JUDGMENT
K.S. Puttaswamy, J.
1. On a reference made by one of us (Puttaswamy J.), this case was posted before us for disposal.
2. For the assessment year 1975-76 relevant to the previous year ending on March 31, 1975, the petitioners who are agriculturists did not file their return within the time permitted by section 18(1) of the Karnataka Agricultural I.T. Act, 1957 (Karnataka Act No. 22 of 1957) (“the Act”), before the Agricultural Income-tax Officer, Dharwar (A.I.T.O.), for which reason that officer issued them a notice under section 18(2) of the Act, calling upon them to file their return, to which also they did not respond. In that view, the A.I.T.O. issued a proposition notice to the petitioners under section 19(4) of the Act, on December 5, 1977, fixing the date of hearing as December 14, 1977, which was however served on them only on December 30, 1977. But the A.I.T.O., without noticing the non-service of the said notice on the petitioners before the hearing date, completed a best judgment assessment against them on December 27, 1977 (Ex. B) under the Act. Against the said order of the A.I.T.O., the petitioners moved the Commissioner of Agricultural Income-tax (“the Commissioner”) in a revision under section 35 of the Act, who on March 9, 1979 (Ex. D), has rejected the same as not maintainable. In this petition, under article 226 of the Constitution, the petitioners have challenged the orders made by the Commissioner and the A.I.T.O.
3. Sri R. B. Guttal, learned counsel for the petitioners, contends that the revision petition filed by his clients before the Commissioner under section 35 of the Act, was maintainable and, therefore, he was bound to entertain the same and deal on merits.
4. Sri S. Rajendra Babu, learned Government Advocate, appearing for the respondents, in justifying the order of the Commissioner, contends that section 35 of the Act only confers suo motu power of revision on the Commissioner and that too only to rectify orders that are prejudicial to the interests of the Revenue and not otherwise.
5. The Commissioner has rejected the revision petition filed by the petitioners as not maintainable on the ground that the order of the A.I.T.O. challenged by them was not prejudicial to the interests of the Revenue.
6. Section 35(1) of the Act, which confers power of revision on the Commissioner that is material for our purpose reads thus :
Section 35. “Revision Commissioner or Joint Commissioner of orders prejudicial to Revenue. – (1) The Commissioner or Joint Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by any authority subordinate to him is erroneous in so far as it is prejudicial to the interests of the Revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment.”
7. This section in terms does not provide for a revision to an assessee who is aggrieved by an order made under the Act. On the other hand, this section only confers a suo motu power of revision on the Commissioner and that too when he finds that the order of his subordinate is prejudicial to the interests of the Revenue and not otherwise. The Commissioner is not conferred with a general power to interfere with all orders of his subordinates at the instance of each and every person. The power conferred by section 35(1) of the Act is a limited power and can be exercised by him if the circumstances specified therein exist in conformity with other provisions of the same section. If the Legislature in its wisdom restricts the power of revision, it is not open to this court or the Commissioner to enlarge the same and hold otherwise. We are, therefore, of the view that the Commissioner was justified in holding that the revision filed by the petitioners was not maintainable and in not dealing with the same on merits. We see no merit in the contention of Sri Guttal and we reject the same.
8. Sri Guttal next contends that the A.I.T.O. acted illegally in completing his assessment though the proposition notice had not been served on the petitioners before the hearing date specified in the same.
9. Sri Rajendra Babu sought to support the order of the A.I.T.O.
10. In their revision, as also before this court, the petitioners have asserted that the proposition notice dated December 5, 1977, fixing the date of hearing as December 14, 1977, had been served on them only on December 30, 1977, which assertion is not denied by the respondents. In the absence of such a denial, we must necessarily accept this plea of the petitioners and examine their case on that basis. Even otherwise, we find no ground to hold otherwise.
11. When once we hold that the proposition notice had not been served on the petitioners on or before the hearing date fixed in it, it necessarily follows that it was not open to the A.I.T.O. to complete his assessment before the actual service of that notice on the petitioners and giving them necessary opportunity to file their objections and state their case. Without any doubt, the procedure adopted by the A.I.T.O. is in contravention of the provisions of the Act and the principles of natural justice. From this, it follows that the original assessment order made by the A.I.T.O., which is manifestly illegal, is liable to be quashed.
12. Sri Rajendra Babu suggests that the petitioners be directed to file their objections to the original proposition notice received by them within a reasonable time and then also appear before the A.I.T.O. on a date to be fixed by this court to enable him to redetermine the matter in accordance with law. Sri Guttal prays for 45 days’ time from this day for filing objections of the petitioners and for 60 days’ time for their appearance before the A.I.T.O. We are of the view that this request of Sri Guttal is fair and reasonable.
13. In the light of our discussion above, we make the following orders and directions :
(i) we quash the assessment order dated December 27, 1977 of the A.I.T.O. and direct him to restore the proceedings to its original file;
(ii) we grant time to the petitioners to file their objections, it any, to the original proposition notice received by them before the A.I.T.O. on or before September 13, 1985. We direct the petitioners to appear before the A.I.T.O. on October 8, 1985, and produce all such material that they propose to produce in support of their case and the A.I.T.O. is free to complete his assessment on that day or any other date that may be fixed by him;
(iii) we direct that the security, if any, furnished by the petitioners in pursuance of the interim order made by this court shall be kept in force till the assessment proceedings are completed by the A.I.T.O. We also direct the A.I.T.O. to regulate the refund and recoveries in conformity with the assessment order to be made by him.
14. Writ petition is disposed of in the above terms. But, in the circumstances of the case, we direct the parties to bear their own costs.
15. Let this order be communicated to the respondents within 15 days from this day.
