TMI Blog1983 (8) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... not get any jurisdiction to reassess and that Ex. P-7 assessment order is one passed without jurisdiction. The facts necessary for disposal of this O.P. lie in a short compass. The petitioner owns a cardamom estate within the jurisdiction of the first respondent. A return as contemplated under the Act was submitted by the petitioner showing his income from the cardamom estate for the years 1971-72, 1972-73, 1973-74 and 1974-75 (four years) and the same was duly scrutinised by the then Agrl. ITO, Alwaye, who assessed him to agricultural income-tax on the basis of the said return. Exhibit P-1 dated December 23, 1974, is a true copy of the order of assessment. This was challenged by the petitioner in revision before the Deputy Commissioner of Agricultural Income-tax and Sales Tax (Appeals), Ernakulam, who, after hearing the petitioner and considering the materials on record, modified Ex. P-1 order granting certain relief to the petitioner as per Ex. P-2 order. Thereafter, the Agrl. ITO passed consequential order in accordance with Ex. P-2 and that order is Ex. P-3. According to the petitioner, the assessment for the said years has, therefore, become complete and final. More than on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ? (ii) Can there be a waiver of the notice contemplated under s. 35 of the Act ? (iii) On the facts and circumstances of this case, can the relief prayed for under article 226 of the Constitution be refused to the petitioner on the ground of delay ? and (iv) Is the order of reassessment sustainable in law and on facts ? We are concerned in this case only with sub-s. (1) of s. 35 of the Act which reads: "35. Income escaping assessment .-(1) If for any reason the agricultural income chargeable to tax under this Act has escaped assessment in any financial year or has been assessed at too low a rate, the Agricultural Income-tax Officer may, at any time within five years of the end of that year serve on the person liable to pay the tax or in the case of a company on the principal officer thereof a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 17 and may proceed to assess or reassess such income and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section : Provided that the tax shall be charged at the rate at which it would hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een assessed at too low a rate, that Ext. P-4 notice was issued. Clause (a) in Ex. P-4 gives the reason and that is " escaped assessment due to omission in taking progressive yield ". This is the only reason given and the same has been specifically asserted in Ex. P-4. The next question is whether for the reason stated in Ex. P-4, the previous assessment made on the agricultural income of the petitioner for the relevant period can be reopened and reassessed under s. 35 of the Act. The counsel appearing for the respondents strongly contended that the words used in s. 35 are " any reason " and, therefore, if it found that income has escaped, that alone is sufficient to invoke the powers under s. 35 of the Act. The respondents have no case that it was because the petitioner has been assessed by the previous officer at too low a rate that the assessment was reopened under s. 35 of the Act. There is no case for the respondents that in the return submitted by the petitioner for the relevant period before the previous Agrl. ITO, he did not show the actual income or total income or omitted any items of income. All the available materials were placed before the then Agrl. ITO who duly consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y wrong, but they were findings arrived at by him on the basis of the opinion formed by him after a consideration of the relevant materials. What happened in that case was that the successor Agrl. ITO, while effecting the assessment for the year 1971-72, re-examined the said matter and came to a totally different conclusion. Referring to the different conclusion, the Division Bench observed that it was a mere change of opinion on the part of the successor-officer in respect of a question on which a finding had been entered by his predecessor on the same materials and that it is now well established that such mere change of opinion on the part of either the same officer or his successor in regard to any relevant matter concerning the tax liability of the assessee will not justify resort being taken to the power conferred by s. 35 of the Act and that the legality of the action taken by the ITO has to be judged with reference to the grounds on which he proceeded to act under s. 35 of the Act. In CIT v. Simon Carves Ltd. [1976] 105 ITR 212 (SC), while considering an income escaping assessment under s. 147(b) of the I.T. Act, 1961, the Supreme Court observed that discretion was vested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gnised under s. 35 of the Act. Exhibit P-9 guidelines issued by the Board of Revenue (Taxes), Trivandrum, in the matter of agricultural income from cardamom plantations is produced before this court. This deals with the progressive yield method and the genuineness and the correctness of this have not been disputed. But this relates to 1980-81 assessment and 1979-80 accounting year. Whatever that might be, the counsel for the petitioner submitted that this was produced only for showing that different methods are adopted for assessing the agricultural income from cardamom plantations and the progressive yield method is only one of those methods. There is no dispute that agricultural income from cardamom plantations can be assessed on the basis of the return submitted by the assessee, provided the concerned officer is satisfied that the return contained a true and correct statement of facts relating to the income. As pointed out by the Supreme Court, merely because the previous officer selected one of the methods permissible in law which resulted in lower tax liability of the assessee, it cannot be said that the officer did not exercise his discretion in a proper and judicious manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e invalid. The counsel appearing for the petitioner pointed out that although this decision of the Division Bench was challenged before the Supreme Court, the above dictum was not interfered with, as could be seen from First Addl. ITO v. Suseela Sadanandan [1965] 57 ITR 168 (SC). There can be no doubt, in the light of the principles stated in the above decisions, that the requirements of a valid notice as contemplated under s. 35 of the Act cannot be waived. The decisions of the Supreme Court and this court, referred to above, constitute a complete answer to the contention of the counsel for the respondents that the petitioner has waived his right to question the validity of the notice, as he has failed to take this plea before the tax authorities. The counsel for the respondents cited a decision of a learned single judge of this court in Ahammed Kutty Haji Bros. v. Agrl. ITO [1979] 117 ITR 209 (Ker). The provisions in ss. 35 and 17(2) of the Act came up for consideration in this case before the learned judge. This decision was cited by the counsel in support of his contention that an assessment can be reopened under s. 35 of the Act on the basis of information received subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be decided on the facts and circumstances of the case. The power to grant relief under art. 226 of the Constitution is a discretionary power. In Suniti Devi Jaipuria v. ITO [1971] 79 ITR 391 (Cal), the question whether delay was a sufficient ground for refusing relief by issue of a writ came up for consideration. It was held in that case that if there was a patent lack of jurisdiction, normally the court would interfere and would not stay its hands merely on the ground of delay on the part of the petitioner to come to the court. Where writs of certiorari or prohibition are concerned, a challenge to the exercise of a jurisdiction not vested or against action in excess of such jurisdiction or for error apparent on the record are always amenable to the writ jurisdiction of the High Courts and in such cases consideration of delay will not at all be material. In Madhavlal Sindhoo v. Idurkar [1956] 30 ITR 332 (Bom), Desai J., as he then was, observed (p. 337) : " Where, however, there is patent lack of jurisdiction and the court is immediately satisfied that the inferior court or authority has exceeded its jurisdiction, the court will very readily interpose. The discretion to grant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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