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Madhavlal Sindhoo Vs. V.R. Idurkarand anr. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberMiscellaneous Petition No. 350 of 1955
Judge
Reported in[1956]30ITR332(Bom)
ActsIncome Tax Act, 1922 - Sections 34
AppellantMadhavlal Sindhoo
RespondentV.R. Idurkarand anr.
Appellant AdvocateJhaveri, Adv.
Respondent AdvocateG.N. Joshi, Adv.
Excerpt:
.....(ito) issued notice under section 34 for assessment of income of assessee - petition for issue of writ of prohibition on ground of lack of jurisdiction - petitioner contended that he falls under jurisdiction of calcutta ito - where there is patent lack of jurisdiction and court is satisfied that inferior court or authority has exceeded its jurisdiction writ can be issued - ito has exceeded jurisdiction - writ to be issued. - section 31(4) (since repealed) :[tarun chatterjee & h.l.dattu, jj] jurisdiction of high court - respondent, a government company, chartered appellants vessel to carry rock phosphate from togo to west coast india - dispute arose between parties - under agreement, respondent had chosen mumbai as port of delivery vessel carrying rock phosphate was delivered at port..........contentions are raised by the petitioner in support of his present petition for the issuance of a writ of prohibition against the respondents. the contention in the forefront of the petition is that the first respondent had no jurisdiction to issue the notice under section 34 after the expiry of a period of 8 years from 31st march, 1945, which was the last date of the assessment year 1944-45. it is also the contention of the petitioner in the petition that it is patent on the face of the record that there is total absence of jurisdiction in the first respondent to issue this notice. mr. zaveri, learned counsel for the petitioner, has relied on a decision of the appeal court in s. c. prashar v. vasantsen. now, the facts of that case were similar to the facts of the present case before.....
Judgment:

1. This is a petitions for a writ of prohibition or any other appropriate writ in a matter arising under the Income-tax Act. The facts leading up to this petition are not in dispute and I shall state them succinctly.

2. The petitioner was served with a notice dated 23rd March, 1949, under section 34 of the Indian Income-tax Act by the Income-tax Officer, Calcutta. It was stated in the notice the Income-tax Officer had reasons to believe that the income of the petitioner for the assessment year 1944-45 had escaped assessment and therefore it was proposed to reassess the income of petitioner. The Petitioner was required to deliver a return to the Income-tax Officer within 35 days from the receipt of that notice. An enquiry was held in pursuance of that notice. The Income-tax Officer, Calcutta, by an order made on 1st August, 1949, decided the case in favour of the petitioner. Another similar notice dated 9th March, 1953, was issued under the same section by the Income-tax Officer, A-V ward, Bombay, calling upon the petitioner to submit a similar return of his total income for the same assessment year, viz., 1944-45. The petitioner objected to the jurisdiction of the Income-tax Officer at Bombay to issue the notice since he had always been assessed at Calcutta. Another notice dated 19th March, 1953, was served on the petitioner under the same section of the Income-tax Act. By that notice, the Income-tax Officer, Calcutta, called upon the petitioner to submit his return of his total income for the same assessment year, viz., 1944-45. The petitioner submitted his return under protest to the Income-tax Officer, Calcutta, in April, 1953. Nothing, however, was done by the Income-tax authorities either in pursuance of the notice dated 9th March, 1953, or the notice dated 1953, but on 5th March, 1954, another similar, notice (4th in the series) was issued by the first respondent, who is the Income-tax Officer, A-V Ward, Bombay, under section 34 of the Act, calling upon the petitioner to submit a return of his total income for the same assessment year, 1944-45. On objection being taken by the petitioner to the jurisdiction of the Income-tax Officer Bombay, to issue any such notice, when his income had all says been assessed in the previous years in Calcutta, the first respondent informed the petitioner that the Central Board of Revenue had transferred the case of the petitioner to the first respondent from the Income-tax Officer, Calcutta, to the first respondent in Bombay. The petitioner thereafter submitted his return under protest. On objection being taken by the petitioner to the notice under section 34, the first respondent replied that the as is of that notice was that the Income-tax Tribunal in the case of Bhagwandas Harakchand had held that a net profit of Rs. 2,31,315 for which that firm was sought to be assessed was really the profit of Madhavlal Sindhoo (the petitioner before me). Various contentions were raised by the petitioner before the Income-tax Officer and the matter is pending before him.

3. The present petition was filed on 25th October, 1955, and was accepted by this court on 27th October, 1955. Various contentions are raised by the petitioner in support of his present petition for the issuance of a writ of prohibition against the respondents. The contention in the forefront of the petition is that the first respondent had no jurisdiction to issue the notice under section 34 after the expiry of a period of 8 years from 31st March, 1945, which was the last date of the assessment year 1944-45. It is also the contention of the petitioner in the petition that it is patent on the face of the record that there is total absence of jurisdiction in the first respondent to issue this notice. Mr. Zaveri, learned counsel for the petitioner, has relied on a decision of the appeal Court in S. C. Prashar v. Vasantsen. Now, the facts of that case were similar to the facts of the present case before me. The appeal Court in that case expressed the view that the Income-tax Officer had exceeded his competence and authority in issuing the notice and that the want of jurisdiction pleaded by the petitioner was patent on the face of the record. The appeal of the Income-tax authority was dismissed and the decision of the trial Court, issuing the writ of prohibition on the ground that the Income-tax Officer has assumed the jurisdiction which it was patent the did not possess, was confirmed. This being the position, Mr. G. N. Joshi, learned counsel for the respondent, stated that so far as this Court is concerned, it was not open to him to press any argument on the question of the operation of section 34 and construction of the provisions of that section. In opposition to the rule it was, however, urged that there was gross delay in the matter of the filing of this petition, the dates relied on being that the notice challenged in this petition was issued by the Income-tax Officer, Bombay, on 5th October, 1954. and the present petition was filed on as late as 25th October, 1955. It was further stated that the question of delay was not before the appeal Court in the decision relied on by Mr. Zaveri. Mr. Zaveri has urged that where the absence of jurisdiction is patent in any judicial or quasi-judicial matter, a writ of prohibition would issue as a matter of right and regardless of any delay on the part of the petitioner. Learned counsel has relied on a passage in Halsbury's Laws of England, 3rd edition, Volume II, page 115. It is there stated :

'Where the absence of jurisdiction is apparent on the face of the proceedings and the application is made by a party, the order goes as of right and not as a matter of discretion. Smallness of the amount of the matter in dispute and delay on the part of the applicant are not in themselves grounds for refusal.'

4. This statement of the law was principally based on a decision of the Court of Appeal in England in the case of Farquharson v. Morgan. I had occasion to consider that decision and other decisions in Prashar's case in which the petition for a writ of prohibition was in the first instance heard by me. I had also occasion to consider the general principles having bearing on the question of delay in an application for a writ of prohibition. In my opinion there is some difference between the English and Indian law on this question of delay. But it is not necessary to examine again the decisions of the English Courts on this question of delay. I shall only repeat what I stated in my judgment in Prashar's case :

'Basically and in a broad general sense both in India under our Constitution and in England where these prerogative writs owe their origin in the prerogatives of the Crown always to be safeguarded by the King's Courts, the grant of them is discretionary. An exception sought to be made in decisions of Court in England, that a writ of prohibition is in case of patent usurpation of jurisdiction demandable of right is, if those decisions are scrutinised, a result of the historical background of this prerogative writ. The root principle of the English law about jurisdiction is that the judges stand in the place of the sovereign and, therefore, necessarily to be restrained by prohibition. Such usurpation when it is patent has been judicially characterised as in contempt of the Crown. It is with this background that in England it has been held that in such a case the writ of prohibition is demandable of right. But no such considerations need weigh with this Court in appreciating the broad principle that granting of all writs under article 226 of the Constitution including the writ of prohibition is always discretionary though of course different considerations may prevail in case of different writs........................ The following propositions though not exhaustive of the subject are sufficient for the purposes of this case and I venture to think that rue measure and scope of the exercise of this jurisdiction and the discretion of this Court to issue a writ of prohibition under our law, in respect of proceedings in excess of jurisdiction, may be thus stated :

(i) The High Court has always the power and discretion to grant or refuse to grant this writ which though it is primarily intended for enforcement of fundamental rights must also issue where necessity demands immediate and decisive interposition.

(ii) The considerations that arise when this writ is asked for on the ground that any inferior Court or person or body of persons having legal authority is committing or has committed an error of law apparent on the face of its proceedings and those that arise in a case of excess or usurpation of jurisdiction by any such Court or authority must necessarily be differentiated for in the former case there is an erroneous exercise of jurisdiction which exists while in the latter case there is no jurisdiction at all.

(iii) Absence of jurisdiction may be patent, that is, apparent on the face of the proceedings, or latent in the sense that is not so apparent. Where the defect is not apparent, the Court in its discretion may refuse the writ if the facts or circumstances attending the case show under delay, insufficient materials, misconduct, leaches or acquiescence on the part of the party applying for it or are such as would render it unjust on the part of the Court to interpose.

(iv) Where, however, there is patent lack of jurisdiction and the Court is immediately satisfied that the inferior Court of authority has exceeded its jurisdiction, the Court will very readily interpose. The discretion to grant or refuse to grant the writ is of course there. But since discretion contemplates an exercise of arbitrium and not arbitrariness the writ must go though not of right nor or course yet almost as a matter of course unless an irresistible case of withholding the writ is made out.'

5. Since the conclusion reached by me is that there was usurpation of jurisdiction by the first respondent which is apparent on the face of the notice read with section 34 of the Income-tax Act, this case must fall in the last category stated above. Therefore, in my opinion, although a writ of prohibition cannot go as a matter or right it should in the present case go almost as a matter of course and the delay in the filing of this petition should be no bar to the issuance of the writ.

6. It was next urged by Mr. Joshi that there was another reason why no writ of prohibition should issue in the present case. It was said that in issuing the notice under consideration the first respondent was not acting in any judicial or quasi-judicial capacity. The argument was that in issuing that notice the first respondent was doing purely an administrative act and all that he did was that he issued a notice under any obligation to act judicially or even quasi-judicially in issuing that notice. Reliance was placed by learned counsel on a decision of the Court of Appeal in England in The King v. Electricity Commissioners. I need not summaries the facts of that case since learned counsel has only relied on some observations made by the learned Lord Justice in that case. Nor is it necessary to cite any of the observations of the learned Lord Justice in that case relied upon by Mr. Joshi, because the principles there summarised have been accepted by courts in Indian in a catena of cases. The operation of a writ of prohibition, it is now well established, is not confined to anything intended to be done by what are usually termed as 'Courts'. The operation of the writ extends to cases and orders made by various persons exercising quasi-judicial functions. I had occasion to consider this very question Prashar's case. Reference was made by me to a decision of this Court in Harakchand Makanji & Co. v. Commissioner of Income-tax, where a similar question arose in a case of investigation under section 22 (1) of the Income-tax Act. It was there held that a public notice under section 22 calling return of income was the first step in assessment proceedings. It was also there held that notice under section 34 was necessary in certain cases under section 34 as the first step in the assessment proceedings. There is to my mind little force in the present argument and the present contention must be negatived.

7. Mr. Jhavery wanted to refer to some additional points in support of the petition. I did not deem it necessary to hear him on those points since the view I have taken is that the first respondent was patently in error when he assumed jurisdiction and issued the notice challenged in this petition.

8. In the result, the petition succeeds and the rule will be made absolute and writ of prohibition will issue against the first respondent and his successors in officer from taking and further steps or proceedings or from assessing or re-assessing the petitioner in respect of the assessment year 1944-45 in pursuance of the notice dated 5th March, 1954.

9. Respondents 1 and 2 will pay the petitioner's costs of this petition. Costs fixed at Rs. 250.

10. Petition allowed.


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