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TMI Blog1953 (7) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ngh s Trust and stating that the Trust being one wholly for charitable purposes its income was exempt from tax and therefore a refundought to be granted at source from cerain dividend amounts. The application or letter which related to the assessment year 1945-46 was accompanied by the dividend warrants concerned as also what was described as a statement of accounts. The application appears to have been dealt With by the Income-tax Department as an application for refund, for on November 3, 1945, the Income-tax 0fficer Companies District I, wrote to Messrs, S. K. Sawday Co. to say that the matter would be dealt with by the Income-tax Officer, District III(1), to whom all papers were being forwarded for necessary action. The next letter, dated February 28, 1946, asked for the production of the Trust Deed in the original, and by a letter dated May 15, 1946, Messrs. S. K. Sawday Co. sent to the Income-tax Officer, District III(i), a copy of the deed. Thereafter, on May 27, 1946, the Income-tax Officer informed the income-tax practitioners that they should depute a responsible representative to attend at his office on May 31, 1946, with the Trust Deed in the original for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en by Messrs. S. K. Sawday Co. to the Income-tax Officer on November 30, 1949 and thereafter began persistent knockings at the door, if I may use that expression, of the Income-tax Officer with no response from within for about seven or eight months. There was letter after letter, interview after interview, for what practical purpose one finds it difficult to understand. In all these letters and during all these interviews, the representatives of the assessee were asking for a specific order in express terms that the claim for a refund was being refused the Matters went on in that fashion till May 26, 1950, when the Income-tax Officer woke up to realise that something had to be done and on that date he addressed a letter to the representatives of the assessee in which he said that a reply regarding the exemption asked for by the Trust had been issued from his office by a letter, dated November 24, 1949, and he did not know why that letter had not been received by the assessee or its representatives. Apparently, the Income-tax Officer thought that persistent enquiries made by the representatives of the assessee and the demand made by them for an order had been caused by non-receip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellate Assistant Commissioner concluded, the letter of June 2, 1950, had decided nothing and certainly had not itself dealt with the assessee's letter of August 18, 1945, and the claim for refund made therin on the basis of a total exemption from tax liability. Accordingly, he held that the appeal preferred before him was not maintainable. Thereafter, there was a further appeal to the Appellate -Tribunal. The Tribunal held that there was no proper application under Section 48 at all and, therefore, no order passed upon the letter of August 18, 1945 could be appealable. In any event, the only order passed on that letter was the order of November 24, 1949, but no appeal had been preferred against that order. The order of June 2, 1950, had merely, pointed out to the assessee that no application for a refund in the prescribed form had been made and that the only application or purported Aapplication had already been disposed of by the earlier order. As be the Appellate Assistant Commissioner so before the Tribunal the assessment contended that Section 48 did not apply at all, but the Tribunal that contention. It held that whether a person was liable only for a port ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the form prescribed. The prescribed form further make it clear that it should be signed by the claimant, himself and it is also required that there should be a verification, also signed by the claimant, in which, particularly, he must declare whether he is resident or ordinarily resident, or resident but not ordiny by resident and he must also affirm that the statements contained the application are correct. In the present case, the application or the letter, was sent by Messers S. K: Sawday Co. who did not say that they were acting for and on behalf of the trust, but assuming that no express statement to that effect was necessary, it seems to me that in order that the prescribed form may be complied with, it is essential that the application should be signed by the claimant himself and also must be verified by him. Then again, there is Rule 37 which provides that an application under Rule 36 shall be accompanied by a return of total income in the form prescribed under Rule 22, unless the applicant has already made such a return to the Income-tax Officer. It is true that in the present case, the assessee was not, according to its contention, liable to tax at all. But that did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviso of section 18 (3) of the Act that such a certificate is relevant only to interest on securities, but not relevant at all to dividend income, as the income in the present case was. Be that as it may, I can see no reason for any one thinking that the letter of the 24th November did not contain a refusal to grant the refund claimed. The letter begins by saying that it is with reference to the assessee's application and that application, as have already stated, was for a refund on the ground that the income of the trust was exempt from tax as it was a trust ''wholly for charitable purposes . Once the reply of the Income-tax Officer said, as it did, that the income of the trust was not exempt as claimed, because there was no valid trust, it is difficult to see what remained to be said in order to refuse the claim of refund. That the advisers of the assessee also understood the letter as containing a refusal appears clearly from their reply of the 30th November, 1949, in which they said that they wanted to take the matter on appeal and would be obliged if regular orders refusing grant of refunds were made available to them. The short question, therefore, is, although ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave already given when dealing with the order of the 24th November, 1949, under the preceding question. But the other ground given by the Tribunal in the first part of its order appears to me to be unassailable. The letter of the 2nd June, 1950, did not contain any order at all and was not a pronouncement on the letter of the 18th August, 1945, or any.other letter. Previously, on the 26th May, 1950, the Income-tax Officer had pointed out that the assessee's letter of the 18th August, 1945, had been disposed of by the Income-tax Officer's letter of the 24th November, 1949, and when the advisers of the assessee still went on pressing for an express order of refusal, all that the letter of the 2nd June, 1950, stated in reply was that there had been no application for a refund by the Trust up to that time and, therefore, no question of refusing or granting the refund arose. The Income-tax Officer was not treating the letter of the 18th August, 1945, as still pending and was not refusing the claim made by it on the ground that it was not a proper application, but having previously informed the assessee that the letter of the 18th August had already been disposed of, he was only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st? It will be noticed that the question asks not whether the Tribunal was right in holding that no appeal lay before the Appellate Assistant Commissioner, but whether it was right in refusing to go into the merits of the claim. Really, however, the Tribunal did not refuse to go into the merits of the claim, but simply did not do so, because the only matter which it appears to have been invited to consider was whether an appeal lay to the Appellate Assistant Commissioner. Having held that no such appeal lay, it had nothing further to do and in fact it did nothing. Quite obliviously, the assessee misread the last sentence in the Tribunal's order, where it said that the Appellate Assistant Commissioner was right in saying that no appeal could lie before him and in refusing to go into the merits of the case. The assessee obviously took it as the Tribunal itself having said that it would not go into the merits of the case, but the meaning of the sentence is clear. All that the Tribunal held was that the Appellate Assistant Commissioner was right in taking the view that no appeal lay before him. If it came to the conclusion that the Appellate Assistant Commissioner was wro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per course of action when they were misguiding them selves.) Nor can the assessee sustain an objection that the Appellate Assistant Commissioner or the Appellate Tribunal did not give it an opportunity to remove the defects from the application. No prayer for such an opportunity was ever made, as Dr. Sen Gupta had to concede. On the contrary, it was insisted on behalf of the assessee that Section 48 did not apply to the case at all and therefore the Department was bound to grant refund on the letter of 1945, as it was. In any event, what we are considering here is a question of law and it can by no means be said that either the Appellate Assistant Commissioner or the Apellat Tribunal was bound, as a matter of law, to offer an opportunity to the assessee to bring its application into order. As I have pointed out, quite apart from there being any legal obligation on the Tribunal to have such an opportunity, there was even no room for the exercise of discretion in that behalf, because the assessee was taking its stand on its alleged right to have a refund on the letter of the 18th August, 1945, such as it was, since in the view of its advisers, Section 48 had no application. In my opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst Income-tax Officer should have treated it as such, as he undoubtedly did, up to the time when have dismissed it on the merits. Then again, if the other Income-tax Officer, who wrote the letter of the 2nd June, 1950, thought that there was no proper application for a refund by the trust at all, there was no reason why he should not have said in November or December, 1949, what he ultimately said in December, 1950, and why he should have gone on causing an almost endless correspondence and granting endless interviews. The five year long harassment caused to the assessee is writ large on the face of the proceedings and for that harassment there was no excuse at all. The assessee might have deserved a dismissal of its application, but it certainly did not deserve the protracted harassment. It is difficult to regard with patience or pronounce with becoming restraint on the callousness and want of consideration shown by the officers of the Department in sending no reply whatever to a long series of reminders in relation to a pending case, and the want of-I had almost said efficiency, but shall say-care exhibited by the holding of interviews and discussions regarding an application w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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