TaxTMI 
TaxTMI 
1974 (5) TMI 22
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....mmissioner under section 30 of the 1922 Act and section 246 of the 1961 Act respectively. The Appellate Assistant Commissioner was of the opinion that the adddition made to income of the assessment year 1960-61 to the extent of Rs. 53,559 had to be deleted and that a sum of Rs. 83,600 had to be added as income from undisclosed source. Similarly, in the case of assessment year 1961-62 he was of the view that the addition of Rs. 4,45,726 to income from business had to be deleted, but addition of Rs. 1,82,887 had to be made as income from undisclosed source. Against the orders passed by the Appellate Assistant Commissioner, the petitioner filed revision petitions before the Commissioner of Income-tax. The revision petition in respect of the assessment year 1960-61 was disposed of by one Commissioner of Income-tax and the revision petition filed in respect of the assessment year 1961-62 was disposed of by a different Commissioner of Income-tax. Both the Commissioners were of the view that there was no substance in the revision petitions and they rejected them. Aggrieved by the orders passed by the Commissioners of Income-tax, the petitioner has filed these two writ petitions. It is ....
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....31(3) of 1922 Act: " In disposing of an appeal the Appellate Assistant Commissioner may, in the case of an order of assessment,-- (a) confirm, reduce, enhance or annul the assessment, or (b) set aside the assessment and direct the Income-tax Officer to make a fresh assessment after making such further enquiry as the Income-tax Officer thinks fit or the Appellate Assistant Commissioner may direct, and the Income-tax Officer shall thereupon proceed to make such fresh assessment, and determine where necessary the amount of tax payable on the basis of such fresh assessment ........ " Section 251(1) of 1961 Act: " In disposing of an appeal, the Appellate Assistant Commissioner shall have the following powers-- (a) in appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment; or he may set aside the assessment and refer the case back to the Income-tax Officer for making a fresh assessment in accordance with the directions given by the Appellate Assistant Commissioner and after making such further enquiry as may be necessary, and the Income-tax Officer shall thereupon proceed to make such fresh assessment and determine, where necessar....
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....d by the Income-tax Officer and assess it under his powers under section 31 of the 1922 Act. The Supreme Court negatived the said contention. While doing so it quoted with approval the decision of the Patna High Court in Jagarnath Therani v. Commissioner of Income-tax and a decision of the Madras High Court in Sri Gajalakshmi Ginning Factory v. Commissioner of Income-tax . In the Patna case the assessee had three businesses at Purnea, Jalpaiguri and Calcutta. His income from Purnea only was assessed by the Income-tax Officer. On appeal by the assessee, the Appellate Assistant Commissioner assessed him with regard to the income from the other two businesses. The head of income was the same within section 6 of 1922 Act, but the source of income was different. The Patna High Court observed: "Now this section relating to appeals is enacted for the benefit of the subject and also, to the limited extent therein stated, for the benefit of the Crown. But the subject-matter of the appeal is the assessment and the scope of the appeal must in my opinion be limited by the subject-matter. The appellate Authority has no power of travel beyond the subject-matter of the assessment and, for all ....
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....d of the year, there has never been any doubt as to his powers of redoing the categorisation and bringing the assessment within the true description of the law. " Relying on the above observation, Sri Rajasekhara Murthy contended that, since in this case the sums of Rs. 83,600 and Rs. 1,82,887 had been dealt with by the Income-tax Officer, it was permissible for the Appellate Assistant Commissioner to trace them to a source different from the source to which they had been traced by the Income-tax Officer. On going through the judgment of this court carefully, I find that the observations made by this court which are extracted above, are slightly inconsistent with the conclusion reached by the court in that decision and also the principle enunciated by the Supreme Court in Commissioner of Income-tax v. Shapoorji Pallonji Mistry, because in the concluding paragraph (quoted earlier) this court has held that the Appellate Assistant Commissioner had no competence to alter the findings of the Income-tax Officer to the effect that the cash credits in question were part of the business income into a finding that they were undisclosed income from an undisclosed source. It is also not ....