Revision refusal can be prejudicial, statutory relief survives absent express limitation, and departmental control cannot bind discretion.

An order refusing to revise under Section 33 may itself be prejudicial if it confirms the assessee's adverse position, so a reference under Section 66(2) remains competent. The assessee was also held entitled to relief under Section 25(3) because the record showed discontinuance of the profession and sufficient material to trigger enquiry into the statutory exemption. The claim was not barred by limitation, as no express limitation applied before the 1939 amendment and a later inserted time bar could not defeat the accrued right. The Commissioner's statutory discretion under Section 33 could not be legally controlled by the Central Board of Revenue.

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Issues: (i) Whether an order of the Commissioner refusing to exercise revisional power under Section 33 was an order otherwise prejudicial to the assessee so as to support a reference under Section 66(2); (ii) whether the assessee was entitled to relief under Section 25(3) in the assessment for 1933-34; (iii) whether the assessee's claim for relief was barred by limitation after the 1939 amendment; (iv) whether the Commissioner's discretion under Section 33 could be controlled by the Central Board of Revenue.

Issue (i): Whether an order of the Commissioner refusing to exercise revisional power under Section 33 was an order otherwise prejudicial to the assessee so as to support a reference under Section 66(2).

Analysis: The expression "otherwise prejudicial" was construed to mean an order that adversely affects the assessee's position for the purposes of the statute. The Court preferred the view that an order refusing revision may itself be prejudicial if it confirms the adverse position of the assessee. The Court followed the reasoning of the Full Bench view that a refusal to revise can be an independently prejudicial order within Section 66(2).

Conclusion: The Commissioner's order dated 29 August 1939 was prejudicial to the assessee and the reference was competent.

Issue (ii): Whether the assessee was entitled to relief under Section 25(3) in the assessment for 1933-34.

Analysis: Section 25(3) imposed a duty that no tax shall be payable on income earned after discontinuance of the profession, and the assessee had in fact discontinued practice during the relevant period. The materials before the assessing officer showed that the assessee had become a High Court Judge, which should have put the officer on enquiry as to discontinuance. The Court held that the officer had sufficient material to investigate entitlement to relief and that the statutory relief ought not to have been denied on the facts.

Conclusion: The assessee was entitled to relief under Section 25(3), and the assessing officer was not justified in denying it.

Issue (iii): Whether the assessee's claim for relief was barred by limitation after the 1939 amendment.

Analysis: Before the amending provision, no statutory period of limitation was expressed for a claim under Section 25(3), and a limitation bar cannot be implied where the statute does not provide one. The Court also treated the verbal approach made to the Income-tax Officer in March 1939 as sufficient for the purpose of the controversy on time. The later inserted sub-section could not be used to defeat the accrued right in the circumstances of this case.

Conclusion: The claim was not barred by limitation.

Issue (iv): Whether the Commissioner's discretion under Section 33 could be controlled by the Central Board of Revenue.

Analysis: The Commissioner was bound by departmental instructions, but a statutory discretion vested in him could not be legally controlled by the Board. The Court held that only judicial exercise of discretion is known to law, and no legal control of the kind suggested existed over the Commissioner's statutory power.

Conclusion: The Commissioner's discretion under Section 33 could not be legally controlled by the Central Board of Revenue.

Final Conclusion: The reference was maintainable, the assessee succeeded on the substantive tax relief and limitation questions, and the revisional refusal could not be sustained as a bar to the reference.

Ratio Decidendi: An order refusing revision under Section 33 can itself be prejudicial for purposes of Section 66(2), and where the statute creates a right to relief without prescribing a limitation period, that right cannot be defeated by implication or departmental practice.

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