Ramanlal Kamdar vs Commissioner of Income Tax

Ismail J.

The Income Tax Appellate Tribunal, Bangalore Bench, u/s 256(1) of the Income Tax Act, 1961, has referred the following questions for the

opinion of this court:

(1) Whether, on the facts and in the circumstances of the case, it has been rightly held that the proceedings u/s 154 were rightly invoked ?

(2) If the answer to the first question is '' yes '', whether it could be held that, in the facts and circumstances of the case, the levy of interest under

the proviso (iii)(b) to Section 139(1) was valid ?

We are of the opinion that the reference itself was incompetent and hence we do not propose to answer the questions referred to this court. We

shall now indicate the reasons for this opinion.

In the original assessment for the assessment year 1962-63 a mistake had crept in while working out interest u/s 139(1)(iii). Thereafter, the

Income Tax Officer issued a notice to the assessee, proposing to rectify the mistake u/s 154 and calling upon the objections of the assessee. The

notice expressly referred to the tax effect which would result as a consequence of the rectification. The mistake was that instead of treating the

assessee as an unregistered firm for the purpose of calculating the interest the Income Tax Officer had treated the assessee as a registered firm. On

October 27, 1967, a partner of the assessee appeared before the Income tax Officer pursuant to the notice issued by him and stated that the

assessee had no objection to the revision proposed by the Income Tax Officer. Thereafter, the Income Tax Officer passed an order on February

17, 1963, rectifying the mistake u/s 154 of the Act. Notwithstanding the fast that a partner of the assessee had appeared before the Income Tax

Officer and stated that the assessee had no objection to the proposed revision, the assessee preferred an appeal to the Appellate Assistant

Commissioner of Income Tax. That officer dismissed the appeal, upholding the order of the Income Tax Officer. The assessee preferred a further

appeal to the Income Tax Appellate Tribunal, Bangalore Bench. The Tribunal also dismissed the appeal. It is, thereafter, at the instance of the

assessee, the Tribunal has referred the questions extracted already.

We are of the opinion that the appeals to the Appellate Assistant Commissioner and to the Tribunal, by the assessee, were incompetent. We

have already referred to the fact that one of the partners of the assessee, viz., Shri Chandulal Kamdar, appeared before the Income Tax Officer on

October 27, 1967, and stated that the assessee had no objection to The proposed revision. Once the assessee had stated that it had no objection

to the proposed revision and the Income Tax Officer had also revised the original assessment as proposed by him, the assessee could not be said

to have been aggrieved by the order of the Income Tax Officer. Only if the assessee was aggrieved by the order of the Income Tax Officer, he had

the right to file an appeal before the Appellate Assistant Commissioner and once the assessee could not have had any grievance in, view of the

statement made by the partner, the appeal to the Appellate Assistant Commissioner was incompetent and equally the appeal to the tribunal was

incompetent. If so, the reference to this court of the two questions said to arise out of the order of the Tribunal is also incompetent. We may point

out in this context the fact that one of the partners of the assessee appeared before the income tax Officer and stated that the assessee had no

objection to the proposed revision has not been disputed at any stage and even before us, and every one of the authorities, viz., the Income Tax

Officer, the Appellate Assistant Commissioner and the Tribunal has referred to this fact in the course of their orders.

Under these circumstances, we return the reference without answering the questions extracted already. No order as to costs.