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TMI Blog1965 (10) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... m not quite sure if this reference would have been made had this position been taken before the Single Bench. The facts giving rise to these writ petitions may here be briefly stated: Shri Rattan Chand Kapur, son of late Shri Gokal Chand, is stated to have separated from his father some time in 1927. In March, 1942, Rattan Chand, created a trust called " Rattan trust ". In 1946, a sum of Rs. 5 lakhs was ostensibly donated to the Trust by Shri Gokal Chand, the father of Shri Rattan Chand. In May, 1951, Shri Gokal Chand died. In June, 1947, this trust was assessed for the year 1947-48. Rattan Chand was also assessed as a Hindu undivided family for the year 1946-47. This assessment was made in September, 1946. On 25th March, 1963, a notice was issued to Shri Rattan Chand Kapur under section 148 of the Income-tax Act (43 of 1961) by the Income-tax Officer, Special Investigation Circle "A", Amritsar, stating that the said officer had reason to believe that Shri Rattan Chand's income in respect of the assessment year 1946-47 had escaped assessment within the meaning of section 147 of the Income-tax Act and that the said Income-tax Officer proposed to assess the income for the said asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned in the heading of these writ petitions. The assessee has also suppressed in these petitions the fact of the assessment order having been made. The present writ petitions have also been described to be highly belated without offering any cogent explanation for the undue delay. Lastly, it has been urged that the petitioner had actually acquiesced in response to the notice and was estopped from challenging the same in the present proceedings. The petitioner's learned counsel has attempted to meet this objection with the submission that the petitioner was unaware of the assessment proceedings. It is, however, common case of the parties that the petitioner has since preferred appeals against the orders of assessment in accordance with the provisions of the Income-tax Act. It may here be pointed out that the petitioner has also presented to this court supplementary writ petitions with the object of challenging the assessment orders as well ; of course, the challenge is mainly confined to the validity of the original notice. The petitioner's counsel has very fairly conceded that he is not entitled to take us into the merits of the assessment order, which may require appreciation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar Sitaram v. Certificate Officer, a Division Bench of the Calcutta High Court observed that where the assessees themselves invite a particular Income-tax Officer to make an assessment on them, they cannot thereafter turn round and say that he had no jurisdiction to make the assessment. Shri Awasthy has also referred us to Shivram Poddar v. Income-tax Officer in which the Supreme Court once again emphasised what it had often observed earlier, that the Income-tax Act provides a complete machinery for assessment of tax and for relief in respect of improper or erroneous orders made by the revenue authorities and it is for those authorities to ascertain the facts applicable to a particular situation and to grant a proper relief in the matter of assessment of tax. Resort to the High Court in exercise of its extraordinary jurisdiction conferred or recognised by the Constitution in matters relating to assessment, levy and collection of income-tax may be permitted only when questions of infringement of fundamental rights arise, or where on undisputed facts the taxing authorities are shown to have assumed jurisdiction which they do not possess. In attempting to bypass the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken before the appellate authorities. In order to warrant the entertainment of a petition under this article, in my opinion, there must ordinarily be something to show that it would cause palpable injustice to the assessee to force him to adopt the remedies provided by the statute. It is true that this court may persuade itself to interfere if there is something going to the root of the jurisdiction of the Income-tax Officer, but, then again, this is a matter of discretion to be exercised on the facts and circumstances of each case, whether it would be more appropriate that this court decides to intervene itself ignoring the machinery which the legislature has in its wisdom provided for redress of grievances. In view of the legal position which I have just stated, I may deal with the petitioner's submission, because, according to Shri Sastri, there are special circumstances in this case which justify interference by this court. According to Shri Sastri the last date for reopening the assessment was March 31, 1955, and thereafter, there was no jurisdiction on the Income-tax Officer to issue a notice under section 34(1)(a) of the Indian Income-tax Act, 1922. This right having bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to, or is likely to amount to, fifty thousand rupees or more for that year. It is not disputed that the present case is covered by the sixteen-year limitation. Section 297 of the current Act repeals the Indian Income-tax Act, 1922. Under section 297(2)(d)(ii), where in respect of any assessment year after the year ending on the 31st day of March, 1940, any income chargeable to tax has escaped assessment within the meaning of that expression in section 147 and no proceedings under section 34 of the repealed Act in respect of any such income are pending at the commencement of this Act, a notice under section 148 may, subject to the provisions of section 149 or section 150, be issued with respect to that assessment year and all the provisions of the current Act are to apply accordingly. The counsel has laid emphasis on some relevant dates in the present case. Rattan Chand, son of Gokal Chand, is stated to have separated from the family somewhere in 1927. In March, 1942, Rattan Chand is stated to have created a trust called the " Rattan Trust ". In January, 1946, according to the petitioner's case, a sum of Rs. 5 lakhs was donated to this trust by Gokal Chand, the father of the author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-43, the assessee received from her non-resident husband sums of money amounting to Rs. 9,180, which were assessable to income-tax under section 4(2) of the Income-tax Act. She, however, did not submit any return of income in respect of those items. Proceedings under section 34 of the Income-tax Act were initiated against her on July 25, 1949, after the expiry of four years but within eight years. The High Court held on a reference that the assessment proceedings were not valid as the period of limitation prescribed under section 34 for failure to submit a return was 4 years and the period had expired before the amendment of section 34 in 1948, prescribing an eight-year period of limitation for such a case, came into force. On appeal to the Supreme Court, it was held by Sarkar, Hidayatullah and Raghubar Dayal JJ. (Das and Kapur JJ. dissenting), ' that the assessment proceedings were valid as section 34, as amended in 1948, was applicable to this case'. Per Das and Kapur JJ. (dissenting): 'Section 31 of the Indian Income-tax (Amendment) Act, 1953, and section 34 as amended in 1948, did not revive the right of the Income-tax Officer to initiate proceedings which had been barred unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limit of time for its own officers to take action. This limit of time is binding upon the officers, but the liability under the charging section can only be said to be unenforceable after the expiry of the period under the law as it stands. In other words, though the liability to pay tax remains, it cannot be enforced by the officers administering the tax laws. If the disability is removed, or, according to a new law, a new time-limit is created retrospectively, there is no reason why the liability should not be treated as still enforceable. The law does not deal with concluded claims or their revival but with the enforcement of a liability to the State which though existing remained to be enforced '." Shri Awasthy submits that the majority view in this case supports his contention, whereas Shri Sastri argues that the opinion on the point at issue, which concerns us, was equally divided, and Sarkar J. had proceeded on somewhat different lines, though in the ultimate result, he agreed with Hidayatullah and Raghubar Dayal JJ. Shri Awasthy has relied on the head-notes at pages 2 and, 4 of the report in Prashar's case. At page 2, it is stated to have been held by Sarkar, Hidayatull ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gujarat High Court in Mathurdas Govinddas v. G. N. Gadgil, Income-tax Officer, Ahmedabad. He has quite fairly brought to our notice that the Bombay High Court has in Laxminarayan R. Rathi v. Income-tax Officer, Poona, dissented from it. Shri Awasthy has tried to distinguish the Full Bench decision and has, in the alternative, doubted its correctness in the light of the later Supreme Court decision. Shri Sastri has also relied on the following observations of the Supreme Court in S. S. Gadgil v. Lal Company at page 236: "It is true that by the amendment made by section 18 of the Finance Act, 1956, a notice could be issued within two years from the end of the year of assessment. But the application of the amended Act is subject to the principle that, unless otherwise provided, if the right to act under the earlier statute has come to an end, it could not be revived by the subsequent amendment which extended the period of limitation. The right to issue a notice under the earlier Act came to an end before the new Act came into force. There was undoubtedly no determinable point of time between the expiry of the earlier Act and the commencement of the new Act ; but that would not, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the jurisdiction under article 226 of the Constitution is discretionary and the High Court is not bound to issue a writ merely because it is lawful to do so. It is also not intended thereby to supersede the authority and jurisdiction conferred upon the taxing authorities who are vested with power to deal with the merits of the contentions raised before them. The High Court must in each case consider whether the act or omission complained of has resulted or is likely to result in grave injustice and whether the party approaching it has another adequate remedy which is equally efficacious; whether he has approached the court without acquiescence and without undue delay; whether the problem posed raises complicated questions of disputed facts which it would be inappropriate for the High Court to determine; whether the aggrieved party has been guilty of misrepresentation or suppression of material facts and whether, notwithstanding the apparent breach, it would be inequitable to grant relief. At the close of the judgment, the court took pains to state that it was constrained to set aside the order because there was no indication as to the grounds on which the High Court had rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel for the petitioner has also urged that what the assessing authority has described to be a protective assessment on Rattan Chand in his individual capacity and in his capacity as Hindu undivided family are illegal. Finally, Shri Awasthy has submitted that, when all is said and done, it is not possible to hold that the invalidity of the notice is manifest on the face of the present record or that the law is clearly against the revenue. An error-if at all there is one-is, according to the counsel, far from apparent on the face of the record and, in order to establish it, the assessee had to resort to a long-drawn process of reasoning on points on which clearly there may be more than one opinion. In such circumstances, the error can scarcely be described to be self-evident and it would require lengthy and complicated arguments to establish it. A writ is hardly an appropriate remedy for curing the defect under the rules governing the power of this court under article 226 of the Constitution. This submission too cannot be said to be without merit or unjustified. On behalf of the petitioner, an express request has been made that in case this court is inclined not to go i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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