TaxTMI 
TaxTMI 
1973 (9) TMI 11
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Appellate Assistant Commissioner for the purposes of holding that the order of the Income-tax Officer was erroneous in so far as it was prejudicial to the interest of revenue ? 2. Whether section 33B proceedings can be taken against the legal heirs of a deceased assessee, and if so, whether the proceedings taken in this case by issue of a notice on an heir who was the karta of the Hindu undivided family are valid ? 3. Whether the legality of an assessment which had become final could be challenged in the proceedings taken by the Commissioner of Income-tax under section 33B of the Indian Income-tax Act, 1922 ? " The assessee, Sunderlal, had filed a return for the assessment year 1959-60 on September 5, 1959, in response to a notice unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....following order : " The counsel only wanted that action under section 33B be deferred till the disposal of the appeal for the assessment year 1960-61 by the Tribunal. I do not find any force in this argument and his request cannot, therefore, be adhered to. For the reasons in para. 2 above (wherein the order of the Appellate Assistant Commissioner for the assessment year 1960-61 has been discussed), the Income-tax Officer's order under section 23(3) of the Indian Income-tax Act, 1922, dated February 6, 1964, is erroneous ; the assessment is, therefore, set aside and the Income-tax Officer is directed to make a fresh assessment in accordance with law. " The order of the Commissioner was thereafter challenged by the assessee before the Trib....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssioner to revise Income-tax Officer's orders.- (1) The Commissioner may call for and examine the record of any proceeding under this Act and if he considers that any order passed therein by the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such enquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. (2) No order shall be made under sub-section (1)- (a) to revise an order of reassessment made under the provisions of section 34 ; ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he order passed by the Income-tax Officer is prejudicial to the interest of the revenue. This conclusion is further strengthened by the use of the words " if he considers " used in the sub-section which postulates a scrutiny by the Commissioner of all the relevant facts for holding that the order is prejudicial to the interest of the revenue. A perusal of the order of the Commissioner of Income-tax shows that after referring to the fact that the Appellate Assistant Commissioner had held that the amount in question was taxable in the assessment year 1959-60 and not in the assessment year 1960-61, and stating the reasons which led the Appellate Assistant Commissioner to come to this conclusion, the Commissioner of Income-tax held as under : ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on the date of the assessment order. This sub-section was inserted by an amendment which came into force on the 11th September, 1933, and was introduced in order to get over the difficulty caused by a decision of the Bombay High Court in Ellis C. Reid, Administrator in India of the Estate of Sir Henry Proctor v. Commissioner of Income-tax, where it was held that assessment proceedings could not be continued after a person's death, and his executors were not liable to pay tax, if the death occurred while assessment proceedings were pending. The proceedings which the Commissioner took out under section 33B of the Act were against Lala Sunder Lal, and not against the legal representatives although notice was served on Sri Bankey Behari Lal as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion of a person against whom the proceedings have been taken under the Act. He would, however, be a person by whom tax was payable because of the provisions of section 24B(1). This means that the revisional power could be exercised by the Commissioner in respect of an assessment order passed by the Income-tax Officer. The result of the foregoing discussion is that while on the one hand proceedings against a deceased person are a nullity, on the other side the conditions requisite for the exercise of power under section 33B were satisfied in the present case. Now, the principle that proceedings cannot be taken against a deceased person is one of general law, and does not pertain to the domain of statute law. It is settled that the principle....