Rudrappa Ningappa Ganijera and Another vs Agricultural Income Tax Officer

Chandrakantaraj, URS J.

This writ petition, coming up for preliminary hearing after notice to respondent, is disposed by the following order, the counsel appearing for parties have been heard.

The petitioners have impugned in this writ petition, the legality and correctness of the assessment order made by the respondent- Agrl. ITO, Dharwar, under s. 19(4) of the Karnataka Agrl. I.T. Act, 1957 (hereinafter referred to as "the Act") For the assessment year 1976-77, the petitioners, not having filed their returns under the Act were served with notices under s. 18(2) read with s. 36 of the Act on more than one occasion. Finally, they appeared before the respondent and produced certain documents. On the basis of the documents produced, and having regard to the evasive tactics adopted by the petitioners. The respondents issued notice in Form No. 5 prescribed under the Karnataka Agrl. I.T. Rules, 1957 (hereinafter referred to as "the Rules", proposing to assess the petitioners for tax due in respect of 160 acres of "J" class lands cultivated by them. He estimated the gross income of the petitioners liable to tax at Rs. 26,848 and further proposed to tax 60 per cent. of the said income treating the remaining 40 per cent. as expenses incurred for cultivation. He further invited objections to the said proposal by March 19, 1979. The notice was dated March 8, 1979.

It is the case of the petitioners that they received the said notice in Form No. 5, on March 19, 1979, itself by registered post with acknowledgment due and. Therefore, were not able to file their objections and were surprised to receive the final assessment order dated April 28, 1978, made under s. 19(4) of the Act (best judgment assessment). Aggrieved by the same, they have approached this court under art 226 of the Constitution contending that the impugned assessment order, a true copy of which is produced at Ex. B, is illegal inasmuch as the same is passed without an opportunity being afforded to them as required by the second proviso to s. 19 of the Act.

Shri Venkatachalaiah, learned High Court Government pleader, appearing for the respondent, has solely depended on the records of the case to demonstrate that notice was indeed sent to the petitioners if Form No. 5 and the same was received by the petitioners and, therefore, the petitioners can not be permitted to take the stand that they have not been given an opportunity of being heard. He has further contended that after receiving the notice on March 19, 1979, it was the duty of the petitioners to ascertain the next date of hearing and it was not necessary for the respondent to issue a fresh notice fixing another date of hearing; He has also contended that the writ petition is not maintainable inasmuch as the petitioners had an alternative remedy under s. 21 of the Act for having the assessment order set aside showing sufficient cause.

Shri M Rama Bhat, learned counsel appearing for the petitioners, has advanced only the contention pleaded by placing reliance on a Division Bench ruling of this court in the case of Mallappa Kallappa Ugare Vs. Agricultural Income Tax Officer, Bijapur, He has further pointed out that the Rules are silent as to what should happen if the notice issued by the authorities under the Act was not served in time to appear before the authorities on the date specified in the notice. He has, therefore argued that in order to satisfy the requirement of the second proviso to s. 19 of the Act, it is incumbent of the respondent-ITO to issue a fresh notice because what is contemplated under the second proviso to s. 19 of the Act is a reasonable opportunity and not a mere empty formality of issuing notice under s. 19(4) of the Act.

There is some force in the contention advanced for the petitioners. From the facts set out in the ruling of the Division Bench referred to earlier, which are somewhat identical to some extent with the fact of the present case on hand, it is clear that in the decided case, the Agrl. ITO concerned had, in fact, issued a fresh notice when the first was served two days after the date set out for hearing, the second notice required the assessee thee in to file his objections, if any, within a specified number of days after the receipt of the notice. In that case, in response to such second notice, the petitioner though the counsel filed his objections, but the concerned Agrl. ITO proceeded to assess the petitioner, in that case, without giving him an opportunity of being heard in the light of the objections filed. Therefore, this court came to the conclusion that it was clear from the perusal of the notice dated May 12, 1971, that the respondent had merely directed the assessee to prefer his objections if any. To the proposition notice but did not fix another date of hearing and, in that view on the matter, the court held that the order of assessment impugned therein could not be sustained. Shri Rama Bhat really placed reliance on the procedure followed by the ITO concerned in the aforementioned decision in issuing a second notice because the first notice had not been served on the petitioner before the date specified in the notice.

On a perusal of the records produced by the learned Government pleader it is clear that the notice was served on the petitioners herein on March 19, 1979, at their village. The acknowledgment was received back at Dharwar on March 23, 1979, this itself indicates that Bannur, the place of residence of the petitioners, is somewhat distantly situated from Dharwar City. Where the respondent has his office. If the notice was received on March 19, 1979, it is reasonable to presume that the petitioners could not on that date reach Dharwar in response to the notice and appear before the respondent. It is equally clear that the respondent became aware that the notice had been served only on March 19, 1979, on or after March 23, 1979, the date on which the postal acknowledgment was returned to Dharwar post office as evidenced by the postal seal. It was, therefore, necessary for the respondent to issue a fresh notice fixing another date of hearing and inviting objections, if any, from the petitioners, it is only then that this court can construe the reasonableness of the opportunity contemplated under the second proviso to s. 19 of the Act. If the respondent kept quiet even after realising that the notice had not been served in time for the appearance of the petitioners, he cannot be vested with jurisdiction to proceed on the assumption that the petitioners should have approached in time after March 19, 1979. The rules, earlier stated, are silent on the subject. The impugned order of assessment must be held to have been made without affording a reasonable opportunity to the petitioners. For that reason, the order cannot be sustained and, therefore, it is liable to be set aside.

This only leaves me to deal with the second contention raised for the respondent that there is an alternative remedy which the petitioners did not make use of and, therefore, this court should refrain from exercising its jurisdiction under art. 226 of the Constitution, this argument has really no force because inadequate opportunity goes to the very root of jurisdiction and in such cases where there is clear want of jurisdiction for the respondent to proceed with the completion of the assessment, then this court, under art. 226 of the Constitution, in spite of the alternative remedy, should interfere when it is satisfied about the inherent lack of jurisdiction.

In the result, the assessment order, at Ex. B, bearing the date April 28, 1979, passed by the respondent is set aside. Consequently, the order of penalty imposed for concealment under s. 22 of the Act as also the demand notice under s. 21920 of the Act at Exs. C and D, respectively, are also set aside. However, liberty is reserved to the respondent-Agrl. ITO, Dharwar, to continue the proceedings from the stage of issue of the proposition notice. It is made clear that it is unnecessary for the respondent to issue a fresh notice in Form No. 5. The petitioners shall appear before the respondent-Agrl. ITO on April 30, 1980, and show cause to the proposition notice received by them on March 19, 1979, and co-operate with the respondent to complete the assessment proceedings in accordance with law.

In the circumstances of this case, there will be no order as to costs.

Shri Venkatachalaiah, learned High Court Government Pleader is permitted to file his memo of appearance within 14 days from today.