Provisional assessment objections can be adjudicated by the tax officer, and the surtax provision was upheld against article 14 challenge.

Section 7 of the Companies (Profits) Surtax Act, 1964 was construed as requiring the Income-tax Officer to consider and adjudicate an assessee's objections before making a provisional assessment; the power to take objections into account necessarily included the power to accept or reject them, and the provision was not limited to mechanical processing. The Court also held that the provision was not arbitrary or violative of article 14, because it operated within a guided statutory scheme with notice, opportunity to object, provisional assessment, and later adjustment at regular assessment. The writ petitions therefore failed and the provisional assessment regime was upheld.

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Issues: (i) Whether section 7 of the Companies (Profits) Surtax Act, 1964 empowered the Income-tax Officer to consider and decide objections raised by the assessee before making a provisional assessment; (ii) Whether section 7, on that construction, conferred unguided, uncanalised and arbitrary power violative of article 14 of the Constitution of India.

Issue (i): Whether section 7 of the Companies (Profits) Surtax Act, 1964 empowered the Income-tax Officer to consider and decide objections raised by the assessee before making a provisional assessment.

Analysis: Section 7 provides for provisional assessment in a summary manner after notice to the assessee and permits the assessee to file objections within the prescribed time. The provision authorises the Income-tax Officer to take the objections into account before making the provisional assessment. The power to consider objections necessarily includes the power to accept or reject them, and the provision does not contemplate any mechanical acceptance of the objections. The earlier Supreme Court ruling on a differently worded provision under the Income-tax Act, 1961 was held inapplicable.

Conclusion: The objection was rejected and section 7 was held to authorise adjudication of the assessee's objections in the course of provisional assessment.

Issue (ii): Whether section 7, on that construction, conferred unguided, uncanalised and arbitrary power violative of article 14 of the Constitution of India.

Analysis: Section 7 operates as part of the statutory scheme of surtax, is read with the charging and assessment provisions and the Schedules, and is controlled by notice, opportunity to object, provisional character of the levy, and adjustment at regular assessment. These features were treated as sufficient guidance and safeguards, and the absence of an appeal against provisional assessment was not considered enough to make the provision arbitrary.

Conclusion: Section 7 was held not to violate article 14.

Final Conclusion: The writ petitions failed, and the provisional assessment provisions were upheld as valid and operative.

Ratio Decidendi: Where a fiscal provision authorises provisional assessment after notice and permits objections to be considered before determination, the assessing authority may adjudicate those objections, and such a provision is not unconstitutional merely because no appeal lies from the provisional assessment if the statutory scheme supplies adequate guidance and safeguards.

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