Jagannatha Shetty, J.
1. In this batch of writ petitions under article 226 of the Constitution, the petitioners challenge the validity of the orders made by the Commissioner of Income-tax under section 263 of the Income-tax Act, 1961, for short 'the Act'.
2. The facts in all these cases are similar and, for the sake of convenience, I set out those leading up to the petition in W.P. No. 6660 of 1974. The petitioner herein is a lady. She filed voluntary returns of income for the assessment that it was her previous savings inclusive of the gifts given to her at the time of her marriage. She was not assessed to tax previously. Along with the returns of income she filed a letter dated October 20, 1972, which reads as follows :
'With reference to the above, I beg to request you that out of my previous savings I am now having cash of Rs. 31,500 with me and that I may be assessed as under :
Y.E. Asst. Year : Rs.21-10-68 69-70 7,5009-11-69 70-71 7,80030-10-70 71-72 8,00019-10-71 72-73 8,200-----------31,500----------- and have enclosed Form No. 3 for all the above 4 years. I have not been assessed to income-tax anywhere in India and have submitted the above 4 returns voluntarily.'
On October 25, 1972, she submitted another letter stating thus :
'In continuation of my letter dated October 20, 1972, I write to inform you that my father at the time of marriage paid the cash to me. Subsequently I used to lend this privately and I earned interest. Thus, all the cash of Rs. 31,500 is now offered for assessments. I have no documentary evidence to prove the same. My husband, Shri Formal Nanaji, is an assessee and paying income-tax. I further state that no part of this amount has been received from my husband.'
3. While accepting the returns, spot assessments were made by the Income-tax Officer spreading over the income for the assessment years 1969-70 to 1972-73 as desired by the petitioner. Large number of similar assessments were made on other assesses. Thereafter, it was brought to the notice of the Commissioner of Income-tax that the income of these assesses has been invested in the business of their husbands. In the enquiry made, it was discovered that the assesses during the relevant period of assessment had no business of their own, much less any money-lending business.
4. The Commissioner issued a notice dated October 14, 1974, calling upon the petitioner to show cause why the assessments should not be set aside with a direction to the Income-tax Officer to re-do the same in accordance with law. On October 18, 1974, the petitioner filed her objection raising various contentions. After hearing the petitioner and considering her contentions, the Commissioner formed prima facie opinion that the returns filed by the assessee did not disclose her circulating capital for any of the five years and there was no evidence that she was engaged in the money-lending business. He further observed thus :
'Any Income-tax Officer who does his duties diligently would have sat up, on reading the assessee's letter and seeing the assessee's returns and would have made elementary enquiries to satisfy himself that there was a business done by the assessee and there was income earned from it as alleged. That he did not so and misdirected himself in accepting the returns under section 143(1) without the basic necessaries prescribed thereunder is enough to establish prejudice to revenue. The subsequent enquiries, as already stated, only confirmed what should have occurred prima facie to any diligent and industrious Income-tax Officer doing his functions without haste and with due deliberation. The result of these enquiries have no doubt been put in my notice to the assessee, but they do not form the sole basis for prejudice. Prejudice can be easily deduced on the facts of her record from the very returns filed by the assessee and the impossible explanations given in her letter and the fact that the assessments were completed in great haste without any enquiry being made in a new case and on the very next day the returns of income were received for the assessment years 1969-70 to 1972-73;
5. With that conclusion, the Commissioner set aside the assessments in exercise of his powers under section 263, with a direction to the Income-tax Officer to afford an opportunity to the assessee to prove her case and to make the assessments afresh according to law.
6. Though the order of the Commissioner related to the assessments made for the years 1969-70 to 1973-74, the petitioner has challenged the validity of the said order so far as it relates to the assessment for the year 1969-70 only.
7. In the writ petitions, the petitioners have stated that they gave no alternate remedy against the impugned orders except to approach this hon'ble court. It is an incorrect statement. The orders challenged in all these petitions were made by the Commissioner under section 263 of the Act, and are appealable to the Tribunal under section 253(1)(c) of the Act. The Act provides a complete and self-contained machinery for obtaining relief against improper action taken by the departmental authorities, and normally a party who is aggrieved by such action should have recourse to that machinery. It is only where the action complained of is, on the face of it, erroneous for want of jurisdiction or impairs the fundamental right of a person, this court entertains a petition under article 226 and not otherwise. I do not think that the case on hand falls within any one of these principles. However, I proceed now to examine the validity of the contentions since counsel on both sides wanted a decision on merits, as there are similar cases still pending before the Commissioner.
From the contentions urged, the primary question that falls for decision is whether the Commissioner was justified in invoking his power under section 263 of the Act. Section 263, so far as it is relevant, provides :
'263. (1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or canceling the assessment and directing a fresh assessment.
(2) No order shall be made under sub-section (1)
(a) to revise an order of reassessment made under section 147, or
(b) after the expiry of two years from the date of the order sought to be revised.'
In Commissioner of Income-tax v. T. Narayana Pai, while dealing with the scope of the above section, the present learned Chief Justice of this court observed :
'The section requires that two conditions should be satisfied in order to entitle the Commissioner to set aside an order passed by the Income-tax Officer. The said conditions are : (1) that the order proposed to be revised is erroneous; and (2) that such order has resulted in prejudice to the interests of the revenue. The satisfaction of these two conditions is essential for setting aside the order proposed to be revised.'
8. Relying on the above decision, Mr. Srinivasan, learned counsel for the petitioners, submitted that the assessments revised by the Commissioner could not be said to be erroneous and prejudicial to the interests of the revenue, and, therefore, he was in error in setting aside the said orders.
9. I cannot accept the contention. In all these cases the assessments were made in undue haste and without any enquiry or evidence. The petitioners were all new assesses filing returns without any accompanying statements of their income or the interest earned by the alleged money lending transactions, or the particulars of the gift said to have been received from their relatives to build up their circulating capital. The Income-tax Officer chose to complete the assessments without making any enquiries on those matters, spreading over the income disclosed for the past four assessment years. Assuming that the income disclosed belonged to the assessee, there was no reason why it should be spread over for the past assessment years, and why it should not have been assessed for the current year in which the returns were filed. The assessments made without such enquiry and evidence, in my view, are doubtless erroneous and prejudicial to the interests of the revenue.
10. Section 263 of the Act is analogous to section 33B of the Indian Income-tax Act, 1922. While dealing with the scope of the latter, the supreme Court in Smt. Tara Devi Aggarwal v Commissioner of Income-tax observed that where an income has not been earned and is not assessable merely because the assessee wants it to be assessed in hisher hands in order to assist someone else who would have been assessed to a larger amount and rate of tax, the assessment so made will be erroneous and prejudicial to the interests of the revenue and that the commissioner of Income-tax seas jurisdiction to cancel the assessment. These principles are clearly attracted to the present cases.
11. Mr. Srinivasan, however, contended that after the amendment to section 143 of the Act, the assessment in question, though made without any enquiry or evidence, cannot in any event be said to be erroneous, though it might be prejudicial to the interests of the revenue, since the Income-tax Officer could accept any voluntary return without requiring the presence of the assessee or the production by him of any evidence in support of the return, and he need not be satisfied about the correctness of the source of income..
12. Section 143(1)(a) as substituted by Act 42 of 1970 with effect from April 1, 1971 provides where a return has been made under section 139, the Income-tax Officer may, without requiring the presence of the assessee or the production by him of any evidence in support of the return, make an assessment of the total income or less of the assessee after making such adjustments to the income or loss declared in the return as are required to be made under clause (b)........... and determine the sum payable by the assessee or refundable to him on the basis or such assessment. It is true that the Income-tax Officer need not have been satisfied that the voluntary return submitted by the assessee was correct and complete. He could accept the return of income as submitted by the assessee. But the income must be the income earned by the assessee in the relevant year. The Income-tax Officer has no power to assess the income of one person in the hands of another. To that extent at least, he must apply his mind and cannot blindly make the assessment while accepting the voluntary return. Since no such inquiry was made by the Income-tax Officer in all these cases, the assessments must be held to be prejudicial to the interests of the revenue, and what is prejudicial to the interests of the revenue must be held to be erroneous though the converse may not always be true. The Commissioner, in my view was, therefore, right in revising the assessment under section 263 of the Act.
13. The petitioners have not been prejudiced in any way by not disclosing to them the nature of the materials collected by the Commissioner behind their back. The Commissioner has directed the Income-tax Officer to make the assessments afresh according to law after making proper enquiries. The petitioners will have full opportunity of showing to the Income-tax Officer that the assessments earlier made were correct and the enquiries subsequently made were incorrect.
14. In the result, rules in these petitions are discharged, with costs. Advocate's fee Rs. 100. One set.