Tax Management India. Com
                            Law and Practice: A Digital eBook ...
TMI - Tax Management India. Com
Case Laws Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Manuals SMS News Articles Highlights
        Home        
 
Extracts
Home List
← Previous Next →

Dwarkanath, Hindu Undivided Family Versus Income-Tax Officer, Special Circle, Kanpur

1965 (3) TMI 23 - SUPREME Court

Whether a reference would lie to the High Court against an order of the Commissioner? - Held that:- If a tax is due in consequence of an order from an assessee, the Income-tax Officer is under a duty to serve on him a notice of demand. Pursuant to the directions given by the Tribunal the Income-tax Officer made fresh calculations under the head " Capital gains " and ascertained the amount due from the assessee. In the circumstances, pursuant to the said calculation, he should have passed an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s an order and issue a notice in accordance with law. - Civil Appeal No. 62 of 1964 - Dated:- 29-3-1965 - Judge(s) : K. SUBBA RAO., J. C. SHAH., S. M. SIKRI JUDGMENT The judgment of the court was delivered by SUBBA RAO J.-The facts leading up to this appeal may briefly be narrated. Gujarat Cotton Mills Co. Ltd., hereinafter called the company , is a limited company having its registered office at Ahmedabad. In the year 1938, the company appointed Messrs. Pira Mal Girdhar Lal and Co., hereinafter .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ptember, 1946. In September, 1946, the shareholding of the partners of the agency firm in the company was as follows : Kanpur group ... 32,500 shares Bombay group ... 26,362 shares Because of certain differences between the partners, they decided among themselves to sell their shares and to surrender their managing agency. On September 7, 1946, the said 11 partners entered into an agreement with the firm of Messrs. Chhattu Ram and Sons of Bihar, hereinafter called the purchaser firm. Under that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

general body meeting and accepted the resignation of the agency firm and by another resolution appointed the purchaser firm as the managing agents in its stead. In terms of the agreement, the purchaser firm paid for the entire shareholding of the partners of the agency firm at Rs. 65 per share. The appellant is a Hindu undivided family. Its karta was one Dwarkanath and the present karta is his son, Ramji Prasad. The said family was one of the 11 partners of the agency firm belonging to the Kanp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tant Commissioner of Income-tax confirmed the same. On further appeal, the Income-tax Appellate Tribunal, Delhi Bench, held that the said receipt had to be taxed as Capital gains under section 12B of the Income-tax Act, 1922, and directed the Income-tax Officer to modify the assessment in accordance with its order. The assessee made an application under section 35 of the Income-tax Act to the Tribunal for further directions and the Tribunal, by its order dated March 26, 1954, amended its previou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed also the consideration for the relinquishment of the managing agency rights. The Income-tax Officer rejected the said contentions of the assessee. He re-determined the assessable income under the heading Capital gains but did not issue a notice of demand as prescribed in section 29 of the Income-tax Act. After making an infructuous attempt to get suitable directions from the Appellate Tribunal, on March 5, 1956, the assessee filed an application before the Income-tax Officer to issue a notice .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of Income-tax under section 33A(2) of the Income-tax Act for revising the order of the Income-tax Officer dated September 28, 1955. On March 28, 1959, the Commissioner dismissed the revision petition on two grounds, namely, (i) that it was not clear whether the revision petition under section 33A of the Income-tax Act was maintainable, and (ii) on merits. It may be noticed that long before the revision petition was dismissed, the appeal filed by the assessee against the order of the Income-tax O .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

missing the revision. Thereafter, on July 28, 1959, the assessee filed Writ Application No. 2071 of 1959 in the High Court of Judicature at Allahabad, inter alia, for a writ of certiorari or any other direction or order of like nature to quash the order of the Income-tax Commissioner, Lucknow, dated March 28, 1959, and the order of the Income-tax Officer dated September 28, 1955, and for a writ of mandamus or any other order or direction of the like nature directing the Commissioner to pass a fr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

given in the affidavit were incomplete and confused ; and (3) even on merits, there was no force in the revision petition. Hence, the appeal. Mr. A. V. Viswanatha Sastri, learned counsel for the appellant, contended that the affidavit filed in support of the petition was in accordance with law, and that, even if there were any defects, the court should have given an opportunity to the appellant to rectify them ; and that the High Court should have held that the revision against the order of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

were different from those in the present case, for the facts in both the cases were the same and in fact they arose out of the same transaction, namely, the sale of the shares by the agency firm to the purchaser firm. Mr. Gopal Singh, learned counsel for the revenue, while supporting the order of the High Court raised a preliminary objection, namely, that the order of the Commissioner under section 33A of the Income-tax Act was an administrative act and, therefore, no writ of certiorari would li .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose. This article is couched in comprehensive phraseology and it ex facie confers a wide power on the High Courts to reach injustice wherever it is found. The Constitution designedly used a wide language in describing the nature of the power, the purpose for which and the person or authority against whom .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

plicated requirements of this country. Any attempt to equate the scope of the power of the High Court under article 226 of the Constitution with that of the English courts to issue prerogative writs is to introduce the unnecessary procedural restrictions grown over the years in a comparatively small country like England with a unitary form of government to a vast country like India functioning under a federal structure. Such a construction defeats the purpose of the article itself. To say this i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sh a judicial or a quasi-judicial act and not an administrative act. It is, therefore, necessary to notice the distinction between the said two categories of acts. The relevant criteria have been laid down with clarity by Atkin L. J. in Rex v. Electricity Commissioners, elaborated by Lord Justice Scrutton in Rex v. London County Council and authoritatively restated in Province of Bombay v. Kusaldas S. Advani. The said decisions laid down the following conditions to be complied with : (1) The bod .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ative tribunal or authority. Therefore, the fact that an order was issued or an act emanated from an administrative tribunal would not make it any the less a quasi-judicial act if the aforesaid tests were satisfied. The concept of a quasi-judicial act has been conceived and developed by English judges with a view to keep the administrative tribunals and authorities within bounds. Parker J. in R. v. Manchester Legal Aid Committee brought out the distinction between judicial and administrative act .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion, the body concerned had to consider proposals and objections and consider evidence, then there is the duty to act judicially in the course of that inquiry..... Further, an administrative body in ascertaining facts or law may be under a duty to act judicially notwithstanding that its proceedings have none of the formalities of and are not in accordance with the practice of a court of law.... If, on the other hand, an administrative body in arriving at its decision at no stage has before it an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the formalities of, and are not in accordance with the practice of, a court of law. It is enough if it is exercising, after hearing evidence, judicial functions in the sense that it has to decide on evidence between a proposal and an opposition. A body may be under a duty, however, to act judicially (and subject to control by means of these orders) although there is no form of lis inter partes before it : it is enough that it should have to determine a question solely on the facts of the partic .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

expediency, it cannot be said that it is under a duty at any time to act judicially. There are innumerable decisions of this court where it issued a writ of certiorari to quash a quasi-judicial act of an administrative tribunal or authority. This court set aside the order of the Andhra Pradesh State Government approving the order of nationalization of road transport made by the Andhra Pradesh Road Transport undertaking in Gullapalli Nageswara Rao v. Andhra Pradesh State Road Transport Corporati .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Government, the Examination Committee and the Board of Revenue were administrative bodies, but the acts impugned were quasi-judicial ones, for they had a duty to act judicially in regard thereto. The law on the subject may be briefly stated thus : The provisions of a statute may enjoin on an administrative authority to act administratively or judicially. If the statute expressly imposes a duty on the administrative body to act judicially, it is a clear case of a judicial act. But the duty to ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r advisable to lay down a hard and fast rule or an inflexible rule of guidance. With this background let us look at the relevant provisions of the Income-tax Act. Section 33A. (2) The Commissioner may, on application by an assessee for revision of an order under this Act passed by any authority subordinate to the Commissioner, made within one year from the date of the order (or within such further period as the Commissioner may think fit to allow on being satisfied that the assessee was prevente .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Appellate Assistant Commissioner or to the Appellate Tribunal but has not been made, the time within which such appeal may be made has not expired, or, in the case of an appeal to the Appellate Tribunal, the assessee has not waived his right of appeal, or (b) where an appeal against the order has been made to the Appellate Assistant Commissioner, the appeal is pending before the Appellate Assistant Commissioner, or (c) the order has been made the subject of an appeal to the Appellate Tribunal : .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rd of the proceeding in which such order was made and make such enquiry or cause such enquiry to be made. After such enquiry, he can make an order not to the prejudice of the assessee but to his benefit. Such revision is not maintainable if the time prescribed for an appeal against such an order to the appropriate authorities has not expired or if an appeal against such an order is pending before the appropriate authorities. The scope of the revision is, therefore, similar to that prescribed und .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

revision. The fact that the Commissioner cannot make an order to the prejudice of an assessee does not possibly change the character of the proceeding. Though the Commissioner may not change the order of the inferior authority to the prejudice of the assessee, he may not give the full relief asked for by the assessee. But it is said that the Commissioner exercising jurisdiction under section 33A of the Act is only functioning as an administrative authority and all his orders made thereunder part .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

see in the sense that he was in a worse position than before the order was made. But the Board incidentally made the following observations : On the contrary, section 33 follows upon a number of sections which determine the rights of the assessee and is itself, as its language clearly indicates, intended to provide administrative machinery by which a higher executive officer may review the acts of his subordinates and take the necessary action upon such review. It appears that, as a matter of co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the assessee ; if he does so without invitation, it is clear that, if he does nothing to worsen the position of the assessee, the latter can acquire no right ; the review may be a purely departmental matter of which the assessee knows nothing. If, on the other hand, the Commissioner acts at the invitation of the assessee and again does nothing to worsen his position, there is no justification for giving him a new right of appeal. These observations were made in the context of a question wheth .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d by the Amending Act of 1939 ; but by Act XXIII of 1941 the revisional powers of the Commissioner were restored. Section 33A took the place of section 33 with certain modifications. Sub-section (1) of section 33A provided for the Commissioner acting suo motu ; and sub-section (2) thereof, on the application of the assessee. Under this section the Commissioner can exercise the revisional jurisdiction subject to the conditions mentioned therein. While section 33 only provided for the suo motu exe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ransport Co. Ltd. and Suganchand Saraogi v. Commissioner of Income-tax. They did not consider the scope of the revision before the Commissioner and whether the orders made thereunder satisfied the well settled tests of judicial act laid down by this court. In our view, for the reasons mentioned by us earlier, the said judgments were decided wrongly. That apart, on the assumption that the order of the Commissioner under section 33A of the Act was an administrative one, the respondent would not be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

entitled to approach the High Court under article 226 of the Constitution for the issue of a writ of mandamus or other appropriate direction to the Income-tax Officer to discharge his statutory duty. We, therefore, reject the preliminary objection of the respondents. The High Court mainly dismissed the writ petition on the ground that the affidavit filed in support of the writ petition was highly unsatisfactory and that on the basis of such an affidavit it was not possible to entertain the peti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ts upon which the applicant relies and the grounds upon which the court is asked to issue a direction, order or writ, and shall conclude with a prayer stating clearly, so far as circumstances permit, the exact nature of the relief sought. The application shall be accompanied by an affidavit or affidavits in proof of the facts referred to in the application. Such affidavit or affidavits shall be restricted to matters which are within the deponent s own knowledge. The application filed in the High .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the affidavit, is a relative of the petitioner and he also looked after the case on his behalf as his pairokar and was fully conversant with the facts. He solemnly affirmed and swore as follows : I, Dhruva Das, aforesaid deponent do hereby solemnly affirm and swear that the contents of paragraphs 1, 2, 3 and 50 partly are true to my personal knowledge, that the contents of paragraphs 4, 5, 6, 7, 8, 9, 10, 11 12, 13, 14, 15, 16, 20, 21, 25, 27, 29 partly, 31, 32, 34, 37, 38, 41, 42, 44 are ba .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ant agreements and the copies of the said orders and agreements were also annexed to the affidavit as schedules. It is not clear from the schedules whether certified copies or the original of the orders received by the appellant were filed. The said agreements and the orders afford sufficient basis to appreciate the case of the appellant and for disposing of the same. Deponent s own knowledge in rule 1(2) of Chapter XXII of the Rules is wide enough to comprehend the knowledge of the appellant de .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the facts stated in the affidavit are not based on the deponent s knowledge. The other facts alleged in the affidavit are only introductory in nature and if they are excluded, the result will not be affected. That apart, if the affidavit was defective in any manner the High Court, instead of dismissing the petition in limine, should have given the appellant a reasonable opportunity to file a better affidavit complying with the provisions of rule 1 of Chapter XXII of the Rules. We cannot, therefo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nfusion in the nature of the reliefs asked for. We cannot also agree with the High Court that the decision of the Bombay High Court in Baijnath Chaturbhuj v. Commissioner of Income-tax was given on different facts and that it was impossible to contend that any part of the money paid by Messrs. Chhatturam and Sons was really compensation for the managing agency rights. The Bombay decision was given in the context of the dispute between the Bombay group and the income-tax authorities and was based .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

etition in limine. We find in the decree issued by the High Court that Sri Gopal Behari appeared on behalf of the opposite parties ; presumably he appeared as the appellant must have issued notice in terms of rule 1(4) of Chapter XXII of the Rules. Be that as it may, the High Court did not finally decide two important questions that really arose for consideration before it, namely, (i) whether a revision lay to the Commissioner under section 33A(2) of the Act against the order of the Income-tax .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e time within which such an appeal may be made has not expired or where an appeal against the order has been made, it is pending before him. It follows that if no appeal lies against the order of an officer to the Appellate Assistant Commissioner, the Commissioner can revise that order under section 33A of the Act. In the present case, pursuant to the directions of the Tribunal, Delhi Bench, the Income-tax Officer determined the assessee s capital gains under section 12B of the Act ; but the Inc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.