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of <h1>Court upholds assessments post 1932-33, denies relief under Section 33. Appeal allowed, parties bear own costs.</h1> The court held that the assessments made subsequent to 1932-33 were not nullities, the Commissioner did not act improperly in refusing to cancel ... - Issues Involved:1. Whether the assessments made subsequent to the year 1932-33, including the supplementary assessment for the year 1931-32, were a nullity in view of the decision of their Lordships of the Privy Council.2. Whether the Commissioner of Income-tax acted improperly in refusing to exercise the discretion vested in him to cancel the said assessments and to order the repayment of the sums received from the assessees on account of those assessments.3. Whether the assessees could be denied the relief claimed by them under Section 33 of the Income-tax Act on any valid ground.Issue-wise Detailed Analysis:1. Nullity of Assessments:The first question addressed was whether the assessments made subsequent to the year 1932-33, including the supplementary assessment for the year 1931-32, were a nullity. The court noted that the assessments were duly made by the Income-tax Officer in the proper exercise of his duty. The assessments would have stood unquestioned had the Board decided differently in 1939. The court held that the assessments were not a nullity in any sense other than that they might have been set aside if challenged in due time. The court emphasized that convenience of administration demands that the validity of an assessment shall be tested in a particular way, as provided by the Income-tax Act. The court found strong support for this conclusion in the recent decision of the Board in Raleigh Investment Co. v. Governor-General in Council [1947] 15 I.T.R. 332; 74 I.A. 50. Therefore, the court answered the first question by stating that the assessments were not a nullity.2. Improper Refusal to Exercise Discretion:The second question examined whether the Commissioner of Income-tax acted improperly in refusing to exercise the discretion vested in him to cancel the assessments and order repayment. The court assumed, for the purpose of the appeal, that the Commissioner had the power to grant the relief claimed by the respondent. The court considered whether the refusal was improper, meaning contrary to equity and good conscience. The court held that the only remedies open to the taxpayer, whether in regard to appeal against assessment or to claim for refund, are to be found within the four corners of the Act. The court found that the refusal of the Commissioner was based on the valid reason that the assessees had not availed themselves of the procedure provided by law. The court concluded that the Commissioner did not exercise his discretion improperly.3. Relief under Section 33:The third question was whether the assessees could be denied the relief claimed by them under Section 33 of the Income-tax Act on any valid ground. The court held that Section 33 does not create a right in the assessee. The section is intended to provide administrative machinery for a higher executive officer to review the acts of subordinates. The court emphasized that appropriate relief is specifically given by other sections of the Act. The court concluded that the third question was wholly misconceived and that the respondent's claim for relief under Section 33 was rightly rejected.Procedural Point under Section 33 and 66(2):The court also addressed the procedural point of whether an order made by the Commissioner under Section 33, refusing to set aside an assessment, is 'otherwise prejudicial' to the assessee, allowing for a reference to the High Court. The court concluded that a reference does not lie from an order under Section 33 unless the order is prejudicial to the assessee in the sense that he is in a worse position than before the order was made. The court found that the reference in this case was incompetent as the Commissioner did not enhance the assessments or otherwise alter the respondent's position for the worse.Conclusion:The court allowed the appeal, set aside the judgment of the High Court of Judicature at Lahore dated 23rd March, 1944, and ordered that the parties bear their own costs of the appeal and all proceedings in the High Court.
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