# COMMISSIONER OF INCOME-TAX~ MADRAS v. MTT. AR. S. AR. ARUNACHALAM CHETTIAR

- **Citation:** [1953] 1 S.C.R. 463
- **Court:** Supreme Court of India
- **Decided:** 1950-01-11
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/commissioner-of-income-tax-madras-v-mtt-ar-s-ar-arunachalam-chettiar-35
- **Pages:** 13

## Headnote

S.C.R.
SUPREME COURT REPORTS
463
was a regular agency established in British India for
1952
the purchase of the entire raw materials required for Angl:;,.,,,0,.
the manufacture abroad and the agent was chosen by Textile co., Ltd.
reason of his skill, reputation and experience in t!:ie
v.
line of trade.
The terms of the agency stated in the Commissioner of
earlier part of this judgment fully establish that
Income-tax,
Messrs. Best & Co. Ltd. were carrying on something
M~•·
almost akin to the business of a managing agency in • Mahajan J.
India of the foreign company and the latter certainly
had a connection with this agency.
We therefore
negative this contention of the learned counsel
as well.
For the reasons given above we uphold the view
taken by the High Court .and dismiss the appeal
with costs:
Appeal dismissed.
Agent for the appellant: P. K. Mukherii.
Agent for the respondent : G. H. Rajadhyaksha.
COMMISSIONER OF INCOME-TAX~ MADRAS
v.
MTT. AR. S. AR. ARUNACHALAM CHETTIAR.
tMEHR CHAND MAHAJAN, DAS and BHAGWATl JJ.]
~
Indian Income-tax Act (XI of 1922), ss. 30, 33, 34, 66 (1) and
1952
Dec. 22.
....
( 2)-0rder of Appellate Tribimal directing Income-tax Officer to allow
certain deductions-Income-tax Officer adding certain other items in
computing income-Appeal to Appellate Assistant CommissionerMaintainability-Order of Appellate Tribunal under inherent
powers directing Income-tax Officer to revise his order-Gornpetency
of reference.
-
By an order dated August 20, 1943, the Appellate Tribunal
directed that certain deductions claimed by the assesses should be
allowed.
The matter came back to the Income-tax Officer and he
made an order on September 26, 1945, but did nop issue any fresh
notice of demand.
The assesses appealed to the Appellate Assistant Commissioner complaining that in his order of September 26,
tbe Income-tax Officer had wron~ly includeil a sum of Rs. 13,000
QQ
464
SUPREME COURT REPORTS
(1953)
1952
as nnassessed foreign income of earlier years.
The A_ppellate
-
Assistant porumissioner held that the order of September 26 was
Comtnissione1· 01 not appealable. The assessee, therefore, inade a miscellaneous
lnco1nc-tax,
ai.plication to the Appellate Tribunal, "'hich held that the lncome111adtas
tax Officer acted wrongly in including the sum of Rs. 13,000 at
v.
that stage and directed the Income-tax Officer to revise his comliftt. Ar- S. Ar. putation accordingly.
The Commissioner of Income-tax, being of
Arun(lchala1n opinion that the Appellate Tribunal had no jurisdiction to enterGheitiar.
tain or make such order on a miscellaneous· application applied for
' a reference to the High Court under s. 66 (1) of the Income-tax
Act. The Trihunal referred certain questions and the High Court
directed the Tribunal to - refer certain other qUestions also but
when the references came on for hearing the High Court held that
the references were incompetent.
The Commissioner of Incometax appealed to the Supreme Court with the leave of the High
Court:
Held, (i) that in carrying out the directions of the Tribunal
and in passing the order of September 26, 1945, the Income-tax
Officer cannot be regarded as having acted under s. 23 or s. 27 of
the Act and no appeal lay from his order under s. 30 (1). The
order made by the Appellate Assistant Commissioner was not
therefore an order under s. 31 (3) and no further appeal lay to the
Appellate Tribunal under s. 33 (1) so as to enable the Tribunal to
make an order under s. 33 (4) and as there was no order under
s. 33 (4), no question of law can be said to arise out of an order
under s. 33 (4) and there can be no valid reference under s. 66 (1)
ors. 66 (2);
(ii) even-assuming that the order of the Income-tax Officer
dated September 26, 1945, was an order under s. 23 ors. 27 and as
such appealable, the order made by the Appellate Assistant Commissioner declining to entertain the appeal was not an order under
any of the sub-sections of s. 31 and no appeal lay therefrom to the
Appell'llte Tribunal

## Text

S.C.R.
SUPREME COURT REPORTS
463
was a regular agency established in British India for
1952
the purchase of the entire raw materials required for Angl:;,.,,,0,.
the manufacture abroad and the agent was chosen by Textile co., Ltd.
reason of his skill, reputation and experience in t!:ie
v.
line of trade.
The terms of the agency stated in the Commissioner of
earlier part of this judgment fully establish that
Income-tax,
Messrs. Best & Co. Ltd. were carrying on something
M~•·
almost akin to the business of a managing agency in • Mahajan J.
India of the foreign company and the latter certainly
had a connection with this agency.
We therefore
negative this contention of the learned counsel
as well.
For the reasons given above we uphold the view
taken by the High Court .and dismiss the appeal
with costs:
Appeal dismissed.
Agent for the appellant: P. K. Mukherii.
Agent for the respondent : G. H. Rajadhyaksha.
COMMISSIONER OF INCOME-TAX~ MADRAS
v.
MTT. AR. S. AR. ARUNACHALAM CHETTIAR.
tMEHR CHAND MAHAJAN, DAS and BHAGWATl JJ.]
~
Indian Income-tax Act (XI of 1922), ss. 30, 33, 34, 66 (1) and
1952
Dec. 22.
....
( 2)-0rder of Appellate Tribimal directing Income-tax Officer to allow
certain deductions-Income-tax Officer adding certain other items in
computing income-Appeal to Appellate Assistant CommissionerMaintainability-Order of Appellate Tribunal under inherent
powers directing Income-tax Officer to revise his order-Gornpetency
of reference.
-
By an order dated August 20, 1943, the Appellate Tribunal
directed that certain deductions claimed by the assesses should be
allowed.
The matter came back to the Income-tax Officer and he
made an order on September 26, 1945, but did nop issue any fresh
notice of demand.
The assesses appealed to the Appellate Assistant Commissioner complaining that in his order of September 26,
tbe Income-tax Officer had wron~ly includeil a sum of Rs. 13,000
QQ
464
SUPREME COURT REPORTS
(1953)
1952
as nnassessed foreign income of earlier years.
The A_ppellate
-
Assistant porumissioner held that the order of September 26 was
Comtnissione1· 01 not appealable. The assessee, therefore, inade a miscellaneous
lnco1nc-tax,
ai.plication to the Appellate Tribunal, "'hich held that the lncome111adtas
tax Officer acted wrongly in including the sum of Rs. 13,000 at
v.
that stage and directed the Income-tax Officer to revise his comliftt. Ar- S. Ar. putation accordingly.
The Commissioner of Income-tax, being of
Arun(lchala1n opinion that the Appellate Tribunal had no jurisdiction to enterGheitiar.
tain or make such order on a miscellaneous· application applied for
' a reference to the High Court under s. 66 (1) of the Income-tax
Act. The Trihunal referred certain questions and the High Court
directed the Tribunal to - refer certain other qUestions also but
when the references came on for hearing the High Court held that
the references were incompetent.
The Commissioner of Incometax appealed to the Supreme Court with the leave of the High
Court:
Held, (i) that in carrying out the directions of the Tribunal
and in passing the order of September 26, 1945, the Income-tax
Officer cannot be regarded as having acted under s. 23 or s. 27 of
the Act and no appeal lay from his order under s. 30 (1). The
order made by the Appellate Assistant Commissioner was not
therefore an order under s. 31 (3) and no further appeal lay to the
Appellate Tribunal under s. 33 (1) so as to enable the Tribunal to
make an order under s. 33 (4) and as there was no order under
s. 33 (4), no question of law can be said to arise out of an order
under s. 33 (4) and there can be no valid reference under s. 66 (1)
ors. 66 (2);
(ii) even-assuming that the order of the Income-tax Officer
dated September 26, 1945, was an order under s. 23 ors. 27 and as
such appealable, the order made by the Appellate Assistant Commissioner declining to entertain the appeal was not an order under
any of the sub-sections of s. 31 and no appeal lay therefrom to the
Appell'llte Tribunal under s. 33 (1) and there could be no order of
the Appellate Tribunal under s. 34 (1). The order of the Appellate
Tribunal correcting the order of the Income-tax Officer and directing that the sum of Rs. 13,541 should not be included cannot be
rega1·ded in any event as an order under s. 33 (4) so as to attract
.the operation of s. 66 (1) or (2).
CIVIL APPELLA1'E JURISDICTION: Civil Appeals
Nos. 10andlO-Aof1952. Appeal from the Judgment
and Order dated 11th January, 1950, of the High
Court of Judicature at Madras in Cases Referred
Nos. 80 of 1946 and 38 of 1948.
M. 0. Setalvad, Attorney-General for India, (G. N.
Jushi and P. A. Mehta, with him) for the appellant.
S,. $.rishnamachariar for ~he respondeut,
(
S.C.R.
SUPREME OOURT REPORTS
465
1962
1952. December 22. The Judgment of the Court
was delivered by
Commissioner of
DAS J.-These two consolidated appeals are diteciInoome-tax,
ed against the judgment and order made on January
_Madras
11, 1950, by the High Court of Judicature at Madras
v.
in References No. 80 of 1946 and No. 38 of 1948 Mtt. Ar. s. Ar.
Arunaohalam
under section 66 of the Indian Income-tax Act whereOhettiar.
by the High Court relying on its earlier decision in
Commissioner of Income-tax, Madras v. R. Rm. M.
Sm. Sevitgan alias Manickavasagam Chettiar(1) .held
that the references were incompetent and accordingly
refused to answer the questions raised therein.
'l'he
facts are shortly as follows.
The respondent who is a Nattukotai Chettiar had
his headquarters at Karaikudi in India and also
carried on his money-lending business at branches at
Maubin, Kualalumpur and Singapore. He also. had
income from properties at Maubin and Singapore.
For the assessment year ~941-42 the Income-tax
Officer calculated the assessee's accrued foreign
income as Rs. 29,403 at Maubin, Rs. 27,731 at Kualalumpur and Rs. 34,584 at Singapore, in all Hs. 91,718.
After deducting out of this amount Rs. 4,500 allowed
under the 3rd proviso to section 4 (1) of the Act, the
Income-tax Officer computed the total assessable
foreign income at Rs. 87,218. Out of the total remittances of Rs. 84,352 the Income-tax Officer allocated
Rs. 7,900 to the accrued income of Maubin and·
Rs. 62,.315 to those of Kualalumpur and Singapore
and the balance of Rs. 14,137 to the taxed income of
earlier years.
'rhe Income-tax Officer disallowed the
claim of the assessee to deductions under several
heads.
On the basis of the total foreign income of
Rs. 67 ,218 and income from other sources the Incometax Officer calculated Rs. 23,266-8-0 to be due by the
assessee on account of income-tax, super-tax and
surcharges thereon and by his assessment order dated
January 31, 1942, made this amount payable on or
before February 25, 1942. 'rhe assessee preferred an
(I) [1948] 16 l.T.R. 59; (1948) r M,L.J. r5n A.I,R, 1948 Mad, pS.
Das J.
•
466
SUPREME COURT REPORTS
[1953]
19s2
appeal to
the Appellate Assistant Commissioner
0
.-.
1against the disallowance of the severa.l items of his
0
~,::~~;:;
0 claim inoiuding the claim for replantation expenses
Madras '
adtounting to $ 498 incurred at Kualalumpur and a
•
'
v.
bad debt of $ 15,472 at Singapore.
The Appellate
Aftt. Ar. s. Ar. Assistant Commissioner by his order dated May 25,
Arunachalam 1942, allowed some of the several objections. but disQheUiar.
DasJ.
allowed the items of replautation expenses and bad
debt .and reduced the assessment to Rs. 22,548.
The
assessee took a further appeal before the Appellate Tribunat against the disallowance of the several claims by
the Appellate Assistant Commissioner including the
two items mentioned above.
'fhe Appellabe Tribunal
by its order dated August 20, 1943, held that the replantation expenses "will be allowed to th.e appellant
as expenses." As regards the bad debt the Tribunal
held that it was permissible and that "the deduction
claimed will, therefore, be allowed."
The result was
that the appeal was partly allowed.
The matter came back before the Income-tax
Officer on September 26, 1945. Deducting Rs. 778 on
account of replantatiim expenses the Kualalumpur
income was reduced to Rs. 26,953 and after deducting
Rs. 24,17 5 on account of the bad debt the Singapore
income came down to Rs. 10,409.
These two reduced
amounts together with Rs. 29,403 being the income
from Maubiu made up the total accrued income of
Rs. 66,765. Out of this amount Rs. 4,500 was.deducted on account of uuremitted profits of Maubin under
the 3rd proviso to section 4(1) of the Act, leaving a
balance of Rs. 62,265.
Out of the remittances the
Income-tax Officer allocated Rs. 7 ,000 towards the
accrued income of Rs. 29,403 from Maubin and
Rs. 37,362 against the total accrued income of Kualalumpur and Singapore. He also allocated Rs. 24,549
as remittances out of assessed.profits of previous years,
leaving a balance of Rs. 13,541.
This amount the
Income-tax Officer considered as· remittances out of
earlier years' unassessed income and held it to be
assesEable
to tax.
After adding Rs. 13,541 to
Rs. 62,265 being the net accrued income of tbe year
•
-
-
8.C.R.
SUPREME COURT REPORTS
467
from Maubin, Kualalumpur and Singapore the In1952
come-ta:c Officer arrived at the total foreign income 0
.-. • . 01
.
.
.
.
ommission,.,r
of Rs. 7 5,806.
On the basis of this foreign mcoipe
Income-tax,
together with other income the Income-tax Officer
Madi·a•
re9alculated the amount of income-tax, super tax and
v.
surcharges thereon at Rs. '2'2,80'2-6-0 and after giving Mtt. Ar. 8· Ar.
Arunachalam.
credit for certain amounts, found Rs. 21,211-14-0
Ohettiar.
as the balance due which by his order dated September '26, 1945, was made payable in equal moiety on or
Da• J.
before September 30, 1947, and March 31, 1948. He,
however, did not issue any notice of demand urtder
section 29 of the Act. .
Being aggrieved by the inclusion of Rs. 13,541 as
the alleged unassessed foreign income of earlier years
remitted to India during the year of account the assessee preferred an appeal before the Appellate Assistant
Commissioner.
The Appellate Assistant Commissioner was not satisfied that the assessee had any right
of appeal under section 30 of the Act for there ha.d
been no assessment under section '23 and no notice of
demand had been served on the assessee under section
29 of the Act. Accordingly the Appellate Assistant
Commissioner by his order dated November 19, 1945,
declined to admit the appeal. He, however, expressed the view that the assessee's remedy might lie in a
miscellaneous application to the Tribunal complaining that the Income-tax Officer had either misconstrued or had not given effect to the order of the
Appellate Tribunal.
'fhe assesses then brought a miscellaneous application to the Appellate Tribunal.
The Appellate
Tribunal held that the finding of the Income-tax
Officer that the sum of Rs. 13,541 was to be assessed
as u.ntaxed profits of earlier years remitted to India
in the accounting year did not arise in the course of
giving effect to the Appellate Tribunal's order and
by its order dated February 20, 1946, cancelled that
finding and directed the Income-tax Officer to revise
tbe computation accordingly.
The last mentioned order having been served on t·he
Commissioner of Income-tax, Madras, on March· 8,
468
SUPREME COURT REPORTS
(1953]
19.;2
1946, the latter on May 1, 1946, made an application
C
.-.
,before·the Appellate 'rribunal under section 66(1) of
omm,,,sstoner oJ
·
Incom•·tax
thii Act and prayed that three quest10us formulated
Madras • by him in his petition should be referred to the High
•.
Court.
The contention was that the Appellate 'rdMtt. Ar. s. Ar. bunal had no jurisdiction in law to entertain, consider
Ar~~=:i::;~m and pass the order which it did on the miscellaneous
application seeing that it was neither an appeal
Das J.
under section 33 of the Income-tax Act nor could
it be regarded as a rectification under section 35
of ·any mistake committed by
the Bench. 'l'he
Appellate Tribunal took the view that although
no specific provision was made in the Act by which it
could give effect to its order or explain any ambiguity
in such an order by a later order in any miscellaneous
application filed by any party, such power, nevertheless, was inherent in the Tribunal. 'rhe Tribunal
accordingly thought that a point of law did arise and
on August 23, 1946, referred the following question
to the High Court, namely:-
"Whether in the facts and circumstances of this
case the order of the Bench dated 20th February,
1946, in the miscellaneous application is an appropriate order and is legally valid and passed within
the jurisdiction and binding on
the Income-tax
Officer."
The Tribunal declined to refer the other questions
formulated by the Commissioμer.
This reference
came to be numbered as Case Referred No. 80 of
1946. It appears that pursuant to an order made by
the High Court on March 30, 1948, on the application of the Commissioner of Income-tax under section 66 (2) of the Act the Tribunal referred the
following question to the High Court:-
"If the answer to the question already referred to
the High Court by the order of the Appellate Tribunal dated \)3rd August, 194.6, is in the affirmative,
whether, in the circumstances and on the facts of the
case, the recomputation made by the Income-tax
Officer pursuant to the decision of the Appellate
•
S.C.R.
SUPREME COURT REPORTS
469
Tribunal in R.A.A. No. 53 (Madras) of 1942-43 was
1962
valid and correct."
Oommissionsr of
The Appellate Tribunal made this further reference
Income-tarx,
on July 19, 1948, which came to be numbered "as
1'fadras
Case Referred No. 38 of 1948.
v.
f
'd
Mtt. Ar. s. Ar.
The two referred cases came up
or cons1 eration Arunachalam
before a Bench of the Madras High Court and it was
Ol.-ttiar.
held that the reference
under section 66(1) was
incompetent in view of the earlier decision of that
Court mentioned above which they felt to be binding
on them and accordingly the Bench declined to
answer the questions.
The Commissioner of Incometax thereafter applied for and obtained leave to
appeal· to this Court from the decisions in both the
references and obtained such leave on his undertaking
to pay the costs of the assessee in any event. The
two appeals were thereafter consolidated and have
come up before us for final disposal.
Section 66-A (2) gives to the aggrieved party a right
of appeal to this Court from any judgment of the
High Court delivered on a reference made under
section 66 in any case which the High Court certifies
to be a fit one for appeal to this Court.
Section 66
(5) provides that the High Court upon the hearing of
any such case referred to it under section 66(1) and
(2) shall decide the questions ~f law raised thereby
and shall deliver its judgment thereon containing the
grounds on which such decision is founded.
During
the opening of the case by the learned AttorneyGeneral a question arose as to whe(iher the simple
refusal of the High Court to hear the case on the
ground that the reference was incompetent was a
• decision and judgment such as is contemplated by
section 66(5) of the Act from which alone a right of
appeal to this Court is given.
While maintaining
that the decision and judgment of the Madras High
Court fell within the meaning of section 66(5) the
learned Attorney-General for greater safety asked
that the appeal may be treated as one on special leave
granted by this Court under article 136 of the Consti- ·
yl.ltion,
't'he le~rnl)d Advocaite
apl?earin~ for thl;l
Das J,
470
SUPREME COURT REPORTS·
[1953]
1952
assess.ee-respondent did not object to this prayer and
0
-. -
1accordingly we gave leave to the appellant under
01nmissioner o
.
.
Income-ta•,
article 136 aud treated this appeal as one filed purMadras
st!aut to such leave. In the circumstances it is not
v.
necessary for us to express any opinion on the appealMtt. Ar. s. Ar. ability of the order of the High Court under section
Arunachalam 66-A of the Act.
Chettiar.
The learned Attorney-General contends that the
Das J,
decision relied on by the High Conrt has no application to the facts of the present case. In that case the
Tribunal by its order dated Jnly 11, 1944, allowed
an appeal from the Appellate Assistant Commissioner
and cancelled the assessment which it held to be
illegal. This order was served on the Commissioner
shortly thereafter. On October 5, 1944, an application was made to the Tribunal by the Income-tax
Officer under section 35 to correct a statement contained in the statement of facts in the order.
More
than 60 days after the date of the service on him of
the order of July 11, 1944, to wit on October 7,
1944, the Commissioner made an application under
section 66 (1) of the Act requiring the Tribunal to
refer to the High Court the question as to the correctness of its decision embodied in the order of July
11, 1944. Both the applications were disposed of
on the same day, namely, January 17, 1945, when
the application for rectification was granted and a
case was stated for the opinion of the Court as prayed.
Section 66 (1) requires the application to be made
within 60 days of the date on which the applicant is
served with notice of an order under sub-section ( 4)
of section 33. It was held that the granting of an
application for rectification under section 35 and.
correcting the error in the order was not an order
under section 33 ( 4) and, therefore, was not one in
respect of which section 66 (1) permitted a case to be
stated. It was. further held that if the Appellate
Tribunal improperly or incorrectly made a reference
in violation of the provisions of the statute, the
High Court was capable of entertaining an objection
to the statement of the c11,se 11,11d that, if it came to th~
-
S.C.R.
SUPREME COURT REPORTS
471
conclusion that the case should not have been stated,
1952
the High Court was not compelled to express an 0
.-.
f
, .
,
omnz.issioner o
opm10n upon the quest10n referred. In the crtse
Income-taro,
before us there is no question that the present appliMadras
cation was not made within time, but the contention
v.
is that section 66 (1) only contemplates an applicaMtt. Ar. s. Ar.
· ·
f Arunochalam
tion for a reference of a question of law arisrng out o
Chettiar.
"such order" which clearly means an order made
under section 33( 4), and, therefore, if there is no valid
Das J.
order under that section no question of law can be
said to arise out of "such order" and consequently the
Appellate Tribunal can have no jurisdiction to make
any reference to the High Court under section 66(1).
Section 66 (2) provides that if on any application
being made under sub-section ( 1) the Appellate Tribunal refuses to state the case on the ground that no
question of law arises, t.he assessee or the Commissioner may, within the time specified therein, apply to
the High Court and th-a High Court may, if it is not
satisfied of the correctness of the decision of the
Appellate Tribunal, require the Appellate Tribunal to
state the case and to refer it.
The jurisdiction given
to the High Court under this sub-section· is condi-
. tional on an application under sub-section (1) being
refused by the Appellate Tribunal.
This clearly presupposes that the application under sub-section (1)
was otherwise a valid application.
If, therefore, an
application under sub-section (1) was notwell-founded in that there was no order which could properly be
said to be an order under sub-section (4) of section 33
then the refusal of the Appellate Tribunal to state a
case on such misconceived application on the ground
that no question of law arises will not authorise the
High Court, on an application under sub-section (2)
of section 66, to direct the Tribunal to state a case.
The jurisdiction of the Tribunal and of the High
Court is conditional on there being an order by the
Appellate Tribunal which may be said to be one under
section 33 (4) and a question of law arising out of
such an order.
The only question for our consideration, therefore, is whether in this case any questioq
9J
47'2
SUPREME COURT REPORTS
[1953]
1952
of law arose out of an order which can properly
Cammissio"er of b~ said to hav~ been made bl'. the Appellate 'fribunal
Incom.Hax,
under sub-sect10n (4) of section 33, for if it did not,
Madras
then the Appellate Tribunal would have no jurisdicv.
ti6n under sub-section (1) of section 66 to refer a case,
Mtt. Ar. s. Ar. nor would the High Court have jurisdiction under
'Arunachalani
)
Ohettrar.
sub-section (2 of that section to direct the 'rribunal
to do so.
Das J.
It was at one stage suggested by the learned AttorneyGeneral that we should in the first instance remit
the matter to the High Court for their decision on
this question but as the question is_ one of law depending on the construction of the relevant sections of
the Act it will save time if it is decided by us here and
now. It is not disputed that we have the power, on
the hearing of this appeal, to decide this question.
It will be recalled that when on 19th November,
1945, the Appellate Assistant _Commissioner declined
to admit the appeal, the ass@ssee did not prefer any
appeal but only made a miscellaneous application
before the Appellate Tribunl),\. There is no provision
in the Ac.t permitting such an application.
Indeed,
in the statement of the -case the Appellate Tribunal
states that
in entertaining that application and·
correcting the error of the Income-tax Officer it acted
in exercise of what it regarded as its inherent powers.
There being no appeal unde1· section 33 (1) and the
order having been made in exercise of its supposed
inherent jurisdiction, the order cannot possibly be
regarded as one under section 33 (4) and there being
• no order under section 33 (4) there could be no
reference under section 66 (1) or (2) and the appellate Court properly refused to entertain it.
The learned Attorney-Genera\ submits that this
Court should not take such a narrow and technical
view but should treat that miscellaneous app·lication
as really an appeal under section 33.
Turning now
to section 33 we find that any assessee objecting to
an order, passed by an Appellate Assistant Commissioner under section '28 or section 31 may appeal to
the Appellate Tribm~al within j;he time specifieq iq
1
S.C.R.
SUPREME COURT REPORTS
473
sub-section (1) which time, however, may be extend- ·
i 95u
ed by the Tribunal under sub-section ('2A).
Under 0
.-.
b
.
(4)
h
A
ll
'r .b
l .
.
ommisswner o,
su -sect10n
t e
ppe ate
n una is gnrtln
Inaorne-tax,
power, after giving both parties to the appeal an
Madras
opportunity to be heard, to pass such order thereon
v.
as it thinks fit.
It is thus clear that tpe Appellate Mtt. Ar. s. Ar.
Tribunal can make an order under section 33 ( 4) only
Ar~;,:~~=~~"'
on an appeal from an order·passed by the Appellate
Assistant Commissioner under section '28 or section
Das J.
31.
If, therefore, there is no order which may
properly be said to have been made by the Appellate
Assistant Commissioner under section '28 or section 31
then there can bo no appeal under section 33 (1) and
consequently there can be no order under section 33
( 4).
Section '28 is not relevant for our present pur·
pose. Section 30 provides for filing of appeals against
assessments made under the Act.
Sub-section (1) of
that section prescribes the different decisions against
which an appeal will lie.
Sub-section ('2) prescribes
the time within which the app~al is to be filed. Sub-
.section (3) prescribes the form in which the appeal
is to be made.
'rhen comes section 31 which gives
power to the Appellate Assistant Commissioner to
hear and dispose of such appeal.
Sub-section (3) of
section 31 empowers the Appellate Assistant Commissioner in disposing of an appeal under section 30
to make one or other order under one or other of the
several clauses of that sub-section. It is, therefore,
clear that in order that the Appellate Assistant
Commissioner may exercise his jurisdiction and make
an order under section 31, there must be an appeal as
contemplated by section 30.
The learned AttorneyGeneral only relies on the opening part of sub-section (1) of section 30 and contends that the appeal
before the Appellate Assistant Commissioner was with
respect to the amount of income assessed under
section '23 or section 27. It will be recalled that the
Appellate Tribunal held that the two sums claimed
by the assessee would be allowed to him and concluded by saying that the appeal was partly allowed.
The
power of ~he Appellate Tribunf\l under se9tion 33(4)
47'1
SUPREME COURT REPORTS
[1953)
195•
is indeed wide, for on an appeal properly before
C
.-.
1it, it can make such order as it thinks fit.
Therefore,
omni-issi.o 1Mr o
b
A
.
.
.
Income-taro
tl:fe order made
y the
ppellate Tribunal 1ll thrn
Madras • case on August 20, 1943, must be read and construed
v.
as a direction to the Income·tax Officer to carry out
Mtt. Ar. s. Ar. the directiol)s by allowing the two deductions in quesArunachalam tion.
When the matter again came before the
Chettiar.
j
Income-tax Officer his function was only to carry out
Das J.
the order of the Appellate Tribunal. He could not
otherwise reopen the assessment already made by
him under section 23.
Therefore, in carrying out
the directions of the Tribunal and in doing wh:it he
did on September 26, 1945, the °Income-tax Officer
cannot be regarded as having acted under section 23
or section 27 of the Act and that being the position
no appeal lay from that order of the Income-tax
Officer under section 30 (1) of the Act.
The result
of it was that there was no proper appeal before the
Appellate Assistant Commissioner such as is contemplated by section 30 (1) and, therefore, the order
made by the Appellate Assistant Commissioner cannot be regarded as an order made by him under section 31 (3), for an order under section 31 (3) can
. only be made in disposing of an appeal properly
filed under section 30, and consequently no further
appeal lay to the Appellate Tribunal under sectio~
33 (1) so as to"enable the Appellate Tribunal to make
an order under sub-section (4) of that section. In
the premises, there being no order which may properly be said to have been made under section 33 (4),
no question of law can be said to arise out of an
order made under section 33 ( 4) and comequently
there can be no valid reference under section 66, sub·
section ( 1) or sub-section (2).
If, therefore, the
reference was incompetent for want of jurisdiction
both under section 66 (1) or section 66 (2) surely the
High Court could decline to entertain it as it did.
Even if the order dated September 26, 1945, made.
by the Income-tax Officer after the matter came back
to him to give effect to the decisions of the Appellate
Tribunal be regarded as an orqer made by him unqer
~
..
'
•
S.O.R.
SUPREME COURT REPORTS
475
section 23 or section 27 and as such appealable
I9o2
under section 30 (1) then the order made by the 0
.-.
/
Appellate Assistant Commissioner on November 19,
0
7,:;::~;:;·
0
1945, declining to admit the appeal clearly amountMadras ,
ed to a refusal on his part to exercise the jurisdiction
v.
vested in him by law.
An order thus founded on an Mtt. Ar. s. Ar.
error as to his J·urisdiction may conceivably be COrArunachalam
Chettiar.
rected by appropriate proceedings but it cannot
certainly be regarded as such an order as is contemDas J.
plated by any of the sub-sections of section 31. Such
an order not coming within the purview of section
28 or section 31, no appeal lay therefrom to the
Appellate 'rribunal under section 33 (1) and if no
such appeal properly came before the Appellate
'l'ribunal it could not properly make an order under
section 33 ( 4) and if there was no order under section 33 ( 4) there could be no reference under section
6H, sub-section (1) or sub-section (2).
It follows,
therefore, that the order of the Appellate Tribunal
correcting the order of the Income-tax Officer directing that the sum of Rs. 13,541 should not be included in the assessment cannot be regarded as an order
passed by the Appellate 'rribunal under section 33
(4) so as to attract the operation of section 66.
The learned Attorney-General urged that having
under section 66 (2) of the Act directed the Appellate Tribunal to state a case the High Court could
not afterwards refuse to answer the question thus
referred to it.
·whether the High Court was so
precluded or not requires no decision on this occasi"on, for even conceding but not deciding that the
High Court was so precluded, this Court, at any
rate, can surely entertain the question of the competency of the reference.
'fhe result, therefore, 1s that we
dismiss. these
appeals with costs.
Appeals dismissed.
Agent for the appellant: G. H. Rajadhyaksha.
Agent for the respondent: M. S. K. Aiyangar.