P L D 1964 (W (PLP)

3. The assessment of the petitioner's transactions to sales. tax as a manufacturer in 1961 did not apparently bring the realization to the petitioner that it could get relief under the above‑mentioned section on the income‑tax side, with the result that it has been disputing that view of the Sales tax Department by preferring appeals. When the petitioner realized the advantage on the income‑tax side, it found that appeals from the assessment orders had become barred by time; therefore, it adopted the device of going in revision to the Commissioner of Income‑tax under section 33‑A (2) of the Income‑tax Act. That application was also barred by time, but the Commissioner condoned the delay. With respect to the request for revising the assessments and allowing the benefit of section 15‑B he observed as follows :‑‑ "Since the petitioner had not made any claim for relief under section 15‑B in the return of income and the Income‑tax Officer had not passed an order refusing to grant such relief, the petitioner's request is outside the scope of section 33‑A (2). The concession of section 15‑B cannot be allowed."

4. Mr. Fazlur Rahman's request to this Court, in accordance with the prayer clause of the petition, is Firstly, that the view of the Income‑tax Commissioner an to the scope of the revision is legally untenable; and Secondly, that there being no other adequate remedy open to the petitioner, this Court should declare that the order of the Commissioner is illegal and direct him to grant the relief and also declare that the receipt of Rs. 7,22,996 by the Department as income‑tax was illegal.

5. As the petitioner has admitted that relief was not granted to it under section 15‑B because of its own misap prehension and the alleged misapprehension of the assessing officer, it has no grievance that any order illegally rejecting any of its claims was made by the assessing officers. Mr. Fazlur Rahman's contention, therefore, was that the language of section IS‑B of the Income‑tax Act was mandatory and contained a command to the assessing authorities to grant the relief irrespective of whether it was asked for or not. To indicate that the Assessing Officer was in a position to grant the relief, the following statement has been included in paragraph 5 of the petition "The petitioner has given full information regarding employ ment of more than 20 persons and use of electric energy in the returns filed before respondent No. 2, but not withstanding the above‑mentioned facts the petitioner was not granted relief under section 15‑H, as the petitioner was not treated as an 'industrial Undertaking' entitled to exemption under section 15‑B (2) (a) of the Income‑tax Act as 'manufacturer' of goods"

6. Mr. Noorul Arifin, appearing on behalf of the respondents, Interrupted Mr. Fazlur Rahman to point out that the above allegations of fact were incorrect because the qualifications necessary to attract the provisions of section 15‑B were not disclosed by the petitioner in its returns. He offered to shove the record to the petitioner's representatives for ascertaining the correctness of his objection. Mr. Fazlur Rahman consulted the. Accountant of the petitioner and then conceded that the number of employees and the use of electric energy were not mentioned in the returns but urged that they were reflected in them in as mnt13 :o: the amount spent towards the salary of the employees and the charges met for the consumption of electricity were mention ed in them. We did not agree with this view of Mr. Fazlur Rehman because the expenses incurred towards the salary of the employees could not necessarily indicate the number of the employees; nor could the payment of charges for consumption of electricity necessarily indicate that electric energy was used for assembling the machines. Counsel, therefore, pressed that the mandatory character of the language of the provision imposed a duty on the assessing officers to grant relief and that their failure to grant it Is a sufficient illegality for being rectified by this Court in exercise of its jurisdiction under Article 98 (2) of ‑the Constitution. The relevant part of sccaio7, 15‑B of the Income‑tax Act, 1922, is as follows :‑ "(1) Subject to the provisions of this section, there shall be exempt from the tax payable under this Act so much of the profits and gains derived from any industrial undertaking to which this section applies as do not exceed an amount comput ed with reference to the capital employed in the undertaking, as hereinafter provided." The emphasis of counsel was on the words "shall be exempt". He has inferred from them that the duty of granting exemption was independent of the authorities, according to him, was to find out as to whether an assessee was entitled to the exemption or not. In any event, according to him, if In fact and law an assessee is entitled to that relief it may be and ought to be granted under the Constitution.

8. The first part of counsel's argument amounts to placing on the assessing authorities the burden of discovering the existence of adequate circumstances attracting the relief and of grating it to an assessee. But exemptions being departures from the generality of taxation, they are to be claimed and proved by the assessees. Moreover, his contention impliedly advances the proposition that the presumption of equality and uniformity of taxation is destroyed by a provision which confers a favour only an assessee. We are unable to subscribe to these propositions. We are supported to our view by the following observation of Agarwala. J. in Commissioner of Income‑tax v. Maharaja Visweswor Singh ((1935)3 I T R 216 at 219) with reference to both the propositions advanced by, counsel "the onus of showing that a particular class of income is exempt from taxation lies on the assessee. As was observed in In re : Scottish Widows Fund and Life Assurance Co. (1 Tax. Cas. 10) in one sense it is true that a taxing statute should be con strued liberally and favorably to the subject, but, on the other hand, equality and impartial justice in the incidence of taxation are of greater moment and the statute should be construed so as to promote that equality and that impartiality of justice. There is no presumption in favour of the exemption of the few. from the incidence of a general tax." . . ..

9. The second part of Mr. Fazlur Rahman's contention that this Court may and ought to grant relief on the ascertainment of the qualifications for exemption amounts to an expectation that; in exercise of the extraordinary jurisdiction, the functions‑and jurisdiction of the Income‑tax Authorities be assumed by this Court. This ‑view too is unacceptable to us.

10. Counsel's criticism of the ground reproduced above in paragraph 3, on which the Commissioner of Income‑tax rejected the revision application of the petitioner, seeks to elicit from us the scope of revisional jurisdiction conferred by section 33‑A (2) of the income‑tax Act on the Commissioner of Income‑tax. That jurisdiction is discretionary, though not arbitrary: The first consideration before us, therefore, is whether the discretion was or was not exercised in an arbitrary manner. In this respect we have the high authority of the opinion expressed by the Privy Council in Commissioner of Income‑tax v. Tribune Trust, Lahore ((1948) 16 I T R 214) In that case the assessee was not granted a certain relief in assessment, but the Privy Council held in In re; The Trustees of the Tribune Trust ((1939) 7 I T R 415) that it was entitled to it. Before the decision of the Privy Council was given, the assessee was assessed to income‑tax in accordance with the view' of the Department for several years and appeals against those assessments had become barred by time before the assessee could take advantage of the judgment of the Privy Council. The assessee, therefore, went in revision under section 33 of‑ the Income‑tax Act which corresponded to the present section 33‑A: The Commissioner rejected the application but the High Court ordered him to make a reference under section 66 of the Act and relying on the consideration that the order of the Commis sioner was "contrary to equity and good conscience" set it aside. The Department appealed to the Privy Council and their Lordships in the Commissioner of Income‑tax v. Tribune Trust, Lahore ((1948) 16 I T R 214 at p. 225) set aside the judgment of the High Court observing as follows ;‑ " It . . . . . (the argument advanced on behalf of the assessee) assumes that section 33 creates a right in the assessee. In their Lordships' opinion it creates no such right. On behalf of the respondent the well‑known principle which was discussed In 4uiious v. Bishop of Oxford (1880) 5 App. Cas 214 was invoked and it was urged that the section which opens with the words `The Commissioner may of his own motion imposed upon him a duty which he was bound to perform upon the pplication of an assessee. 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." Further, at page 226 "The commissioner may act under section 33 with or without the invitation of the assessee ; if he does so without invitation, it is clear that, if he does nothing to worsen the position of the assessee, the latter can acquire no right; the review may be a purely departmental matter of which the assessee knows nothing. If, on the other hand, the Commissioner acts at the invitation of the assessee and again does nothing to worsen his position, there is no justification for giving him a new right of appeal. He has a specific right of appeal against the assessment or order of the subordinate officer, which is "subject to its own time‑limit. That he cannot enlarge by taking a course which is on his part purely voluntary." The facts of this case indicating the divided mind of the petitioner which led it to question its status as a manufacturer on the sale start side and to urge that it enjoys that status on the income‑tax side, impress us unfavorably not merely because of the inconsistency but also because in explanation of its omission to prefer appeals against the income‑tax assessments with which it now professes to be dissatisfied, its counsel has pleaded its ignorance of law, We have not tried to find out whether the petitioner stands on the whole to gain more if its status as a manufacturer is recognised on the income‑tax as well as the sales tax sides or if it is not so recognised. A comparison could throw some light on the reason of the omission, but taking the petitioner o its word that it was under a misapprehension or was unware hat exemption could be claimed by it on the income‑tax side, we have only to add that the ignorance of law is no excuse. If the Commissioner of Income‑tax was to set aside assessments on the ground of the ignorance of the assessees that exemptions could be claimed by them, then the regularity and methodicality of assessments would be in serious jeopardy. Without expressing any opinion as to the circumstances in which the revisional power way be exercised, we respectfully adopt the view of the Privy Council expressed in the above‑noted case that the Commissioner] did not exercise his discretion illegally or improperly.

11. In order to directly meet the argument of Mr. Fazlur Rahman that the reason actually advanced by the Commissioner for rejecting the revision application is untenable, we may mention that consistently with our finding that the necessary information attracting the exemption was never supplied in the returns, the, Commissioner could take notice of the fact that the request mad to him by the assessee could not be reconciled with the record an that, in this sense it was outside the scope of the inquiry. The Privy Council has observed, though in a different context, in Paul Couvreur v. M. G. Shapiro (P L D 1947 P C 360) as follows "The respondent cannot be heard to advance an argument which is irreconcilable with the case put forward in his plead ings and which has consequently not been adjudicated upon by the Courts below." When compared with the above observation, the reason given by the Commissioner is justifiable in its essence.

12. We accordingly dismiss the petition. This conclusion was announced by us at the close of Mr. Fazlur Rahman's arguments on the 5th of February 1964.

13. Mr. Noorul Arifin was not called upon to reply. M.N. Petition dismissed.