, where the Legislature has dealt with the rights of the assessee under different heads and provided for a different determination of such appeals, the jurisdiction of the Appellate Assistant Commissioner must be limited in the manner so indicated.

12. We may refer to the decision of the Punjab High Court which has apparently taken a somewhat different view. In Brij Mohn Rameshwar Das v. Commissioner of Income-tax I.L.R. (1953) Bom. 390 : 1953 Bom. L.R. 950 : 24 I.T.R. 54 in a quantum appeal against an assessment under Section 23 (4) the Appellate Assistant Commissioner made an order under Section 31 (2) directing the Income-tax Officer to re-compute the income on the basis of a further enquiry as. well as the asscssee's accounts. The view taken was that there being nothing in Section 31 which limits the scope of a further enquiry, there was no bar to the Appellate Assistant Commissioner directing the Income-tax Officer to take into consideration the account books of the assessee for making a re-assessment. The learned Judges were however careful to point out that they expressed no opinion as to the weight, if any, which should be given to the books of account which were not produced in response to the notices under Section 22(4). It must be mentioned that in that case there had been an application under Section 27 of the Act to the Income-tax Officer and on his refusal to cancel the assessment, there was an appeal against that order to the Appellate Assistant Commissioner. That appeal was dismissed by the Appellate Assistant Commissioner. But nevertheless, in the quantum appeal, the Appellate Assistant Commissioner thought that there was no material on record, to justify the best of judgment assessment at the particular figure adopted by the Income-tax Officer. That was how the order of remand came to be made. It is not necessary for us to examine this decision further, for this does not really run counter to the earlier Bombay decision that we have referred to wherein also the right of the Appellate Assistant Commissioner to direct an examination of the accounts was conceded to a limited extent, viz., to the extent necessary to satisfy that the best of judgment assessment was not a capricious one. Though the learned Judges of the Punjab High Court did not express it in those words, it is obvious that they approved of that reason as the one that underlay the order of remand made by the Appellate Assistant Commissioner.

13. In the light of the above discussion, we proceed to answer the questions. The first question is whether it is open to the assessee to raise the question of non-liability to be assessed when such a contention had not been taken before the Income-tax Officer. We can find nothing in any of the relevant provisions of the Act which places any fetter upon the right of the assessee to deny his liability to be assessed at all (as distinct from his liability to be assessed under Section 23(4) in the appeal before the Appellate Assistant Commissioner). The powers of the Appellate Assistant Commissioner are far greater than those of the Tribunal. The entire assessment is before him. Though in a case to which Section 27 might be attracted, his jurisdiction might be limited somewhat, we can see nothing in Section 31 or in any other provision which denies the right of the assessee to question his liability to be assessed. The mere fact that that ground was not taken before the Income-tax Officer is not sufficient to our minds to deny this right to the assessee. Indeed Section 30 specially provides for an appeal on this ground. Under Sub-section (2-A) of Section 31, the Appellate Assistant Commissioner may allow an appellant to go into any ground of appeal not specified in the grounds of appeal. There is nothing to suggest that a ground of appeal taken by the appellant becomes incompetent solely for the reason that that particular ground was not advanced before the Income-tax Officer at the time of the assessment. We accordingly answer this question in the affirmative and in favour of the assessee. We have already indicated that the question of non-liability to be assessed, must be based on grounds other than those on which non-liability to best of judgment assessment can be raised.

14. Question 2 is also answered in the affirmative. That the Appellate Assistant Commissioner has a power to pass a remand order under Section 31(2) is beyond dispute. But the extent to which that power can be used in a quantum appeal arising from an order under Section 23(4) has been indicated above.

15. Question 3 is of a general nature. It arises on the following facts When the matter, that is, the quantum appeal, came before the Appellate Assistant Commissioner, he made an order of remand under Section 31(2). His directions were these:

I find from a perusal of the assessment order and the records that there was no proper basis for the high assessments adopted and that the Income-tax Officer was merely guided by the income estimated in the previous year. As regards the degree of residence, it varied according to the circumstances applicable to each year and just because a person was treated as resident and ordinarily resident in earlier years, it did not prevent him from claiming that the status for the accounting period was different.

On these grounds the case was remanded 'to determine the correct degree of residence and re-compute the income for each business on the basis of statements subsequently filed as well as his accounts.' Surprisingly enough, the Income-tax Officer to whom the remand was directed chose to object to the jurisdiction and even the propriety of the order made by the Appellate Assistant Commissioner. Whether the order of the Appellate Assistant Commissioner was or was not proper or was in excess of jurisdiction, it certainly did not lie in the mouth of the subordinate authority, the Income-tax Officer, to question that order. Nevertheless, the Income-tax Officer finally submitted the remand report. When the appeal came on for final hearing, a different Appellate Assistant Commissioner was in charge and he apparently refused to consider the remand report on the ground that the remand was beyond the jurisdiction of his predecessor-in-office. We are firmly of the view that it was not open to the succeeding Appellate Assistant Commissioner to deal with the matter m a manner which was really a function of a superior appellate authority These officers, the Income-tax Officer or even the Appellate Assistant Commissioner have no powers to review their own orders and any final order passed by them is-subject to an appeal to the next higher authority, the Appellate Tribunal. If the order of remand made by the Appellate Assistant Commissioner was in any way erroneous the succeeding Appellate Assistant Commissioner had no jurisdiction to rectify it but should have left it to the Department to take the matter up in appeal to the Appellate Tribunal if it thought fit. We are not called upon to examine whether the Appellate Assistant Commissioner who finally disposed of the appeal, though he might have made observations about the jurisdiction of his predecessor, did or did not deal with the appeal before him within the scope of the powers vested in him under Section 31 of the Act and whether in disposing of the quantum appeal, he confined 'his attention only to determining whether the Income-tax Officer made a proper estimate on the materials before him. For the purpose of answering this question it is not necessary for us to examine that matter. We answer this question by saying that where an Appellate Assistant Commissioner has made an order of remand giving certain directions to the Income-tax Officer, it is not open to the succeeding Appellate Assistant Commissioner, who finally hears the appeal, to question the jurisdiction of his predecessor. He should only carry into effect the order made by his predecessor and leave the matter to be agitated in a superior tribunal if the parties choose to adopt such a course.

16. In the circumstances of the case, we make no order as to costs.


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