1960 (4) TMI 82 - HC - Income Tax

Summary

Issues Involved:
1. Validity of the assessment order dated February 23, 1959.
2. Applicability of the limitation period under section 34(3) of the Income-tax Act.
3. Alleged concealment of income by the petitioner.
4. Adequacy of the opportunity provided to the petitioner to be heard and produce documents.

Detailed Analysis:

1. Validity of the Assessment Order Dated February 23, 1959:
The petitioner sought a writ of certiorari to quash the assessment order dated February 23, 1959, passed by the Income-tax Officer, "A" Ward, DehraDun, for the assessment year 1950-51. The assessment was challenged on the grounds that it was made beyond the period of limitation prescribed under section 34(3) of the Income-tax Act. The court examined whether the order was passed within the permissible period of eight years from the end of the assessment year, as allowed under certain conditions stipulated in section 34(3).

2. Applicability of the Limitation Period Under Section 34(3) of the Income-tax Act:
The court noted that the assessment order was passed after the expiry of four years but within eight years from the end of the assessment year 1950-51. The Income-tax Officer argued that the order fell within the extended period of eight years as it was an order under section 23 to which clause (c) of sub-section (1) of section 28 applied. The petitioner contended that this clause did not apply, and thus, the assessment was beyond the period of limitation. The court clarified that the limitation prescribed under section 34(3) applies only at the stage of passing the order of assessment and does not invalidate the proceedings taken for assessment prior to making the order.

3. Alleged Concealment of Income by the Petitioner:
The Income-tax Officer's assessment included a finding that the petitioner had concealed income amounting to Rs. 1,00,000 and Rs. 12. The petitioner argued that the Rs. 1,00,000 was disclosed in a letter dated April 15, 1953, and the omission in the return was bona fide. The Rs. 12 was claimed to be a trivial amount omitted inadvertently. The court held that it could not re-examine the correctness of these findings under its writ jurisdiction, as it involved questions of fact better suited for appellate review. The court emphasized that the finding of the Income-tax Officer on the concealment was within his jurisdiction and did not suffer from a manifest error apparent on the face of the record.

4. Adequacy of the Opportunity Provided to the Petitioner to be Heard and Produce Documents:
The petitioner claimed that he was not given a reasonable opportunity to be heard and produce documents, as the notices issued on February 13, 1959, required compliance by February 20, 1959. The court found that the petitioner had requested an adjournment, which was granted until February 23, 1959. The court did not find sufficient evidence to conclude that the petitioner was denied a reasonable opportunity, noting that the petitioner could have arranged for the production of documents even if he was out of station. The court also noted that this issue was pending decision in the petitioner's application under section 27 of the Income-tax Act.

Conclusion:
The court dismissed the petition, holding that the assessment order was within the jurisdiction of the Income-tax Officer and did not suffer from any manifest error of law. The petitioner was advised to seek remedy through the appellate process provided under the Income-tax Act, as these proceedings were more appropriate for addressing the factual disputes and alleged errors in the assessment order. The court emphasized the limited scope of its writ jurisdiction under article 226 of the Constitution, which does not extend to re-examining findings of fact or errors not apparent on the face of the record.