Padmanabha Menon Krishna Menon vs Income Tax Commissioner and Others

Subramania Iyer, J.—This is an application presented under Article 226 of the Constitution of India for "writs of certiorari and piohibition or such other writs and commands deemed just, proper and expedient on the facts and circumstances of the case". The Petitioner is a retired District Superintendent of Police, Travancore, residing in the City of Trivandrum. The Respondents are three in number and they are:

The Income Tax Commissioner, Bangalore;

The Asst. Appellate Commissioner, Trivandrum and

The Second Addl. Income Tax Officer, Trivandrum Circle.

There was an assessment made on the Petitioner by the third Respondent for the year 1122. The order of assessment is dated 14-8-1951. An amount of Rs. 89,020/-has been regarded by the omcer as income of the Assessee derived under the heading "Other sources". The relevant Act applicable to the case is the Travancore Income Tax Act, 23 of 1121. Sections 3, 4 and 9 provide for the assessment of income. The Assessee''s case before the officer was that though this amount had been received by him, it was exempt from assessment to tax u/s 4, Clause (3), Sub-clause (vii) of the Act being not.

receipts arising from business or the exercise of a profession, vocation or occupation, which are of a casual and nonrecurring nature, or are not by way of addition to the remuneration of an employee.

The officer took the Assessee''s statement and also obtained information from the Lloyd''s Bank wherein one Mr. Levy had deposited this amount in his name which was afterwards transferred to the Petitioner in the accounts of the said Bank. The information obtained from the Bank revealed that there had been remittance of moneys twice a year in the years 1946, 1947, and 1948 by the said Mr. Levy the Assessee-Petitioner. The Petitioner in his statement before the officer admitted that he was imparting spiritual instructions to the said Mr. Levy and also to certain other persons that the amounts given by Mr. Levy to the Petitioner were made by way of gifts and though the gifts were repeated year after year of varying amounts, it could not be said to be an income of a recurring nature to attract the operations of the relevant portions of the Income Tax Act. The officer after considering the Assessee''s statement and the aforesaid and other information obtained from the Lloyd''s Bank, came to the conclusion thus:

As Mr. Levy has given these amounts to Mr. Menon in consideration of the spiritual instructions given to him, the amounts he got transferred and received in Travancore are income assessable to Income Tax in the hands of Mr. Menon.

Against this order of assessment, the Petitioner filed an appeal before the 2nd Respondent on 3-9-1951. That appeal was posted for hearing to 3-10-1951 on which date the Petitioner applied for and obtained an adjournment. Two days thereafter that is on 5-10-1951 the Petitioner filed the present application before this Court for the aforesaid reliefs. Though the Petitioner does not make mention of the appeal in his affidavit, a paper called, "statement of facts" which accompanied the application and affidavit, the fact of the appeal having been filed and of its pendency is made mention of. The main ground on which relief is sought in this Court is that the order of assessment has omitted to decide the only point as to whether the fund on which tax is levied was assessable to Income Tax. There occurs in paragraph 3 of the affidavit a statement to the effect that.

the 3rd counter-Petitioner had no warrant or jurisdiction to assess the Petitioner on the said sum under the provisions of the Travancore Income Tax Act.

A preliminary objection is taken by Mr. G. Rama Iyer, learned Counsel for the 3rd Respondent that this petition is not maintainable because firstly, the Income Tax Act under which the order of assessment challenged was passed, provides the Petitioner with Anr. remedy and as that Act provides a complete machinery affording ample and effective remedy to the aggrieved Assessee, proceedings by way of an application for writs cannot be maintained. Secondly, assuming a remedy, by way of an application for a writ like the one presented in this Court is maintainable as a concurrent remedy available to him, the Petitioner having elected to pursue the remedy by way of an appeal, he ought not to be permitted to avail himself of the other remedy by way of resorting to this Court. When it is stated that there are concurrent remedies it does not mean that those remedies can be simultaneously pursued; it means only that the party entitled to concurrent remedies can pursue the one or the other according to his option and if he elects to pursue the one, then he cannot pursue the other as well. Thirdly it is stated that the order sought to be quashed has ceased to be final, an appeal having been preferred against it and that there not being a final order to be quashed, the writ for certiorari will not lie.

Learned Counsel for the Petitioner contends that the petition before this Court is maintainable because the ground on which relief is sought in this Court is that on the face of the order of assessment there is a defect in that, a decision upon a particular point which was essential for the officer exercising the jurisdiction has not been rendered by that officer and that in the absence of such a decision, it would be beyond the competence and jurisdiction of the officer to levy the tax. As regards the second preliminary objection his answer is that concurrent remedies could be pursued concurrently. As regards the third objection, the answer is that on account of the fact that an appeal has been preferred, the order of assessment does not cease to exist and if it does exist, it is available to be quashed by this Court.

In the order of assessment, the 3rd Respondent does not discuss the question as to for what specific reasons he reached the conclusion that the fund in question was liable to Income Tax. He concludes, as is clean from the portion read above, that the fund is liable to assessment to income. He indicates in the last portion of the order as to under what head of taxable income the particular fund is brought. The argument is that in the absence of a discussion of the question as to whether it is a windfall and. therefore not liable to assessment u/s 4, Clause (3)(vii), the conclusion cannot be supported and must be regarded as not having been made. If the law of Income Tax enjoins upon the officer to write a judgment giving not merely the conclusion but the grounds therefor, it may be contended that the absence of those grounds is a defect. My attention has not been drawn to any provision of law under which the 3rd Respondent as the assessing officer is bound to discuss the pros and cons on the questions of taxability or otherwise of a particular fund. In the absence of any such provision, I consider that the omission of the officer to support his conclusion by a discussion of the grounds, though materials supporting his conclusion are mentioned, is not a defect in the order of assessment such as to regard it as containing an error apparent on the face of the record which would be a ground for the interference of the High Court in certiorari.

Learned Counsel for the Petitioner argued that the Travancore Income Tax Act 23 of 1121 under which the assessment purports to have been made was not in force at the time when the order of assessment was passed. Reliance was placed upon Section 13 of the Adaptation of Laws Order 1950 for this purpose. Objection is taken by the learned Counsel for the 3rd Respondent in that such a point is not raised by the Petitioner in the papers produced along with the petition, either in the petition itself, or in the affidavit, or in the statement of facts, or on account of any other paper produced along therewith. Learned Counsel for the Petitioner relies upon the third sentence in the 3rd paragraph of his affidavit as also upon paragraph 2 thereof. Relevant portions were read before me in extenso. I am unable to find a case like the one that is sought to be argued before me, taken or even hinted in the petition, affidavit, or other paper filed along with the application. In the absence of a ground being taken, I find it impossible to permit learned Counsel for the Petitioner to rely upon it and though he has mentioned this point I do not feel called upon to pass a decision on it as I consider it beyond the scope of this application.

As held by the supreme Court in - Rai Brij Raj Krishna and Another Vs. S.K. Shaw and Brothers, when a statute like the Rent Control Act affords a complete machinery for the decision of questions arising thereunder, a party aggrieved by any order passed by any officer under that Act is confined to those remedies provided by the Act. The Income Tax Act docs contain a complete machinery for deciding the questions as to whether a particular fund on which Income Tax is levied is or is not liable to such levy. If the Assessee is aggrieved by the order of the officer, an appeal is provided and if before the appellate authority, he does not succeed or does not succeed completely, to the extent of his failure he is given a right of further appeal to still higher appellate authority. If even before that authority he does not get complete redress and if a question of law arises, then he is given the further opportunity of having that question brought up before the High Court for opinion and the final decision will be in accordance with the opinion of the High Court. It is therefore clear that the Petitioner gets an opportunity for getting complete efficient and effective redress in the matter of his complaint, that is made by him in this petition. When such a machinery is provided and when there is no illegality or fatal irregularity in the pursuit of the procedure provided by the Act or a usurpation or excessive exercise of jurisdiction, then a resort to the High Court for relief in exercise of the extra-ordinary jurisdiction under Article 226 of the Constitution cannot be permitted.

Further the Petitioner thought that his grievance could be redressed by the provisions for appeal made in that behalf in the Income Tax Act and for such redress he has referred an appeal before the 2nd Respondent. That appeal having been tiled and being pending, in my view a resort to this Court cannot be permitted. In -''Rex v. Inspector of Taxes for Parish of Kingsland'' (1922) 8 TC 327 (B) the Lord Chief Justice says at page 329:

The question whether there should be a writ of Prohibition is a question whether that which is being done is or is not being done without jurisdiction. The Surveyor says that he discovers that a person chargeable has been allowed a deduction not authorised by this Act. Mr. Montgomery concedes that the question whether the deduction is or is not authorised by the Act is a question within the jurisdiction of the Surveyor to determine. lit that part of the argument Mr. Montgomery appeared to say - I do not know if he seriously meant it - that, if the Surveyor decided the question correctly, the matter was within his jurisdiction, but if he decided it incorrectly, the matter was not within his jurisdiction. If that be indeed the argument, it appears to me to confuse two things; an erroneous decision within the jurisdiction and a usurpation of a jurisdiction which does not exist. I think it is a fact that the question which had to be determined here was a question at the outset within the jurisdiction of the Surveyor, and if there is exception taken to the additional first assessment which he had accordingly made, there is a clear right of appeal under the Act, and that right of appeal is at this present moment being pursued by the applicant in this case. I think, therefore, that the application for the writ of Prohibition manifestly fails. So here.

Learned Counsel for the Petitioner at the conclusion of the argument placed before the court a decision in - U. C. REKHI Vs. Income Tax OFFICER, 1ST "F" WORD, NEW DELHI., which has taken the view which I have taken in this judgment as regards the maintainability of an application for a writ in a matter of Income Tax under similar circumstances. I am very thankful to Mr. Narayana Pillai for having brought the authority to my notice which Mr. Rama Iyer could, but which he may not have cited seeing the inclination of the court and in view of the fact that he stood supported by the other authorities relied upon by him including the decision of the King''s Bench Division and of the supreme Court.

The result is that the Original Petition is dismissed with costs. Advocate''s fee for the 3rd Respondent who alone appeal''s is fixed at Rs. 200/-.