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

CIVIL APPEAL No. 10/1952Supreme Court[1953] 1 S.C.R. 46322 December 1952Bench: 3 JudgesAuthor: MEHR CHAND MAHAJAN, SUDHI RANJAN DAS, NATWARLAL HARILAL BHAGWATI13 pages
AI SummaryDismissed

What were the facts?

The assessee, Mitt. Ar. S. Ar. Arunachalam Chettiar, appealed to the Appellate Assistant Commissioner against an Income-tax Officer's assessment order for the assessment year 1941-42. The Appellate Assistant Commissioner partly allowed the appeal. The assessee then appealed to the Appellate Tribunal, which directed the Income-tax Officer to allow certain deductions, specifically replantation expenses and a bad debt. When the matter returned to the Income-tax Officer, he made an order on September 26, 1945, which the assessee considered incorrect as it included Rs. 13,000 as unassessed foreign income from earlier years. The Appellate Assistant Commissioner held this order was not appealable. The assessee then made a miscellaneous application to the Appellate Tribunal, which directed the Income-tax Officer to revise his computation. The Commissioner of Income-tax appealed to the Supreme Court against the High Court's decision that the references were incompetent.

What did the Supreme Court hold?

The Supreme Court held that the Income-tax Officer's order dated September 26, 1945, was not made under Section 23 or Section 27 of the Act, as he was merely carrying out the directions of the Appellate Tribunal. Therefore, no appeal lay from this order under Section 30(1). Consequently, the order of the Appellate Assistant Commissioner was not an order under Section 31(3), and no further appeal lay to the Appellate Tribunal under Section 33(1). As there was no order under Section 33(4), no question of law could arise from such an order, making the reference under Section 66(1) or 66(2) incompetent. Even if the Income-tax Officer's order was considered appealable, the Appellate Assistant Commissioner's refusal to entertain the appeal was not an order under Section 31, thus precluding an appeal to the Appellate Tribunal and a subsequent reference. The Court dismissed the appeals, upholding the High Court's view that the references were incompetent.

What were the issues?

1. Whether the Income-tax Officer's order dated September 26, 1945, made in carrying out the directions of the Appellate Tribunal, was an order under Section 23 or Section 27 of the Indian Income-tax Act, 1922, making it appealable under Section 30(1). 2. Whether the order of the Appellate Assistant Commissioner declining to entertain the assessee's appeal was an order under any sub-section of Section 31, allowing a further appeal to the Appellate Tribunal under Section 33(1). 3. Whether the order of the Appellate Tribunal correcting the Income-tax Officer's order, directing that a sum of Rs. 13,541 should not be included, could be regarded as an order under Section 33(4) so as to attract the operation of Section 66(1) or 66(2), thereby making the reference to the High Court competent. Assessee's Contentions: The assessee argued that the Income-tax Officer's order was appealable and that the subsequent proceedings were valid. Revenue's Contentions: The Commissioner of Income-tax contended that the Appellate Tribunal had no jurisdiction to entertain the miscellaneous application and make the order it did, rendering the references incompetent.

Which sections of the Income-tax Act were involved?

Section 4(1),Section 23,Section 27,Section 30,Section 30(1),Section 31,Section 31(3),Section 33,Section 33(1),Section 33(4),Section 66,Section 66(1),Section 66(2)

AI-generated summary — verify with the full judgment below

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 Inco

The order continues below.

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