Right of appeal under income-tax law is not conditional on prior objection before the assessing officer.

Section 30 of the Indian Income-tax Act conferred a right of appeal on an assessee denying liability to be assessed, and that right was not conditioned on a prior objection before the Income-tax Officer. A return filed without further hearing did not amount to consent to assessment, so the appeal before the Assistant Commissioner was competent. A later factual objection that the income had not been received as a member of a Hindu undivided family was rejected because the assessment had proceeded throughout on the opposite footing and the point had not been raised earlier. The request for reference was therefore not defeated.

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Issues: (i) Whether an assessee who had not disputed liability before the Income-tax Officer could still maintain an appeal under section 30 of the Indian Income-tax Act by denying liability to be assessed. (ii) Whether the contention that the assessee did not receive the income as a member of a Hindu undivided family could be raised at the reference stage to defeat a direction for reference.

Issue (i): Whether an assessee who had not disputed liability before the Income-tax Officer could still maintain an appeal under section 30 of the Indian Income-tax Act by denying liability to be assessed.

Analysis: The statutory language of section 30(1) conferred a right of appeal on any assessee objecting either to the amount or rate of assessment or denying liability to be assessed under the Act. The provision did not make the right of appeal dependent upon a prior objection before the Income-tax Officer. Where the return had been accepted without further hearing, there may have been no real opportunity to challenge liability before the assessing officer. The filing of a return could not, by itself, amount to consent to assessment, and there was nothing in the Act requiring a prior denial of liability before the assessing authority as a condition precedent to appeal.

Conclusion: The appeal before the Assistant Commissioner was competent and the assessee's right of appeal was not barred by the absence of a prior objection before the Income-tax Officer.

Issue (ii): Whether the contention that the assessee did not receive the income as a member of a Hindu undivided family could be raised at the reference stage to defeat a direction for reference.

Analysis: The assessment throughout proceeded on the footing that the income was received in the assessee's capacity as a member of a Hindu undivided family, if in law she could so be regarded. No contrary factual basis had been suggested at any earlier stage, and the only controversy that had been agitated was the legal status of the assessee as a member of the family. In those circumstances, the new objection was treated as too late to be raised and as not preventing the reference sought by the assessee.

Conclusion: The objection was rejected and did not stand in the way of requiring a reference.

Final Conclusion: The applications were maintainable, the Commissioner's view was held to be unsound, and a reference on the stated question was directed.

Ratio Decidendi: A statutory right of appeal against assessment cannot be made conditional upon a prior objection before the assessing officer unless the Act expressly so provides, and a new factual objection not raised at earlier stages cannot be used to defeat a reference where the case has proceeded on an established footing.

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