P L D 1963 Dacca 186 (PLP)

Explanation.‑--For the purposes of subsections (1) and (2) the Appellate Assistant Commissioner shall be deemed to be an authority subordinate to the Commissioner. (3) Every application by an assessee under subsection (2) shall be accompanied by a fee of twenty‑five rupees."

6. In the case of Commissioner of Income‑tax v. Tribune Trust (P L D 1947 P C 247) the Judicial Committee of the Privy Council had to construe the provisions of section 33 of the Income‑tax Act as it stood before it was amended into the form it has assumed after the enactment of the said section 33‑A. The aforesaid section 33 was couched in a language which, on material particulars, was the same as that of section 33‑A (1). The Judicial Committee in the aforesaid case held that the function exercised by the Commissioner under section 33 was an administrative function and not a judicial function. In the course of the judgment pronounced by the Board it has been observed thus: "The fallacy implicit in this question has been made clear in the discussion of the first two questions. It assumes that section 33 creates a right in the assessee . . . . It appears that as a matter of convenience a practice has grown up under which the Commissioner has been invited to act "of his own motion" under the section and where this occurs a certain degree of formality has been adopted. But the language of the section does not support the contention, which lies at the root of the third question and is vital to the respondent's case, that it affords a claim to relief. As has been already pointed out, appropriate relief is specifi cally given by other sections it is not possible to interpret section 33, as conferring general relief."

7. Referring to the aforesaid decision of the Board, a Single Bench of the Calcutta High Court in the case of Sitalpore Colliery Concern Ltd. v. Union of India ((1957) 32 I T R 26.) has held that the introduction of subsection 33‑A, which gives a right to the assessee to move the Commissioner to exercise his powers under section 33‑A, has not changed the administrative nature of the revisional powers of the Commissioner and that, even where the Commissioner exercises his powers under section 33‑A‑ (2), on the application of the assessee, he is not bound to hear the assessee. Sinha, J., in the judgment that he delivered in the aforesaid case, has stated as follows: "The question is as to whether the reorientation of the section by giving an additional right to the assessee to move the Commissioner has made a difference. In other words, whether the fact that the assessee has been given a right to apply to the Commissioner to make a revision has transformed this administrative machinery into a judicial one. It will be observed that even under section 33‑A (2), the Commissioner may, and not must, grant relief. In my opinion, the intro duction of this subsection has not changed the nature of the revisional powers of the Commissioner so as to make it compulsory for him to hear the assessee. The scheme of the Act has always been, and still is, that the assessee has his normal rights of appeal under the Act. If he chooses to proceed to take advantage of it, he has the right to a full and complete hearing. Section 33‑A confers upon the Commissioner the power of revision which is administrative in character, whether he acts on his own motion or at the instance of the assessee. If it was intended to alter the nature of the powers so as to transform the administrative function into a judicial one, then the wordings would have been different. Under the section the Commissioner may call for the record; he may make such enquiry as he thinks fit, or he may cause such enquiry to be made as he thinks fit, and then pass an order. The only limitation is that he must not do anything which is contrary to the provisions of the Act. If it is to be held that the proceedings are judicial, or that the Commissioner is acting as a Court, then each step taken would partake of the ordinary procedure of the Court, that is to say, of judicial proceedings. Every enquiry made or cause to be made must be made upon notice to the party, and in either case it must be done in his presence and after hearing him and/or his lawyers. It does not seem to me that it was intended that this elaborate procedure was intended to be followed in the case of a revision under section 33‑A, whether it is under subsection (1) or subsection (2). The scheme has always been and still is that the Commissioner will look into the records and will consider the orders of his subordinate officers will make or cause to be made such enquiry as he thinks fit, and made an order. It is only because the procedure is summary that it has been explicitly laid down that the order made shall not operate to the prejudice into this section the elaborate procedure of a judicial proceeding, then there is no reason why the order should not be to his prejudice. Similar terms would have been used as used in section 33 or 33‑B. The position is that the assessee has been given an option whereby he .can either appeal or move the authority to take administrative action by looking into the records and proceed ing to detect whether an order made by a subordinate officer is defective or erroneous. If he chooses to take the latter course, he has this advantage that the Commissioner in acting under this section might discover something against the assessee, but he is protected inasmuch as an order cannot be made under this section to his prejudice. As distinguished from the procedure laid down in this section; the other provision‑ set out above provide expressly for hearing the assessee and in such cases the result may not be always favourable to the assessee. That being the scheme of the section and the Act, it is not permissible to introduce notions of natural justice, and the Commissioner has done no more or no less than the Act provides."

8. The above decision has been followed by the Andhra Pradesh High Court in the case of Additional Income‑tax Officer v. Cuddapah Star Transport Co. Ltd. ((1960) 40 I T R 200). Another decision of an Indian High Court is to the same effect. It is, however, interesting to note that even in India the Courts have issued writs of certiorari in respect of matters which were disposed of by the Commissioner under subsection (4) of section 33‑A, and we may note the following cases: (1) Walchand Nagar Industries Ltd. v. V. S. Gaitonde, Income- tax Officer, Companies Circle 1 (3), Bombay and another (1962) 44 1 T R 260. (2) Income‑tax Officer, V Circle, Madras and another v. S. K. Habibullah (1962) 44 I T R 809.

9. We would point out with respects, that the judgment pronounced by Sinha, J., ignores the important fact that the Board in the case reported in P L D 1947 P C 247 has recognized that section 33 would have received a different construction if the context justified a contrary interpretation. The context of subsection (2) has been ignored in the Calcutta decision quoted above.

10. A Division Bench of this Court, in Writ Petition No. 151 of 1961, in the case of Fazlur Rahman v. Commissioner of Income‑tax, East Pakistan (the case being still unreported) has recently held, disagreeing with the decision of Sinha, J., in (1957) 32 I T R 26, that the Commissioner exercising powers under section 33‑A (2) exercises a judicial function and is, therefore, bound to give the assessee a hearing. While agreeing with the decision made by this Court in the said case, we would like to add the following observations: --‑ There can be no manner of doubt that section 33, which was construed by the Judicial Committee of the Privy Council in the aforesaid case of Commissioner of Income‑tax v. Tribune Trust (P L D 1947 P C 247) conferred no right on the assessee to pray in aid the discretionary powers which were given to the Commissioner under the said section. It was held, under the aforesaid circum stances, that the function of the Commissioner under the said section was an administrative function because no duty was cast upon the Commissioner to give relief to the assessee. Lord Simonds, who delivered the opinion of the Board, has, however, considered it fit to make the following observation; "It is possible that there might be a context in which words so inapt for that purpose would create a duty. But in the present case there is no such context." It is patent that Lord Simonds had made it clear that, in an appropriate context, the words used in the said section 33 would cast a duty on the Commissioner to consider whether a case has been made out for the exercise of the powers which were conferred upon him by that section. The aforesaid dictum has an important bearing upon this case.

11. In the decision of the House of Lords in the case of Julius v. Lord Bishop of Oxford ((1880) 5 A C 214) there are also observations to similar effect. The main decision in the said case, is not relevant to the facts of this case, but, in the opinion expressed by the House of Lords, a large number of cases have been discussed, having regard to the context, in which a general enabling power was interpreted as having created a right in the applicant to invoke the exercise of such a power, and it is not necessary for us to discuss those cases again. Subsection (2) of section 33‑A of the Income‑tax Act, which has been introduced by way of amendment, leaves no room for any doubt that it has conferred, on an aggrieved assessee, "a right" to make an application to the Commissioner under the said section. This is a proposition which has been assented to in the decisions of the Indian High Courts, to which reference has been made above, and, in this connection, it is unnecessary for us to add to the reasons as stated by this Court in the case of Fazlur Rahman v. Commissioner of Income‑tax (Writ Petition No. 151 of 1961) as referred to above. To hold otherwise would render subsection (2) illusory and ineffective. As a corollary to this proposition, it is also clear that subsection (2) of this section casts a corresponding duty upon the Commissioner to entertain an application made by an assessee under the said subsection and to dispose of the same on consideration of the points raised therein.

12. When the Commissioner acts suo motu under sub section (1), no duty is cast on him to exercise his powers there under and, in this sense, he exercises an administrative function. But, under the said subsection (2), which confers a right upon the assessee, it is not open to the Commissioner either to entertain the assessee's application or to refuse to entertain the same in accordance with his sweet will. It is important to bear in mind this distinction. Under subsection (2), it becomes incumbent on the Commissioner to consider al l the B matters that have been placed before him in the application) made by an aggrieved assessee and on such consideration the Commissioner has to decide, upon exercising judicial mind, whether he would grant the relief sought for under his discre tionary powers or whether he would not exercise the said powers in favour of the applicant. The nature of the duty cast on the Commissioner under subsection (2) is not a purely administra tive function as under subsection (1). The Commissioner, under subsection (2) is bound to investigate into the matters which have been alleged in the application made to him by the assessee and to give a decision on matters that have been specifically put in issue. The issue thus raised would involve an assertion on the one side and an opposition on the other and they would, therefore, assume the nature of judicial issues which must be decided in a judicial spirit and manner. 7 he powers conferred on him are discretionary, but he cannot arbitrarily refuse to do so on a full consideration of the application by applying his mind in a judicial way.

13. There is, therefore, as we have discussed above, no escape from the conclusion that the function exercised by the Commissioner under subsection (2) of section 33‑A is a judicial function.

14. We may state here that the references made by Sinha, J., in 1957, 32 I T R 26, to the provisions of various other sections of the Income‑tax Act and also to the fact that section 33‑A imposes an embargo upon the Commissioner against the passing of an order which will adversely affect the petitioner, are not decisive factors. The crucial question is, what is the nature of the duty cast on the Commissioner, if such a duty has been cast on him? The right conferred on the petitioner to make a revisional application imposes an obligation upon the Commis sioner to consider the application and to give a decision thereon.

15. This being so, the Commissioner is bound to conform to the principles of natural justice and, therefore, to give hearing to an aggrieved assessee who has made an application under subsection (2). The points raised in a petition filed under this subsection may be substantiated on further evidence and other materials which may be produced before the Commissioner. In the circumstances, the Commissioner is bound to give suffici ent opportunity to the petitioner to produce such evidence and to advance such arguments as will substantiate his case. Admit tedly, no such hearing or opportunity was given to the petitioner in the present case.

16. On behalf of the respondent it has been urged that the petitioner was given a hearing in respect of the notice served on the respondent demanding redress of his grievances. As we have already observed, such notice was treated as made under section 35 of the Income‑tax Act. Mr. Mesbahuddin appearing on behalf of the respondent has very rightly conceded that the hearing given to the petitioner on what was taken to be applica tions under section 35, cannot be treated as giving a hearing in respected of the applications which the petitioner submitted to the respondent under section 33‑A (2) of the Act. Mr. Asrarul Hussain has contended that under section 35, which empowers the Commissioner to rectify some mistake, no relief could be given by the Commissioner as has been asked for in the applications which the petitioner had made to the respondent under sub section (2) of section 32‑A. Learned counsel has further argued that, even in respect of the hearing, which the respondent, namely, the Commissioner had given to the petitioner, it is evident from the affidavit‑in‑opposition filed on behalf of the said respondent that he has not considered the vital matters which had been put in issue in the applications under section 33‑A (2). He has advanced before us some very severe criticisms on the view taken by the Commissioner with regard to the merits of the petitioner's application to him. We do not propose to discuss them here as they are not very material for a decision of this case although we are impressed by the force of learned counsel's argument.

17. In view of the findings which we have arrived at, as stated above, we make the Rule absolute and quash the orders, dated the 30th of June 1961, passed by the respondent, namely, the Commissioner of 'Income‑tax, East Pakistan Circle, in Revision Cases Nos. 113 and 114 of 1958‑59 and 184 of 1958‑59, rejecting the petitioner's applications submitted to him under subsection (2) of section 33‑A of the Income‑tax Act. We also direct the respondent to dispose of the said applications made by the petitioner under the aforesaid provision in accordance with law and in consonance with the observations made above. The petitioner is entitled to the costs of this application, which assess at ten gold Mohurs. S. B./A. H. Rule made absolute.