C.I.T CENTRAL, CALCUTTA versus NATIONAL TAJ TRADERS

Citation: [1980] 2 S.C.R. 268 · Decided: 27-11-1979 · Supreme Court of India · Bench: V.D. TULZAPURKAR

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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C.I.T. CEN1RAL, CALCUITA 
v. 
NATIONAL TAJ 1RADERS 
November 27, 1979 
LV. D. TuLZAPURKAR AND E. S. VENKATARAMIAH, JJ.] 
Income Tax Act, 1922, Section 33B-Constructi'on of section 33B wit# parti-· 
cular bearing on the scope of the appellate powers of the Tribunal under sub-
section 4 thereof and the effect ·of sub-section 2(b) on sub section (4)-... 
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Whether sub section 2(b) of section 33B has the effect of attenuation or turtait~ ,.
ing. the appellate por.;ers of the Tribunal under sub section 4. 
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in respect of the accounting years ending March 31, 1957 and March 195!~ 
respectively on the voluntary returns submitted by the respondent, the Income 
Tax Officer 'E' Ward District TI (1) Calcutta completed the assessment for these 
years (1957-58 and 1958-59) on total incomes of Rs. 7000/- and Rs. 7500/-
respectively, the same having been made in the status of unregistered firm con-
sisting of three partners, namely Asha Devi Vaid, Santosh Devi Vaid and Sugni 
Devi Vaid with equal shares. On August 2, 1962, the Commissioner of Income 
Tax issued notice to show cause why the said assessments should not be can~ 
celled under section 33B of the Act as he felt that the completed ..,._ments 
were erroneous as being prejudicial to the interests of the Revenue and the- In
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come Tax Officer 'E' Ward District TI(l) Calcutta had no territorial juriodictioo 
over the case of the <issessee. The notice was served on the assessee on August 
3, 1962 and the hearing was fixed by the Commissioner for August 6, 1962. 
On the ground that none appeared and there was no application for adjourn~ 
ment, the Commis$ioner passed his order under section 33B ex part• on that 
date. 
By his said order the Commissioner cancelled the assessments made by the 
Income Tax Officer on three grounds (a) that some of the partners were mino;; ~ 
and were not competent to enter into any partnership agreement with the resui't """--
that the status of unregistered firm assigned to the assessee by the Income Tax 
Officer was clearly wrong and as such the assessments deserved to be cancelled; 
(b) that the books of acconnts were unreliable and they were not properly 
examined bY the Income Tax Officer with the result that the assessments made 
were prejudicial to the interests of the revenue and ( c) that the Income Tax 
Officer has no territorial jurisdiction over the case which fell in the jurisdictien 
of Income Tax Officer, District III Calcutta and directed the Income Tax Officer 
having proper jurisdiction to me.kc fresh assessments after examining the records 
of the a.ssessee in accordance with law. 
The appeals preferred to the Appellate Tribunal under section 33B(3) weft!"~ 
accepted. Finding that the Commissioner's order passed at 11.30 A.M. ex parte 
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was had in as much as the notice served upon the assessee permitted flling of 
objections at any time during the course of August 6, 1962 and the objectio11S 
were in fact filed later in the day, the Tribunal remanded the case with the 
direction to dispose it of afresh after giving due opportunity to the respond,eat 
assessee. On a reference to the High Court at the instance of the appellant, the 
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C.I.T. V. NATIONAL TAJ TRl1DERS 
269 
High Court held : (a) the assumption of jurisdiction by the Commissioner under 
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section 33B of. the Income Tax Act was valid in law; (b) the Tribunal acted 
properly in vacating or cancelling the Commissioner's order, but, (c) the Tribu-
nal did not act properly in directing the Commissioner to act under section 
33B(l) because the period of limitation of two years prescribed under section 
33 (2 )(b) for him to act under section 33 B ( 1) had expired. In doing 50, the 
High Court held that the provision of sub section 2(b) was absolute and covered 
even a revisional order of the Commissioner passed in pursuance of a dire<:tion 
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given by any appellate authority. 
Allowing the appeal by Certificate, the Court 
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HELD : 1. Under sub section (1) of section 33B of the Income Tax Act, 
power has been conferred upon the Commissioner to revise Income-Tax Officer's 
orders but the e:tercise of such power is regulated by the two conditions men-
tioaed therein namely, (a) he must consider tpe order sought to be revised to 
be erroneous as being prejudicial to the interests of the revenue and (b) he must 
give an opportunity to the assessee of being heard before revising it. Sub-s. 
(2)(b) prescribes a period 

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