9911796707
TMI Blog2020 (9) TMI 1053X X X X Extracts X X X X X X X X Extracts X X X X ..... ntation of the impugned order dated 30.12.2019 and impugned demand notice dated 30.12.2019 (collectively annexed at Annexure A) as well as stay penalty proceedings ordered to be commenced as per the impugned order dated 30.12.2019; C. Ex parte ad interim relief in terms of prayer B may kindly be granted. C1. This Hon'ble Court may be pleased to issue a writ of mandamus or a writ in nature of mandamus or any other appropriate writ or order quashing and setting aside the bank attachment notices dated 13.2.2020 (collectively annexed at Annexure R) issued for recovery of assessed dues which are subject matter of the present petition. C2. Pending admission and final hearing of this petition, this Hon'ble Court may be pleased to stay the operation, execution and implementation of the bank attachment notices dated 13.02.2020 (collectively annexed at Annexure R) and the petitioner may please be allowed to operate the bank accounts in question. D. Such further relief(s) as deemed fit in the facts and circumstances of the case may kindly be granted in the interest of justice for which act of kindness your petitioners shall forever pray." 3. The brief facts of the case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent issued a notice on 13.11.2019 alleging that the petitioners did not submit the details as per notices dated 19.05.2019 and 10.10.2019. 3.9. It is the case of the petitioners that, petitioners by letter dated 18.11.2019 addressed to the respondent Assessing Officer pointed out that petitioners had already submitted the documents in detail with reply dated 24.06.2019. The petitioners also submitted the tabular details required as per the notice dated 13.11.2019 regarding cash sales and cash deposits with letter dated 27.11.2019. 3.10. The petitioners received another notice dated 06.12.2019 from the respondent alleging that the details as called for by notices dated 19.05.2019, 10.10.2019 and 13.11.2019 were not submitted. The petitioners by reply dated 12.12.2019 again clarified that the petitioners has submitted all the documents and details called for by the earlier notices. The petitioners also visited the office of the respondent to inform him about the online submission of details, so as to avoid communication gap in this regard. 3.11. The petitioners, thereafter, received the impugned assessment order dated 30.12.2019 passed by the respondent making huge addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioners. 5.1. On the other hand, learned Senior Advocate Mr. M.R. Bhatt assisted by learned Senior Standing Counsel Mrs. Mauna M. Bhatt for the respondent submitted that the petition is not maintainable, as there is an alternative efficacious remedy available under the provision of the Act, 1961 to prefer an Appeal before the CIT (Appeals), if the petitioner is aggrieved by the impugned assessment order. 5.2. It was further submitted that, on merits without prejudice to the plea of alternative remedy available to the petitioners, that the Assessing Officer was justified in passing the impugned order on the basis of the information in his possession which is available from the bank of the petitioners. 6. Having heard the learned advocates appearing for the respective parties and having gone through the materials on record, we are of the opinion that the impugned assessment order passed by the respondent is in violation of the principles of natural justice, as the petitioner was never provided with the information in possession of the respondent Assessing Officer which is made the basis for making the additions. Moreover, the respondent has not taken into consideration the repli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the Writ Petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case law on this point but to cut down this circle of forensic whirlpool, we would rely or some old decisions of the evolutionary era of the constitutional law as they still hold the field. 16 . Rashid Ahmad vs. Municipal Boar d, kairana, AIR 1960 SC 163, laid down that existence of an adequate legal remedy was a factor to be taken into consideration in the matter of granting Writs. This was followed by another Rashid case, namely, K.S.Rashid & Son Vs. The Income Tax Investigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment. the High Court will issue appropriate orders or directions to prevent such consequences. Writ of certiorari and prohibition can issue against Income Tax Officer acting without jurisdiction under 8.34 I.T.Act". 20. Much water has since flown beneath the bridge, but there has been no corrosive effect on these decisions which though old, continue to hold the field with the result that law as to the jurisdiction of the High Court in entertaining a Writ Petition under Article 226 of the Constitution, in spite of the alternative statutory remedies, is not affected, specially in a case where the authority against whom the Writ is filed is shown to have had no jurisdiction or had purported to usurp jurisdiction without any legal foundation." 10. The only question, which arises, if the assessment order is quashed and the matter is remanded back to the assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e party would get unfair advantage. The power to quash an order under Article 226 can be exercised not merely when the order sought to be quashed is one made without jurisdiction in which case there can be no room for the same authority to be directed to deal with it. But in the circumstances of a case the Court might take the view that another authority has the jurisdiction to deal with the matter and may direct that authority to deal with it or where the order of the authority which has the jurisdiction is vitiated by circumstances like failure to observe the principles of natural justice the Court may quash the order and direct the authority to dispose of the matter afresh after giving the aggrieved party a reasonable opportunity of putting forward its case. Otherwise, it would mean that where a Court quashes an order because the principles of natural justice have not been complied with it should not while passing that order permit the Tribunal or the authority to deal with it again irrespective of the merits of the case. A Division Bench of the Punjab High Court, in C. I. T. v. Ramesh Chander ,93 ITR 450 at p. 478 = (1973) Tax LR 1427 at p. 1440 (Punj) ) took the view that what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson cannot be taxed on the principle of estoppel does not admit of much argument. Article 265 of the Constitution lays down that no tax shall be levied except when authorised by law. 8. It was also argued based on Explanation 1 to Section 132 and similar provision in certain other sections which lay down that in computing the period of limitation any period during which any proceeding is stayed by an order or injunction of any court shall be excluded, that where it is intended that the period of limitation prescribed by any of the provisions of the Incometax Act should not be strictly enforced the law itself makes a specific provision. It is a well established principle of judicial procedure that where any proceedings are stayed by an order of a Court or by an injunction issued by any Court that period should be excluded in computing any period of limitation laid down by law. Especially after the Limitation Act 1963, the provisions of which are now applicable to all proceedings, a provision like Explanation 1 to Section 132 is superfluous and no argument can be based on it. 14. In, Wright v. John Bagnall and Sons Ltd., (1900) 2 QB 240, a case arising under the Workmen's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessees that they are not covered by the expression "any person" in S. 153 (3) (ii) of the Act. The only contention is that there is no "finding" or "direction" within the meaning of S. 153 (3) (ii) of the Act in the order of the Appellant Assistant Commissioner in consequence of which or to give effect to which the impugned assessments have been made. 11. The expression "finding" and "direction" are limited in meaning. A finding given in an appeal, revision or reference arising out of an assessment must be a finding necessary for the disposal of the particular case, that is to say, in respect of the particular assessee and in relation to the particular assessment year. To be a necessary finding, it must be directly involved in the disposal of the case. It is possible in certain cases that in order to render a finding in respect of A, a finding in respect of B may be called for. For instance, where the facts show that the income can belong either to A. or B and to no one else, a finding that it belongs to B or does not belong to B would be determinative of the issue whether it can be taxed as A's income. A finding respecting B is intimately involved as a step in the proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not mean, without anything more, that the excess over the disclosed cost of construction constitutes the concealed income of the assessees. The finding that the excess represents their individual income requires a proper enquiry and for that purpose an opportunity of being heard is needed to be given to the assessees. In deed, that is now plainly required by Explanation 3 to S. 153 (3). The expression "another persons" in the Explanation would include persons intimately connected with the person in whose case the order is made in the sense explained by this Court in Murlidhar Bhagwan Das (supra). It is one thing for the partners of a firm to be required to explain the source of a receipt by the firm, it is quite another for them in their individual status to be asked to explain the source of amounts received by them as separate individuals. On such opportunity being provided it would have been open to the assessees to show that the excess alleged over the disclosed cost of construction did not constitute any taxable income. The finding contemplated in Explanation 3, it will be noted, is a finding that the amount represents the income of another person. We are unable to hold that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent years 195556 and 195657. It is agreed by the parties that if S. 153 (3) (ii) of the Act cannot be invoked by the Revenue, it is necessary to decide the first question formulated by the Tribunal. In view of the opinion expressed by us on the application of S. 153 (3) (ii) of the Act, the case must go back to the High Court for its opinion on the first question. 18. The appeals are allowed, the judgment dated Sept. 17, 1971 of the High Court governing the cases of the different assessee for the assessment years 1955-56 and 1956-57 is set aside. The provisions of S. 153 (3) (ii) of the Incometax Act, 1961 are not applicable to the instant case. Accordingly, the second question is answered in favour of the assessees and against the Revenue. The cases are remanded to the High Court for its opinion on the first question formulated by the Incometax Appellate Tribunal. The assessee are entitled to their costs of these appeals." 13. In order to understand the issue, it would be germane to refer to the provisions of Section 153(6) of the Act, which reads thus: "Time limit for completion of assessment, reassessment and re-computation. 153. (6) Nothing contained in subsections (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR.) had an occasion to consider Section 153(3)(2) of the Act, 1961, as it was in existent for the relevant period which was equivalent to Section 153(6) of the Act, 1961 as on today. The Karnataka High Court after considering the decision of this Court in case of Additional CIT v. New Jehangir Vakil Mills Co. Ltd. reported in (1979) 117 ITR 849 held that the proceedings would not be barred by limitation, in view of the Section 153(3)(ii) of the Act, 1961, existing at the relevant time. The Court held as under: "Both sides do not dispute that if s. 153(3) (ii) of the Act does not apply, the impugned notices are barred by time and, therefore, the only question that calls for a critical examination is the true scope and ambit of s. 153(3)(ii) of the Act. That section that is material as amended by the Direct Taxes (Amendment) Act of 1964, which came into force on October 6, 1964, reads thus : "153. (3) The provisions of subsections (1) and (2) shall not apply to the following classes of assessments, reassessments and re-computations which may, subject to the provisions of subsection (2A), be completed at any time ... (ii) where the assessment, reassessment or re-computation i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade under ss. 250, 254, 260, 262, 263 and 264 of the Act. When there is an order made under any of these sections then and then only the first part of clause (ii) of subs. (3) of s. 153 operates. That there is no order made under any of these sections to invoke s. 153(3) of the Act, is not in dispute also. But, in the second part of clause (ii) of subs. (3) of s. 153 of the Act, the words used are "an order of any court in a proceeding otherwise than by way of appeal or reference under this Act". "An order of any court" means an order of any and every court in the country. The hierarchy and status of the court in the country is not decisive. All that this provision provides is that it must be a court and there must be an order of a court. The nature of the court and the nature of the order made by the court have no relevance. If there is an order of a court, whatever be its status, then the bar of limitation is automatically lifted. Acceptance of any other construction, and more so the construction suggested by Sri Ramabhadran on these words, would really result in legislation in the guise of interpretation, which is impermissible. Section 153(3) is not a charging section but is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he period specified in subs. (2) of s. 153. Under Subs (3) of s. 153, it is provided that the provisions of subss. (1) and (2) shall not apply to the following classes of assessments, reassessments and re-computations which may be completed any time... (ii) where the assessment, reassessment or re-computation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order,.... or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act. It is clear that once the amount of compensation is finally determined in judicial proceedings, effect to that finding will have to be given with reference to the year in which possession was taken and since that is so, by virtue of s. 153(3)(ii), the question of limitation would not arise for consideration. That is the prima facie view which appears to us at the present stage. In view of this prima facie view, it is not necessary that any direction should be given so as to save or prevent the bar of limitation from operating against the incometax authorities as apprehended by them. Under these circumstances, the directions which were sought for a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
