TARA DEVI AGGARWAL versus COMMISSIONER OF INCOME-TAX, WEST BENGAL, CALCUTTA

Citation: [1973] 2 S.C.R. 1035 · Decided: 27-11-1972 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Dismissed

Judgment (excerpt)

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1-035 
TARA DEVI AGGARWAL 
v. 
COMMISSIONER OF INCOME-TAX, WEST BENGAL, 
CALCUTTA 
November 27, 1972 
[K. s. HEGDE, P. JAGANMOHAN REDDY AND H. R. KHANNA, JJ.] 
Income-tax Act (11 of 1922) s. 33B.-Power of Commissioner to 
cancel assessn1ent and re.open-'Prejudicial tO the interests of rev~nue', 
scope of. 
Section 33B of the Income-tax Act, 1922, enables the Commissioner 
to call for and examine the record of any proceeding ·under the Act and 
to pass such orders as. he deems necessary, a.s the circumstances of the 
case justify when he considers the order passed erroneous insofar as it 
is prejudicial tO· the interests of the revenue. 
In the present case, the assessee-appellant submitted a return and the 
income-tax officer. though he was not satisfied a.1JOut the various sou~ces 
of the assessee's income, passed an order of assessment. 
The Com~is­
sioner of Income-tax, after notice under s. 33B of the Income-tax A.ct, 
1922, held that inquiries revealed that the assessee neither resided in nor 
carrfcd 01; .ri:rzy business from the address given in the return, that the 
income-tax officer was not justified in accepting the initial capital, the 
sale of ·ornaments, the income from business, the investments etc .. withotit 
any inquiry or evidence whatsoever, and that there were suspicious cir-
cumstances showing connection with the business of the assessee's husbimd. 
In the result, he held that the order of the income-tax officer was erro-
neous and prejudicial to the revenue and directed the income-tax officer 
to make a fresh assessment, after making inquiries with regard to the juris~ 
diction and the business carried on by the :;ssessee, the possession ot 
initial capital, acquisition and sale of ornaments, purchase of plot of land 
and resources, and the money invested in the name o'f the assessee. 
On the question of the jurisdiction of the Commissioner to pass the 
order the Appellate Tribuna1 held in favour of the assessee, arid the High 
Court, on reference, in favour of the Revenue. 
· 
In appeal to this Court, it was contended that the Commissioner had 
no jurisdiction under S. 33B to cancel the assessment made by the income, 
tu. officer inasmuch as it cannot be said that where an B66essee lras been 
assessed to tax it was prejudicial to the interests of· revenue on the ground 
that no assessment could have been made in respect of the income of 
which she made a volunt~J!Y return. 
Dismissing the appeal, 
HELD : Even where an income had not been earned and is not assess-
able, merely because the assessee wants it to be assessed in his or her 
hands in artier to assist someone else who would have been "'5sessed to 
a larger amount, an assessment so made can certainly be erroneous and 
prejudicial to the interests of revenue. If so, the Commissioner, under 
s. 33B, had ample jurisdiction to cancel the assessment and to initiate pro· 
ceedings for assessment under the provisions of the Act against some other 
assessee who, according to the income-tax authorities, is liable for 
the 
income thereof. [1040 H; 1041 A-CJ 
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J.036 
SUPREME COURT REPORTS 
[1973] 2 S.C.R, 
Ra.n1payan' Devi Saraogi v. Commissioner of Income-tax, 81 I.T.R. 84 
followed. 
Commr. of Income-tax v. Rao Thakur Narayan Singh, 56 I.T.R. 234 
explained. 
CIVIL APPELLATE JURISDICTION : 
Civil Appeal No. 2387 
of 1969. 
Appeal by certificate from the judgment and order dated 
May 16, 1969 of the Calcutta High Court in Income-tax Refe-
rence No. 25 of 1966. 
G. C. Sharma, Randhir Chawla, 0. P. Dua, R. P. Soni, S. R. 
Gupta and M. V. Goswami for the appellant. 
P. L Juneja. S. P. Nayar and R. N. S<Jl;hthcy 
for the res-
pondents. 
The Judgment of the Court was delivered by 
JAGANMOHAN REDDY, J.-This is an appeal by certific,ate 
agains1 the judgment of the High Court of Calcutta rendered on 
a reference under sub-s. ( 1) of s.66 of the Indian Income-tax 
Act, 1922 (hereinafter referred to as the 'Act'). The assessee, 
it appears, had filed voluntary returns of income for the assessment 
years 1955-56 to 1959-60 giving her address as 5/ A Bysack 
Street, Calcutta which was then within the jurisdiction of the 
Income-tax Officer, 'J' ward, District I (1) Calcutta. The return 
for 1958-59 was dated 22nd August 1959 while the &SSessments 
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for the other years were antedated. It also appears ft:om 
the 
order sheet that the Income-tax Officer had directed issue 'of 
notice under s.23(2) in respect oi five

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