TMI Blog1965 (6) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... erived from the wakf estate, and the appellant was assessed as an individual on the said aggregate income. The appellant preferred an appeal from the order of assessment to the Appellate Assistant Commissioner, who, by his order dated December 29, 1962, directed that the appellant should be taxed separately in respect of the income arising from the said wakf estate. By the said order a further direction was given that ₹ 19,676, ₹ 20,670 and 21, 564 should be excluded from the appellants individual assessment for the assessment years 1958-59, 1959-60 and 1960-61 respective as the income of the wakf estate for those years. Pursuant to this direction of the Appellate Assistant Commissioner, separate assessments were made under section 23 (3) of the Income Tax Act, 1922 (hereinafter referred to as the Act), for the income arising from the wakf estate and notices of demand under section 29 of the Act for the years 1958-59, 1959-60, 1960-61 and 1961-62 had been issued to the appellant. For the assessment year 1958-59, the income from the wakf estate was assessed as wakf estate of the late Ibrahim Barry through mutwalli Shaik Md. Shaffi Barry , in the status of an association ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect-matter of this appeal, the Income Tax Officer firstly failed to indicate in the order that the assessments were made under section 41 (1) of the Act, as he should have done, and he also failed to hold that the beneficiaries under the wakf estate were an indeterminate class of persons. It was argued that it was only after it was held that the beneficiaries were not determinate that the tax could be computed at the maximum rate of 25 per cent. There was nothing in the assessment orders to indicate that Income Tax Officer came to the conclusion that the beneficiaries were an indeterminate class of persons and that being so, tax at the maximum rate could not be computed, but having been so computed, there was an error of law apparent on the face of the records. Mr. Mukherjee further argued that the authority to compute the tax at the maximum rate was derived from the first proviso to section 41 (1) of the Act and, in order to invoke and apply this proviso, the taxing authority must hold that the beneficiaries were an indeterminate class of persons. Without holding that the beneficiaries are an indeterminate class of persons, the maximum rate could not be applied. The substance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uation of a property for the purpose of local rates and taxes. On appeal to the local valuation court, that court decided that the property was exempted from valuation for the purpose of local rates under a different statute. After several years a new valuation list was prepared and the property, which was previously held to be exempt, was again entered in the valuation list. Exemption was again claimed on the basis of the statute. While dealing with this question it was held that a decision of a local valuation court did not create an estoppel, per rem judicator, when the valuation list, which was the subject of an earlier decision, had come to the end of its statutory life and a new quinquennial valuation list was brought into existence, even if it was shown that there had been to change of circumstances. This decision is of no assistance to Mr. I. P. Mukherjee. In the assessment for the year 1958-59, the order was made under section 23 (3) and section 41 (1) of the Act. In the assessment for subsequent years, namely, 1959-60, 1960-61 and 1961-62, the Income Tax Officer had computed the tax at the maximum rate without specifying in the orders of assessments that section 41 (1) wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessment order made it quite plain that the tax was levied at the maximum rate. Similarly, he also referred to the assessment order and computation of income for the year 1960-61 which is annexure I to the petition and in which the income was taken to be ₹ 23,993 and the total tax was computed at ₹ 7,437.46. He also referred to the notice of demand for the year 1960-61 under section 29 of the Act, which is annexure H to the petition, and in which the demand of ₹ 7,437.46 was made for Income Tax. Mr. S. Mukherjee submitted that in this year also the assessment order and the demand notice under section 29 made it plain that tax was computed at the maximum rate. The same submission was made with regard to the assessment order and notice of demand for the year 1961-62, which are annexures J and K to the petition. Mr. S. Mukherji argued that it was not incumbent on the Income Tax Officer to set out in the assessment order the particular section of the Act under which the assessment was made or to set out therein the grounds on which the order was made. The computation of tax for the years 1959-60, 1960-61 and 1961-62 was sufficient determination by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omission or failure to give reasons for the order was no ground for challenging the validity of the order itself. In support of this contention Mr. S. Mukherji relied upon another decision of the Supreme Court in Syed Yakoob v. K. S. Radhakrishnan. There is a good deal of force in this contention of Mr. S. Mukherji. The statute has not imposed upon the Income Tax Officer a duty to set out the reasons or to quote the section under which the power of making the assessment was exercised. Mr. S. Mukherji also relied upon a Special Bench decision of the Madras High Court in Gunda Subbayya v. Commissioner of Income Tax in which, while considering a similar question, namely, the duty of the Income Tax Officer to disclose the grounds on which the order was made, it was held that, although it was desirable that the Income Tax Officer should indicate in his order the material on which he made the assessment, he could not be compelled to do so. In this case the demand notices and the assessment orders make it clear that the assessments were made at the maximum rate. That, in our opinion, is a sufficient determination by the Income Tax Officer of the appellants liability to Income Tax at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and fixed at a higher rate, the appellate authority under the Act would have been competent to deal with his grievance, and give him relief, if he was entitled to any. The jurisdiction of this court under article 226 of the Constitution cannot be invoked for agitating matters of the nature which have been raised in this appeal. The learned counsel for the appellant sought to rest his case on the contention that there was an error of law apparent on the face of the records, in the failure of the Income Tax Officer to quote the provisions of the Act and set out the reasons in the order made. That, in our opinion, can by no means be treated as an error of law apparent on the face of the records. Mr. S. Mukherji next argued that, even assuming that the order made by the Income Tax Officer was irregular and was also wrong in imposing liability for tax at a higher rate, those are matters concerning the merits of the orders of assessment and such irregularity could not be regularised nor could the error be rectified by this court in exercise of its jurisdiction under article 226 of the Constitution. In support of this contention, Mr. S. Mukherji relied upon decisions of the Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the assessment for the year 1958-59, and should be assessed separately. This was done as appears from the assessment order at pages 100-102 of the paper-book. But for the years 1959-60 and 1960-61, the Appellate Assistant Commissioners direction was that two sums of ₹ 20,670 and ₹ 21,564 were to be excluded, as the income of the wakf property. But, it was argued, that for the year 1959-60, the Income Tax Officer had raised the income from ₹ 20,670 to ₹ 20,886 and for the year 1960-61, the income was raised by the Income Tax officer from ₹ 21,564 to 23,993. Relying upon these figures, Mr. I. P. Mukherjee contended that the Income Tax Officer violated the clear direction of the Appellate Assistant Commissioner and had arbitrarily raised the income as mentioned above. In our opinion, there is no merit in this contention. It is true that the Appellate Assistant Commissioner by his said order had directed that the two sums of ₹ 20,670 and ₹ 21,564 were to be set apart as being the income of the wakf property. But the order of the Appellate Assistant Commissioner was not a determination of the income of the wakf properties for the years 1959- ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
