1992 (7) TMI 7 - HC - Income Tax

Summary

Issues: Challenge to order of Agricultural Income-tax Officer refusing to change "previous agricultural year" under Assam Agricultural Income-tax Act, 1939. Consideration of circumstances for giving or refusing consent for change of "previous agricultural year."

Analysis:
The petitioner, an assessee under the Assam Agricultural Income-tax Act, 1939, challenged the Agricultural Income-tax Officer's order refusing to change the "previous agricultural year." The Act defines "previous agricultural year" as the twelve months ending on March 31 preceding the assessment year, with an option for the assessee to choose a different year based on their accounts. The proviso states that once the option is exercised, it cannot be changed without consent. The issue at hand was the circumstances under which consent should be given or refused. The lack of explicit guidelines in the proviso raised concerns of potential discrimination through arbitrary exercise of power, violating Article 14. However, it is established that guidelines need not be explicitly stated but can be inferred from the purpose of the provision.

The court examined the implied circumstances for exercising discretion in granting or refusing consent. It was noted that the authority has the power to impose conditions while giving consent, with the underlying principle being that consent is the rule and refusal is the exception. Judicial review, in this case, focused on the decision-making process rather than the decision itself. The grounds for administrative action subject to control by judicial review were classified into four categories: illegality, irrationality, procedural impropriety, and disproportionality. "Illegality" requires the decision-maker to correctly understand and apply the relevant law.

The court found that the Agricultural Income-tax Officer did not consider the matter in line with the legal principles discussed, leading to an illegal exercise of jurisdiction. Consequently, the impugned order was deemed unsustainable and set aside. The petition was allowed, the Officer's order was annulled, and the matter was remanded for fresh disposal considering the court's observations. No costs were awarded in the case.