1960 PLP 922 (PTD)

4. In the facts and circumstance of this case, the following question of law arises: " Whether, on the facts and in the circumstances of this case, the Income-tax Officer was justified in refusing to grant renewal of registration under section 26-A of the Indian Income- tax Act ? " S. N. Datta, V. D. Narayan and B. P. Rajgaria for the Assessee. R. J. Bahadur for the Commissioner. In this case the assessee has been taxed for the assessment years 1951-52 and 1952-53 in the status of an unregistered firm. It appears that an application for renewal of registration of the firm was made under section 26-A along with the return of income for each of the two assessment years. Notice was issued by the Income-tax Officer under section 23, subsection (2), requiring the assessee to attend the Income-tax Officer's office and to produce any evidence in support of the return. The assessee failed to comply with the notice, but several adjournments were given by the Income-tax Officer. As a last and final chance the case was adjourned to the 21st of November, 1952, and the assessee's representative was warned that if compliance was not made by the adjourned date, there would be ex carte assessment of Income-tax in the case of the firm and of its partners. No compliance was made by the assessee on the adjourned date also, and, therefore, the Income-tax Officer proceeded to complete the assessment under section 23 (4). He also refused to register the firm as it had not complied with the notice under section 23 (2) of the statute. In the course of his order the Income-tax Officer stated as follows: " The assessee's representative Mr. Banerji who brought the application for time was clearly warned (vide my order, dated November 14, l9i2, in the 1952-53 order sheet) that if compliance was not made on November 21, 1952, ex-carte assessment in the case of the firm and of the partners would be completed. Repeated warnings had, however, no effect on the assessee and on November 21, 1952, another telegram was received asking for two months' adjournment. It is to be noted that whereas in application dated November 13, 1952, the assessee had asked for adjournment after the middle of December, in this telegram two months' adjournment was requested for. The ground given for adjournment was that their accountant `was not coming. It was obvious that the assessment proceedings could not be indefinitely held up if a particular accountant of the assessee did not choose to come back. The assessee had already been allowed three months' time during which period (to) arrange to engage any other accountant if the particular person was not in a position to come back. In any case, there was absolutely no reason for holding back the accounts and other evidence, as some other person or any of the partners could comply with the notice. The application for time was accordingly rejected and this intimation was given to the assessee by my letter dated November 21, 1952. Till this date there has been no further response from the assessee's side. The default in this case is, thus, clearly established. For non-compliance with the statutory notice under section 23 (2). I am constrained to complete the assessment under section 23 (4) to the best of my knowledge and information. 1 also refused to register the firm as it has not complied with the notice under section 23 (2)." The assessee went up in appeal before the Appellate Assistant Commissioner, and it was contended on its behalf that notice should have been given to the assessee before refusing to renew registration. The argument was rejected by the Appellate Assistant Commissioner and the assessment was confirmed. The same argument was put forward before the Appellate Tribunal, which dismissed the appeal and confirmed the order of assessment and also the refusal of the Income-tax Officer to renew registration of the firm. Under section 66 (1) of the Indian Income-tax Act, the Income-tax Appellate Tribunal has submitted the following question of law for the opinion of the High Court: " Whether, on the facts and in the circumstances of this case, the Income-tax Officer was justified in refusing to grant renewal of registration under section 26-A of the Indian Income-tax Act ? " On behalf of the assessee learned counsel put forward the argument that the Income-tax Officer should have given notice to the assessee before refusing to grant renewal of registration. It was submitted that the order of the Income-tax Officer was illegal in the absence of such notice. We do not think that this argument is correct. The present case is concerned not with the cancellation of registration of a firm. The question agitated in the present case relates to the refusal of the Income-tax Officer to grant registration of the firm. The point is whether in the case of refusal to register it is necessary for the Income-tax Officer to give notice to the assessee. The answer to the question depends upon the interpretation of section 23 (4) of the Indian Income-tax Act which is to the following effect: " 23 (4). If any person fails to make the return required by any notice given under subsection (2) of section 22 and has not made a return or a revised return under subsection (3) of the same section or fails to comply with all the terms of a notice issued under subsection (4) of the same section or, having made a return, fails to comply with all the terms of a notice issued under subsection (2) of this section, the Income- tax Officer shall make the assessment to the best of his judgment and determine the sum payable by the assessee on the oasis of such assessment and, in the case of a firm, may refuse to register it or may cancel its registration if it is already registered: Provided that the registration of a firm shall not be cancelled uptil fourteen days have elapsed from the issue of a notice by the Income tax Officer to the firm intimating his intention to cancel its registration." It is manifest from the language of this subsection that the Income-tax Officer has the power to make the assessment to the best of his judgment and also to refuse to register a firm in case the assessee firm fails to comply with all the terms of the notice issued under section 23 (2). There are two distinct powers granted to the Income-tax Officer under this subsection. He may refuse to register the firm, or he may cancel the registration of the firm which is already registered. The proviso, however, makes it clear that in the case of cancellation of registration the Income-tax Officer is bound to issue a notice to the firm intimating his intention to cancel its registration. The proviso, therefore, applies to a case where there is cancellation of registration. In the case of refusal to register there is no provision in the section that there should be any issue of notice. In our opinion the principle of the maxim " expressio unius est exclusio alterious " applies to this case, and applying this principle, we hold that in the case of refusal to register a firm there is no duty imposed on the Income-tax Officer to give notice to the assessee intimating his intention to refuse the application for renewal of registration. We, therefore, reject the argument of learned counsel for the assessee on this point. The question may be approached from another standpoint. We shall assume in favour of the assessee that even in case of refusal to register the Income-tax Officer is bound to give notice to the assessee intimating his intention to refuse registration. Even upon that assumption we hold that there has been no violation of natural justice in this case. The reason is that the assessee has availed itself of the right of appeal against the order of the Income-tax Officer refusing registration. Section 30 of the Income-tax Act provides a right of appeal to the assessee from an order made by the Income-tax Officer under section 23 (4) of the Income-tax Act refusing to register a firm. In the present case the assessee has availed itself of the right of appeal before the Appellate Assistant Commissioner and also before the Appellate Tribunal, and its point of view was placed before both these authorities with regard to the question of registration. The assessee cannot, therefore, be heard to complain at this stage that there has been any violation of the principle of natural justice. In support of this view we should like to refer to the decision of this High Court in Sheopujan Choudhary v. State of Bihar (A I R 1956 Pat. 212), in which it was held that there is no principle of law that the party adversely affected should be heard at each and every stage of the administrative process. There is no such general requirement in the principle of audi alteram partem. On the other hand, the principle is satisfied if the party adversely affected is given sufficient opportunity to know the case he has to meet and to answer that case at some stage of the administrative proceeding, and not at all stages. It was also pointed out by the High Court in that case that the concept of natural justice cannot be imprisoned within the strait jacket of any fixed formula. For these reasons we hold that on the facts and circumstances of this case the Income-tax Officer was justified in refusing to grant renewal of registration of the firm under section 23 (4) of the Indian Income-tax Act. We accordingly answer the question of law referred by the Income-tax Appellate Tribunal against the assessee in favour of the Income-tax Department. The assessee must pay the costs of this reference. Hearing fee Rs.

250. Question answered accordingly.