Law: Income Tax Act, 1961

Section: 263

Law: Income Tax Act, 1922

Section: 33B

Section 263 of the Income-tax Act, 1961 [Corresponding to section 33B of the Indian Income-tax Act, 1922] - Revision - Of orders prejudicial to interests of revenue - Assessment years 1950-51 to 1953-54 - Assessee challenged constitutional validity of section 33B of 1922 Act and prayed for quashing of notices issued by Commissioner proposing to cancel registration granted to assessee earlier - Whether section 33B of 1922 Act is intra vires and valid - Held, yes - Whether since facts upon which order of commissioner was to be made were disputed, matter involved investigation and inquiry into facts which could not be done in application under article 226 of Constitution of India - Held, yes - Whether petitions being premature were liable to be dismissed - Held, yes FACTS The assessee petitioner was a registered partnership firm. For all the years under consideration it was assessed under section 23(3) as a registered firm. For the next period the renewal of registration was refused on the ground that the profits of the previous years were not credited in the books in accordance with the shares specified in the partnership deed, or in accordance with the particulars given in the application forms, or in accordance with the certificate appended thereto. When the petitioner's appeal was pending before the AAC, the Commissioner exercising his power under section 33B issued notice to show cause why the renewal of registration for the year 1950-51 to 1953-54 should not be cancelled and assessments under section 23 (3) set aside. The petitioner thereupon filed writ praying for quashing the notices and contending that section 33B was ultra vires of the Constitution. HELD The procedure contemplated under section 5(7A) was different from the procedure laid down under section 33B. Under section 5(7A) there was no question of the assessee being heard at any stage. Further, there was no question of preferring any appeal. Under section 33B, it is true that in the first instance the Commissioner calls for and examines the record ex parte. It was strenuously argued by petitioner that the Commissioner acted behind the back of the assessee, looks into the papers, and makes up his…

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