JUDGMENT
GENTLE, C.J. – This is a reference made at the instance of the assessee by the Income-tax Appellate Tribunal under Section 66 (1) of the Indian Income-tax Act. The question referred for the opinion of this Court is the following :-“Whether in the circumstances of the case, the Bench had the power in law to order the resumption of the assessment proceedings from the stage indicated in the Benchs order.”
The facts are the following :- The assessees are the agents of the Standard Vacuum Oil Company, Limited, for the distribution of petrol and oils of various kinds and descriptions. In respect of the year of account the assessees returned a loss of Rs. 731 on their business, as reflected by their books, and it would seem that the assessees obtained from their customers at the time sales were transacted signed vouchers giving the price paid for the goods supplied.
The Income-tax Officer was not satisfied either with the assessees books or vouchers. He took the view that the assessees were trading in, what is commonly called, the “black market” and were receiving sums far in excess of the proper market rate recorded in the vouchers and books. By a letter dated the 30th July, 1943, the Income-tax Officer called upon the assessees to attend at his office and produce any evidence on which they relied to support the return they had made. Apparently the enquiry continued. On the 20th December, 1943, the assessees wrote the Income-tax Officer stating that they did not received any extra payments or amounts for crude oil or kerosene oil over and above the company rates from four named customers, and the letter adds, “we do not wish that the above persons shall be summoned and examined in person in proof of our denial of receiving extra payment.” No additional evidence was furnished by the assessees beyond their books and vouchers. It would seem that the Income-tax Officer however obtained, from a number of the assessees customers, books of the customers which recorded payments to the assessees far in excess of the amounts stated in the vouchers and in the assessees books. He came to the conclusion that the assessees had made substantial profits by dealings in the black market which were not reflected in their books and he added a sum of Rs. 40,000 as profits for the year and made an assessment accordingly.
On appeal to the Appellate Assistant Commissioner, in substance the Income-tax Officers action was supported save that the amount of Rs. 40,000 was reduced to Rs. 30,000.
The assessees appealed to the Income-tax Appellate Tribunal. In its order the Tribunal expressed that it did not approve of the addition; there was no material indisputably to come to the conclusion that the appellants accounts were not reliable; the orders of the Income-tax Officer and the Appellate Assistant Commissioner were cancelled and a direction was given that the Income-tax Officer should proceed with the enquiry from the stage when the appellants wrote to the officer on the 20th December, 1943, and that the officer should examine the customers of the assessees to prove that the customers had paid amounts more than those recorded in the assessees booked and dispose of the case of the basis of such enquiry.
The sole point for decision here is whether the Tribunal had authority or jurisdiction to make the order which it did, namely to direct the Income-tax Officer to re-hear the enquiry from the stage at which the Tribunal directed it to be commenced. On behalf of the assessees it was contended that the Tribunal had no such power or authority.
The power or authority of the Tribunal is expressed in very general terms in sub-section (4) of Section 33 of the Indian Income-tax Act. That sub-section provides that “the Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit.”
The jurisdiction or powers of the Appellate Assistant Commissioner in appeals carried to him are given in sub-section (3) of Section 31 of the Act. These powers are to confirm, reduce, enhance or annual the assessment or set aside the assessment and direct the Income-tax Officer to make a fresh assessment after making such further enquiry as the officer thinks fit.
The powers conferred upon the Appellate Tribunal are in no way restricted by the statute. The general authority to pass such orders as it thinks first is a very wide one. There is no substance in the suggestion made by learned counsel for the assessees that the powers of the Tribunal are limited to allowing or rejecting an appeal. What is the full extent of the powers conferred upon the Tribunal it is unnecessary to go into in detail in this reference, but clearly they must include the same powers which are conferred upon the Appellate Assistant Commissioner who has authority to direct the Income-tax Officer to hold a further enquiry. That is what the Tribunal has done here.
In my view the answer to the question referred should be in the affirmative. The Commissioner will have his costs, Rs. 250.
PATANJALI SASTRI, J. – I agree and have nothing to add.
Reference answered in the affirmative.