C.I.T., WEST BENGAL II, CALCUTTA versus M/S. ELECTRO HOUSE

Citation: [1972] 1 S.C.R. 589 · Decided: 02-09-1971 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Case Partly allowed

Judgment (excerpt)

A 
B 
c 
D 
E 
F 
G 
H 
C.I.T., WEST BENGAL II, CALCUTTA 
v. 
M/S. ELECTRO HOUSE 
September 2, 1971 
(K. S. HEGDE AND A. N. GROVER, JJ.J 
589 
Income-tax Act (11 of 1922), s. 338--Whether jurisdiction of Com-
111issio11er depends on issue of proper notice to assessee, 
The Commissioner of Income-taJC found that the orders of the Income-
tax Officer gr.;nting registration to the assessee firm and renewal of regis-
tration for the next year were erroneous and prejudicial to the interests 
of ·revenue. 
He therefore proceeded against the assessee under s. 33B of 
the Incomc~tax Act, 1922, after issuing noti~e to the assessee. 
The High Court, on re'ference, held that the notice was not valid and 
that therefore, the Commissioner had no jurisdiction to proceed with the 
enquiry. 
Allowing the appeal to this Court, 
HELD : Section 33B, unlike s. 34 of the Act does not prescribe any 
notice to be given. 
For the assumption of jurisdiction to proceed under 
ii. 33B a notice is not a condition precedent. The section only requires 
th~ Commissioner to give nn opportunity to the assessee before reaching 
his decision and not before commencing the enquiry. The requirement 
is only a principle of natural justice, and its breach may affect the legality 
of the order, but does not affect the jurisdiction 
of the Commissioner. 
Therefore, the question as to what the notice given 
in the present case 
:-.hould have contained did not arise at all. [592 C-H] 
Gita Devi Aggamal v. 
C.l.T., West Bengal, 76 I.T.R. 
496(8.C.), 
followed. 
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 2376 
to 2379 of 1968 and 1168 to 1171 of 1971. 
Appeals by certificate/special leave from the judgments and 
orders dated May 2, 1968 of the Calcutta High Court in Income-
tax Reference Nos. 63, 112 and 113 of 1965. 
Jagadish Swarup, Solicitor-Genera/, A. N. Kirpal, R. N. Sach-
tlte,v and B. D. Sharma, for the appella1nt (in all the appeals). 
S. T. Desai and D. N. Mukherjee, for the respondent (in all the 
appeals). 
The Judgment of the Court was delivered by 
Hegde, J. Civil Appeals Nos. 1168-1171 of 71 
are by 
'Pccial leave and Civil Appeals Nos. 2376-2379 of 68 are by 
certificate. These appeals arise from the decision of the Calcutta 
High Court in certain tax references. 
In those references the 
High Court was considering the one question referred to it by 
the Tribunal under section 66(1) of the Indian Income-tax Act, 
1922 (in brief 'the Act') and two other questions referred to it 
hy the Tribunal in accordance with the directions given by that 
590 
SUPREME COURT REPORTS 
(1972] 1 S.l'.R. 
Court under section 66(2) of the Act. 
The High Court has 
only an,wered the question referred to it by the Tribunal under 
section 66 ( 1) of the Act and it has not answered the other two 
questions as being unnecessary. 
The question referred under 
section b6(i) .is: 
''Whether on the facts and in the circumstances of 
the case, the notice issued under section 33B of the 
Indian Income-tax Act, 1922 met the requirements of 
the law and whether the Commissioner of Income-tax 
validly exercised jurisdiction under section 33B of the 
Indian Income-tax Act, 1922? 
The facts of the case lie within a narrow compass. 
The 
concerned assessment years are 1959-60 and 1960-61, the cor-
responding accounting years having ended on December 31 of 
each of the years 1958 and 1959. 
The assessee M/s. Electro 
House claimed to be a firm comtitutcd under a deed of partner-
ship dated January 2, 1958. 
The business of that firm was 
started by Baidyanath Gorai sometimes in the year 1949 and 
.up to the assessment year 1958-59 he was assessed as the sok 
proprietor thereof. 
On January 2, 19 5 8 he purported to enter 
into a partnership with his mother-in-law and son-in-law. Under 
that partnership he had 40% share and his mother-in-law and 
son-in-law had 30% share each in the profits and losses of the 
firm. 
The Income-tax Officer accorded registration of the part-
nership in question under section 26 A of the Act for the two 
assessment years with which we are concerned in these appeals. 
The Commissioner of Income-tax, West Bengal, however appears 
to have found on an examination of the records that the orders 
·Of the Income-tax Officer granting registration to the asscssec 
firm for the assessment year 1959-60 and renewal of registration 
for the assessment year 1960-61 were erroneous and prejudicial 
to the interests of the revenue. 
He therefore proceeded against 

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