BASI REDDY, J. - The petitioner is an income-tax assessee. He has filed this application under Article 226 of the Constitution for the issue of a writ of mandamus or any other appropriate writ directing the Income-tax Officer, Adoni, the first respondent herein, to dispose of the petitioners application filed on April 24, 1956, under section 45 of the Indian Income-tax Act, in accordance with law, and not to treat the petitioner as a defaulter in regard to the payment of penalties levied for the assessment years 1945-48, during the pendency of his appeals I.T.A. Nos. 597 to 599 of 1953-54, on the file of the Appellate Assistant Commissioner, Bangalore.
The application dated April, 24, 1956, filed by the petitioner before the first respondent, was in fact considered and disposed of by the latter by his order dated April 25, 1956; but the complaint of the petitioner is that he had not been given a personal hearing by the first respondent in dealing with his application under section 45 of the Income-tax Act and consequently the order passed by the first respondent is bad in law.
The petitioner was an arrack depot keeper and was also deriving income from lorries. For the assessment years 1945-46, 1946-47 and 1947-48, he returned incomes of Rs. 16,523, Rs. 20,887 and Rs. 4,025 respectively. But the assessments were completed on incomes of Rs. 55,882, Rs. 61,729 and Rs. 75,233 respectively. The incomes so assessed included certain credit items aggregating to Rs. 54,600 for 1945-46, Rs. 27,500 for 1946-47, and Rs. 54,500 for 1947-48 appearing in the books of the assessee. The assessee did not give a satisfactory explanation for those credits and therefore the Income-tax Officer treated the same as income.
The petitioner questioned the correctness of the finding of the Income-tax Officer before the Appellate Assistant Commissioner but without success. In further appeal to the Appellate Tribunal the concurrent findings of the Appellate Assistant Commissioner and the Income-tax Officer were affirmed. His application under section 66(1) of the Act was dismissed. The High Court also dismissed his application filed under section 66(2) of the Act. Against the said order, the assessee filed an application for leave to appeal to the Supreme Court and it was also dismissed. He then took the matter up to the Supreme Court and obtained leave to appeal, but the appeal has since been disposed of and has been dismissed by the Supreme Court. The result is that the finding given by the Income-tax Officer that the cash credits denoted concealed profits stands undisturbed.
It is true that the appeals filed by the petitioner against the levy of the penalties aggregating to Rs. 39,000 are now pending before the Appellate Assistant Commissioner, Bangalore. Pending those appeals, the petitioner filed an application before the first respondent setting out his case, representing his difficulties and requesting the first respondent to stay the collection of the penalties pending the disposal of the appeals filed by him. But the Income-tax Officer, taking into consideration the fact that the petitioner had made persistent defaults in payments and that, although the due date for payment of the penalties was March 31, 1945, the petitioner had not paid anything at all towards those arrears although two years had elapsed, declined to exercise to discretion vested in him under section 45 of the Income-tax Act in favour of the petitioner. It is this order of the Income-tax Officer passed on April 25, 1956, which is sought to be reopened by this petition under article 226 of the Constitution. The grievance of the petitioner is that he had not been given a personal hearing by the Income-tax Officer, which it is said he was under a duty to do, in dealing with an application under section 45 of the Income-tax Act.
I am clearly of opinion that there is no merit in this contention. Section 45 of the Act vests a wide discretion in the Income-tax Officer to treat or not to treat an assessee as being in default pending an appeal by the assessee under section 30 of the Act. Section 45 does not require that the Income-tax Officer should give a hearing to the assessee before he exercises his discretion under the section. There are several sections in the Income-tax Act which specifically provide for a hearing, e.g., sections 28, 35 and 43; not so section 45. All that the section contemplates is that the Income-tax Officer should apply his mind to the facts and circumstances of the case and exercise his discretion judiciously; and so long as the Officer does not act arbitrarily, capriciously or vindictively, an order passed in the sound exercise of his discretion is not open to challenge. In the present case the impugned order shows that the Income-tax Officer did apply his mind and, having regard to the previous conduct of the assessee in making chronic defaults in spite of the indulgence shown to him on prior occasions, decided not to exercise his discretion in favour of the assessee but to treat him as a defaulter. If follows that the order passed by the Income-tax Officer is neither illegal nor unjust, and the petitioner has not made out a case for the exercise of the extraordinary jurisdiction of this court under article 226 of the Constitution.
The writ petition is accordingly dismissed with costs. Advocates fee Rs. 100.