The Commissioner dismissed my revision petition and the officer will not even issue a demand notice - can I take that to the High Court?
Yes. The Supreme Court held that an order of the Commissioner on an assessee's revision petition is a quasi-judicial act, not a merely administrative one, and can be quashed by certiorari under Article 226. It also held that where tax is due in consequence of an order, the Income-tax Officer is bound to serve a notice of demand; failing to do so makes him amenable to mandamus. The High Court had dismissed the writ petition in limine on the state of the affidavit, and that too was wrong: knowledge derived from perusal of disclosed documents is the deponent's own knowledge, and a defective affidavit should be allowed to be cured.
Decided by the Supreme Court (Supreme Court of India - J.C. Shah, K. Subba Rao and S.M. Sikri JJ; judgment delivered by Subba Rao J) on 1965-03-29, reported as AIR 1966 SC 81; [1965] 57 ITR 349 (SC); [1965] 3 SCR 536. It bears on section 264, section 156 of the Income Tax Act 1961, in Revision & Rectification and Appeals matters.
Two things come from this case. First, revision by the Commissioner is not a departmental favour. The jurisdiction affects the assessee's rights, the revising authority must give him an opportunity to be heard, and the resulting order is quasi-judicial and reviewable - which displaces the High Court decisions that had read the Privy Council in Tribune Trust as making the Commissioner's order purely administrative. Second, the Court held in the alternative that even if the order were administrative, the officer's statutory duty to serve a notice of demand is enforceable by mandamus, so the assessee is not left without a remedy. The judgment is also the source of the reading of Article 226 as a power wide enough to reach injustice wherever it is found, moulded to Indian conditions rather than tied to English prerogative writ practice.
Binding on every court and authority in India.
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The appellant Hindu undivided family was one of eleven partners in the managing agency firm of Gujarat Cotton Mills. In September 1946 the partners agreed to sell their shares at Rs 65 each to a purchaser firm, on terms that the agency firm resign the managing agency and the purchaser be appointed in its place. The appellant held 11,230 shares. For 1948-49 the Income-tax Officer taxed the excess of Rs 2,98,909 as business income; the Appellate Assistant Commissioner agreed; the Tribunal held it taxable as capital gains under section 12B and directed the officer to modify the assessment. The officer recomputed the gains but issued no notice of demand under section 29, and refused to issue one when asked. An appeal against that refusal was rejected as not maintainable. A revision to the Commissioner under section 33A(2) was dismissed, partly on the footing that it might not be maintainable and partly on merits. The Allahabad High Court dismissed the writ petition in limine.
The appeal was allowed. The Court set aside the High Court's order, issued a writ of certiorari quashing the Commissioner's order and a writ of mandamus directing the Income-tax Officer to pass an order and issue a notice in accordance with law, with costs throughout. It rejected the Revenue's preliminary objection that an order under section 33A is administrative: the jurisdiction is prima facie judicial, the order affects the assessee's rights, it is implicit in a revisional jurisdiction that the parties affected be heard, and the fact that the Commissioner cannot make an order prejudicial to the assessee does not change the character of the proceeding. The High Court decisions holding otherwise were said to have been wrongly decided. Since no appeal lay to the Appellate Assistant Commissioner against the recomputation, the Commissioner had power to revise it. On section 29, where tax is due in consequence of an order the officer is under a duty to serve a notice of demand, and he had not discharged it.
The Court took the preliminary objection first. Certiorari lies against a judicial or quasi-judicial act and not an administrative one, and the conditions are legal authority, authority to determine questions affecting the rights of subjects, and a duty to act judicially. That an order emanates from an administrative body does not make it any the less quasi-judicial if those tests are satisfied. The duty to act judicially need not be expressly imposed; it may be gathered from the cumulative effect of the nature of the rights affected, the manner of disposal provided, the criteria to be applied, the phraseology used and the nature of the power conferred. Applied to section 33A(2): the assessee applies within a limited time, the Commissioner calls for the record, may make enquiry and passes an order, and revision is barred while an appeal lies or is pending. That is the shape of a revisional jurisdiction and it carries with it the duty to act judicially. The Privy Council's observations in Tribune Trust were made on a different question, whether a reference lay, and the section there considered was repealed; section 33A, which lets the assessee apply, is not the same provision. The Court held in the alternative that even assuming the Commissioner's order were administrative, the officer's failure to discharge his statutory duty under section 29 would attract mandamus. On Article 226, the article is couched in comprehensive phraseology and confers a power wide enough to reach injustice wherever it is found; equating it with English prerogative writ practice would import unnecessary procedural restrictions.
The nature of the jurisdiction and the rights decided carry with them necessarily the duty to act judicially in disposing of the revision.
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Handle my notice → Ask a CA on WhatsAppYes. The Supreme Court held that an order of the Commissioner on an assessee's revision petition is a quasi-judicial act, not a merely administrative one, and can be quashed by certiorari under Article 226. It also held that where tax is due in consequence of an order, the Income-tax Officer is bound to serve a notice of demand; failing to do so makes him amenable to mandamus. The High Court had dismissed the writ petition in limine on the state of the affidavit, and that too was wrong: knowledge derived from perusal of disclosed documents is the deponent's own knowledge, and a defective affidavit should be allowed to be cured. This was decided by the Supreme Court (Supreme Court of India - J.C. Shah, K. Subba Rao and S.M. Sikri JJ; judgment delivered by Subba Rao J) and bears on section 264, section 156 of the Income Tax Act 1961. It is reported as AIR 1966 SC 81; [1965] 57 ITR 349 (SC); [1965] 3 SCR 536. Two things come from this case. First, revision by the Commissioner is not a departmental favour. The jurisdiction affects the assessee's rights, the revising authority must give him an opportunity to be heard, and the resulting order is quasi-judicial and reviewable - which displaces the High Court decisions that had read the Privy Council in Tribune Trust as making the Commissioner's order purely administrative. Second, the Court held in the alternative that even if the order were administrative, the officer's statutory duty to serve a notice of demand is enforceable by mandamus, so the assessee is not left without a remedy. The judgment is also the source of the reading of Article 226 as a power wide enough to reach injustice wherever it is found, moulded to Indian conditions rather than tied to English prerogative writ practice. If it applies to you, the first step is this: If a revision order is passed without hearing you or without dealing with your case, challenge it by writ - the order is quasi-judicial and certiorari lies.
The appellant Hindu undivided family was one of eleven partners in the managing agency firm of Gujarat Cotton Mills. In September 1946 the partners agreed to sell their shares at Rs 65 each to a purchaser firm, on terms that the agency firm resign the managing agency and the purchaser be appointed in its place. The appellant held 11,230 shares. For 1948-49 the Income-tax Officer taxed the excess of Rs 2,98,909 as business income; the Appellate Assistant Commissioner agreed; the Tribunal held it taxable as capital gains under section 12B and directed the officer to modify the assessment. The officer recomputed the gains but issued no notice of demand under section 29, and refused to issue one when asked. An appeal against that refusal was rejected as not maintainable. A revision to the Commissioner under section 33A(2) was dismissed, partly on the footing that it might not be maintainable and partly on merits. The Allahabad High Court dismissed the writ petition in limine. The matter was decided on 1965-03-29 by the Supreme Court (Supreme Court of India - J.C. Shah, K. Subba Rao and S.M. Sikri JJ; judgment delivered by Subba Rao J). On those facts the Supreme Court held as follows. The appeal was allowed. The Court set aside the High Court's order, issued a writ of certiorari quashing the Commissioner's order and a writ of mandamus directing the Income-tax Officer to pass an order and issue a notice in accordance with law, with costs throughout. It rejected the Revenue's preliminary objection that an order under section 33A is administrative: the jurisdiction is prima facie judicial, the order affects the assessee's rights, it is implicit in a revisional jurisdiction that the parties affected be heard, and the fact that the Commissioner cannot make an order prejudicial to the assessee does not change the character of the proceeding. The High Court decisions holding otherwise were said to have been wrongly decided. Since no appeal lay to the Appellate Assistant Commissioner against the recomputation, the Commissioner had power to revise it. On section 29, where tax is due in consequence of an order the officer is under a duty to serve a notice of demand, and he had not discharged it.
The Court took the preliminary objection first. Certiorari lies against a judicial or quasi-judicial act and not an administrative one, and the conditions are legal authority, authority to determine questions affecting the rights of subjects, and a duty to act judicially. That an order emanates from an administrative body does not make it any the less quasi-judicial if those tests are satisfied. The duty to act judicially need not be expressly imposed; it may be gathered from the cumulative effect of the nature of the rights affected, the manner of disposal provided, the criteria to be applied, the phraseology used and the nature of the power conferred. Applied to section 33A(2): the assessee applies within a limited time, the Commissioner calls for the record, may make enquiry and passes an order, and revision is barred while an appeal lies or is pending. That is the shape of a revisional jurisdiction and it carries with it the duty to act judicially. The Privy Council's observations in Tribune Trust were made on a different question, whether a reference lay, and the section there considered was repealed; section 33A, which lets the assessee apply, is not the same provision. The Court held in the alternative that even assuming the Commissioner's order were administrative, the officer's failure to discharge his statutory duty under section 29 would attract mandamus. On Article 226, the article is couched in comprehensive phraseology and confers a power wide enough to reach injustice wherever it is found; equating it with English prerogative writ practice would import unnecessary procedural restrictions. In the words reproduced by the source cited on this page: "The nature of the jurisdiction and the rights decided carry with them necessarily the duty to act judicially in disposing of the revision."
It was decided by the Supreme Court on 1965-03-29 and is reported as AIR 1966 SC 81; [1965] 57 ITR 349 (SC); [1965] 3 SCR 536. Binding on every court and authority in India. A Supreme Court decision binds every assessing officer, every Commissioner (Appeals), every bench of the Income Tax Appellate Tribunal and every High Court in India. An officer who declines to follow it is acting contrary to law, and that refusal is itself a ground of appeal. On section 264, section 156, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The appeal was allowed. The Court set aside the High Court's order, issued a writ of certiorari quashing the Commissioner's order and a writ of mandamus directing the Income-tax Officer to pass an order and issue a notice in accordance with law, with costs throughout. It rejected the Revenue's preliminary objection that an order under section 33A is administrative: the jurisdiction is prima facie judicial, the order affects the assessee's rights, it is implicit in a revisional jurisdiction that the parties affected be heard, and the fact that the Commissioner cannot make an order prejudicial to the assessee does not change the character of the proceeding. The High Court decisions holding otherwise were said to have been wrongly decided. Since no appeal lay to the Appellate Assistant Commissioner against the recomputation, the Commissioner had power to revise it. On section 29, where tax is due in consequence of an order the officer is under a duty to serve a notice of demand, and he had not discharged it. It arises in Revision & Rectification and Appeals matters, on section 264, section 156 of the Income Tax Act 1961, and was decided by Supreme Court of India - J.C. Shah, K. Subba Rao and S.M. Sikri JJ; judgment delivered by Subba Rao J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Where an order creates a demand and no notice of demand follows, apply in writing for one, and if it is refused ask for mandamus; the duty is statutory. Swear the affidavit through someone conversant with the file, state which paragraphs are on personal knowledge and which on perusal of records, and annex the orders and agreements relied on. Do not run a revision and an appeal together on the same order - revision is barred while an appeal against that order is available or pending.
Validity check could not be completed. Only this judgment was available. Nothing later has been checked. The judgment construes section 33A(2) of the 1922 Act, and the wording of section 264 of the 1961 Act is not identical. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The case was decided under the 1922 Act: the revision was under section 33A(2) and the demand notice under section 29. Sections 264 and 156 of the 1961 Act are the successor provisions and are the numbers under which the case is now cited, but that mapping is mine, not the Court's. The Court expressly declined to say whether the Bombay High Court's view in Baijnath Chaturbhuj, on which the appellant relied, was correct, and it did not decide the underlying capital gains question. The harvested text carries a number of obvious transcription errors. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal was allowed. The Court set aside the High Court's order, issued a writ of certiorari quashing the Commissioner's order and a writ of mandamus directing the Income-tax Officer to pass an order and issue a notice in accordance with law, with costs throughout. It rejected the Revenue's preliminary objection that an order under section 33A is administrative: the jurisdiction is prima facie judicial, the order affects the assessee's rights, it is implicit in a revisional jurisdiction that the parties affected be heard, and the fact that the Commissioner cannot make an order prejudicial to the assessee does not change the character of the proceeding. The High Court decisions holding otherwise were said to have been wrongly decided. Since no appeal lay to the Appellate Assistant Commissioner against the recomputation, the Commissioner had power to revise it. On section 29, where tax is due in consequence of an order the officer is under a duty to serve a notice of demand, and he had not discharged it.
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