Section 10A excess profits tax power is incidental to a valid pending assessment or reassessment, not a standalone proceeding.

Section 10A of the Excess Profits Tax Act was held to be incidental to a valid, pending assessment or reassessment proceeding and not a standalone jurisdiction to initiate separate adjustment proceedings. The power to counteract avoidance or reduction of excess profits tax liability could be exercised only within an assessment or reassessment already validly commenced. The Court could not finally decide, on the materials before it, whether the section 10A order had been made in a proceeding validly opened under section 15, so the validity of the section 15 reopening was left unresolved pending a supplementary statement of facts.

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Issues: Whether section 10A of the Excess Profits Tax Act could be invoked independently, or only in the course of a pending assessment or reassessment proceeding, and whether further facts were required before the validity of the section 15 proceeding could be determined.

Analysis: Section 10A was held not to create an independent proceeding. The power to make adjustments for avoidance or reduction of excess profits tax liability is exercisable in the course of the original assessment or reassessment and presupposes a valid pending proceeding. On the materials then before the Court, however, it could not be finally determined whether the order under section 10A had in fact been made in a proceeding validly commenced under section 15, and the validity of the section 15 reopening was therefore left unresolved at that stage. The Court directed a supplementary statement of the case on that factual question.

Conclusion: Section 10A could not be used as a standalone proceeding and was confined to a valid assessment or reassessment proceeding. The matter was remitted for a supplementary statement of facts on the pending section 15 proceeding.

Ratio Decidendi: The power to counteract tax avoidance under section 10A is only incidental to a valid and pending assessment or reassessment proceeding and cannot be exercised independently.

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