TMI Blog1964 (9) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... he garb of elaborating their arguments are really introducing and urging new points and making out a new case. Since the whole matter will be disposed of by a larger Bench, this question can also be urged there. Order of Division Bench I. D. DUA J.-This petition under articles 226 and 227 of the Constitution at the instance of four brothers was admitted by a Bench of this court on March 12, 1964, with a direction that it should be set down for hearing before the vacation. It was heard by Jindra Lal J. who on September 11, 1964, referred the case to a larger Bench on the ground that the points involved were of considerable importance and not free from difficulty, the amount involved being also substantial. It may be pointed out that in September 7, 1964, Jindra Lal J., after hearing arguments for nearly two hours, was informed by the learned counsel for the revenue that some of the points urged on behalf of the petitioners had not been taken in the petition. This was controverted on behalf of the petitioners and it was submitted by their counsel that all the points were actually taken in the petition and, during the arguments, those points were merely being elaborated. The learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... July 21, 1959, held that the said dividend income was not taxable in the assessment year 1956-57 and accordingly directed the Income-tax Officer to include this amount in the income for the assessment year 1957-58. The department took an appeal from this order to the Income-tax Appellate Tribunal but the same was unsuccessful, having been dismissed on August 17, 1961, following the judgment of this court in J. Dalmia v. Commissioner of Income-tax (Reference No. 16 of 1959). The assessment of the income of the deceased for the year 1957-58 had been made by the Income-tax Officer on February 10, 1958, when he held that this amount had been assessed in the year 1956-57. This amount was accordingly not assessed in the hands of the deceased for the assessment year 1957-58. Faced with this situation, the Income-tax Officer sought to tax this amount under section 34(1)(b) of the Indian Income-tax Act, 1922, with the result that a notice was issued to Shri Harmukh Rai Modi, petitioner No. 2, under that section for reassessing the said dividend income of the deceased. The notice dated November 7, 1959, was issued to petitioner No. 2 and it is averred in the writ petition that no notice was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidend income. Pt. Ghisa Ram, the representative of the four petitioners, is alleged to have met the Income-tax Officer, respondent No. 2, and explained to him that these notices are illegal and without jurisdiction, deserving to be cancelled or withdrawn. The Income-tax Officer replied that, since the dividend income had escaped assessment, he was entitled to assess the same in the hands of the petitioners. These notices are stated in the writ petition to be on their face barred by time as, in the circumstances of this case, notices under section 148 of the Act of 1961 could be issued only within four years of the expiry of the relevant year, namely, March, 1958. The last day of the relevant assessment year is, according to the petitioners, March 31, 1958. it is further added that, in view of the fact that the deceased had himself returned this dividend income in his return for the assessment year 1957-58 and the Income-tax Officer not having taxed the same on the view that it should be properly taxed in the year 1956-57, it cannot be said that there was any omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was also served on him. None of the petitioners ever raised any objection and the Income-tax Officer, respondent No. 2, bona fide believed that Shri Harmukh Rai Modi was acting for all the legal representatives of the late Shri Multani Mal Modi. No return having been filed by the assessee in compliance with the notice, the assessment was completed under section 23(4) on October 29, 1960, and indeed the assessee did not take up the position that he had not been served under section 34. The only communication received from the assessee was a telegram from Shri Ghisa Ram for the adjournment of the case. While accepting the assessee's appeal and cancelling the assessment order, the Appellate Assistant Commissioner directed fresh assessment for the year 1957-58, according to law, after properly serving notices on all the legal representatives of the late Shri Multani Mal Modi. In the return, it is also pleaded that there is no time-limit to the issue of notices on the facts and circumstances of this case. Reference in the return has also been made to section 150 of the Income-tax Act, 1961, according to which the normal period fixed under section 149 of the Act is not applicable to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ghisa Ram Sharma would be binding on him. Shri Harmukh Rai Modi had also executed a power of attorney in favour of Shri Mela Ram Mahendra, advocate, Patiala, on January 30, 1958, to represent the income-tax cases of the late R. B. Seth Multani Mal Modi. In regard to the dividend warrants now in dispute, Shri Harmukh Rai Modi is stated to have certified that these dividends related to shares which were his own property at the time when the dividends were declared and also during the relevant period being in his own possession. This certificate is dated January 25, 1958, and Harmukh Rai Modi has signed for late R. B. Seth Multani Mal Modi. On February 1, 1958, an indemnity bond was executed by Harmukh Rai Modi as legal representative of late R. B. Seth Multani Mal Modi in respect of refund claimed on dividends. In addition, all the statements during the assessment proceedings were signed by Harmukh Rai Modi as legal heir and representative of deceased father. Even after the passing of the assessment order against the estate of the deceased, Multani Mal Modi, Harmukh Rai Modi continued to represent the entire estate in the matter of making payments and getting extension of time for de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termeddling with the same. Indeed, Shri Ghisa Ram Sharma, the attorney of the deceased in these proceedings, continued to represent Shri H. R. Modi also as his attorney in these proceedings. As an intermeddler also, Shri H. R. Modi represents the estate of the deceased and, in any event, to the extent of the estate of the deceased represented by Shri H. R. Modi, the notices given can by no means be assailed. The revenue, it is emphasised, has acted bona fide in considering that Shri H. R. Modi fully represents the estate of the deceased. This aspect depends on evidence and its adjudication, requiring as it does consideration of questions of fact and law, the matter should appropriately be raised before, and adjudicated upon, by the subordinate departmental authorities. Lalji Haridas v. R. H. Bhatt has been cited for the submission that the jurisdiction of the High Court under article 226 of the Constitution is not intended to supersede the jurisdiction and authority of the Income-tax Officers to deal with the merits of all the contentions that the assessee may raise before them, and so, it would be entirely inappropriate to permit an assessee to move the High Court under article 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt should " take into consideration the statutory scheme of remedies and decline to interfere unless the alternative remedies are inadequate and to compel a party to resort to them will amount to denial of speedy justice in the circumstances and would mean grave hardship and harassment and waste of time and money." This rule was propounded having regard to three decisions of the Supreme Court in the cases of Lalji Haridas, Shiv Ratan, and of Madhya Pradesh Industries Ltd. v. Income-tax Officer. Lastly, reference has been made to a recent decision of this Bench in Rattan Chand v. Central Board of Direct Taxes, in which, on a fairly exhaustive review of case law, we declined to interfere on the writ side, leaving the assessee to seek remedies provided by the statute. Shri Karkhanis has in reply very persuasively argued that the impugned notice being without jurisdiction, this court should, in its discretion, interfere at this stage and quash it, seeking support for this submission from the decision in the case of Mrs. Suseela and from the Supreme Court decision in Calcutta Discount Co. Ltd. v. Income-tax Officer, Calcutta. Reference by the counsel has also been made to Hari Vishnu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the deceased on the basis of the reasons set out in the decision of the Supreme Court in S. C. Prashar v. Vasantsen Dwarkadas. This plea, according to Shri Awasthy, apart from being an afterthought, having been raised only on September 7, 1964, would be of no avail even to petitioners Nos. 1, 3 and 4, if petitioner No. 2 is held to represent the entire estate of the deceased, R. B. Multani Mal Modi. And again, this plea, so submits the counsel, does not invalidate the impugned notice issued under section 148 of the new Act. After the arguments on the preliminary objection, the counsel for the parties have also addressed us on the merits of the controversy, but, in our opinion, the basic question which must, in the very first instance, require determination is whether Shri H. R. Modi, petitioner No. 2, effectively represented the estate of the late R. B. Multani Mal Modi, for, if that question is decided in favour of the revenue, then this writ petition presented by all the four sons of the deceased assessee would be difficult to sustain. It may be pointed out that even according to the petitioners' counsel, the question of the vires of the second proviso to section 34(3) does n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 34 of the old Act being barred by time and the notice under section 148 of the new Act being incompetent as also on the effect of the previous order of the taxing authorities. On this question, arguments both pro and con have been urged at the bar, but these are matters which this court is disinclined at this stage in the present proceedings to deal with and to pronounce upon. This is a question which is pre-eminently within the jurisdiction of the taxing authorities under the Income-tax Act to consider and adjudicate upon. We are not convinced that there is either a jurisdictional infirmity or such grave illegality patent on the face of the record as to constitute exceptional circumstances which would justify exercise of this court's jurisdiction under article 226 of the Constitution at this stage. We are not at all satisfied that to leave the petitioners to urge their grievances before the departmental hierarchy in accordance with the Income-tax Act would amount to unreasonable denial of speedy justice or would mean grave and palpable hardship or unnecessary harassment or undue waste of time and money. On the contrary, such a course would be in conformity with the statutory ..... X X X X Extracts X X X X X X X X Extracts X X X X
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