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1965 (3) TMI 23

er 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 order and issued a notice of demand to the assessee. In not doing so, it must be held that the Income-tax Officer did not discharge his duty which he was bound to do under the Act ; with the result he had become amenable to a writ of mandamus directing him to do what he should have done under the Act. - In the result, the order of the High Court is set aside and we issue a writ of certiorari quashing the order of the Commissioner and a writ of mandamus directing the Income-tax Officer to pass 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 offi .....

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. 2,98,909 realized by the assessee under the head income from business , i.e., the difference in the amount for which it purchased the shares and that for which it sold them. On appeal, the Appellate Assistant 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 previous order dated August 3, 1953, by substituting the word processed in place of the word assessed in its previous order. The assessee raised various contentions before the Income-tax Officer, inter alia, that the said income was not liable to be taxed under section 12B of the Income-tax Act under the head Capital gains and that in any case in order to determine the amount of capital gains the market value of the shares only should be taken into consideration, as the price of Rs. 65 per share .....

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rit of mandamus or any other order or direction of the like nature directing the Commissioner to pass a fresh order in accordance with the decision of the Bombay High Court and direct the Income-tax Officer to pass a fresh order in accordance with law and to issue a notice of demand as required by section 29 of the Income-tax Act. The High Court dismissed the said application in limine mainly on the following 3 grounds : (1) the affidavit filed in support of the writ petition was highly unsatisfactory and on the basis of such an affidavit it was not possible to entertain the petition ; (2) the facts 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 Income-tax Officer to the Commissioner was maintainable under section 33A of the Act, as the .....

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nd complicated 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 is not to say that the High Courts can function arbitrarily under this article. Some limitations are implicit in the article and others may be evolved to direct the article through defined channels. This interpretation has been accepted by this court in Basappa v. Nagappa and Irani v. State of Madras. But we are satisfied that this case falls directly within the confines of the certiorari jurisdiction as understood in England. It is well settled that a writ of certiorari can be issued only to quash 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 bee .....

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expediency, it cannot be said that it is under a duty at any stage to act judicially. The relevant principles have been succinctly stated in Halsbury s Laws of England, 3rd edition, vol. 11, at pages 55 and 56, thus : It is not necessary that it should be a court : 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. 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 particular case, solely on the evidence before it, apart from questions of policy or any other extraneous considerations. Moreover an administrative body, whose decision is actuated in whole or in part by questions of policy, may be under a duty to act judicially in the course of arriving at that de .....

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er 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 prevented by sufficient cause from making the application within that period), call for the record of the proceeding in which such order was passed, and on receipt of the record may make such inquiry or cause such inquiry to be made, and, subject to the provisions of this Act, may pass such order thereon, not being an order prejudicial to the assessee, as he thinks fit : Provided that the Commissioner shall not revise any order under this sub-section if- (a) where an appeal against the order lies to the 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 A .....

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t were validly made and were effective until they were set aside ; and that a reference to the High Court did not lie from an order under section 33 of the Act unless that order was prejudicial to the assessee 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 convenience, a practice has grown up under which the Commissioner has been invited to act of his own motion, under the section, and where this occurs a certain degree of formality has been adopted. But the language of the section does not support the contention, which lies at the root of the third question and is vital to the respondent s case, that it affords a claim to relief. Continuing the same idea, the Board observed : The Commissioner may act under section 33 with or without the invit .....

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er of the Commissioner under section 33A of the Act was an administrative one, the respondent would not be in a better position. What the appellant complains is that the Income-tax Officer in terms of section 29 of the Act is under an obligation to issue a demand notice. If the said contention was correct, he did not discharge the duty imposed on him by the statute. If the Commissioner only made an administrative order in refusing to give any direction to the Income-tax Officer, it would not exonerate the said officer from discharging his statutory duty. In that event the assessee would certainly be 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 petition. In exercise of the powers conferred by article 225 of the Constitution and of other powe .....

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relevant 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 derived from a perusal of the relevant documents ; and the affidavit in express terms disclosed and specified the documents, the source of the appellant s knowledge. He swore in the affidavit that the documents annexed to the affidavit were true copies of public documents. If they are certified copies of public documents, they prove themselves ; if they are originals of the orders sent to the appellant, the deponent, as his agent, speaks to their receipt. It is, therefore, not correct to say that 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 no .....

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of the Act. If a revision lay to the Commissioner, the Commissioner should have considered the second question before dismissing it. Therefore, the question is whether a revision lay to the Commissioner under section 33A(2) of the Act. A revision does not lie to the Commissioner against an order where an appeal against that order lies to the Appellate Assistant Commissioner but has not been made and the 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 Income-tax Officer did not make any order under section 23(3) of the Act, nor did he issue a regular notice of demand as prescribed under section 29 of the Act. The result was, no appeal lay against the computation made by the Income-tax Officer to the Appellate Assistant Commissioner. Indeed, on .....

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