HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income-tax, U.P., Lucknow v. Kanpur Coal Syndicate
Civil Appeal No. 673 of 1963
[1964] 8 SCR 85 ·
Indian Income-tax Act, 1922: sections 3, 14(2)(b), 30, 31 and 33
Sources & disclosures includedDownload original judgment / order
3-judge bench · K. Subba Rao, J. · J. C. Shah, J. · S. M. Sikri, J.
Assessment years: 1948-49
01 · Facts of the case
The assessee was an association formed to purchase coal and supply domestic customers and small industries. For assessment year 1948-49, it requested assessment of members on their respective shares instead of assessment of the association. The officer and Appellate Assistant Commissioner rejected the request. The Tribunal recognised the officer's alternative power but considered itself unable to direct its exercise; the Allahabad High Court held otherwise on reference (SCR pp.86–88; PDF pp.2–4).
Source: Primary judgment: facts
02 · Discussion by the Hon’ble Court
The Court read section 3 as recognising the association and individual members as separate alternative assessable entities. An objection to association-level assessment was a denial of liability in the relevant circumstances and therefore appealable under section 30. Under section 31, the Appellate Assistant Commissioner's assessment powers were plenary and coterminous with those of the officer; section 33 likewise gave the Tribunal ample power to set aside the assessment and issue consequential directions concerning members (SCR pp.88–92; PDF pp.4–8).
Source: Primary judgment: discussion
03 · Judicial decision
The Court upheld the High Court's answer: the Tribunal had jurisdiction to direct cancellation of the association's assessment and appropriate fresh assessments on individual members. Revenue's appeal was dismissed with costs (SCR pp.92–93; PDF pp.8–9).
Source: Primary judgment: decision
04 · Outcome / in whose favour
In favour of the assessee/respondent on the scope of appellate jurisdiction. The decision affirmed the power to give the requested kind of direction, rather than itself quantifying members' liabilities (SCR pp.92–93; PDF pp.8–9).
Source: Primary judgment: outcome
05 · AKHB REVIEW POINT
AKHB analysis: identify the actual statutory power being challenged and frame an appeal ground that connects the disputed assessment treatment with the appellate authority's corrective powers. Keep the broad principle on appellate assessment powers separate from the historical entity-choice provision on which this case arose (based on SCR pp.90–93; PDF pp.6–9).
Source: Primary judgment: reviewPoint
Source & verification
Download original judgment / order · Open cited source rendition
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Statutory scope
The alternative choice between taxing an association of persons and its members arose under section 3 of the 1922 Act. It must not be assumed to remain an elective regime under present law; current appellate powers and entity-assessment provisions require independent review.
Later treatment
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