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TMI Blog1968 (3) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... , Special Investigation Circle, Indore, dated 27th February, 1965, rejecting their application under section 45 of the Income-tax Act, 1922 (Act No. XI of 1922), and for a writ of mandamus requiring him to forbear from enforcing the demands raised by him, for the assessment year 1959-60, till the disposal of the appeals filed by the partnership firm for the assessment years 1956-57 and 1958-59, and not to take any coercive measure for the enforcement of the demand. The facts leading to this application, shortly stated, are these. The petitioners constituted a Hindu undivided family and were assessed in that status after the assessment year 1956-57. There was a partial partition of the family on 11th September, 1955, and on the next date, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Both these appeals were pending on the date this application was moved. In the meanwhile, the Income-tax Officer, Special Investigation Circle, Indore, made an assessment of the firm for the year 1958-59, and as against Rs. 85,521 returned as loss, he determined that profits amounting to Rs. 2,09,619 had been earned by the partnership firm, during the relevant year, and raised a demand for payment of Rs. 91,377-42 P. as tax. Against this order of assessment, the firm preferred an appeal which was still pending. Similarly, for the assessment year 1959-60, the Income-tax Officer, Special Investigation Circle, Indore, made an assessment of the partnership firm on 31st March, 1964, by which he rejected the books of accounts and resorted to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Income-tax Officer under section 45 of the Income-tax Act, 1922. The Income-tax Officer called upon the petitioners to appear before him with their books of accounts on 25th February, 1965, and produce such other evidence as desired which would substantiate their allegation that they were really not in a position to pay the tax demanded. The petitioners, accordingly appeared before the Income-tax Officer and produced their books of accounts along with the abstracts showing their financial position and resources. The Income-tax Officer scrutinised the books of accounts and other papers, and ultimately passed the impugned order on 27th February, 1965, rejecting their application under section 45 of the Income-tax Act, 1922. This appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in India : see Vetcha Sreeramamurthy v. Income-tax Officer, Vizianagaram, Vellore Govindarajulu Mudaliar v. Income-tax Officer, Adoni, Aluminium Corporation of India Ltd. v. C. Balakrishnan, Hardeodas Jagannath v. Income-tax Officer, Shillong, and P. C. Dwadesh Shreni and Co. (P.) Ltd. v. Income-tax Officer, Aligarh. However, so long as the Income-tax Officer has exercised his discretion fairly and reasonably, the court should have no power to interfere. In the special circumstances of the present case, the Income-tax Officer, Special Investigation Circle, Indore, found on enquiry that the petitioners had wilfully failed to comply with the notice of demand although they were possessed of sufficient assets to enable them to meet the demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d large funds to investments in colonies where they are doing brisk business at the same time taking the plea that there are no liquid funds with the firm and the partners. I, therefore, feel convinced that the assessees have been deliberately withholding the payment. Their conduct also shows that they have been trying to gain time on one plea or the other. It was only when the last petition has been dismissed that they have given the threat that if the collection of tax was not stayed till decision of appeal, they will be taking particular steps. Certainly, the assessees have every right to seek protection of law available to them but the threat given at this stage and in the manner it has been done is, to say the least, most unreasonable. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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