Chagla, C.J:—

This reference substantially raises the same question that was raised in the last reference Commissioner of Income-tax v. Tejaji Farasram(1) viz., the power of the Commissioner to pass orders under s. 33-B of the Act. In that case we had to deal with the position where the Commissioner exercised his power after the Appellate Assistant Commissioner had made his order. In the present case the question arises which we left open in the last reference as to whether the Commissioner has the power to pass an order under s. 3 when an appeal has been preferred by the assessee and is pending before the Appellate Assistant Commissioner.

Now, the facts briefly are that the Income-tax Officer made assessment on the assessee in respect of the assessment years 1947-49, 1948-1949 and 1949-1950. The assessee was registered as a firm under s. 26A of the Act. The assessee appealed to the Appellate Assistant Commissioner and the Appellate Assistant Commissioner reduced assessment for the years 1947-1948 and 1948-1949, and the appeal with regard to the assessment year 1949-1950 was still pending before him. The Commissioner then passed an order under s. 33-B, the effect of which was to direct the Income-tax Officer to cancel the registration of the firm under s. 26A and to assess the assessee as an unregistered firm. The order was made with regard to all the three assessment years 1947-1948, 1948-1949 and 1949-1950. With regard to the assessment years 1947-1948 and 1948-1949 the question is now concluded by our judgment in the last reference inasmuch as the Commissioner exercised his powers under s. 33-B after the appeal had been decided by the Appellate Assistant Commissioner. It is clear that he had no jurisdiction to pass any orders under s. 33-B. The only question that survives for consideration in this reference is as to whether the position is any different for the assessment year 1949-1950 inasmuch as the Appellate Assistant Commissioner had not passed any order and the appeal was still pending before him.

Sir Nusserwanji says that inasmuch as the order of the Income-tax Officer had not become merged in the order of the Appellate Assistant Commissioner under s. 33-B, the Commissioner had jurisdiction to revise the order of the Income-tax Officer. Sir Nusserwanji says that in this case clearly he was revising the order of the Income-tax Officer and not the order of the Appellate Assistant Commissioner and, therefore, on principle, the position is different from the position we considered in the last reference. Now, in our opinion, when one analyses s. 33-B a little more closely it is apparent that the Legislature never intended to give the power to the Commissioner to revise an order of the Income-tax Officer when the assessee had appealed from that order. As pointed out in the last reference, the object of enacting s. 33-B was to confer a power upon the Commissioner in the interest of revenue to revise orders of the Income-tax Officer which could not be revised under any circumstances if the assessee did not appeal from those orders. However, erroneous the order of the Income-tax Officer may be, however, prejudicial to the revenue, the assessee by refusing to exercise his right of appeal could make that order conclusive. In order to fill up this obvious lacuna the Legislature enacted s. 33. But once the assessee has appealed, there is no difficulty whatsoever in the way of the department in agitating any question before the Appellate Assistant Commissioner which in its opinion should be agitated and decided in the interest of public revenue. Now, it is clear that when an appeal is pending before the Appellate Assistant Commissioner, the Income-tax Officer has the right to be heard either in person or by a representative, and the very point which the Commissioner has taken and on which he has given his decision under s. 33-B could have been urged under the directions of the Commissioner before the Appellate Assistant Commissioner. It is only when no remedy is open to the Commissioner to revise the order of the Income-tax Officer, that this jurisdiction under s. 33-B arises. But when a legal remedy is given to him to get the orders of the Income-tax Officer revised, he cannot requisition to his aid the power conferred upon him under s. 33-B. Once the appeal with regard to the year 1949-1950 was pending before the Appellate Assistant Commissioner the Commissioner was given the full right to get the order of the Income-tax Officer revised in any manner he thought necessary in the interest of public revenue. He had to satisfy the Appellate Assistant Commissioner that the firm had been wrongly registered and that the registration should be cancelled and if he could not induce the Appellate Assistant Commissioner to take the view he had taken, he had a further right to go to the Tribunal. Therefore, instead of getting a decision from the ordinary Tribunals set up under the Income-tax Act, viz., the Appellate Assistant Commissioner, and the Appellate Tribunal the Commissioner exercised his revisional powers under s. 33-B. In our opinion, the revisional powers are exceptional powers to be exercised at exceptional time, for exceptional reasons, and the exceptional reason for which the powers can be and should be exercised is when the Commissioner feels that the public revenue is likely to suffer and that no remedy is open to him to get the order of the Income-tax Officer revised. As he had a clear obvious remedy in the appeal which was pending before the Appellate Assistant Commissioner, in our opinion, he had no jurisdiction to exercise his powers under s. 33-B. In view of this decision it is unnecessary to decide the other questions raised by the Tribunal.

The answer to question No. 1 will be in the negative. This question only deals with the years 1947-1948 and 1948-1949. As the Tribunal has also dealt in its judgment for the year 1949-1950, but has not raised any specific question with regard to that assessment year, we think it necessary to raise a question which clearly arises from the order of the Tribunal and in respect of which all necessary facts are set out in the statement of the case. The question raised will be:—

“Whether the order of the Commissioner acting under s. 33B(1) setting aside the order of the Income-tax Officer while an appeal from that order was pending before the Appellate Assistant Commissioner was valid?”

and we answer that question in the negative. Question No. 2—It is unnecessary to answer this question. Question No. 3—“Whether on the facts and circumstances of the case, the orders passed by the Income-tax Officer, dated June 21, 1952, are bad in law, as fresh notices as required by ss. 22 and 23 of the Income-tax Act required by ss. 22 and 23 of the Income-tax Act were not given by the Income-tax Officer to the assessee?” In our opinion, it is unnecessary to decide this question because all proceedings taken by the Income-tax Officer pursuant to the orders passed by the Commissioner under s. 33-B must be bad inasmuch as we have held that the orders of the Commissioner are bad.

The Commissioner to pay the costs.

Attorneys for Commissioner: N.K Petigara.

Attorneys for respondent: Manilal Kher Ambalal and Co.

Answer accordingly.

P.M.P