COMMISSIONER OF INCOME-TAX; MADRAS versus MTT. AR. S. AR. ARUNACHALAM CHETTIAR

Citation: [1953] 1 S.C.R. 463 · Decided: 22-12-1952 · Supreme Court of India · Bench: MEHR CHAND MAHAJAN · Disposal: Dismissed

Judgment (excerpt)

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 Commissioner-
Maintainability-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 Assist-
ant 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 lncome-
111adtas 
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 com-
liftt. Ar- S. Ar. putation accordingly. 
The Commissioner of Income-tax, being of 
Arun(lchala1n opinion that the Appellate Tribunal had no jurisdiction to enter-
Gheitiar. 
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 Income-
tax 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 Com-
missioner 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 direct-
ing 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 Appeal

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