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Commissioner of Income-tax (Central) Vs. Christian Mica Industries Ltd. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKolkata High Court
Decided On
Case NumberIncome-tax Reference No. 321 of 1969
Judge
Reported in[1979]120ITR627(Cal)
ActsIncome Tax Act, 1922 - Sections 23A(1), 23A(8) and 33B(1)
AppellantCommissioner of Income-tax (Central)
RespondentChristian Mica Industries Ltd.
Appellant AdvocateAjit Sengupta and ;Prabir Majumdar, Advs.
Respondent AdvocateNone
Excerpt:
- .....it extends to all orders passed by him if the commissioner considers that such orders are erroneous in so far as they are prejudicial to the interests of the revenue. further, as the commissioner is empowered by section 33b(1) to pass such order as the circumstances of the case may justify, it cannot be said that be had no jurisdiction to pass those orders directing the ito to pass orders afresh under section 23a(1) of the act. moreover, the approval of the iac to drop the proceedings cannot affect the power of the commissioner under section 33b(1) of the act.8. we, accordingly, answer the question in the negative and in favour of the revenue without expressing any opinion on the merits of the case which the tribunal will decide when the matter goes back to it. there will be no order as.....
Judgment:

Deb, J.

1. This is a reference under Section 66(1) of the Indian I.T. Act, 1922. The Tribunal has referred the following question to this court:

' Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the order of the Commissioner of Income-tax made under Section 33B(1) of the Indian Income-tax Act, 1922, was bad in law in so far as it directed the Income-tax Officer to pass a fresh order under Section 23A(1) of the Indian Income-tax Act, 1922 '

2. The statement of the case relates to the assessment years 1955-56 and 1956-57 for which the relevant accounting years are the previous years ending 31st December, 1955, and 31st December, 1956, respectively. The assessee is a company to which Section 23A(1) of the Indian I.T. Act, 1922, applies. In view of the interim dividends declared by the assessee on February 19, 1956, and December 14, 1956, for the assessment years 1955-56 and 1956-57, respectively, the ITO dropped the proceedings under this section initiated by him after obtaining the approval of the IAC.

3. As the assessee actually distributed the dividends after the expiry of 12 months of the close of the relevant accounting periods, the CIT considered that the interim dividends should not have been recognised by the ITO and the orders dropping the proceedings were erroneous in so far as they are prejudicial to the interests of the revenue. Therefore, after giving an opportunity to the assessee of being heard under Section 33B(1) of the Indian I.T. Act, 1922, the Commissioner set aside the orders of the ITO and directed him to pass fresh orders under Section 23A{1) of the Act in accordance with law.

4. The assessee filed appeals. The. Tribunal held that the power of the Commissioner under Section 33 B(1) is solely confined to an order of assessment made by the ITO and that be has no jurisdiction to pass the said orders as the ITO was directed under Section 23A(8) of the Act by the IAC to drop the proceedings. The Tribunal, accordingly, allowed the appeals and set aside the orders of the Commissioner.

5. But, in our opinion, the IAC merely approved the recommendation of the ITO to drop the proceedings and his approval cannot be regarded as an order as contemplated by Section 23A(8) of the Act.

6. Further, Section 33B(1) says that the Commissioner may call for and examine the records of any proceedings under this Act and if he considers that any order passed therein by the ITO is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such enquiry, as he deemed necessary, pass such order thereon as the circumstances of the case justify including an order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment.

7. It Is, therefore, clear from the language of Section 33B(1) that the power of the Commissioner is not confined to an order of assessment passed by the ITO but it extends to all orders passed by him if the Commissioner considers that such orders are erroneous in so far as they are prejudicial to the interests of the revenue. Further, as the Commissioner is empowered by Section 33B(1) to pass such order as the circumstances of the case may justify, it cannot be said that be had no jurisdiction to pass those orders directing the ITO to pass orders afresh under Section 23A(1) of the Act. Moreover, the approval of the IAC to drop the proceedings cannot affect the power of the Commissioner under Section 33B(1) of the Act.

8. We, accordingly, answer the question in the negative and in favour of the revenue without expressing any opinion on the merits of the case which the Tribunal will decide when the matter goes back to it. There will be no order as to costs.

Sudhindra Mohan Guha, J.

9. I agree.


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