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TMI Blog1960 (8) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin 31st March, 1951. Several reminders were sent by the respondent No. 1 to the petitioner to submit his return for the aforesaid period and ultimately the petitioner submitted a letter dated 24th April, 1951, along with which he filed a fresh return under protest. In this fresh return he showed his income as given in the original return. I shall have to refer to this letter later when I deal with the points raised by the petitioner. The 7th February, 1952, was fixed as the date for hearing of the matter by respondent No. 1. On this date the case was adjourned on the request of the petitioner as the karta of the family was away and 4th March, 1952, was fixed for the hearing of the case. On that date an application was again made for adjournment on the ground that the karta of the family was away in connection with the marriage of his daughter and it was not possible for the firm to produce documents and explain matters in the absence of the karta. Further, a telegram from the advocate of the petitioner had been received from Calcutta and filed before the Income-tax Officer in which it was stated that the counsel could not leave Calcutta and was unable to reach there before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the order allowing the appeal against the order rejecting the application under section 27, to the Income-tax Appellate Tribunal, Calcutta Bench. By an order dated 12th December, 1957, the two appeals were dismissed. On the 9th November, 1959, two notices dated 5th November, 1959--one under section 22(4) and the other under section 23(2) of the Act--issued by respondent No. 1 in respect of the assessment year 1946-47 were received by the petitioner. These two notices were issued as the Income-tax Officer proceeded to reassess the petitioner under the orders of the appellate authorities directing him to reassess the petitioner. In effect the Income-tax Officer re-started the proceedings initiated under section 34 by the notice dated 19th March, 1951. On the 11th November, 1959, the petitioner filed an application before the Income-tax Officer, Nowgong, challenging the validity of the notice issued under section 34 dated the 19th March, 1951. According to the petitioner as the notice of the 19th March, 1951, was invalid and illegal, the notices issued on 5th November, 1959, were also illegal. The validity of the assessment proceedings before the Income-tax Officer was thus ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rce in the preliminary points raised by the respondent's counsel. The petitioner's contention is that the proceedings before the Income-tax Officer are without jurisdiction as the notice issued under section 34 which is a condition precedent for the starting of the assessment proceedings was invalid and therefore a writ of prohibition should be issued. For this relief it is not necessary for the petitioner to ask for the cancellation or quashing of the order passed by the Income-tax Appellate Tribunal and the only necessary party to whom the writ could go is the Income-tax Officer. It can also not be said that the Income-tax Officer is bound to carry out the order of the Appellate Assistant Commissioner and the Income- tax Appellate Tribunal and unless that order is set aside this court will not issue mandamus. The officer can only be compelled to carry out a legal order and if this court is of opinion that the proceeding are without jurisdiction any order by the Income-tax Appellate Tribunal directing the Income-tax Officer to proceed with the assessment can be no bar to this court issuing a writ of prohibition. As to the second point the short answer is that the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer shall not issue a notice under clause (a) of sub-section (1)-- (i) for any year prior to the year ending on the 31st day of March, 1941; (ii) for any year, if eight years have elapsed after the expiry of that year, unless the income, profits or gains chargeable to income tax which have escaped assessment or have been under assessed or assessed at too low a rate or have been made the subject of excessive relief under this Act, or the loss or depreciation allowance which has been computed in excess, amount to, or are likely to amount to, one lakh of rupees or more in the aggregate, either for that year, or for that year and any other year or years after which or after each of with eight years have elapsed, not being a year or years ending before the 31st day of March, 1941; (iii) for any year, unless he has recorded his reasons for doing so and in any case falling under clause (ii) unless the Central Board of Revenue and in any other case, the Commissioner, is satisfied on such reasons recorded that it is a fit case for the issue of such notice: Provided further that the Income-tax Officer shall not issue a notice under this sub-section for any year, after the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Officer is discovered. In the present case the notice was issued under clause (b). After the Income-tax Officer is satisfied that the income has escaped assessment due to any of the two causes, he has to serve on the assessee a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 22. The jurisdiction upon the Income-tax Officer to proceed to assess or reassess the income is conferred only after the notice has been served. The requirements of section 22(2) have thus been incorporated in section 34 by reference to section 22(2). The language of section 34 no doubt provides that the notice issued under the said section need not contain all the requirements mentioned in section 22(2). The question which thus arises is what are the requirements mentioned in section 22(2). Section 22(2) requires a notice to be served on the person requiring him to furnish within such period not less than thirty days a return in the prescribed form and verified in the prescribed manner setting forth (along with such other particulars as may be provided for in the notice) his total income and his total world income during the previo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the assessment. If an invalid notice is given it is no notice in the eye of law and the proceedings before the Income-tax Officer on such notice will be without jurisdiction. It was also held in this case that there could be no waiver of an invalid notice. I shall have to refer to this case when I deal with the question of waiver. This case, however, clearly lays down that the issue of a valid notice is a condition precedent for the exercise of the jurisdiction by the Income-tax Officer to assess in respect of an escaped income. The next case is R.K. Das Co. v. Commissioner of Income-tax [1956] 30 I.T.R. 439, 448; A.I.R. 1956 Cal. 161. In this case Chakravartti C.J. also held agreeing with the Bombay view that the issue of a valid notice was a condition precedent for the exercise of jurisdiction by the Income-tax Officer under section 34. The following observations at page 163 of the report may be quoted: Where the time for making an assessment in the normal way has expired or certain omissions have occurred by reason of which no assessment has taken place or an under-assessment has occurred and the statute requires that in such circumstances the Income tax Officer c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own to be invalid then the validity of the proceedings taken by the Income-tax Officer without a notice or in pursuance of an invalid notice would be illegal and void. That is the view taken by the Bombay and Calcutta High Courts...... and we think that that view is right. Their Lordships then proceeded to consider whether the notice in that case could be said to have been invalid and the contention of the appellant on this behalf was not accepted. This case however clearly approves the view taken by the Bombay High Court and the Calcutta High Court in the cases to which I have already referred and lays down that the issue of a valid notice is a condition precedent for the exercise of the jurisdiction by the Income-tax Officer under section 34. In view of this decision it cannot be argued that the requirement of a valid notice is only a procedural requirement and that it is not a foundation for the exercise of jurisdiction for reassessment. Mr. Choudhuri drew our attention to the case of Maharaj Kumar Kamal Singh v. Commissioner of Income-tax [1959] 35 I.T.R. 1, 5; A.I.R. 1959 S.C. 257; [1959] Suppl. (1) S.C.R. 10, 15. He refers to the following passage at page 260 of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is no notice at all and clearly the Income tax Officer proceeded to assess the assessee under section 34 without complying with the condition precedent laid down in section 34 which alone could have given him jurisdiction to assess the assessee. I am in complete agreement with the above observations. The period given in the notice being shorter than thirty days the notice did not comply with the requirement of section 22(2) and it was invalid. The proceedings before the Income-tax Officer were thus invalid. The next contention raised by Mr. Choudhuri is that even though the notice was defective, it was waived by the assessee. In this connection two questions arise for determination; firstly whether there could be a waiver in respect of a notice which is a condition precedent for the exercise of jurisdiction to assess under section 34 and secondly, if the facts pointed out by the department establish the case of a waiver. As pointed out in the case of Basheshar Nath v. Commissioner of Income-tax [1959] 35 I.T.R. 1 90, 234, 249 ; A.I.R. 1959 S.C. 149; [1959] Suppl. (1) S.C.R. 528, 588, 608. at page 172: The generally accepted connotation is that to constitute 'w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entionally relinquished or he can be said to have abandoned. The existence of a valid notice is a condition precedent for the exercise of the jurisdiction by the Income-tax Officer to assess or reassess. It does not confer any right on the assess which he could abandon. The want of notice affects the jurisdiction of the Income-tax Officer to proceed with the assessment and thus affects the proceedings for the assessment and does not in any manner affect the right of the assessee which he could validly abandon. There is another aspect of the matter which may be considered. The right of the assessee to be assessed or not to be assessed arises only the valid proceedings have been taken and the issue of a valid notice is a condition precedent. It has to come into effect prior to the starting of the proceedings. There could therefore be no question of the assessee waiving any right accruing to him. Before dealing with the authorities cited at the bar it will be convenient to dispose of the second question which arises in this connection namely whether it can be said that on the facts disclosed there was a sufficient foundation laid for applying the doctrine of waiver in the present c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition under section 27 on merits and remanded the case for reassessment. Further appeals to the Appellate Tribunal were also rejected. It cannot be said therefore that at any stage the petitioner willingly abandoned his right and participated in the proceedings for assessment. There is no other material placed before us by the counsel for the department from which it could be inferred that there was a waiver by the petitioner of his right. To adopt the language of S.K. Das J. in the Supreme Court decision referred to above in Basheshar Nath v. Commissioner of Income-tax [1959] 35 I.T.R. 1 90; A.I.R. 1959 S.C. 149; [1959] Suppl. (1) S.C.R. 528, at page 172, it would be going too far to hold that every unsuspecting submission to a law subsequently declared to be invalid must give rise to a plea of waiver. It need not be emphasised that even the consent does not confer any jurisdiction on a court which has otherwise no jurisdiction. The counsel for the respondents has relied upon the Privy Council case of Ledgard v. Bull [1886] L.R. 13 I.A. 134; I.L.R. 9 All. 191, 203 (F.C.). Particular reference was made to the following passage at page 145: When the judge has no inherent j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assumption of jurisdiction by the court when proceedings for execution of the final mortgage decree are commenced in it and, therefore, when objection to the defect of jurisdiction is not taken in the first instance, the judgment-debtor must be deemed to have waived it. In this case reference was made to the Privy Council decision reported in Ledgard v. Bull [1886] L.R. 13 I.A. 134; I.L.R. 9 All. 191 to which I have already alluded. The following observation of Mookerjee J. in the case of Gurdeo Singh v. Chandrikah Singh [1907] I.L.R. 36 Cal. 193 was quoted: A court cannot adjudicate upon a subject matter which does not fall which in its province as defined or limited by law; this jurisdiction may be regarded to be essential, for jurisdiction over the subject matter is a condition precedent to the acquisition of authority over the parties, and, if a court has no jurisdiction over the subject-matter of the controversy consent of the parties cannot confer such jurisdiction and a judgment made without jurisdiction in such a case is absolutely null and void; it may be set aside by review or appeal, or its nullity may be established when it is sought to be relied upon in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the notification. Dealing with the arguments, it was held by Mr. Justice Kania that the issue or receipt of a notice is not the foundation of the jurisdiction of the Income-tax Officer to make the assessment or of the liability of the assessee to pay the tax and further that the jurisdiction to assess and the liability to pay the tax are not conditional on the validity of the notice. He further pointed out that the liability of a citizen to pay tax arises under the charging section of the statute. The assessment is merely procedural to determine the quantum of the tax and that the provisions with regard to notice are procedural provisions. The defect in the notice being a procedural defect it could always be waived by the assessee. There is a distinction between a notice issued under section 22(2) and a notice issued under section 34. A notice issued under section 22(2) is not a condition precedent for the exercise of the power of assessment while a notice under section 34 is a condition precedent for the exercise of jurisdiction. this case therefore does not apply to the facts of the present case. In an earlier Bombay case, Commissioner of Income-tax v. Ekb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke the present assessee to attribute to him knowledge of the right that he was relinquishing. Again by the return that he submitted the assessee did not offer to be assessed but claimed on the other hand that he was not liable to assessment since he showed an income below the assessable limit. There is also the fact that there was no waiver of anything before the Income-tax Officer issued the notice under section 24(2) and nothing had been done by the assessee up to and at that point of time which provided jurisdiction to the Income-tax Officer to commence assessment proceedings without issuing a notice under section 38 which was imperative and had not been waived. The counsel for the department refers to the case of Jitan Ram Nirmal Ram v. Commissioner of Income-tax [1951] 19 I.T.R. 476, 484; A.I.R. 1952 Pat. 163. Particular reference is made to the following passage at page 165: Even if we assume for a moment that the notice under section 34 is defective it is impossible in my opinion to hold that the proceedings are illegal or that excess assessment made is null and void. It is of importance to state that section 34, though a part of the Act, imposes no charge on the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n referred to the High Court was in the following terms: Whether on the facts and circumstances of the case there has been sufficient compliance with the provisions of sections 19 and 19A of the Act; and if not whether the assessments in question are void? Section 19 is in similar terms as section 34 of the Income-tax Act and the contention raised in this case was that as no notice was issued under section 19 or 19A, the Superintendent of Taxes has no jurisdiction to assess the petitioner. Two points were urged on behalf of the department. Firstly, it was argued that the jurisdiction to assess does not necessarily depend upon the validity of the notice issued under a particular section and even if there was some defect in the notice the jurisdiction of the officer to assess would not be necessarily affected. It was thus urged by the counsel for the department that these procedural sections should be so construed as to make the working of the Act effective. If, therefore the circumstances mentioned in the section which would confer jurisdiction on the Sales Tax officer to assess do exist, the jurisdiction will not be lost merely because of some irregularity in the procedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 34 was a condition precedent to the assumption of jurisdiction by the Income-tax Officer to assess where an income has escaped assessment in any particular year, I find it difficult to accept the broad proposition that in no case of this kind there could be waive or acquiescence on the part of the assessee so as to confer jurisdiction upon the Income-tax Officer to proceed to assess. A procedural provision, which is meant for the benefit of the assessee can in some circumstances be waived. If the officer of his own accord proceeds to assess on the ground that some income or turnover has escaped assessment after the expiry of the due date under which he should have taken steps to proceed in the normal course under the general provisions of the law for the purpose of making an assessment, he must comply with the provisions of section 34, under the income-tax law or for that matter under section 19A of the present Act. The conditions mentioned in the section must exist to enable the officer to take action. But, where there is some irregularity in the form of the notice issued on the assessee that irregularity could be waived by the assessee in submitting his return sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 1956 when the limitation to take proceedings under section 34 might have expired that the petitioner raised the question for the first time about the invalidity of the proceedings. Even assuming that he has a right to raise the point at this stage he should have come to this court after the ex parte assessment had been made in 1952 for a writ of certiorari quashing the order of assessment on the ground that the assessment was without jurisdiction. The delay in coming to this court disentitles him to a relief under article 226 of the Constitution. I do think there is much substance in this contention. The existence of an alternative remedy is not an absolute bar to grant a relief by this court under article 226 of the Constitution. If the defect of jurisdiction is apparent on the face of the record, i.e., patent, this court will not refuse relief to the petitioner even on the ground of acquiescence. In cases where the defect of jurisdiction is latent namely it can be discovered after enquiry the ground of laches and misconduct may be a valid ground to refuse the relief of prohibition. In the present case, as I have already held the proceedings were on the face of it withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ways been recognised a distinction between what I will call a latent want of jurisdiction, i.e., something becoming manifest in the courts of the proceedings and what I will call a patent want of jurisdiction, i.e., a want of jurisdiction apparent on the face of the proceedings. Whilst in cases of latent want of jurisdiction there has always been a great conflict or judicial opinion, as to whether the grant of the writ was discretionary or not the authorities seem unanimous in deciding that where the want of jurisdiction is patent the grant of the writ of prohibition is of course. In the case of Mayor of London v. Cox [1867] 2 H.L. 239, 279, 283, at page 279 Wills J., giving his opinion to the House of Lords, observed that: ....upon an application being made in proper time, upon sufficient materials, by a party who has not by misconduct or laches lost his right, its grant or refusal is not in the mere discretion of the court. He further observed that: Where, however the defect is not apparent and depends upon some fact in the knowledge of the applicant which he had an opportunity of bringing forward in the court below, and he has thought proper, without excuse, to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt will very readily interpose. The discretion to grant or refuse to grant the writ is of course there. But since discretion contemplates an exercise of arbitrium and not arbitrariness, the writ must go though not of right nor of course yet almost as a matter of course unless an irresistible case for withholding the writ is made out. This, in my opinion, correctly sets out broadly conditions under which a writ of prohibition can be granted. In the present case it is also significant to note that the proceedings of assessment are still continuing though in view of the order of remand and the petitioner took the objection before the Appellate Assistant Commissioner and the Appellate Tribunal about the invalidity of the notice when the matter was before them on appeal from the order of the ex parte assessment. The petitioner has applied for permission to withdraw the appeal as, according to him, the assessment was without jurisdiction.The prayer was refused by the Appellate Assistant Commissioner; further dealing with the merits of the points the Appellate Assistant Commissioner observed that the point was never taken before and it could not therefore be allowed to be raised at t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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