M.C. DESAI C.J. - The Income-tax Appellate Tribunal (Delhi Bench) has, at the assessees instance, submitted this statement of the case inviting this court to answer the following question.
"Whether, in the circumstances of this case, the Commissioner of the Income-tax could lawfully revise the order of the Income-tax Officer with respect to the assessment year 1946-47, that is to say, for a period prior too the coming into force of section 33B of the Income-tax Act, by virtue of his powers under sub-section (1) of that section ?"
The brief facts are that for the assessment year 1946-47, the Income-tax Officer passed an assessment order on March 29, 1951. On March 27, 1953, the Commissioner of Income-tax revised it in exercise of the jurisdiction conferred upon him by section 33B of the Income-tax Act. Section 33B was added with effect from March 30, 1948, by section 7 of the Income-tax and Businesses Profits Tax (Amendment) Act, No. 48 of 1948. Section 1(2) of the Amending Act laid down that :
"Sections 3 to 12 shall be deemed to have come into force on the 30th day of March, 1948, and the amendment made in the Indian Income-tax Act, 1922 (XI of 1922), by section 2 shall be deemed to be operative so as to apply in relation to all assessments subsequent to the assessment for the year ending on the 31st day of March, 1948."
The contention advanced by Shri S. N. Misra for the assessee is that section 33B did not confer upon the Commissioner the power too revise the assessment order though made after March 30, 1948, because it was for the assessment year 1946-47, which had expired before March 30, 1948. What was meant was that section 33B was to be given retrospective effect only to this extent that a Commissioner could revise an order passed by an Income-tax Officer in respect of an assessment year which ended after March 30, 1948, even though it might have ended before September 8, 1948, on which date the Amending Act received the assent of the Governor-General.
All that is laid down in section 33B is that :
"The Commissioner may call for an examine the record of any proceeding under this Act and if he considers that any order passed therein ......... is erroneous....... he may,...... pass such order threon as the circumstances of the case justify,....."
This provision is subject to the limitation that he cannot revise an order after the expiry of two years from its date. In the instant case we are concerned with an order which was made by the Income-tax Officer after section 33B was placed on the statute book. The question, whether the power conferred by it can be exercised in respect of an order made by an Income-tax Officer prior to March 30, 1948, does not arise. As the Commissioner exercised the power in respect of the order made after March 30, 1948, it cannot be said that by doing so he has given retrospective effect to the provisions of section 33B. There is no reference to any assessment year in section 33B and, therefore, it cannot be contended that it is being give retrospetive effect when the power conferred by it is exercised in relation to an order made with respect to an assessment year which ended prior to March 30, 1948. A provision is said to be given retrospective effect when it is applied to a past event. The only event that had happened before section 33B came into force was the expiry of the assessment year but since there is no reference in the section to the expiry of an assessment year (or to even an assessment year), it cannot be said that exercising the power conferred by it in respect of an assessment year that had expired before it came into force amounts to exercising it in respect of a past event. On April 30, 1948, the Commissioner became invested with the power to revise any order of the Income-tax Officer; it may be said that he an order made by an Income-tax Officer after March 30, 1948, but it could not be said that he could not revise an order of the Income-tax Officer, though made after March 30, 1948, if it related to an assessment year which, had expired previous to March 30, 1948. There is nothing in the words of section 33B to support such a contention.
It is to be noted that section 1(2) of the Amending Act itself distinguishes between exercise of the power after a certain date generally, i.e., without any restriction and exercise of a power in relation to assessment for assessment years subsequent to the assessment year ending on March 31, 1948. Section 2 of the Amending Act is to be operative only in relation to an assessment subsequent to the assessment for the year ending on March 31, 1948. The legislature has not placed any such restriction with regard to section 7 by which section 33B has been added to the statute. It follows that it did not intend that section 7 could be operative in respect of subsequent assessments for any previous year.
It is also to be noted that the date, March 30, 1948, with effect from which section 33B came into force is not the last date of any assessment year and, therefore, section 1(2) of the Amending Act was not intended to fix the earliest assessment year to which it was to apply.
The view that we take is supported by several decisions. In Income-tax Officer, Companies District I, Calcutta v. Calcutta Discount Co. Ltd. Chakravatti C.J. and Sarkar J. applied the provisions of section 34 of the Act as they stood amended by section 8 of same Amending Act No. 48 of 1948, to assessment years 1942-43, 1943-44, and 1944-45. Chakravartti C.J. observed at page 481 :
"But given that the section came into operation on the 30th March, 1948, in deciding in what manner it would operate, it is pertinent to enquire first what the section itself says... The effect of section 8 of the Amending Act so operating with respect to section 34 was that it placed the section on the statute-book as on the 30th March, 1948, and made it a part of the Income-tax Act on and from that date. But what was the effect of such introduction of the new section 34 on the Income-tax Act itself ? The effect was that the Income-tax Act, speaking on and from the 30th March, 1948, with the new section as a part of it, began to say in the words of the section itself, and therefore expressly by its own words, that in cases coming under clause 1(a) of the section, the Income-tax Officer would be entitled to issue a notice within eight years from the end of any assessment year in respect of which proceedings or further proceedings seemed to be called for. One has only to read the Act, standing so amended on the 30th March, 1948, and on finds at once a clear provision that all assessment years, ending within eight years from that date, are covered by it, as also all assessment year ending within eight years from subsequent dates. It is immaterial that some of them may be years ended before the 30th March, 1948. The question is not one of retrospective operation at all but a question of what the section says and how far the section, having come into force on the 30th March, 1948, extends by its own words."
With respect we agree with these observations. We do not think that there is any distinction between the power conferred by section 34 and the power conferred by the section 33B. On the contrary, section 34 has reference to a past event, the escape of income from assessment, whereas section 33B has not. In Chotanagpur Banking Association Ltd. v. Commissioner of Income-tax, Das C.J. and Kanhaiya Singh J. held that a Commissioner can revise an assessment order made on March 30, 1949, in respect of the assessment year 1945-46. The ratio defidendi of the decision was that the assessment order was made after March 30, 1948. It was observed by the learned judges that, since the Commissioner acted with reference to an order made after March 30, 1948, he could not be said to have given retrospective effect to the provisions of section 33B. Similarly, in Durgabati and Smt. Narmadabala Gupta v. Commissioner of Income-tax, Ramaswami and Misra JJ. held that section 33B was rightly applied to an assessment order dated September 24, 1948. This decision was reversed by the Supreme Court in Commissioner of Income-tax v. Shrimati Durgabati on another point. It may be said that this decision is distinguishable inasmuch as the assessment year ended on March 31, 1948, after section 33B came into force and, therefore, it could not be argued that the section was applied to an order in respect of an assessment year which had expired before it came into force. Kumara Pillai and Joseph JJ. in Commissioner of Income-tax v. Kozhikode Wyanad Motor Service Ltd. held that an assessment order passed after March 30, 1948, in respect of any assessment year can be revised by the Commissioner.
The only decision directly dealing with the point in controversy and supporting the contention of Sri S.N. Misra is Niranjanlal Ramballah v. Commissioner of Income-tax. There Mangalmurti and Deo JJ. held that the Commissioner could not revise an Income-tax Officers order dated July 22, 1947, in respect of the assessment year 1944-45. With great respect, we find no justification for this observation, because section 1(2) of the Amending Act does not refer to any assessment year. The only reference to any assessment year is in that part of section 1(2) which relates to the enforcement of section 2 of it. We are concerned with the enforcement of section 7 and not that of section 2. However, this decision is distinguishable because the assessment order itself was of date prior to March 30, 1948, and it could be urged that the power conferred by section 33B could not be exercised in relation to it. The assessment order was a past event and it could be urged that there was nothing in section 33B to make it applicable to a past order.
There is no authority of the Supreme Court on the question under consideration. In Commissioner of Income-tax v. Amritlal Bhogilal & Co. it had considered the Commissioners exercising his power under section 33B in relation to assessment years 1947-48, 1948-49, and 1949-50, but since all these assessment years expired after March 30, 1948, it could not be and, therefore, was not, contended before it that section 33B could not be applied with respect to any of them. Similar was the case in Commissioner of Income-tax v. Shrimati Durgabati.
We were also referred too Mishrimal Gulab Chand of Beawar, In re in which Malik C.J. and Seth J. laid down that the laws in force on the first of April, 1944, was the law applicable to the assessment for the assessment year 1944-45. The law that the learned judges contemplated was the law regarding assessment; while considering section 33B, we are not concerned with the law regarding assessment. By what law assessment for a particular assessment year is governed is a question quite different from the question by what law the power to revise an assessment order is governed.
In the result, our answer to the question is in the affirmative.
We direct that a copy of this judgment shall be sent under the seal of the court and signature of the Registrar to the Income-tax Appellate Tribunal, Delhi Bench, as required by section 66(5) of the Income-tax Act. We further direct that the assessee shall give to the Commissioner his costs of this reference, which we assess at Rs. 200. Counsels fee is also assessed at Rs. 200.
Question answered in the affirmative.