ORDER
D.K. Jain, J.
Rule D.B.
2. Since a very short point is involved, with the consent of learned counsel for the parties, we take up the matter for final disposal.
3. Order dated 21-3-2001, passed by the Director of Income-tax (Exemption), New Delhi, under section 264 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), pertaining to the assessment year 1997-98, is under challenge in this writ petition.
4. Briefy stated, the background facts are :
The petitioner, a registered society, did not file its return of income for the assessment year 1997-98 on the plea that its total income was below the taxable limit. A notice under section 142(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was issued to the petitioner, requiring it to file return for the said assessment year. Though according to the petitioner the requisite information was furnished in response to various notices but the assessing officer felt otherwise. Accordingly, taking into consideration the material available on record, the assessing officer assessed the income of the petitioner society for the relevant assessment year at Rs. 20 lakhs. Penalty proceedings under various provisions of the Act were also initiated.
5. Being aggrieved, instead of preferring an appeal, the petitioner filed a revision petition before the Director of Income-tax under section 264 of the Act. By the impugned order, the revision petition has been dismissed and the assessment, as framed, has been upheld. Hence, the present petition.
6. We have heard Mr. Santosh K. Aggarwal, the learned counsel for the petitioner and Mr. R.D. Jolly, the learned senior standing counsel for the revenue, who has put in appearance on advance notice.
7. It is urged before us by Mr. Aggarwal that the impugned order is unreasonable and arbitrary inasmuch as it seeks to uphold the assessment framed without dealing with the contentions urged on behalf of the petitioner. The learned counsel would submit that though the factual position in respect of the assets of the society is noticed in the order but no finding with regard to accrual of income from any of the assets has been recorded by the revisional authority. It is asserted that since all the properties of the trust in Jammu & Kashmir were taken over by the State Government without awarding any compensation and the properties of the trust at other places were in the possession of outsiders and subject-matter of litigation, the petitioner-trust did not derive any income there from after the demise of Shri Dhirendra Bhramachari, the founder of the society, in the year June 1994. It is pointed out that assessments for the assessment years 1976-77 to 1993-94 have also been set aside by the Tribunal with a direction to the assessing officer to pass fresh assessment orders after affording reasonable opportunity of being heard to the petitioner/assessed.
8. Mr. Jolly, on the other hand, submits that the petitioner has a long history of non-cooperation with the revenue and despite various notices issued to them under section 142(1), the requisite information was not furnished to the assessing officer. It is, thus, urged that in the absence of cooperation on the part of the assessed, the assessing officer had no option but to make a best judgment assessment under section 144 of the Act. It is argued that the total income has been determined by the assessing officer on the basis of past investments of the society.
9. Having perused the impugned order, we feel that it cannot be sustained. It is a non-speaking order. The revisional power of the Commissioner or the director, as the case may be; under section 264 may not be as wide as that conferred on an appellate authority but it has all the trappings of a judicial power. It could perhaps be argued that having regard to the language of section 264, the order of the Commissioner is an administrative act. We feel that even if that be so, an administrative body, in ascertaining facts and law, is also obliged to act judicially notwithstanding that its proceedings are not in accordance with the practice of ‘a court of law’. The revisional power has to be exercised on an objective consideration of the facts and circumstances of the case. The power is coupled with a duty to be exercised in the interest of doing real justice between the parties, particularly when under the Act the order passed under section 264 is final.
10. In Dwarka Nath v. ITO (1965) 57 ITR 349 (SC), while dealing with the question whether the order of the Commissioner under section 33A of the Indian Income Tax Act, 1922, in pari materia with section 264 is judicial or quasi-judicial, the Supreme Court observed that prima facie, the jurisdiction conferred under the section is a judicial one. It was said that the nature of the jurisdiction and the rights decided carry with them necessarily the duty to act judicially in disposing of the revision.
11. The revisional authority is, thus, under an obligation to consider and adjudicate on the relevant and material contentions which may be raised by an assessed. In the present case, we find that the director takes note of the stand of the assessed with regard to the status of each of the properties owned by the trust, but has not addressed himself to the real question, namely, whether in the prevailing circumstances any income could accrue to the petitioner from various properties. It is evident that the impugned order is too much influenced by the past non-cooperative conduct of the petitioner, be it on the merits of best judgment assessment or the quantum of income determined. At this juncture, we say no more on the merits of the case lest it may cause prejudice to either side.
12. We, accordingly, set aside the impugned order; make the rule absolute and restore the case to the file of the Director of Income Tax (Exemptions) for consideration of the entire matter afresh in accordance with law. It goes without saying that before passing the order, the Director shall grant a personal hearing to the petitioner. The learned counsel for the petitioner assures the court that the petitioner shall render full cooperation in the matter.
13. The petition and the application seeking interim relief stand disposed of in the above terms.