PETITIONER: THE STATE OF UTTAR PRADESH Vs. RESPONDENT: BHAGWANT KISHORE JOSHI DATE OF JUDGMENT: 17/04/1963 BENCH: <NAME>, K. BENCH: <NAME>, K. DAYAL, RAGHUBAR <NAME>, J.R. CITATION: 1964 AIR 221 1964 SCR (3) 71 CITATOR INFO : R 1968 SC1292 (5,7) E&R 1970 SC1396 (6,7) R 1984 SC 718 (21) RF 1991 SC1260 (54) AFR 1992 SC 604 (81) ACT: Criminal Trial--Investigation by Police Officer below the rank of Deputy Superintendent of Police--Previous permission of Magistrate not obtained--If proper investigation--Such omission if vitiated the trial-- Prevention of Corruption Act , 1947 (2of 1947), s. 5A --Code of Criminal Procedure, 1898 (Act 5 of 1898), ss. 4 (1), 154, 157. HEADNOTE: The respondent was a booking clerk. He committed criminal breach of trust in respect of Rs. 49/1/0. On the receipt of the above mentioned information Superintendent of Police directed M, a Sub-Inspector of Police, to make an enquiry. Thereafter M verified the allegations contained in the information and examined the relevant railway records. On 72 the basis of the information collected, he submitted a report. M made the first stage of investigation without obtaining the order of the Magistrate, 1st Class.1 Subsequently, M obtained permission of a Magistrate, 1st Class, to investigate into the case as required by s. 5A of the Prevention of Corruption Act. Thereafter. he made further investigation and submitted a charge sheet. The respondent was tried and convicted by the Special Judge under s. 5 (2) of Prevention of Corruption Act . On appeal <ORG> set aside the conviction mainly on the ground that the first stage of the investigation was contrary to s. 5A of the Prevention of Corruption Act and the accused must be held to have been seriously prejudiced by the said contravention of the Act. Held (per <NAME> and <NAME>, JJ.), that the first stage of investigation made by M, before obtaining the requisite permission. of the Magistrate, 1st Class, under s. 5 A of the Act , was an "investigation" within the meaning of s. 4 (1) of the code of Criminal Procedure. M received through the report a detailed information of the offence alleged to have been committed by the accused with necessary particulars; he proceeded to the spot of the offence, ascertained the relevant facts by going through the railway records, and submitted a report. These acts constituted an investigation within the meaning of the definition of "investigation" under s. 4 (1) of the Code of Criminal Procedure and as such there was a contravention of s. 5A of the Prevention of Corruption Act. Subsequently M rectified the earlier defect by obtaining the permission of the Magistrate, 1st Class, to investigate into the offence alleged to have been committed by the accused and in effect there was practically de novo investigation in strict compliance with the provision of Code of Criminal Procedure. In fact, the accused has not been prejudiced by the illegality committed by the Police in the first stage of investigation. The conviction of an accused cannot be set aside on the ground of some irregularity or illegality in the matter of investigation. there must be sufficient nexus either established or probabilized, between the conviction and the irregularity in the investigation. <CITATION> at Delhi,  1 S.C.R. 1150, relied on. In re <NAME>, A.I.R. 1915 Mad. 312, In re <NAME>, A.I.R. 1958 Mad, 368 and <CITATION> . ,1. Samuel I.L.R. 1960 Kerala 783, referred to. 73 Mudholkar J.--In fact there was no defect. or irregularity in conducting the first stage of investigation. Investigation, in substance, means collection of evidence relating to the commission of offence for establishing, the accusation against the offender. It is open to a Police Officer to hold preliminary enquiry for ascertaining the correctness of the information. Such preliminary enquiry does not amount to collection of evidence and so cannot be regarded as investigation. <CITATION>  1 S.C.R. 1150, relied on. JUDGMENT:

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 171 of 1961.

Appeal by special leave from the Judgment and order dated January 30, 1960, of <ORG> (<ORG>) at Lucknow in Criminal Appeal No. 643 of 1960.

<NAME>, <NAME> and <NAME>, for the appellant. <NAME>, for the respondent.

1963. April 17. The Judgment of <NAME> and <NAME>, was delivered by <NAME> J. Mudholkar J., delivered a separate Judgment.

<NAME> appeal by special leave is directed against the judgment of <ORG> at Allahabad, Lucknow, Bench Lucknow setting aside that of the Special Judge (West), Lucknow, who convicted the accused-respondent and sentenced him to one year's rigorous imprisonment Under s. 5 (2) of the Prevention of Corruption Act (No. II of 1947), hereinafter called the Act. The case of the prosecution may be briefly stated: The respondent was a booking clerk at Saharanpur in the year 1955-56. Between October 22, 1955, and May 26, 1956, he committed criminal

74. breach of trust in respect of Rs. 49/1/0. On the said allegations the accused was sent up for trial before the Special Judge for offences under s. 5 (1) (c), read with s. 5 (2), of the Act. Before the Special Judge the prosecution filed a number of documents numbering up to 124 and examined 20 witnesses. The accused admitted before him that he had realized the amounts as alleged by the prosecution, but pleaded that he had no dishonest intention, and that the deficit found was due to inadvertance and oversight. The Special Judge considered the entire evidence and found that the evidence adduced by the prosecution established that the accused misappropriated the amounts received by him as a public servant. It was contended before him that the investigation of the case has been made by SubInspector <NAME>, who under the law was not entitled to investigate the case, as he was below the rank of Deputy Superintendent and hence the trial was vitiated. The learned Special Judge held that the said Sub-Inspector did not conduct any investigation before he obtained the requisite permission from the appropriate authority and that even if he did it had not been established that the accused was prejudiced by such an enquiry. In the result he convicted the accused and sentenced him as aforesaid. On appeal by the accused, <ORG> set aside the conviction mainly on the ground that the SubInspector <NAME> made "Investigation" before he obtained the permission of the Additional District Magistrate (Judicial), Lucknow, to investigate the case and as the said investigation was in violation of the provisions of the Act, the accused must be held to have been seriously prejudiced by the said contravention of the Act. <ORG> also casually observed that it was inclined to take the view that the prosecution had not eliminated the reasonable possibility of the defence of the accused being correct. For the said reasons <ORG> set aside the conviction of the accused and acquitted him. The State has preferred the present appeal against the said judgment of <ORG>.

The only question that was argued before us is whether <ORG> was right in acquitting the accused on the ground that the investigation made by Sub-Inspector <NAME> before he obtained 'the permission of the Magistrate vitiated the entire trial.

Learned counsel for the <ORG> contended that the said Sub-Inspector only made a preliminary enquiry to ascertain the truth of the information received by him and, thereafter, after obtaining the requisite permission of the Magistrate he made an investigation of the offence and, therefore, there was neither illegality nor irregularity in the matter of investigation. In any view, the argument proceeded, <ORG> went wrong in setting aside the conviction based on evidence without considering and coming to a conclusion whether the said irregularity, if any, had prejudiced the accused.

On the other hand, learned counsel for the accused- respondent, pressed on us to hold that the investigation was made in consistent disregard of the safeguards provided by the <ORG> in such a case and therefore the <ORG>. should, without any further proof, presume prejudice to the accused.

Before we consider the merits of the rival contentions it would be necessary to notice briefly the alleged irregularity-committed by the prosecution in the matter of investigation.

On April 26, 1956, <NAME>, the Railway Sectional Officer, <ORG>, Lucknow, sent report to <NAME>, <ORG>, stating that he had received information through a source that the accused was in the habit of misappropriating Government money, giving 7 instances of the acts of misappropriations committed by him and informing him that if a proper investigation was made many more cases of misappropriation would come to light. <NAME>, the Sub-Inspector of Police, <ORG>, as P.W. 15 says that on the receipt of the said report, the said Superintendent of .Police directed him to make an enquiry; and he further says that on the basis of the information he checked the railway records, found that the information was correct and submitted a report accordingly. After he submitted the report, on October 8, 1956, the said Sub-Inspector applied to the Additional District Magistrate (Judicial), Lucknow, for permission to investigate the case. On October 19, 1956, the said Magistrate permitted him to investigate. Thereafter, he made further investigation, seized documents, took statements from witnesses and finally submitted a charge-sheet against the accused. The first question is whether the enquiry made by him before he obtained the permission of the Magistrate was "investigation" within the meaning of the provisions of the Code of Criminal Procedure. Section 154 of the Code prescribes the mode of recording the information received orally or in writing by an officer incharge of a police station in respect of the commission of a cognizable offence. Section 156 thereof authorizes such an officer to investigate any cognizable offence prescribed therein. Though ordinarily investigation is undertaken on information received by a police officer, the receipt of information is not a condition precedent for investigation. Section 157 which prescribes the procedure in the matter of such an investigation can be initiated either on information or otherwise. It is clear from the said provisions that an officer incharge of a police station can start investigation either on information or otherwise. Under s. 4 (1) of the Code of Criminal Procedure, "Investigation" includes all the proceedings under this Code for the collection of evidence conducted by a police-officer Or by any person (other than a Magistrate) who is authorized by a Magistrate in this behalf." This <ORG> in <CITATION> (1), described the procedure prescribed for investigation under Ch. XIV of the Code of Criminal Procedure thus:

"Thus, under the Code investigation consists generally of the following steps: (1) Proceeding to the spot, (2) Ascertainment of the facts and circumstances of the case, (3) Discovery and arrest of the suspected offender, (4) Collection of evidence relating to the commission of the offence which may consist of (a) examination of various persons (including the accused) and the reduction of their statements into writing, if the officer thinks fit, (b) the search of places of seizure of things considered necessary for the investigation and to be produced at the trial, and (5) Formation of the opinion as to whether on the material collected there is a case to place the accused before a M agistrate for trial and if so taking the necessary steps for the same by filing of a charge-sheet under section 173 ."

Did <NAME>, the Sub-Inspector, make such an investigation before he obtained the permission of the Magistrate under s. 5A of the Act ? Ex. P-113 shows that <NAME>, the Railway Sectional Officer, received through a source information that the accused was in the habit of misappropriating Government money by not accounting for the saleproceeds of blank paper and other tickets; it also indicates that the information received by the said officer was not vague, but contained precise particulars of the acts of misappropriation committed by the accused. On April 26, 1956 he sent a report of the information received to the Superintendent of Police, <ORG>, Lucknow, indicating to him that if a proper investigation was made many more cases of misappropriation would come to light. On the receipt of the said report, the matter was entrusted to the said <NAME>, a SubInspector of Police of the <ORG>, Lucknow. As P.W. 20 he describes the steps he had taken pursuant to the information given in the said report. He verified the allegations contained in the information given by <NAME>, saw the relevant railway records after taking the permission of the Station Master and found the information given to be correct.. On the basis of the information collected, he submitted a report. But the full details of the enquiry were not mentioned therein. He also did not prepare any case diary in respect of the said enquiry. The said report is not in the record. We may assume that the Sub-Inspector did nothing more than what he states he did in his evidence. Even so t e said police officer received a detailed information of the offence alleged to have been committed by the accused with necessary particulars, proceeded to the spot of the offence, ascertained the relevant facts by going through the railway records and submitted a report of the said acts. The said acts constituted an investigation within the meaning of the definition of "investigation" under s. 4 (1)of the Code of Criminal Procedure as explained by this Court. The decisions cited by the learned counsel for the <ORG> in support of his contention that there was no investigation in the present case are rather wide off the mark. In In re <NAME> a division Bench of <ORG> held that an informal enquiry on the. basis of a vague telegram was not an investigation within the meaning of s. 157 of the Code of Criminal Procedure. In In re <NAME> (2), <NAME>, of the Madras (1) A.I.R. 1915 Mad. 312. (2) A.I.R. 1958 Mad. 368, 371-372.

<ORG> described the following three 'stages a policeman has to pass in a conspiracy case:

"......hears something of interest affecting the public security and which puts him on the alert; makes discreet enquiries, takes soundings and sets up informants and is in the second stage of qui vive or lookout; and' finally gathers sufficient information enabling him to bite upon something definite and that is the stage when first information is recorded and when investigation starts."

This graphic description of she stages is only a restatement of the principle that a, vague information or an irresponsible rumour would not in itself constitute information within the meaning of s. 154 of the Code or the basis for an investigation under s. 157 thereof. <CITATION> (1), a full Bench of <ORG> ruled that,"it can be stated as a general principle that it is not every piece of information however vague, indefinite and unauthenticated it may be that should be recorded as the First Information for the sole reason that such information was the first, in point of time, to be received by the police regarding the commission of an offence." The full Bench also took care to make it clear that whether or not a statement would constitute the First Information Report in a case is a question of faCt and would depend upon the circumstances of that case. These and such other decisions were given in the context of the question whether an information given was the First Information within the meaning of s. 154 of the Code: they are not of much relevance in considering the question whether in a particular case a police officer has made an investigation of a cognizable offence within the meaning of s. 157 of the Code; that would depend upon the nature of the information received by the police officer, and the steps taken by him for (1) I. L. R, 1960 Kerala 783.

ascertaining the 'truth of the information and for detecting the crime.

In this case, the information received was clear and precise and the Sub-Inspector, on the basis of the said information, went to the spot to investigate into the truth of the allegations and indeed took some of the crucial steps to detect the crime. We, therefore, hold that the Sub- Inspector of the Police made investigation of the offence before obtaining the requisite permission of the Magistrate.

Section 5A of the Act reads:

"Notwithstanding anything contained in the Code of Criminal Procedure, 1898, no police officer below the rank--

X X X X X

(c) elsewhere, of a deputy superintendent of police, shall investigate any offence punishable under section 161 , section 165 , or section 165A of the Indian Penal Code or Under sub-section (2) of section 5 of this Act, without the order of a presidency magistrate or a magistrate of the first class, as the case may be, or make any arrest therefore without a warrant ;"

It is manifest from the section that an officer below the rank of a Deputy Superintendent of Police cannot investigate an offence punishable under the provisions of the Act without the order of a Magistrate, First Class. The scope of the said section and the reason underlying the said provision and others were considered by this Court in <CITATION> (1). It was stated therein that s. 5A was inserted in the Act by Act 59 of 1952 to protect (1)  supp. 2 S. C. R. 201.

public servants against harassment and victimization. This Court further observed therein that the said statutory safeguards must be strictly complied with, for they were conceived in public interest and were provided as a guarantee against frivolous and vexatious prosecution. The reason for the rule was given thus, at p. 208:

"While in the case of an officer of assured status and rank, the legislature was prepared to believe him implicitly, it prescribed an additional guarantee in the case of police officers below that rank, namely, the previous order of a presidency magistrate or a magistrate of the first class., as the case may be..The magistrate's status gives assurance to the bona fide of the investigation ."

Notwithstanding the clear and express provisions of the statute, in the present case the Sub-Inspector made the investigation of the.offence alleged to have been committed by a public servant without obtaining the order of a Magistrate, First Class.. We hope and trust that investigations under the Act will be conducted in strict compliance with the provisions of the Act. But in this case the police officer realised his duty after he made some investigation of the offence and hastened to rectify the defect. After he verified the railway records in the light of the information received by him, he registered the case. Thereafter on October 8, 1956. he applied to the Additional District Magistrate (.Judicial), Lucknow, for permission to investigate the offence. Therein he stated that no Deputy Superintendent of Police was posted for the Lucknow branch of the <ORG> establishment. The Superintendent of Police in Eorwarding that application endorsed that statement nd further pointed out that he was busy with the supervision of other important cases and administrative duties. The Magistrate on October 19, 1956, on the basis of the said facts gave the necessary permission to the Sub- Inspector to investigate the offence. The Sub-Inspector thereafter made a detailed investigation, took statements, of witnesses, seized the relevant papers, got an investigation ,made, when necessary through other branches of <ORG>, and thereafter submitted the charge-sheet. In short, after taking the permission of the Magistrate, he started practically a fresh investigation in strict compliance with the provisions of the Code of Criminal Procedure. Indeed, no attempt has been made to point out any defect or contravention of the provisions of the Code of Criminal Procedure in the matter of investigation after the granting of the said permission. After the investigation, the accused was tried by the Special Judge. The prosecution examined 20 witnesses and filed 124 exhibits. The defence examined 3 witnesses. The learned Special Judge, on a careful consideration of the entire evidence, came to the conclusion that the prosecution had brought home the guilt of the accused.

In these circumstances the question is whether <ORG> was justified in setting aside the conviction on the ground that the first stage of the investigation was contrary to the provisions of the Act.

The argument of the learned counsel for the respondent may be elaborated thus:Whenever there is a consistent disregard of the provisions of the Code of Criminal Procedure in the matter of investigation it must be held almost in all cases that it' has prejudiced the accused in the matter of trial, for otherwise it would enable a police officer below the rank of Deputy Superintendent of Police to make an investigation free from the statutory safeguards designed to prevent the abuse of police powers, to secure the necessary information and thereafter to take the requisite permission of the Magistrate and then to shape his investigation to achieve the desired result or to implement his scheme. No doubt this practice, if it exists, must be condemned; but the question is, does the infringement of the salutary provisions of the Act in the matter of investigation, without more, invalidate the trial ? If we accept the broad proposition advanced by the learned counsel, we would be disregarding the provisions of s. 537 of the Code of Criminal Procedure; we would be ignoring an honest body of compelling evidence on the basis of the dereliction of duty by the police. The question is not whether in investigating an offence the police have disregarded the provisions of the Act, but whether the accused has been prejudiced by such disregard in the matter of his defence at the trial. It is, therefore, necessary for the accused to throw a reasonable doubt that the prosecution evidence is such that it must have been manipulated or shaped by reason of the irregularity in the matter of investigation, or that he was prevented by reason of such irregularity from putting forward his defence or adducing evidence in support thereof. But where the prosecution evidence has been held to be true and where the accused had full say in the matter, the conviction cannot obviously be set aside on the ground of some irregularity or illegality in the matter of investigation: there must be a sufficient nexus, either established or probabilized, between the conviction and the irregularity in the investigation.' In this case, as we have earlier pointed out, not only the trial was fair and the evidence convincing, but even the earlier defect was rectified by having practically a de novo investigation in strict compliance with the provisions of the Code of Criminal Procedure. We cannot, therefore, hold that the accused has been prejudiced by the illegality committed by the police in the first stage of 'the investigation, <ORG> st:t: aside the conviction on the ground that there was a breach of the mandatory safe guards of the Act in that the first stage of the investigation was contrary to the provisions of the Act. But it did not consider the other question whether the said breach caused prejudice to the accused in the matter of' his trial. In doing so, <ORG> ignored the provisions of s. 537 of the Code of Criminal Procedure. Having carefully gone through the record, for the reasons aforesaid, we are satisfied that no such prejudice has been caused to the accused. He had a fair trial and had his full say. We, therefore, set aside the order of <ORG> and convict the respondent under s. 5 (2) of the Act and sentence him to one year's rigorous imprisonment.

<NAME> perused the .judgment prepared by <NAME> 3., and I agree with him that the appeal should be allowed and the respondent who was a booking clerk at Saharanpur at the relevant time should be convicted and sentenced as proposed by him. I also agree that a mere irregularity in investigation would not be a ground for setting aside the conviction of an accused person unless the court is satisfied that the accused has been prejudiced by it. I, however, find it difficult to agree with his conclusion that there was in fact a defect or irregularity in the investigation in this case.

For the purpose of dealing with this point it is not necessary to set out all the facts ,which fully appear in the judgment of my learned brother. I will, therefore, set out only those facts which have a bearing upon this point.

Upon receiving a report from the Railway Sectional Officer, <ORG>, Lucknow, stating that he had received information through an undisclosed source that the respondent is in the habit of misappropriating Government money, the Superintendent of police, <ORG> directed Sub- Inspector <NAME> to verify the truth of the allegations made against the respondent. <NAME> thereupon went to the Saharanpur railway station and with the permission of the appropriate authority went through certain railway records and submitted a report to his superior to the effect that the allegations made against the respondent appeared to be correct. It was thereafter that he obtained the permission of the Additional District Magistrate (judicial), Lucknow, to investigate into the case as required by s. 5A of the Prevention of Corruption Act and then proceeded to investigate the ease. <ORG> held that what SubInspector <NAME> did before obtaining the permission to investigate was nothing but investigation and that he had done something which is prohibited by s. 5A of the Prevention of Corruption Act. Therefore, according to <ORG> the entire investigation was vitiated and consequently the respondent's conviction and sentence could not be sustained.

What is investigation is not defined in the Code of Criminal Procedure; but in <NAME> and <NAME> v. <ORG> (1), <ORG> has described the procedure for investigation as follows:

"Thus, under the Code investigation consists generally of the following steps':(1) Proceeding to the spot, (2) Ascertainment of the facts and circumstances of the case, (3) Discovery and arrest of the suspected offender, (4) Collection of evidence relating to the commission of the offence which may consists of (a) the examination of various persons (including the (1)  1 S.C.R. 1150.

accused) and the reduction of the their statements into writing, if the officer thinks fit, (b) the search of places of seizure of things considered necessary for the investigation and to be produced at the trial, and (5) formation of the opinion as to whether on the material collected there is a case to place the accused before a Magistrate for trial and if so taking the necessary steps for the same by the filling of a charge-sheet under section 173 ."

This Court, however, has not said that if a police officer takes merely one or two of the steps indicated by it, what he has done must necessarily be regarded as investigation. Investigation, in substance, means collection of evidence relating to the commission of the offence ? The Investigating Officer is, for this purpose, entitled to question persons who, in his opinion, are able to throw light on the offence which has been committed and is likewise entitled to question the suspect and is entitled to reduce the statements of persons questioned by him to writing. He is also entitled, to search the place of the offence and to search other places with the object of seizing articles connected with the offence. No doubt. for this purpose he has to proceed to the spot where the offence was committed and to. various other things. But the main object of investigation being to bring home the offence to the offender the essential part of the duties of an Investigating Officer in this connection is, apart from arresting the offender, to collect all material necessary for establishing the accusation against the.. offender. Merely. making some preliminary enquiries upon receipt of information from an anonymous source or a source of doubtful reliability for checking up the correctness of the information does not amount to collection of evidence and so cannot be regarded as investigation. In the absence of any prohibition m the Code , express or implied, I am of opinion that it is open to a Police Officer to make preliminary enquiries before registering an offence and making a full scale investigation into it. No doubt, s. 5A of the Prevention of Corruption Act was enacted for preventing harassment to a Government servant and with this object in view investigation, except with the previous permission of a Magistrate, is not permitted to be made by an officer below the rank of a Deputy Superintendent of Police. Where however, a Police Officer makes some preliminary enquiries, does not arrest or even question an accused or question any witnesses but merely makes a few discreet enquiries or looks at some documents without making any notes, it is difficult to visualise how any possible harassment or even embarrassment would result therefrom to the suspect or the accused person. If no harassment to the accused results from the action of a Police Officer how can it be said to defeat the purpose underlying s. 5A ? Looking at the matter this way, I hold that what <NAME> did was something very much short of investigation and, therefore, the provisions of s. 5A were not violated. Since no irregularity was committed by him there is no occasion to invoke the aid of the curative provisions of the Code .

Appeal allowed.


PETITIONER: <ORG> Vs. RESPONDENT: STATE OF MADHYA PRADESH DATE OF JUDGMENT: 25/07/1996 BENCH: <NAME>: <NAME>, A.S. (J) CITATION: JT 1996 (6) 652 1996 SCALE (5)467 ACT: HEADNOTE: JUDGMENT:

THE 25TH DAY OF JULY, 1996 Present :

Hon'ble Dr. Justice <NAME> Hon'ble Mr. Justice <NAME> and <NAME>, Adv. for the appellants. <NAME>, Adv. for the Respondent J U D G M E N T The following Judgment of the Court was delivered: <NAME>

State of Madhya Pradesh (With Criminal Appeal No. 252 of 1984) J U G M E N T THOMAS, J.

A youngman, by name <NAME>, was murdered on 23.8.1980, near Government Degree College Dhar. The police arraigned five persons for the said murder and the Sessions Judge, after trial, convicted the first two among them (<NAME>-first accused and <NAME> second accused) of the offence under Section 302 , and acquitted the remaining three persons. State filed an appeal challenging the acquittal and the convicted persons filed another appeal. <ORG> of Madhya Pradesh while confirming the conviction and sentence reversed the order of acquittal of 5th accused (<NAME> and convicted him also of the offence under Section 302 . Sentence of imprisonment for life was awarded to all the convicts. We have before us two appeals by special leave, one jointly filed by <NAME> and <NAME> and the other separately filed by <NAME>.

Prosecution set up the following case against five accused. Around 3.30 P.M. deceased <NAME>, PW-1 <NAME> and PW-5 <NAME> were proceeding on bicycles along Dhar-Indore Road. Their cestination was <NAME>'s house at Jetpura. As they reached near <ORG>, all the five accused emerged from the roadside and made a blits on <NAME>. <NAME> and <NAME> were armed with Dhariya. 3rd accused had a pistol and 4th and 5th accused (<NAME>) had sickles with them. Deceased tried to escape but was again attacked by the assailants with their cutting weapons. PW-1 and PW-5 cried for help and thus <NAME> Peon of the College rushed to their rescue. But by then <NAME> had sustained a number of serious wounds on his head and he fell down dead at the spot itself.

Sessions court framed a charge against the accused for offences under Sections 302 and 148 read with Section 149 of the Indian Penal Code. The accused denied having participated in the occurrence. After trial learned sessions Judge concluded that prosecution has failed to prove that there was an unlawful assembly, but found that <NAME> (first accused) and <NAME> (second accused) have inflicted cut injuries or the deceased with Dhariyas and convicted them under Section 302  and sentenced them each to imprisonment for life.

Out of the four eye witnesses examined by the prosecution <NAME> (PW-4) did not support the case and the other three witnesses spoke to the prosecution version. Learned sessions Judge found the evidence of <NAME> (PW-6) quits acceptable and hence the conviction was based on his testimony. Nonetheless the trial judge was not inclined to convict <NAME> (5th accused) on the strength of the evidence of <NAME> (PW-6). Evidence of the other eye witnesses was found to be not very reliable.

<ORG> on a re-evaluation of the evidences felt that the trial court to have placed reliance on the testimony of <NAME> (PW-1) and <NAME> (PW-5) also. Learned judges expressed the view that sessions judge has given undue importance to certain discrepancies and contradictions noted in their evidence. This is what the <ORG> said about it:

"The discrepancies and contradictions are not in regard to the fact that the accused participated in the incident put in regard to the sequence of events and minor and inconsequential details of the occurrence and other collateral facts which do not make their testimony untrustworthy."

Thus relying on the evidence of PW-6 (Naruram) as corroborated by PW-1 and PW-2 <ORG> found <NAME> also guilty of murder and convicted him and sentenced him as aforesaid.

Learned counsel for the appellants contended that <ORG> committed a basic error in seeking the aid of Section 34  for confirming the conviction of the appellants for the offence under Section 302 . So long as the charge framed against them did not mention Section 34 of . <ORG> was not Justified in using the said provision for convicting the appellants, according to the learned counsel.

<ORG> found that there was no unlawful assembly as the strength of the assembly was insufficient to constitute it into "unlawful assembly". But if the court enters upon a finding that any of the remaining persons who participated in the crime had shareo common intention with the main perpetrators of the crime, the court is not helpless in seeking the aid of Section 34 () to enter a conviction against such persons arraigned as accused. This is despite the difference between the scops of Section 34 and Section 149 , yet they have some resemblance between each other and are to some extent overlapping ( <CITATION> , 1925 PC 1).

Legal position on this aspect remained uncertain for a time after this court rendered a decision in <CITATION> . 1955 (1) SCR 1201. But the doubt was cleared by a constitution bench of this court in <CITATION> ., AIR 1956 SC 116. Where this court observed at para 86, thus:

" Sections 34 , 114 and 149 of the Indian Penal Code provide for criminal liability viewed from different angles as regards actual participants, accessories and men actuated by a common object or a common intention: and the charge is a rolled-up one involving the direct liability and the constructive liability without specifying who are directly liable and who are sought to be made constructively liable. In such a situation, the absence of a charge under one or other of the various heads of criminal liability for the offence cannot be said to be fatal by itself, and before a conviction for the substantive offence, without a charge, can be set aside, prejudice will have to be made put. In most of the cases of this kind, evidence is normally given from the outset as to who was primarily responsible for the act which brought about the offence and such evidence is of course relevant."

It is, therefore, open to the court to take recourse to Section 34 of  even if the said section was not specifically mentioned in the charge and instead Section 149  has been included. Of course a finding that the assailant concerned had a common intention with the other accused is necessary for resorting to such a course. This view was following by this court in later decisions also, ( <CITATION> . AIR 1973 SC 2221. <CITATION> or Punjab, AIR 1974 SC 1256). The first submission of the learned counsel for the appellant has no merit.

While dealing with the case of appellant <NAME>, we may point out that <ORG> chose to believe the evidence of PW-1 and PW-2 and found that their evidence supports the testimony of PW-6 who said that <NAME> was also a participant in the crime. In this context it is to be remembered that learned sessions judge was disinclined to convict <NAME> because PW-6 Naruram did not mention anything about <NAME> in his statement recorded under Section 161 of the Code of Criminal Procedure for short the Code ). When cross- examined, PW-6 was asked this omission and he had no explanation to offer. PW-14, the Investigating Officer who interrogated PW-6, had stated that <NAME>'s name was not mentioned by <NAME> (PW-6) when the latter was questioned during investigation. Learned sessions Judge found it difficult to convict accused <NAME> on the above evidence of PW-6, but the <ORG> chose to act on the said evidence. Learned counsel for the appellant -<NAME> seriously assailed the aforesaid course adopted by the <ORG> and contended that it is not open to the appellant court to interfere with the finding made by the trial court in favour of an accused so lightly as that. Learned counsel further contended that in an appeal against acquittal there must be compelling reasons to disturb a fact finding made by the trial court and that unless the view of the trial court is perverse or at least unreasonable no interference shall normally be made.

Though the Code does not make any distinction between an appeal from acquittal and an appeal from conviction so far as powers of the appellate court are concerned, certain unwritten rules of adjudication have consistently been following by Judges while dealing with appeals against acquittal. No doubt, <ORG> has full power to review the evidence and to arrive at its own independent conclusion whether the appeal is against conviction or acquittal. But while dealing with an appeal against acquittal the appellate court has to bear in mind: first, that there is a general presumption in favour of the ignorance of the person accused in criminal cases that presumption is only strengthened by the acquittal. The second is, every accused is entitled to the benefit of reasonable doubt regarding his guilt and when the trial court acquitted him. He would retain that benefit in the appellate court also. Thus, appellate court in appeals against acquittals has to proceed more cautiously and only if there is absolute assurance of the guilt of the accused, upon the evidence on record, that the order of acquittal is liable to the interfered with or disturbed. ( <CITATION> , AIR 1966 SC 1775, <CITATION> . Goa, AIR 1977 SC 135, <CITATION> , AIR 1987 SC 1083, <CITATION> . , AIR 1988 SC 1158, <CITATION> , AIR 1990 SC 2134).

Trial court which relied on the evidence of <NAME> (PW-6) pointed out that the witness did not refer to any role played by <NAME> when he gave statement to the police during investigation and hence a conviction for the offence of murder cannot be passed against <NAME> on the strength of improvement made at the trial. The said sound reasoning should not have been sidelined by <ORG> without providing sufficient and convincing reasons. None has been given. We have scrutinized the evidence and we too are satisfied that PW-6 <NAME> has, in fact, omitted to mention anything about <NAME> when PW-6 was questioned by police and has later on tried to give an improved version.

We are, therefore, of the opinion that the order of acquittal passed by the trial court in favour of <NAME> should have been maintained by <ORG>. So far as the case of <NAME> and <NAME> is concerned, the appreciation of evidence by the courts below is sound and proper. We agree with the findings recorded by the courts below and are of the opinion that their conviction and sentence are well merited. There is no merit in their appeal.

In the result, we dismiss Criminal Appeal No. 252/84 filed by <NAME> and <NAME>, but we allow Criminal Appeal No. 170A/84, filed by <NAME>. We set aside the conviction and sentence passed on <NAME> and restore the order or acquittal passed by <ORG> in his favour.


JUDGMENT <NAME>, J.

1. The question referred to us by <ORG> in this reference reads as follows :

"Whether, on the facts and in the circumstances of the case, the <ORG> was correct in uphlding the order of the commissioner of Income-tax ?"

2. The question does not indicate what the order of the Commissioner of Income-tax was, on what basis the <ORG> upheld it as correct, and what was nature of the controversy raised by the assessee on it. A perusal of the sated case, however, tell us what the question is all about, a mercy for which we must be thankful. The assessee is a partnership firm carrying on A business of its own. It also indulged in a joint venture in sugar in association with certain other firms. While returning its income for 1969-70, the assessee displayed therein its share income from the joint venture. The Income-tax Officer accepted the return as he found it, and made an assessment on the basis of the return, charging to tax the total income income from the joint venture. Subsequently, the Commissioner of Income-tax initiated proceedings for suo moturevision under section 263 of the Income-tax Act, 1961, on the score that the Income-tax officer action in so far as he brought to charge the assessee's share income from the joint venture was prejudicial to the interest of the <ORG>. Accounting to the Commissioner of Income-tax Officer should have considered assessing the joint venture income in the hands of the association of persons as a whole. By assessing the share income in the individual assessment of this assessee, the Income-tax Officer had put it out of his reach to get at the association of persons as a body and as a taxable entity. It was apparently the view of the Commissioner of Income-tax that the average rate of tax appertaining to the total income of the association of persons was higher than the average rate of tax at which the share income was taxed appertaining to the members of the association of persons. He accordingly set aside the assessment in this case and directed Income-tax Officer to first make an assessment on the association of persons as such and then follow it up with the assessment of the share income of the assessee as member of that association.

3. This order of the Commissioner of Income-tax was confirmed by the <ORG> in appeal. The order of the <ORG> has given raise to the present reference. Two questions were debated before us on the the tax treatment of the association of persons vis-a-vis the individual members thereof. The other question was about the powers of the Commissioner of Income-tax to interfere with the orders of the Income-tax Officer as prejudicial to the interest of the <ORG>.

4. On the first question, it may be said that the position is now fairly well settled. Over a period of years, courts have held that when once an Income-tax officer makes an assessment of the share income of a member of an association, thereafter he could not proceed to asses the income of association of person as such. All that would remain to be done in such a case would be for the Income-tax officer to proceed to deal with the other members shares of income in their respective individual assessments. This position has been laid down as the pattern of assessment in all cases where an association of persons as such earn income in which the members thereof would be entitle to their aliquot shares. It may be conceived that this position regarding the modes of assessment of the association of persons on the one hand and on the members of the association on the other was somewhat clear under the Indian Income-tax Act , 1922, than they are under the present Income-tax Act , 1961. However, it can be taken as fairly well settled now that the position is the same even under the present statute, to this effect, there is a ruling of Bench of our court in <CITATION>  113 ITR 602. To the same effect are the decision of Andhra Pradesh and Calcutta High Courts, vide <CITATION> khan and <CITATION> .

5. The rationale behind the view of courts is variously described. It is sometimes said that an association of persons and a member of such an association are two distinct entities. It is also said that under the scheme of the Income-tax Act ,the Income-tax Officer has choice of alternatives, either to assess the association of persons as a whole, on its total income or,in the alternative, to proceed to assess the respective share income of the individual members thereof. From this conception of the pattern of assessments of the two entities involving an option or an election, it was but a natural step for the court to proceed to hold that when once an Income-tax Officer had taken a particular course of assessment, then not only, does he, as an assessing officer, commits himself to making an assessment in that mode but also commits <ORG> as a whole to the course of action. In other words, if an officer having charge of the assessment of an association of persons makes an assessment for any given assessment year on the total income of the association, there cannot be an assessment thereafter of the individual shares of the members separately. Contrary-wise where an Income-tax Officer having jurisdiction to assess an individual member of an association, proceeds to make an assessment of the share income as part and parcel of that member's total income, then, thereby he renders the department incapable of proceeding to assess to assess the total income of the association of person as a unit.

6. Mr. <NAME>, learned counsel for the assessee-firm, advanced another plausible consideration as being the rationale behind ruling of the court in this regard. He submitted that association of persons is an abstraction and it merely represents and denotes a group of persons who join together for the purpose of carrying on any transaction or business enabling each one of them to earn a share in the general profits obtained by the association as such. In this sense, what is regarded as the income of the association of persons is nothing but the aggegation of the individual shares of profit of the constituent can be spoken of as an entity in itself really and truly, there is only one income or one combination of income which is produced by the association, viz., the aggregate income of all the constituent members. In such a situation, if an Income-tax officer were to bring to charge the share income of a member of anassociation, thereby what the officer does is not merely to get at the income of the particular member concerned, but also to get at a portion of what undoubtedly is the income of the association itself. In this sense, therefor, the moment the member if an association is taxed in respect of his share income, that very moment a part of the association's income also gets taxed. In this situation, to permit the same Income-tax officer or any other officer having jurisdiction over the association of persons to bring to charge the income of the association as a whole, would be to bring about double taxation of the same income or part of it. The objection against double taxation is a principal, unless there are express provisions ought to be construed as negating double taxation.

7. Both in the Indian Income-tax Act , 1922, and in the Income-tax Act of 1961, while there may be no express provision prohibiting double taxation of both of the association and of the members thereof, there is no provision which expressly permits the Income-tax Officer to tax one and the same income both in the assessment of the association of members and of the constituent members thereafter proceed to assess the association of person, as a whole, as a unit of assessment.

8. Mrs. <NAME>, learned junior standing counsel for <ORG>, submitted that in order that the Income-tax officer may be interdicted from proceeding to make an assessment on the association of person following his assessment of the share income of a member thereof,there must be a conscious choice made by the Income-tax officer of the alternatives before him. The suggestion in this argument, was that if, in any given case, the Income-tax officer is said to have made the assessment in a member without an intelligent exercise of his discretion or in a fir of absent-mindedness, as as it were, this argument at first blush seems to be attractive and look like being based on some principal, it really is an argument of inconvenience. All that the learned counsel for the <ORG> suggests is that where an Income-tax Officer, for some reason or other, had taken a false step in making an assessment of a member, rather than being the process by making an assessment on the association, such an act on the part of the Income-tax Officer would be deleterious to the interest of the <ORG>, and in that sense, the fate of the assessment and collection of Income-tax revenue cannot be made to depend purely on the accidental circumstance of the Income-tax Officer taking an initial wrong plunge,as it were, in the stream of assessment. Similar argument have been addressed before courts on the basis of inconvenience and loss that may be caused to <ORG> if it should be held that any step taken by the Income-tax officer in the choice of alternatives would block further action in the other modes available under the Act, more productive of tax revenue. In some of the cases in the books, we find the <ORG> putting forward the contention that the interest of the <ORG> would suffer if it were asked to abide by the assessment by an individual Income-tax Officer on a member of the association where that officer had charged only one of the members of the association, when the jurisdiction for the assessments of the other members and for the assessment of the association of persons as such happens to reside in other Income-tax Officers in different charges and far-flung places. In such a situation, it was urged on behalf of the <ORG> that it would prejudice the <ORG> if the Income-tax Officer assessing the share income of one of the members of the association should be held thereby to commit irretrievably the entire department to that course, blocking any other venue of assessment as against the association as a whole. This kind of argument did not find favour of acceptance at the hands of the court, vide the following observations of this courts, in <CITATION>  113 ITR 602 at p. 604 :

"In one view, there can be no exercise of option by the Income-tax officer who assessed the individual, when he had no jurisdiction to assess the association as such. However, the point adverted to before us is that the choice is by the department as such and not by the individual. In other words, the point sought to be made out is that all the Income-tax Officers are functioning under Income-tax Act to assess the income of any person liable to tax and that thought, for convenience, they are invested with the jurisdiction over particular cases territorially or otherwise, still as all of them are discharging the same function, when one of them is exercising a choice, then he in a way forceloses the power available to the <ORG> to assess the association."

9. We do not, therefore, accept the argument of the learned counsel for the <ORG> that whenever an Income-tax officer has taken the step to assess an individual member of the association in respect of his aliquot share, then the correctness of his choice of assessment is open to question on an inquiry as to whether he had consciously made that choice, having before him all the relevant data therefor, or did so accidentally or without an application of his mind.

10. We may sum up this part of our discussion by observing that whether or not modus operandi in the tax treatment of an association of member vis-a-vis the members thereof can be called an option or a choice or an election, the courts have uniformly held that when once the officer has followed a particular mode of reaching the income to be taxed, then that perse puts the entire <ORG> out of reach of the other mode of making an assessment on the self-same income. It may be observed that this position has not been controverted by the Commissioner of Income-tax when he sought to interfere with the assessment made by the Income-tax officer in this case. Indeed, in the order passed by Commissioner of Income-tax under section 263 of the Act, the Commissioner in so many words had stated :

"......that the order of the Income-tax officer cannot be said to be not in accordance with the law...."

11. This was the conclusion of the Commissioner of Income-tax notwithstanding his earlier observation that when the Income-tax Officer made an assessment of the assessee's share from the joint venture, he had done so "apparently without considering whether the four concerns together could be treated as having formed an association of persons for the purpose of the transaction."

12. The next question, therefore, is whether on the footing that the officer's assessment of the assessee-firm with respect to its share income from the joint venture is not only final but also is valid and in accordance with law, the action of the Commissioner of income-tax under section 263 of the Income-tax Act can be sustained.

13. Section 263 of the Act empowers the Commissioner to call for and examine the record of any proceeding under the Act and if he considers that any order passed therein by the Income-tax Officer us erroneous in so far as it is prejudicial to the interests of the <ORG>, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such enquiry 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. The Commissioner of Income-tax, in the present case, had purported to act in exercise of this power on the ground that the order of the Income-tax Officer, although in accordance with the law, was, in his view, prejudicial to the interests of the <ORG>. This view of the Commissioner of Income-tax that the order passed by the Income-tax Officer was erroneous and prejudicial to the interests of the <ORG>, was endorsed by the <ORG> in their order. The question is whether the view expressed by the Commissioner of Income-tax and the <ORG> are based on a correct understanding of the enabling provisions of section 263 of the Income-tax Act and of the nature of the order of assessment passed by the Income-tax Officer.

14. Section 263 of the Income-tax Act is a provision in sub-chapter E of Charter XX of the Income-tax Act. This Chapter deals with appeals and revision. Section 246 provides a right of appeal to an assessee, against order passed by the Income-tax Officer, to the Appellate Assistant Commissioner. Section 252 provides a further appeal to the <ORG> against the orders passed by the Appellate Assistant Commissioner in appeal. In the sub-chapter XX relating to revision by the Commissioner apart from section 263 , there is yet another provision under section 264 which confers revisional power on the Commissioner of Income-tax. This latter revisional power under section 264 enables the Commissioner, either suo motu or on application by assessee, to interfere in revision with the orders passed by the authorities subordinate to him. The expression "authorities subordinate to him" would include not only the Income-tax Officer, but also the Appellate Assistant Commissioner and the Inspecting Assistant Commissioner. It is, however, specifically stated in section 264 that this power of revision under section 264 is available only against an order other than an order which is subject to revision under section 263 .

15. In the context of the above provisions, the power of the Commissioner of Income-tax under section 263 has to be judged on the words employed therein. The language used by the legislature in section 263 is to the effect that the Commissioner may interfere in revision if considers that the order passed by the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the <ORG>. It is quite clear from the above phrasing that two things must co-exist in order to give jurisdiction to the Commissioner to interfere in revision. The order of the Income-tax officer in question must not only be erroneous but also the error in the Income-tax officer's order must be of such a kind that it can be said of it that it is prejudicial to the interests of the <ORG>. In other words, merely because the officer's order is erroneous, the Commissioner cannot interfere. Again, merely because the order of the officer is prejudicial to the interests of the <ORG>, then again, that is not enough to confer jurisdiction on the Commissioner to interfere in revision. These two elements must co-exist. This construction of the section has been stated and evolved from the statutory language by a decision of <ORG> in <CITATION>  98 ITR 422.

16. The learned counsel for the <ORG> submitted that the order of the Income-tax Officer in the present case was prejudicial to the interests of the <ORG> since by taxing first the share income of the assessee who was a member of the association the officer thereby disabled the <ORG> from getting at the total income of the association of persons as such for being taxed at the higher rate appropriate thereto, resulting thereby in loss of revenue. We find it hard to accept this argument for more than one reason. In the first place, there are no materials started in the order of the Commissioner of Income-tax to suggest in what way there is any prejudice to the interests of the <ORG>. Even if prejudice to the <ORG> is to be reckoned in terms of the actual loss to the exchequer, no figures have been given in the order of the Commissioner of Income-tax to suggest that the average rate of Income-tax on the total income of the association of persons would be far higher than the average rate of income-tax applied to the share income from the joint venture in this assessment year in so far as the present assessee is concerned and in so far as the other members of the association are concerned. Indeed, in one portion of the order, the Commissioner had dealt with the argument advanced on behalf of the assessee to the effect that even if the joint venture is to be assessed as such, the tax effect may not necessarily be more. While noticing this contention of the assessee, the Commissioner had observed that this question as to whether the tax effect would be more or less may be raised when the assessment of the association of persons is taken up. This is an indication that the Commissioner had not, as on that date, any clear idea as to what the difference in tax effect would have been if, instead of taxing the share income of all the members in their respective hands, the <ORG> had first made an assessment on the total income of the association, as such, in respect of the joint venture business. We cannot, therefore, readily accept the thesis that the Income-tax Officer's order shown to be prejudicial to the interests of the <ORG>, by reference to any acceptable materials.

17. Even otherwise, the argument of the <ORG>'s learned counsel is unsound as a matter of construction of section 263 . As we earlier observed, it is essential for the Commissioner to find not only that the order of the Income-tax Officer in question proposed to be revised is prejudicial to the interests of the <ORG> but also that it is erroneous and, therefore, prejudicial in that sense. We have earlier pointed out how the Commissioner himself had clearly conceded the position that the order of assessment made by the Income-tax Officer is in accordance with the law. We fail to understand how an assessment, which is in accordance with the law, can at all be regarded as erroneous, let alone prejudicial to the interests of the <ORG>. We think it is axiomatic that any assessment, which is in accordance with the law cannot, at the same breath, be regarded as erroneous, and if the assessment is not erroneous it cannot be prejudicial to the interests of the <ORG> or for that matter to the interests of the assessee as well. This is on the principle that nothing can be prejudicial either to the <ORG> or to the assessee if it is in accordance with the law, unless it be that the law itself is being questioned on some ground or other, which objection is available under some provision or other of the Constitution. In this case, when the Commissioner had accepted the position that the Income-tax Officer was at liberty to tax the share income from the joint venture in the hands of the assessee as a member of the association, then it follows that that can be regarded as prejudicial to the interests of the <ORG>.

18. In our judgment, the expression "prejudicial to the interests of the <ORG>" is not to be construed in a petty-fogging manner, but must be given a dignified construction. It may be noted that the use of the expression "<ORG>", in our opinion, is significant. It denotes some kind of abstraction or symbol in the same sense in which the expression "crown" is used to distinguish it from any person enthroned. The interests of the <ORG> is not to be equated to rupees and paise, merely. There is a biblical saying that we do not live by bread alone. Varying this saying, it may be said that the <ORG> does not live by tax alone. In this sense, therefore, the interests of the <ORG> are not tied up merely with realising as much <ORG> as possible, willy nilly, merely looking to the productivity aspect of taxation. The jurisdiction of the Commissioner under section 263 is undoubtedly a supervisory jurisdiction. It is intended for interference in special cases to counteract orders which are erroneous as well as prejudicial to the interests of the <ORG>. In this context, therefore, the expression "prejudicial to the interests of the <ORG>" must be regarded as involving a conception of acts or orders which are subversive of the administration of revenue. There must be some grievous error in the order passed by the Income-tax Officer, which might set a bad trend or pattern for similar assessments, which on a broad reckoning, the Commissioner might think to be prejudicial to the interests of <ORG> administration. There might be cases where the Commissioner might wish to interfere with an order of the Income-tax Officer in order to safeguard the fair name and reputation of <ORG> without any thought of going into the particular aspect of the assessment. Assessments which are mala fide, politically and communally motivated may be, however set aside as being prejudicial to the interests of the <ORG>. It is unnecessary, for us to illustrate the point any further. All that we wish to observe is that the scope of the interference under this section is not to set aside merely unfavourable orders and bring to tax some more money to the treasury. Nor is the section meant to get at sheer escapement of revenue which, as is well known, is taken care of by provisions elsewhere in the Act such, for instance, as section 147 of the Act. The prejudice must be prejudice to the revenue administration.

19. The mainspring of action for the Commissioner of Income-tax in the present case would seem to be really to circumvent the position of law which has become will-settled in the matter of assessment of an association and/or the members thereof. Since the Income-tax Officer's order makes it difficult for the <ORG> to get at the total income of the association of persons, it had to be removed out of the way. If it is removed out of the way, the resulting position would be as though there had been no such order even in the first instance, and the field may be clear for the exercise of option once more, as though the <ORG> can begin from the very beginning. This intention to circumvent the clear consequence of the law, as laid down by the courts, is not definitely a purpose which could actuate the Commissioner of Income-tax under section 263 of the Act. This is because, far from the Income-tax under section Officer's order being prejudicial to the interests of the <ORG>, the present action of the Commissioner in seeking to set aside that order is really prejudicial to the <ORG> since it is prejudicial to the law laid down by the courts.

20. The learned counsel for the <ORG> referred to a decision of <ORG> in <CITATION>  67 ITR 84. That was a case which arose under section 33B of the Indian Income-tax Officer offering for assessment some incoome. Without investigating into the source of the income disclosed, the Income-tax Officer hurried with the assessment and completed it. The Commissioner of Income-tax took action under section 33B of the Indian Income-tax Act, 1922, and set aside the assessment for the reason that the income, which was offered for assessment by the assessee in that case, really had to be considered as part of the income of some other taxpayer in a higher income bracket. Before <ORG>, it was urged that on the Commissioner's view that no income was assessable in the hands of the person who filed the return, the Commissioner could not regard the order of assessment as prejudicial to the interests of the <ORG>. <ORG> rejected this contention and upheld the Commissioner's interference under section 33B . One way of understanding the reasoning of <ORG> in this case is to say that the Commissioner is not confined to have regard to the particular assessement order before him for the purpose of drawing a inference that order is prejudicial to the interests of the <ORG>, but he can have regard to the repercussions of that order generally in other assessments as well. Another way of understanding the basis of <ORG>'s decision which commends itself to us is to interpret the power of the Commissioner as based on the substantial interests of the <ORG> and not merely the particular element which might be spotted in the order of the Income-tax Officer as erroneous.

21. Before closing the discussion, we might refer to a decision of <ORG> <CITATION>  53 ITR 225. This case was one in which there was an initial assessment made by an Income-tax Officer on an association of persons. He made the assessment on the assocition brushing aside the objection of the members who urged that the income of the association must be assessed in separate shares in the hands of the constituent members. They raised the same contention in an appeal against the assessment. <ORG> accepted that contention, set aside the assessment on the association and directed <ORG> to assess the share incomes from the association in the respective individual assessments of the members. Before <ORG>, the Department questioned the powers of <ORG> to cancel the assessment on the association and direct <ORG> to make an assessment of the shares of income in the hands of the members. The contention was that option to assess either the association or the members thereof was only with <ORG> and when once he had exercised that option, that cannot be interfered with in appeal. <ORG> rejected this contention on the principal that the appellate authorities under the Income-tax Act had plenary powers in disposing of the appeal and the scope of the appellate power is co-terminous with that of the assessing power of <ORG>, and, in that sense, the choice of alternatives between assessing the association, as such, and assessing the shares of the members apart, was equally open to the appellate authority, in the same manner as it was open to <ORG>.

22. The principle laid down in this judgment of <ORG> cannot, however, be adopted for the purpose of clothing the Commissioner of Income-tax with a power of interference with the exercise of the option made by the Income-tax Officer in the matter of assessment of the members of an association in preference to an assessment to be made on the association itself. In the first place, the basis of <ORG>'s ruling was that an appeal was but a rehearing and the powers of the appellate authority are so equal with those of the assessing authority, in the first instance. In coming to this conclusion, <ORG> were only adopting the general law relating to the powers of the appellate authorities under the Civil Procedure Code, and other enactments dealing with the powers of appellate courts. The Commissioner of Income-tax acting under section 263 is not, however, an appellate authority, by any means. As we had earlier observed, the power conferred on him by this section is in the nature of a supervisory power. We have referred to another revisional power under section 264 which might be regarded as a regular revision. Section 263 , however, is a special power, which, so far as we know, has no parallel in any other statute or legal system. It is an extraordinary revisional power. It is also sui generis, in its nature, and in the occasion for its exercise, it is to be employed not as a jurisdictional corrective or as a review of a subordinate's order in exercise of supervisory power. It is, on the contrary, to one invoked and employed only for the purpose of setting right distortions and prejudices to the <ORG>, which, as we havbe endeavoured to point out earlier, is a unique conception which has got to be understood in the context of and in the interests of revenue administration. The power, as we conceive it, is intended to maintain the tone of the revenue administration and the moral of the Officers manning it. Such a power cannot,in any manner, be equated to, or regarded as approaching in any way the appellate jurisdiction or even the ordinary revisional power conferred on the Commissioner under section 264 of the Act.

23. For all the above reasons, we hold that the Commissioner of Income-tax, in this case, was not justified in interfering with the order of <ORG> under section 263 of the Act. The <ORG>'s order, confirming the Commissioner's decision, was based on a misconception of the provision of section 263 and the nature and finality of the order passed by <ORG>r. On this basis, our answer to the question of law is in the negative and in favour of the assessee. The assessee will have its costs. Counsel's fee Rs.500.