TMI Blog1968 (1) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... tax payable by the firm by Rs. 9,000. It may be mentioned here that, during the pendency of the appellate proceedings referred to above, the petitioner-firm had tppealed agtinst the order made by the Income-tax Officer under section 26A of the Income-tax Act, 1922 (hereinafter referred to as the " Act "), whereby he refused to treat the firm as a registered firm and directed its assessment as unregistered firm. Though the Appellate Assistant Commissioner had upheld this order of the Income-tax Officer, the Income-tax Appellate Tribunal, by its order dated 24th of September, 1963, set it aside ind directed registration of the petitioner-firm. Accordingly, on 21st September, 1966, the petitioner-firm was reassessed as a registered firm and the Income-tax Officer passed a fresh assessment order under section 23(5)(a) of the Act and found the following amounts due and payable by the various partners of the firm : 1. Brij Lal 7,303.32 2. Raghunath Dass 7,146.54 3. Amar Nath 2,609.07 4. Madan Lal 2,579.94 5. Harbans Lal 7,758.76 Against the order of the Income-tax Officer making assessment under section 23(5) of the Act, the firm instituted an appeal before the Appellate A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overy and the proceedings remained stayed during the pendency of the appeal, which the petitioner-firm had preferred before the Appellate Assistant Commissioner and which was decided on 21st September, 1966. After the decision of this appeal by the Appellate Assistant Commissioner, the petitioner-firm again wanted the stay of the recovery proceedings and for that purpose approached the respondent-Income-tax Officer, with its application (marked " D ") dated 21st December, 1966, invoking his jurisdiction under section 220(6) of the new Income-tax Act, 1961. This application was, however, turned down and the Income-tax Officer, by his order dated 29th December, 1966 (annexure " E "), directed the firm to make the payments of the tax due " after deducting share in the refund due to the firm " for the assessment year in dispute. The petitioner-firm was further informed that the total refund of Rs. 9,284.60 had become due to them. Aggrieved by this refusal of the Income-tax Officer to stay the recovery proceedings, the petitioner-firm amended their writ petition and prayed that this order of the Income-tax Officer be also quashed and he be prohibited from recovering the tax due till t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 45 are not merely ' may ' but ' may in his discretion ' and therefore such a discretionary power cannot be under any circumstances converted into a duty. I do not think that there is any force in this contention. No authority in support of this contention has been cited by the Advocate-General. On the other hand, words such as 'may, if they think fit' have been held to have a compulsory force." This Single Bench decision of Bose J. came up for consideration in several cases before various High Courts. In the Calcutta High Court itself, a Division Bench consisting of Das Gupta and Guha JJ. held in Kashiram Agarwalla v. Collector of 24-Parganas that they did not find it possible to agree with the observations of Bose J. After reproducing the observations of Bose J., which have been quoted by me above from Ladhuram Taparia v. B. K. Bagchi, their Lordships referred to the fact that an appeal against that decision of Bose J. was taken to a larger Bench, wherein Harries C.J., delivering the judgment of the appeal, observed as under : " Once an appeal was filed, however, it would be for the Income-fax Officer then to consider whether in the particular circumstances it would be just an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule laid down by the learned judge because when exercising his discretion under section 45 of the Income-tax Act the Income-tax Officer has not to look to the correctness of his own order of assessment. There are other considerations which have to be seen at the time of declaring an assessee to be a defaulter or otherwise ...." Soni J., the other learned member of the Bench, while agreeing with Kapur J., said : "It is a grave thing to interfere in the orderly administration of justice by the ordinary or special Tribunals constituted by the Legislature. If these Tribunals or the functionaries appointed under the special Acts do not perform their duties they may be compelled by an appropriate writ to do so. Where, however, they are acting within the limits of the powers assigned to them by the Legislature and have exercised their discretion, this court will not sit in judgment over them and will not ordinarily interfere unless the discretion has been exercised so capriciously or in such an outrageous manner as to attract the extraordinary jurisdiction of this court. " No other reported or unreported decision of this court has been brought to my notice and Mr. Ganga Parshad ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven in those cases where the assessee has gone up in further appeal to the Income-tax Tribunal so as to valid hardship and injustice to him. However desirable it may be to confer such power to stay recovery of the disputed tax upon the Income-tax Officer or some other authority, the fact remains that, under section 45, it is only the Income-tax Officer who is the authority to treat the assessee as not being in default and that power can be exercised by him only for the period of the pendency of an appeal under section 30 of the Act and not under any other provision of law, as is evident from the use of the expression " such appeal ". It is a well-settled rule of interpretation that, where the language is clear, the courts have no option but to give effect to it and irrespective of the considerations of hardship, justice or equity, they have to enforce the relevant provisions. The scope of section 45 cannot be extended, the language being unambiguous, leaving no room for doubt with regard to the intention of the Legislature. On this short ground the impugned order of the Income-tax Officer refusing to afford relief to the petitioner under section 45 during the pendency of the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fuses to stay, on the ground the financial condition of the State requires recovery of arrears, it would be an order taking into consideration extraneous and irrelevant circumstances. The aforesaid cases are only illustrative and there may be many other cases where the Income-tax Officer would not be exercising his discretion honestly and fairly. It is not possible to exhaust the circumstances under which the Income-tax Officer should or should not give stay. It is in his discretion to give stay but, if he exercises his discretion honestly and fairly without caprice or arbitrariness, a court would not and should not interfere with his discretion." In this authority, Viswanatha Sastri J., the other learned member of the Bench, dealing with the scope of section 45, observed at page 268 of the report as follows : " Section 45 of the Income-tax Act does not give an absolute right to an assessee who has preferred an appeal to get an order from the Income-tax Officer treating him as not in default pending the appeal, independently of the judgment or discretion of the officer. At the same time cases might easily be conceived and do occur, where the assessee would suffer financial ruin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, arbitrarily or mala fide. Reference in this connection may be made to the Division Bench decision of the Madras High Court in Vetcha Sreeramamurthy's case. Subba Rao C.J., while dealing with this matter of interference by the High Court with the discretionary orders, observed as follows at page 257 of the report : " The discretionary statutory power conferred upon an authority for the public good is coupled with a duty to perform it under relevant circumstances. The fact that the exercise of the power is left to the discretion of the authorized person does not exonerate him from discharging his duty. If the discretionary power so conferred is exercised arbitrarily, capriciously or unreasonably or by taking into consideration extraneous or irrelevant considerations, in the eye of law, the authority concerned must be deemed not to have exercised the discretion at all, that is, he his not discharged his duty. If the court on the facts placed before it comes to a definite conclusion that a particular authority has not exercised his duty for one or other of the aforesaid reasons, it will compel the authority to discharge his duty, or, to put it differently, to exercise his discreti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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