Revisional order not prejudicial: mere refusal to interfere does not create a right to seek reference under the Act.

An order declining revision under section 43 of the Cochin Income-tax Act was held not to be prejudicial to the assessee because the statute deems such a refusal non-prejudicial. A reference under section 109(2) arises only where the assessment is enhanced or the revisional order otherwise worsens the assessee's position. Mere refusal to interfere, even if the reasons are arguably wrong, does not itself create a reference right. The revisional order therefore did not entitle the assessee to seek a reference to the High Court, and no reference lay.

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Issues: Whether an order of the Commissioner dismissing a revision petition under section 43 of the Cochin Income-tax Act can be treated as an order prejudicial to the assessee so as to entitle the assessee to seek a reference under section 109(2) of that Act.

Analysis: Section 43 expressly provides that an order by the Commissioner declining to interfere shall be deemed not to be prejudicial to the assessee. The right to seek a reference under section 109(2) arises only where the assessment has been enhanced or the Commissioner's order is otherwise prejudicial. An order merely refusing revision does not worsen the assessee's position, even if the reasons given for refusal are erroneous. The contrary view was treated as displaced by the Privy Council exposition on what constitutes a prejudicial order in revision.

Conclusion: The dismissal of the revision petition by the Commissioner was not a prejudicial order, and no reference lay to the High Court.

Final Conclusion: The petitions failed because the Commissioner rightly refused to make a reference in the absence of any enhancement of assessment or other prejudicial effect from the revisional order.

Ratio Decidendi: An order declining revision is not prejudicial to the assessee unless it places the assessee in a worse position than the order under review, and therefore does not confer a right to seek reference unless the statute expressly so provides.

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