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Rev. Father Prior, Sacred Hearts Vs. Income-tax Officer, - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Cochin
Decided On
Reported in195630ITR451(Coch.)
AppellantRev. Father Prior, Sacred Hearts
Respondentincome-tax Officer,
Excerpt:
joseph vithayathil, j. - this is a petition under article 226 of the constitution for a writ of certiorari or any other appropriate writ or order quashing the order of the income-tax officer, ernakulam, assessing the petitioner to income-tax and the orders passed in appeal and revision therefrom and also for directions in the matter of refund of income-tax illegally levied and collected from the assessee. the petitioner is the prior of the sacred hearts monastery, thevara. the first respondent is the income-tax officer, ernakulam circle, the second respondent is the appellate assistant commissioner of income-tax, trivandrum, and the third respondent is the commissioner of income-tax, mysore, travancore-cochin and coorg.2. the sacred hearts monastery, thevara, is a religious institution......
Judgment:
JOSEPH VITHAYATHIL, J. - This is a petition under article 226 of the Constitution for a writ of certiorari or any other appropriate writ or order quashing the order of the Income-tax Officer, Ernakulam, assessing the petitioner to income-tax and the orders passed in appeal and revision therefrom and also for directions in the matter of refund of income-tax illegally levied and collected from the assessee. The petitioner is the Prior of the Sacred Hearts Monastery, Thevara. The first respondent is the Income-tax Officer, Ernakulam Circle, the second respondent is the Appellate Assistant Commissioner of Income-tax, Trivandrum, and the third respondent is the Commissioner of Income-tax, Mysore, Travancore-Cochin and Coorg.

2. The Sacred Hearts Monastery, Thevara, is a religious institution. It is conducting an educational institution called the Sacred Hearts College, Thevara. Notices were issued by the first respondent to the petitioner under section 44 of the Cochin Income-tax Act, 1117, to the effect that the income of the Monastery in respect of the assessment years 1123 and 1124 had escaped assessment. Pursuant to those notices the Monastery was assessed to income-tax for the years 1123 and 1124 on donations received by the Prior for the construction of the college and also on Mass stipends. It was contended on behalf of the petitioner that the donations and Mass stipends. It was contended on behalf of the petitioner that the donations and Mass stipends were not "income" for which the Monastery could be taxed. The Income-tax Officer held that donations and Mass stipends were voluntary contributions and that, under the Cochin Income-tax Act, 1117, as amended by Act XXII of 1122, such voluntary contributions were liable to be assessed to income-tax.

For the years 1123 and 1124 the petitioner was assessed to income-tax on Rs. 1,17,997 and Rs. 73,847 respectively, amounts received as donations and Mass stipends. The petitioner appealed from these orders before the Appellate Assistant Commissioner of Income-tax, Trivandrum (second respondent). The Appellate Assistant Commissioner upheld the view of Income-tax Officer that donations and Mass stipends were liable to be assessed to income-tax under the Cochin Income-tax Act as amended in 1122. The Appellate Assistant Commissioner, however, held that in the case of Mass stipends allowance should be made in respect of stipends transferred to other institutions and also for the expenses incurred by the Monastery for the celebration of Masses including a reasonable expenditure for the maintenance of the priests in the proportion which the receipts on account of Mass stipends bore to the gross receipts of the Monastery from all sources. It was also noted that for the assessment year 1124 the Income-tax Officer had not taken into account Rs. 8,355 received by the Monastery as Mass stipends. The Appellate Assistant Commissioner set aside the orders of assessment and directed the Income-tax Officer to make fresh assessments after determining the net income in respect of Mass stipends for years 1123 and 1124. The petitioner filed revision petitions from the orders of the Appellate Assistant Commissioner before the Commissioner of Income-tax, Mysore, Travancore-Cochin and Coorg (third respondent) under section 43 of the Cochin Income-tax Act. In the meanwhile, the Income-tax Officer made fresh assessment as per the directions of the Appellate Assistant Commissioner. For the year 1123 the petitioner was assessed to income-tax on Rs. 81,490 received donations and Rs. 20,884 net value of Mass stipends. The Income-tax Officer also assessed the petitioner to income-tax for the year 1125 on Rs. 10,000 received as Mass stipends. The assessee was ordered to pay Rs. 44,374-12-0 as income-tax for the year 1123, Rs. 30,204-13-0 for the year 1124 and Rs. 843-12-0 for the year 1125. From these orders of assessment the petitioner filed appeals before the Appellate Assistant Commissioner and those appeals are still pending. In the revision petitions filed before the Commissioner of Income-tax the commissioner also took the view that donations and Mass stipends are liable to be assessed to income-tax under the Cochin Income-tax Act as amended in 1122 and dismissed the revision petitions on 15th February, 1955. The petitioner was not heard before the revision petitions were disposed of. This petition was filed on 21st April, 1955.

3. The main grounds urged in the petition are that donations received by the petitioner for the construction of the college and Mass stipends are not "income" for which the Monastery is liable to be taxed, that the Income-tax Officer had jurisdictions to assess income-tax on those amounts, that in any case they are receipts of a casual and non-recurring nature and, therefore, exempted under section 5(3) (vii) of the Cochin Income-tax, that the orders of the Income-tax authorities are the result of a misconception regarding the scope of clause (iii) of section 5(3) of the Cochin Income-tax Act, 1117, and the effect of the deletion of the clause by Act XXII of 1122, that they misunderstood the nature of Mass stipends, and that the orders are erroneous on the face of the record. It was also stated in the petition that since the question as to whether donations and Mass stipends are liable to be assessed to income-tax has been finally decided by the Appellate Assistant Commissioner and by the Commissioner of Income-tax, no useful purpose would be served by pressing the appeals filed by the petitioner before the Appellate Assistant Commissioner from the revised orders of the Income-tax Officer.

4. In the counter-affidavit filed on behalf of the Department it was contended that the Income-tax Officer acted within his jurisdiction in assessing the petitioner to income-tax for donations and Mass stipends, that the decision of the income-tax authorities on the question was correct, that no ground was taken by petitioner before the Income-tax Authorities that donations and Mass stipends were not income, that the petitioner had a remedy by way of application for reference under section 109 of the Cochin Income-tax Act, and that the petition was not maintainable.

5. The statement in the counter-affidavit filed on behalf of the Department that the petitioner had not taken before the Income-tax Authorities the ground that donations and Mass stipends were not income does not appear to be correct. This is what the Income-tax Officer says in his first order : One of the grounds taken in the appeal filed before the Appellate Assistant Commissioner from the first assessment order is this : "The Income-tax Officer ought to have found that the amounts received during the year in question did not form a income at all for purpose of assessment under the Act." "It is contended by the learned Advocate for the appellant that (1) neither the Mass stipends nor donations form income and cannot therefore be taxed." In the revision petition filed before the commissioner of Income-tax the first ground taken by the petitioner is as follows : "On the facts and circumstances of the case of the Appellate Assistant Commissioner ought to have found that the donations received by the Monastery were not income and hence not taxable." It is thus clear that the petitioner did put forward before the Income-tax authorities the plea that donations and Mass stipends did not constitute Income for which the petitioner could be assessed to income-tax.

6. The question for consideration is whether this is a fit case in which this Court should exercise the jurisdiction vested in it under article 226 of the commissioner and issue a writ of certiorari quashing the order of the Income-tax Authorities. The mere fact that the impugned orders are wrong will not be a ground for this Court to interfere in the exercise of its extraordinary jurisdiction. This Court will interfere only if the Income-tax Authorities had no jurisdiction to assess the petitioner to income-tax or if they acted illegally in the exercise of their jurisdiction or if there is an error apparent on the face of the record in their order. The question whether the petitioner has other effective remedy will also be taken into consideration by this court in deciding whether this is a fit case in which it should exercise its extraordinary jurisdiction.

7. The law relating to the question has been laid down by the Supreme Court in Hari Vishnu v. Ahmad Ishaque. In the first case his Lordship B. K. Mukherjea, J. (as he then was), said : "The second essential feature of a writ of certiorari is that the control which is exercised through it over judicial or quasi-judicial tribunals or bodies is not in an appellate by supervisory capacity. By granting a writ of certiorari the superior court does not exercise the power of an appellate tribunal. It dons not review or reweigh the evidence upon which the determination of the inferior tribunal purports to be based. It demolishes the order which it considers to be without jurisdiction, or palpably erroneous but does not substitute its own views for those of the inferior tribunal. The offending order or proceeding, so to say, is put of the way as one which should not be used to the detriment of any person vide per Lord Cairns in Walsall Overseers v. L. & N. W. Railway Co. The supervision of the superior court exercised through writs of certiorari goes on two points, as has been expressed by Lord Sumner in King v. Nat Bell Liquors Ltd. One is the area of inferior jurisdiction and the qualifications and conditions of its exercise, the other is the observations of law in the course of its exercise. These two heads normally cover all the grounds on which a writ of certiorari could be demanded certiorari may and it generally granted when a court has acted without or in excess of its jurisdiction. The want to jurisdiction may arise from the nature of the subject matter of the proceeding from the absence of some preliminary proceeding or the court itself may not be legally constituted or suffer from certain, disability by reason of extraneous circumstances : vide Halsbury, second edition, Volume IX, page 880. when the jurisdiction of the court depends upon the existence of some collateral fact, it is well settled that the court cannot by a wrong decision of the fact give it jurisdiction which it would not otherwise possess : vide Bunbury v.Fuller, and R. v. Income Tax Special Purposes Commissioners. A tribunal may be competent to enter upon an enquiry but in making the enquiry may act in flagrant disregard of the rules of procedure or where no particular procedure is prescribed it may violate the principles of natural justice. A writ of certiorari may be available in such cases.

An error in the decision or determination itself may also be amenable to a writ of certiorari but it must be a manifest error apparent on the face of the proceedings, e.g. when it is based on clear ignorance or disregard of the provisions of law. In other words, it is patent error which can be corrected by certiorari but not a mere wrong decision. The essential features of the remedy by way of certiorari have been stated with remarkable brevity and clearness by Morris, L.J., in the recent case of Rex v. Northumberland Compensation Appeal Tribunal. The Lord Justice says : It is plain that certiorari will not issue as the cloak of an appeal in disguise. It does not lie in order to bring up an order or decision for rehearing of the issue raised in the proceedings. It exists to correct error of law when revealed on the face of an order or decision or irregularity or absence of or excess of jurisdiction when shown." His Lordship then quoted with approval the following passage from the judgment in Veerappa Pillai v. Raman and Raman Ltd. "Such writs as are referred to in article 226 are obviously intended to enable the High Court to issue them in grave cases where the subordinate tribunals or bodies or officers act wholly without jurisdiction, or in excess of it, or in violation of the principles of natural justice, or refuse to exercise a jurisdiction vested in them, or there is an error apparent on the face of the record, and such act, omission, error or excess has resulted in manifest injustice. However extensive the jurisdiction may be, it seems to us that it is not so wide or large as to enable the High Court to convert itself into a court of appeal and examine for itself the correctness of the decisions impugned and decided what is the proper view to be taken or the order to be made." 8. The character and scope of the writ of certiorari and the conditions under which it can be issued were discussed by his Lordship Venkatarama Ayyar, J., in the second case, viz., Hari Vishnu v. Ahmad Ishaque. His Lordship discussed the question with reference to English cases particularly Rex v. Northumberland compensation Appeal Tribunal : Ex parte Shaw, and the prior decisions of the Supreme Court and affirmed the principle laid down in T. C. Basappa v. T. Nagappa. It is in the light of these principle that we have to consider whether the orders of the Income-tax Authorities in this case call for interference by this Court in the exercise of its supervisory jurisdiction.

9. We shall first consider whether the Income-tax Officer acted without jurisdiction or in excess of his jurisdiction in assessing the petitioner to income-tax on donations and Mass stipends. The argument of learned counsel for the petitioner is that donations and Mass stipends are not "income" within the meaning of the Income-tax Act and that the Income-tax Officer has, therefore no jurisdiction to assess the petitioner to income-tax on those items. According to learned counsel, the Income tax Officer has jurisdiction to go into the question whether the items are income coming within the purview of the Income-tax Act, but if he wrongly decides that question and assumes jurisdiction which in law he does not possess and assesses income-tax it is a matter in which this court can interfere and set aside the order of assessment on the ground that the decision of the Officer is wrong and that he has no jurisdiction to levy income-tax on the items which are not "income" coming with in the purview of the Act. We are unable to accept this argument. We do not think that the jurisdiction of the income-tax Officer to assess a person to income-tax on particular items of receipt depends upon the existence of some collateral fact which the Officer has to decide first before proceeding to assess the person to income-tax. Under the Income-tax Act, the Income-tax Officer has full jurisdiction to decide whether a person is liable to be assessed to income-tax in respect of particular items of receipt. If the decision is wrong the remedy of the party is to appeal to the higher authorities. It cannot be said to be a case of the Income-tax Officer assuming jurisdiction which he does not in law possess. The question was discussed jurisdiction by Lord Esher, M. R.in Reg. v. Commissioners for Special Purposes of the Income Tax. His Lordship observed : "When an inferior court or tribunal or body, which has to exercise the power of deciding facts, is first established by Act of Parliament, the Legislature has to consider what powers it will give that tribunal or body. It may in effect say, that if a certain state of facts exists and in shewn to such tribunal or body before it proceeds to do certain things, it shall have jurisdiction to do such things, but not otherwise. There it is not for them conclusively to decide whether that state of facts exists and if they exercise the jurisdiction without its existence, what they do may be questioned, and it will be held that they have acted without jurisdiction. But there is another state of things which may exist. The Legislature may intrust the tribunal or body with a jurisdiction, which includes the jurisdiction to determine whether the preliminary state of facts exists as well as the jurisdiction on finding that it does exist, to proceed further or do something more. When the Legislature are establishing such a tribunal or body with limited jurisdiction, they also have to consider, whatever jurisdiction they give them, whether there shall be any appeal from their decision, for otherwise there will be none. In the second of the two cases I have mentioned, it is an erroneous application of the formula to say that the Tribunal cannot give themselves jurisdiction by wrongly deciding certain facts to exist, because the Legislature gave them jurisdiction to determine all the facts including the existence of the preliminary facts on which the further exercise of their jurisdiction depends; and if they were given jurisdiction so to decide without any appeal being given, there is no appeal from such exercise of their jurisdiction." 10. To the same effect is the observation of Sir James W. Colville in The Colonial Bank of Australasia v. Willan. The learned Judge said : Tribunal of limited jurisdiction to exercise that jurisdiction depends.

But those conditions may be founded either on the character and constitution of the tribunal, or upon the nature of the subject matter of the enquiry or upon certain proceedings which have been made essential preliminaries to the enquiry. It is obvious that conditions of the last differ materially from those of the three other classes.

Objections founded on the personal incompetency of the judge or on the nature of the subject matter, or on the absence of some essential preliminary, must obviously, in most cases, depend upon matters which, whether apparent on the face of the proceedings or brought before the superior court by affidavit, are extrinsic to the adjudication impeached. But an objection that the judge has erroneously found a fact which, though essential to the validity of his order, he was competent to try, assumes that, having general jurisdiction over the subject matter, he properly entered upon the enquiry, but miscarried in the course of it. The superior court cannot quash an adjudication upon such an objection without assuming the functions of the court of appeal, and the power to re-try a question which the judge was competent to decide." 11. The law is thus stated in Halsburys Laws of England, second edition, Volume IX, at page 88 : "The case is more difficult where the jurisdiction of the court below depends not upon some preliminary proceeding, but upon the existence of some particular fact. If the fact be collateral to the actual matter which the lower court has to try, that court cannot, by a wrong decision with regard to it, give itself jurisdiction which it would not otherwise possess. The lower court must, indeed, decide as to the collateral fact, in the first instance; but the superior court may upon certiorari inquire into the correctness of the decision, and may quash the proceedings in the lower court if such decision is erroneous, or at any rate if there is no evidence to support if. On the other hand, if the fact in question be not collateral, but a part of the very issue which the lower court has to enquire into certiorari will not be granted, although the lower court may have arrived at an erroneous conclusion with regard to it." 12. This principle was affirmed by Lord Atkin in The King v. justices of Linconlshire and by Lord Reading and Avory J., in Rex v. Bloomsbury Income Tax Commissioners. The principle was followed by the Supreme Court in The Province of Bombay v. Khushaldas Advani Mukherjea, J. (as he then was) said in that case : "When the Legislature delegates powers to an authority and lays down that the powers could be exercised only if a certain state of facts exists, obviously the authority cannot act if the condition is not fulfilled. If its wrongly holds or assumes that the condition exists although it actually does not exist, its assumption of jurisdiction would be unsupportable and could be removed by a writ of certiorari.

The Legislature however, may entrust the authority with a jurisdiction which includes the jurisdiction to determine whether the preliminary state of facts exists. In such cases even if the authority makes a wrong decision either of facts or law, it can be corrected by an appellate tribunal, if there is any, but not by a writ of certiorari, as every authority if it acts within jurisdiction is competent to decide both rightly or wrongly."Rai Brij Raj Krishna v. S. K. Shaw and Brothers. It was held in that case that the Bihar Buildings (Lease, Rent and Eviction) Control act (III of 1947) entrusted the Controller with a jurisdiction which included the jurisdiction to determine whether there was non-payment of rend or not as well as the jurisdiction on finding that there was non-payment of rent to order eviction of the tenant. The principle was discussed by Kapur, J., in Rekhi v. Income-tax Officer, New Delhi, by Bhargava, J., in Sundarlal v. Hindustan Commercial Bank and by Teja Sing, C.J., in Roller Flour Mills v. Income-tax Officer, Patiala. We have no doubt, that under the Income-tax act, the income-tax Officer has jurisdiction to determine whether a particular item of receipt is "income" liable to be assessed to income-tax and that it is not a collateral fact but a part of the very question which the Officer has to inquire into in the exercise of the jurisdiction vested in him under the act. If the decision of the Officer on the question is wrong the remedy of the party is what is provided in the act itself. It follows that even if two items of receipt in respect of which the petitioner was assessed to income-tax do not constitute "income" it cannot be said that the income-tax Officer acted without jurisdiction in assessing the petitioner to income-tax on those items.

14. The next and the more important question is whether there is an error apparent on the face of the record in the orders of the Income-tax Authorities. It is settled law that the High Court can interfere with the decision of an inferior tribunal in the exercise of its supervisory jurisdiction if there is an error apparent on the face of the record in the decision of the tribunal. "Where upon the face of the proceedings themselves it appears that the determination of the inferior court is wrong in law, certiorari to quash will be granted" (Halsburys Laws of England, Vol. IX, page 887). The principle was discussed by Singleton, L. J. Denning L. J. and Morris L. J. in Rex v.Northumberland Compensation Appeal Tribunal in which the decision of Lord Goddard, C. J, in Rex v. Northumberland Compensation Appeal Tribunal was upheld by their Lordships. After referring to the case law relating to the question Singleton L.J., observed : "The decision of the Tribunal was a speaking order in the sense in which that term has been used. The court is entitled to examine it, and if there be error on the face of it, to quash it." "The Court of Kings Bench has an inherent jurisdiction to control all inferior tribunal not in an appellate capacity, but in a supervisory capacity. This control extends not only to see that the inferior tribunals keep within their jurisdiction, but also to see that they observes the law. The control is exercised by means of a power to quash any determination by the tribunal which, on the face it, offends against the law. The kings Bench does not substitute its won views for those of the tribunal as a court of appeal would do. It leaves it to the Tribunal to hear the case again, and in a proper case may command it to do so. When the Kings Bench exercises its control over tribunals in this way, it is not usurping a jurisdiction which does not belong to it. It is only exercising jurisdiction which it has always had." "The speeches in the House of Lords in Walsall Overseers v. London and North Western Railway Company demonstrated that if that which was stated upon the face of an order of an inferior court showed that the order was erroneous in law, then the order could be removed by certiorari and its existence could be ended by quashing it......

.... It is plain that certiorari will not issue as the cloak of an appeal in disguise. It does not lie in order to bring up an order to correct error of law where revealed on the face of an order or decision, or irregularity, or absence of, or excess of, jurisdiction where shown. The control is exercised by removing an order or decision, and then by quashing it." As stated already, the principle laid down in this case was affirmed by the supreme Court in Hari Vishnu v.Ahmad Ishaque.

15. What then is an error apparent on the face of the record which will justify interference by the High Court In Rex v. Northumberland Compensation Appeal Tribunal already referred to, Lord Goddard, C.J., stated the law thus : "Where a tribunal, especially one created by the statute, states in its order the grounds on which the order has been made and when those grounds are not such as to warrant the decision arrived by the tribunal certiorari will issue for quashing the order." "The error of law which can be considered to be apparent on the face of the record is not an error which can be pointed out to the superior court after a long and elaborate argument." "The error of law contemplated is an error so patent, so manifest, that the superior court will not permit the subordinate court to come to a decision in the face of a clear ignorance or disregard of a provision of the law is overlooked or not applied, and that appears from the judgment of the lower court itself, then the superior court may interfere by a writ of certiorari." In Batuk K. Vyas v. Surat Municipality the same learned Chief Justice said.

"The mere fact that two views are possible on question of law does not make the decision of a tribunal with jurisdiction bad on the ground that it has erred in law and the error is apparent on the face of the record. We have had occasion several times to point out that only that error will be corrected by this court which is clearly apparent on the face of the record and which does not become apparent only by a process of examination or argument." 16. The question was discussed by his Lordship Venkatarama Ayyar, J., in Hari Vishun v. Ahmad Ishaque "When does an error cease to be mere error, and become an error apparent on the face of the record Learned counsel on either aside were unable to suggest any clear-cut rule by which the boundary between the two classes of errors could be demarcated. Mr. Pathak for the first respondent contended on the strength of certain observations of Chagla, C.J., in Batuk K. Vyas v. Surat Borough Municipality that no error could be said to be apparent on the face of the record if it was not self evident, and if it required an examination or argument to establish it. This test might afford a satisfactory basis for decision in the majority of cases. But there must be cases in which even this test might break down, because judicial opinions also differ, and an error that might be considered by one Judge as self-evident might not be so considered by another. The fact is that what is an error apparent on the face of the record cannot be defined precisely or exhaustively, there being an element of indefiniteness inherent in its very nature, and it must be left to be determined judicially on the facts of each case." 17. The question came up for consideration before Sinha, C.J., and Hidayatullah, J., in Sagatmal Bhikchand v. M. V. Deo. That was a case under the Central Provinces and Berar Letting of Houses and Rent Control Order, 1949. The petitioner was occupying a rented house for residential purposes and running a shop in another rented house. For his convenient residence and for carrying on his business he purchased a house which was in the occupation of the respondents. He made an application to the Rent Controller, Nagpur, for recovery of possession of the house after determining the tenancy under clause 13(3) (vi) of the Rent Control Order. The petition was opposed by the respondents who contended that there was no necessity for the petitioner to occupy the house. The Rent Controller rejected the petition holding that the petitioner did not require the house for his residence and for his business. The appeal filed by the petitioner before the Additional Deputy Commissioner was also dismissed. The Additional Deputy commissioner took the view that, under clause 13(3) (vi) (a) and (c) of the Rent Control Order, the petitioner had to prove that the need to occupy the house was genuine and bona fide.

In his application for a writ of certiorari the petitioner contended that the Rent Controller and the Additional Deputy commissioner ignored the provisions of sub-clause (a) of clause 13(3) (vi) of the Rent Control Order which was in the following term : "that the landlord needs the house or a portion thereof for the purpose of (a) his bona fide residence, provided he is not occupying any other residential house of his own in the city or town concerned." It was pointed out that the Rent Controller and the Additional Deputy Commissioner ignored the relevant provisions of the sub-clause and that it was an error apparent on the face of the record justifying interference by the High Court in the exercise of its jurisdiction under article 226 of the Constitution. Sinha, C.J., followed the principle laid down by Lord Goddard, C.J., in R. v. Northumberland Compensation Appeal tribunal; Expert Shaw. This decision was followed in Badamibai v. P. A. Tobin. That also was a case under the Central Provinces and Berar Letting of Houses and Rent Control Order, 1949.

Hidayatullah and Chaudhuri, JJ., quashed the order of the Deputy Commissioner on the ground that the amplitude in item (vii) of clause 13(3) of the Rent Control Order was not grasped by him. The learned Judges said : "This being a speaking order Judge, and erroneous on its face because of a misapprehension of the law on the subject is capable of being interfered with by a writ of certiorari".

18. In Krishnaswamy v. Mohanlal which was a case under the Madras Lease and Rent Control Act (XV of 1946), Satyanarayana Rao, J., held : "From the proceedings as set out in the order itself it would be patent that the conclusion of the tribunal was not warranted by law. In other words, the order is a speaking order, an expression used by Earl Cairns, L. C., in Overseers of the Board of Walsall v. L. and N. W.Railway Company. It is no doubt not necessary in all cases to set out evidence or facts on which the decision was based, but if once they are so set out and if from the evidence set out or from the facts found the conclusion does not follow in law it is open to interfere with the order and quash it by issuing a writ of certiorari." "Errors apparent on the face of the proceedings", said the learned judge, "are always treated as errors of jurisdiction for the purpose of quashing by issuing a writ of certiorari." The learned judge added : "Of course, the error which is apparent should not be a mere accidental or formal error which could always be set right by amendment it must be a substantial error and one which goes to the root of the matter".

In Pattabhi Rama v. Govinda it was held that where a Tribunal commits a patent error in respect of propositions of law and its conclusion has been reached on the basis of such erroneous premises which go to the root of the matter the case is one not merely of an erroneous decision but of error apparent on the face of the record which attracts the jurisdiction of the High Court under article 226 of the constitution.

19. The Calcutta High Court considered the question in United Commercial Bank Limited v. Kartar Singh which was a case under the Industrial Disputes Act. The order of the Industrial Tribunal was passed on a wrong apprehension of the scope and powers vested in him under the provisions of section 11(vii) of the Act. Bose. J. held that the order of the Tribunal was liable to be quashed by a writ of certiorari. The learned Judge observed : "If the order impugned is a speaking order or in other words an order which on the face of it sets out the reasons for making the order, such an order can be quashed by certiorari if the reasons are bad in law." 20. In Nangaram v.Ghinsilal the Collector, in deciding an appeal from the order of the Rent Controller under the Jaipur Rent Control Order, 1947, committed a patent error in interpreting a provision of the Rent Control Order. It was held that the order of the Collector could be quashed by a writ of certiorari. In National Coal Company Limited v.Deve the Patna High Court held that when the order of the Tribunal is based on clear ignorance or disregard of the provision of law it is an error apparent on the face of the record and can be corrected by certiorari. In Rangayya v. Chayappa it was held that omission on the part of the Tribunal to consider an important fact is an error apparent on the face of the record justifying interference by the High Court.

21. This Court considered the question in Nagercoil Electric Supply Corporation v. Industrial Tribunal. It was found in that case that the Tribunal was under a misapprehension as to the points that arose for decision before it and that since the misapprehension was apparent from the order it was an error apparent on the face of the record which would constitute a ground for interference by the High Court in the exercise of its supervisory jurisdiction.

22. We shall now consider whether, in the light of the principles laid down in these cases, there is an error apparent on the face of the record in the orders of the Income-tax authorities in this case. There is no dispute as to facts. They are stated thus in the first assessment order of the Income-tax Officer : "During the year it is admitted that the Monastery has collected donation of Rs. 1,17,997. The entire donation has come from foreign countries and the donations were made in response to an appeal made by the Monastery to the charitably disposed public for putting additional structures and carrying out improvements for their newly started college at Thewara." The ground on which the Monastery was sought to be assessed to income-tax on these donations was stated thus by the Income-tax Officer : "It was put forward to the assessees advocate that by the amendments introduced to the Act by the Amendment Act XXII of 1122, these donations fall under the head, voluntary contributions and as such they fall liable to be taxed. In fact, this position is the natural corollary of deletion of the exemption provided by sub-clause (iii) of sub-section (3) of sub-section 5 of the Act as it stood before the amendment." It was next stated in the order that the first contention of the Monastery was that the donations were not "income". That question was, however, not considered by the Income-tax Officer. He proceeded on the basis that the donations were voluntary contributions and that since clause (iii) of sub-section (3) of section 5 exempting voluntary contributions from liability to income-tax was deleted in 1122, they became liable to be assessed to income-tax. The second contention raised on behalf of the Monastery was stated to be the following : "The donations received by the Monastery are not of a recurring nature.

Nor are they receipts with any certainty. The donations in question depended purely on the goodwill and fancy of the donors concerned." The Income-tax Officer held that the donations were of a recurring nature. The reason given was that the Monastery received as donations Rs. 1,17,997 in 1946, Rs. 73,864 in 1947, Rs. 15,360 in 1948 and Rs. 13,433 in 1949. The contention that the donations were of the nature of gifts was repelled by the Income-tax Officer for the following reason : "The idea of gift is usually associated with one individual making an ex gratia payment to another individual. This is a case where an appeal for funds is issued to the wider public, and the money payments made by the public are usually called contributions. There is thus wide difference between gift and voluntary contributions." The decision in Rani Amrit Kunwar v. Commissioner of Income-tax cited on behalf of the assessee was held to be not applicable. With regard to Mass stipends it was contended on behalf of the assessee that a condition was attached to the donation and that they were therefore, not voluntary contributions. The Income-tax Officer held that no condition was attached to the donation of Mass stipends and that they were, therefore, voluntary contributions. It was accordingly held that the donations and Mass stipends were liable it be assessed to income-tax as voluntary contributions under the Cochin Income-tax Act as amended in 1122. The assessment for the year 1124 was based on the reasons given in the order relating to the assessment for 1123.

23. The Appellate Assistant Commissioners order shows that the following contentions were raised before him by counsel appearing for the assessee : "(1) Neither the Mass stipends nor donations form income and cannot therefore be taxed; (2) even if they are to be regarded as income they do not arise from any definite source; (3) donations or contributions to the college are in the nature of gifts and are not taxable at the hands of the donee unless they are part of the emoluments of an office, employment or vocation; and (4) the receipts under both the heads are of a casual and non-recurring nature and hence exempt." The Appellate Assistant Commissioner did not discuss any of the points raised in these contentions. This is what is stated in his order : "The Income-tax Officer effectively met the above contentions in his assessment orders and am in complete agreement with the conclusion reached by him" A further contention raised on behalf of the assessee regarding the illegality of the proceedings started under section 44 of the Cochin Income-tax Act was rejected by the Appellate Assistant Commissioner with the observation that it had been "rightly overruled by the Income-tax Officer". The assessee raised knew contention before the Appellate Assistant Commissioner i.e. "The receipts even if they could be treated as income would come within the exemption contained in clause (1) of section 5(3) relating to income derived from property held under trust or other legal obligation wholly for religious or charitable purpose. In repelling this contention the Appellate Assistant Commissioner said : "These receipts are not income which is arising from any property held under trust. They are the property itself and the benefit of the above provision is therefore not available to the appellant.

24. The Commissioner in his order dismissing the revision petitions filed by the assessee gave the following reason for holding that the donations were liable to be taxed : "By the amendment of section 4 of Act VI of 1117 religious institutions also were made liable to be assessed to income-tax and the effect of the deletion of clause (iii) of sub-section (3) of section 5 was to make voluntary contributions to religious institutions assessable income" With regard to Mass stipends, the commissioner held that they also were donations with the condition attached that Masses should be said as requested by the donors and that they were assessable income.

25. The question for consideration is whether the orders of the Income-tax authorities holding that donations received by the Monetary are the result of an error apparent on the face of the for the construction of the college and Mass stipends are assessable income are the result of an error apparent on the face of the record which will justify interference by this Court in the exercise of its supervisory jurisdiction. As stated already, this Court will not interfere for the mere reason that the Income-tax Authorities took a wrong view on the question that arose for decision before them. This Court will interfere only if the decision is the result of an error which is patent from the orders themselves. We are of opinion that the orders of the Income-tax Authorities in this case are the result of such an error. They have misconceived the scope of clause (iii) of section 5(3) of the Cochin Income-tax Act 1117, and the effect of its deletion by the Amendment Act, XXII of 1122. They did not decide the one question they were called upon to decide viz., whether the donations received by the Monastery for the construction of the college and Mass stipends were "income" at all. This question they ought to have decided apart from the effect of the deletion of clause (iii) of section 5(3) by the Amendment Act. Failure to decide this question which goes to the very root of the matter is not only an error apparent on the face of the record but also amounts to an illegal exercise of jurisdiction by the Income-tax Authorities which by itself as a sufficient ground for interference by this Court in the Exercise of its supervisory jurisdiction. The Income-tax Authorities have also misunderstood the nature of Mass stipend. The finding of the Income-tax Officer that donations are not of the nature of gifts and that they are not receipts of a casual and non-recurring nature is also manifestly erroneous. It is not merely a wrong view on a question on which two views are possible. It is a patently erroneous view. The omission by the Appellate Assistant Commissioner and the Commissioner of Income-tax to consider this important question is clearly an error apparent on the face of the record.

26. It is not disputed that donations of this kind, whether received by religious or charitable institutions of any other body or individual, were not liable to be taxed under the Cochin Income-tax Act of 1117, before it was amended in 1122, and that they are not taxable income under the Indian Income-tax Act. It was solely on the basis of the amendment introduced into the Cochin Act by Act XXII of 1122 that these donations were held to be liable to be taxed for the period during which the amended Act was in force. The question, therefore, for consideration is whether the amendment of the Cochin Act in 1122 had the effect of making donation of this kind taxable income.

27. Section 4 of the Cochin Income-tax Act, VI of 1117, which is the charging section, corresponds to section 3 of the Indian Act. That section was amended by Act XXII of 1122 by substituting the words "company and local authority". But this amendment is not material so far as the question in issue is concerned. It is nobodys case that religious and charitable institutions were altogether exempted under the Cochin Income-tax Act, 1117, from liability to pay income-tax whatever be the nature of their income. The material provisions of the Act with which we are concerned in this case are those contained in section 5 sub-section (3) which provides for exemption of certain classes of income. The relevant portions are extracted below : "Any income, profits or gains failing within the following classes shall not be included in the total income of the person receiving them : (i) Any income, derived from property held under trust or other legal obligation wholly for religious or charitable purposes, and in the case of properties so held in part only for such purposes, the income applied, or finally set part for application, thereto; (ii) Any income derived from business carried on, on behalf of a religious or charitable institution when the income is applied solely to the purpose of the institution; and (a) the business is carried on in the course of the carrying out of a primary purpose of the institution; or (b) the work in connection with the business is mainly carried on by beneficiaries of the institution; (iii) Any income of a religious or charitable institution derived from voluntary contributions and applicable solely to religious or charitable purposes; (vii) Any receipts not being receipts arising from business or the exercise of a profession, vocation, or occupation, which are of a casual and non-recurring nature, or are not by way of addition to the remuneration of an employee; In the sub-section charitable purpose includes relief to the poor, donation, medical relief, and the advancement of any other object of general public utility; but nothing contained in clause (i), clause (ii) or clause (iii) shall operate to exempt from the provisions of this Act that part of the income of private religious trust which does not ensure for the benefit of the public." 28. By the amending Act of 1122, clause (i) of sub-section (3) was substituted by the following clause : "(i) any income which is derived from property held under trust or other legal obligation for religious or charitable purposes and which is applied or finally set apart for application thereto according to the provisions governing the trust or other legal obligation : Provided that if the income so set apart is not actually applied for the purpose for which it was set apart within two years from the end of the year in which it was so set apart or within such extended time as may be allowed by the Commissioner of Income-tax in any special case, it shall be included in the total income and taxed as the income of the year following the end of the period in which it was set apart to the spent." Clauses (ii), (iii) and (viii) were deleted. In clause (vii) after words "any receipts" the words, figure and letter "not being capital gains chargeable according to the provisions of section 13B and" were inserted. In the explanation occurring at the end of the sub-section the words and figures "clause (ii) or clause (iii). The amendment of clause (vii) also is not material so far as this case is concerned. The amendment of the explanation to the sub-section is only consequential to the selection of clauses (ii) and (iii). Therefore the only question for consideration so far as this case is concerned is the effect of the deletion of clause (iii).

29. What was exempted under clause (iii) was "any income of a religious or charitable institution derived from voluntary contributions and applicable solely to religious or charitable purposes." The Income-tax Authorities proceeded on the basis that what was exempted under the clause was voluntary contributions while what really exempted is "income derived from" voluntary contributions. Under clause (i) income derived from property held under trust or other legal obligation wholly for religious or charitable purposes was exempted; and under clause (ii) income derived from business carried on on behalf of a religious or charitable institution as exempted subject to certain conditions.

Donations and Mass stipends will come within the ambit of clause (iii) only if they are "income" derived from voluntary contributions. The Income-tax Authorities took in that donations and Mass stipends were "voluntary contributions". They did not go into the question whether they are "income driven from" voluntary contributions. On the assumption that what was exempted under the clause was voluntary contributions as such they held that donations and Mass stipends came within the clause and that the effect of the deletion of the clause in 1122 was to make them liable to be assessed to income-tax. The Income-tax Authorities have clearly misconstrued the clause and misunderstood its scope.

30. Assuming that what was exempted under the clause is voluntary contributions, it does not necessarily follow that the deletion of the clause will have the effect of making such contributions assessable income under the Act. The question whether voluntary contribution are liable to be taxed will still depend on the question whether they are "income" or not within the meaning of the Income-tax Act. If they are not income but are capital receipts it is clear that they will not come within the ambit of the Act. It is only if they are "income" that they will come within clause (iii) itself. The main contention raised by the assessee before the Income-tax Authorities was that donations and Mass stipends were not "income". This question which goes to the very root of the matter was not considered by the Income-tax authorities. The only question considered by them was whether donations and Mass stipends constituted voluntary contributions. The Income-tax Officer considered also the question whether they were of a recurring nature.

The fundamental question whether they constituted income or were only capital receipts was not considered by him Nor was it considered by the Appellate Assistant Commissioner or the Commissioner of Income-tax. As stated already, this is an error apparent on the face of the record and also amounts to an illegal exercise of jurisdiction. Clause (iii) is only an exemption clause. The primary question is whether it is income at all. Clause (iii) applies only to religious or charitable institutions and not to other bodies or individuals. If donations of this kind are assessable income all individuals and bodies other than religious or charitable institution should be able to be assessed to income-tax in respect of such income under the Cochin Income-tax Act.

We do not think that it will be seriously contended that under the Indian Income-tax Act, donations received by person for putting up a charitable institution and used for that purpose will be regarded as his income and assessed to income-tax. They are obviously of the nature of gift and are capital receipts. They do not come which the meaning of the word "income" as understood in the ordinary language. We do not think that any elaborate argument or reference to authorities is necessary to convince any one that donations of this kind do not constitute the income of the recipient.

31. The word "income" is not defined in the Income-tax Act. Section 3 (9) of the Cochin Act (as amended in 1122) corresponding to section 2(6C) of the Indian Act only says that "income" includes the five kind do not come within any of those categories. But, the sub-section does not purport to be an exhaustive definition of the term "income". Income includes not only the things which the sub-section declares that it shall include but also such things as the word signifies according to its natural impart. As observed by Barund, J., in Amrit Kunwar v.Income-tax Commissioner : "In construing the word income in the Indian Income-tax Act, one has to ask one self whether, having regard to the circumstances surrounding the particular payments and receipts in question, what is received is of the character of income according to the ordinary meaning of that word in the English language or whether it is merely a casual receipt or mere windfall." In Commissioner of Income-tax v. Shaw Wallace Sir George Lowndes attempted to define the word "income" as used in the Indian Income-tax Act in the following manner : "The object of the Indian Act is to tax income, a term which it does not define. It is expansion is more a matter of words than of substance. Income, their Lordships think, in this Act connotes a periodical monetary return coming in with some sort of regularity, or expected regularity, from definite sources. The source is not necessarily one which is expected to be continuously productive, but it must be one whose object is expected to be continuously productive, but it must be one whose object is the production of a definite return, excluding anything in the nature of a mere windfall. Thus income has been likened pictorially to the fruit of a free or the crop of a field.It is essentially the produce of something which is often loosely spoken of as capital." It is true that the effect of this definition has been withheld down considerably by the observations of Lord Russell in Gopal Saran Narain Singh v. Commissioner of Income-tax and of Lord Wright in Kamakshya Narain Singh v. Commissioner of Income-tax. In Commissioner of Income-tax. n Commissioner of Income-tax and Excess Porfits Tax, Madras v. South Indiian Pictures Limited "No infallible criterion or test can be or has been laid down and the decided cases are only helpful in that they indicate the kind of consideration which may relevantly be borne in mind in approaching the problem. The character of the payment received may vary according to the circumstances." Yet the definition of income given by Sir George Lowndes is helpful in understanding its true character. The donations in question do not possess any of the characteristics of income as that word is understood in ordinary language. No case was cited before us in which donations of this kind were treated as the income of the recipient.

32. Amrit Kunwar v. Income-tax Commissioner cited before the Income-tax Officer and referred to in his order is a clear authority for of the Income-tax Act. The assessee in that case, Rani Amrit Kunwar, was the wife of the Ruler of Kalsia and the sister of the Maharaja of Nabha State. In the assessment year she received a sum of Rs. 14,744 from Kalsia State and another sum of Rs. 8,910 from Nabha State. For the purpose of this case we are concerned only with the payment made by Nabha State. It was made as an annual "wardrobe allowance" and as presents on certain specified days of festival in each year. Each payment was specifically budgeted for in the annual budget of the State and the payments have been made consecutively for a period of about twenty years. The question arose as to whether the payments constituted income of the Rani. Braund, J., said : "There can be no doubt that the payments have recurred with both actual and expected regularity for the better part of twenty years. Only once have they been varied in amount and they have been paid quarterly. The sanction for their payment has appeared in the annual budget of the State. I think, therefore, that they have become customary payments in the limited sense at least that they were habitual payments though I am inclined to agree with respect with the learned President of the Tribunal that no fact has been proved to warrant any finding that they are customary payments in the legal significance of that term denoting something that has become legally enforceable by custom. Nor do I think that there is the slightest evidence, as the Income-tax Officer was himself admitted, of any vested right in the Rani to receive the annual sum in question from Nabha State. I think that the use of the expression vested right has been a little unfortunate and misleading.

What we really have, therefore, is a series of payments made over a period long Enough to entitle them to be described as habitual, originating, so far as any evidence in this case goes, in nothing more than the bounty of the Rule of Nabha State............ But, on the facts provided, I am paraded that the Income-tax authorities have not discharged the burden of showing (apart from the were circumstance of repetition) that there is any origin to account for these payments which could amount in its nature to a definite source so as to tender each payment income and not merely casual or a mere annual (though expected) windfall. I do not reach this conclusion, as I have explained, on the ground simply that they are voluntary in the sense that they might be discontinued without the Rani having any enforceable remedy; but on the ground that it has not been proved in this particular case that there is anything more certain than the mere whim of the Ruler to support them." Malik, J., held that the receipts were of a casual and non-recurring nature and that they came within the exemption provided in section 4 clause (3) sub-clause (vii) of the Indian Income-tax Act. The learned Judge observed : "To my mind, the word non-recurring does not mean that it has as a matter of accident or as a matter of fact, recurred, but that there was a claim or a right in the assessee to expect its recurrence. I think a mere voluntary payment, not being receipts arising from arising from business, or the exercise of a profession, vocation or occupation and not being by way of addition, to the remuneration of a employee or not having been made expressly liable is not liable to be taxed and as I understand the exception, a voluntary payment must be deemed to be of a causal and non-recurring nature unless there is a liability on the donor to pay, which liability may arise out of contract, a custom or some order which is binding on him." Iqbal Ahmed, C.J., agreed with the opinion of the two learned Judges.

It has to be borne in mind that the Rani has been receiving the payments for about twenty years, and that the payment was provided for in the State budget. If these receipts did not constitute "income" of the recipient it cannot be contended for a moment that purpose will constitute his income. The payments depended entirely on the him of the donors. there is also no regularity or expected regularity in the payments. It is obvious that receipts of this nature do not constitute "income" of the recipient.

33. Assuming that the donations are of the nature of "income" and not capital receipt, they clearly come within section 5(3) (vii) of the Cochin Income-tax Act which exempts receipts, which are of a casual and non-recurring nature, from liability to assessment. It cannot be contended that the receipts arise from business or the exercise of profession, vocation or occupation by the Monastery or that they are by way of addition to the remuneration of an employee. According to the Income-tax Office, the receipts are of a reassuring nature since the Monastery received donations and Mass stipends during the years 1946 to 1949. As observed by Malik, J., in Rani Amrit Kunwar v. Commissioner of Income-tax, C. P. & U. P., the mere fact that the receipts have recurred in some years is not sufficient to characterise them as recurring receipts. There must be a claim or right in the assessee to expect its recurrence. It is stated in the order of the Income-tax Officer that the donations were made in response to an appeal made by the Monastery for half to construct the college. The appeal were made of different persons on different occasions and the donations also were made by different persons and at different times. The order to the Income-tax Officer itself shows that there was no uniformity whatsoever in the amounts received as donations in the various years. In the year 1946 the total amount received as donation and Mass stipends was Rs. 1,17,997, in 1947 Rs. 76,846, in 1948 Rs. 15,360 and in 1949 Rs. 13,433. In the years 1948 and 1949 only Mass stipends were received. In the circumstances it is impossible to contend that the receipt in this case were of a recurring nature. They were mere "gifts or windfalls" and were clearly of a casual and non-recurring nature. A voluntary gift depending entirely upon the goodwill of the donor does not cease to be of a "casual and non-recurring nature" by reason merely of the fact that the gift is repeated. "A mere donation given each year with no certioration that it would be repeated the year following cannot be regarded as a receipt of a recurring nature". (Vide Stedeford v. Beloe) There is also nothing to show that in this case the donations were repeated by the same donor or donors. It is patent that the Income-tax Officer has misconceived the meaning of the expression "receipts of a casual and non recurring nature" in section 5(3) (vii) of Cochin Income-tax Act. It is not a mere wrong decision on a question on which two views are possible. It is a manifestly erroneous decision resulting from a misconception of the provision contained in section 5(3) (vii).

It clearly amounts to an error apparent on the face of the record. The Appellate Assistant Commissioner and the Commissioner of Income-tax did not consider the question at all.

34. As for Mass stipend, it is clear the Income-tax Authorities have not understood its real nature. The Income-tax Officer proceeded on the basis that it was a donation made to the Monastery and that no condition was attached to the donation. The Appellate Assistant Commissioner also took the view that it was a donation made to the Monastery but that it was earmarked for the saying of Mass. The Commissioner also took his view. I views are possible. It is true that Mass stipend is a donation. But it is a donation to the individual priest who says the Mass. It is given for the maintenance of the Priest. The Priest who receives the Mass stipend is under an obligation to offer Mass for the intention of the donor. In no sense can Mass stipend be said to be a donation made to the Monastery. The petitioner only received the Mass stipends for being distributed among the priests who agreed to say Masses for the intention of the donors. It is the individual priest who says the Mass who is entitled to the stipend. It cannot, therefore, be said to be a donation made to the Monastery. The misconception on the part of the Income-tax Authorities regarding the nature of Mass stipends is also an error apparent on the face of the record. Even if Mass stipends are to be bearded as donations made to the Monastery we have seen that they will not constitute "income" of the Monastery. As stated already, the fundamental error committed by the Income-tax Authorities is that they did not consider the main question that came up for Consideration before them, i.e., whether the donations and Mass stipends are "income" under the Income-tax Act. That is an error apparent on the face of the record which goes to the very root of the matter and which calls for interference by this Court in the exercise of its supervisory jurisdiction.

35. The next question for consideration is whether this Court should refuse to interfere with the order of the Income-tax Authorities on the ground that the petitioner has other effective remedy provided for in the Income-tax Act itself. It was argued by learned counsel for the respondents that the petitioner could apply for reference to this Court when his appeals were dismissed by the Appellate Assistant Commissioner and that remedy is still available to him when the appeals now pending before the Appellate Assistant Commissioner are disposed of. It was, therefore, argued that this Court will not be justified in interfering with the decisions of the Income-tax Authorities in the exercise of its extraordinary jurisdiction. The question of law as to whether the donations and Mass stipends are liable to be taxed was decided by the Appellate Assistant Commissioner by his order disposing of the appeals filed by the petitioner from the first assessment orders of the Income-tax Officer. That question will not arise for decision in the appeals filed from the revised orders of the Income-tax Officer. The only question that arises for decision by the Appellate Assistant Commissioner in the appeals pending before him relates to the correctness of the amount for which allowance was made by the Income-tax Officer as per the direction contained in the orders of the Appellate Assistant Commissioner. The provision for reference is contained in section 109 of the Cochin Act. Under sub-section (2) of that section, an application for reference can be made by the assessee only when a question of law arise out of an order passed under section 41, 42 or 43, and the application has to be made within sixty days of the date on which be is served with notice of the order. If no question of law will arise out of the order to be passed by the Appellate Assistant Commissioner in the appeals pending before him there will be no occasion for the assessee to make an application for reference on the basis of that order. As stated already, the question of law has already been decided by the Appellate Assistant Commissioner, and it will not arise out of the orders to be passed in the appeals now pending before him.

36. The assessee has also no right to apply for a reference in respect of the order passed by the Commissioner of Income-tax under section 43 of the Cochin Act disposing of the revision petition. In the case of an order passed under section 43 the assessee is given the right of applying for a reference only if the Commissioner enhanced the assessment or if the order has otherwise prejudiced him. In this case the Commissioner did not enhanced the assessment. Nor can the order of the Commissioner be said to be prejudicial to the assessee. The first provision to section 43 sub-section (2) says that the Commissioner shall not pass any order prejudicial to the assessee without hearing him or giving him reasonable opportunity of being heard; and the second proviso says that an order by the Commissioner dealing to interfere shall be deemed not to be an order prejudicial to the assessee. It is, therefore, clear that the assessee has no right to apply for a reference in respect of the order passed by the Commissioner.

37. As for the order passed by the Appellate Assistant Commissioner disposing of the appeals it would appear the assessee could have applied to the Commissioner requiring him to refer to the High Court the question of law that arose out of that order. But the position is by no means clear. Under the Cochin Act the hierarchy of Income-tax Authorities consisted of Commissioner of Income-tax, Deputy Commissioner of Income-tax and Income-tax Officer. In ordinary cases assessment had to be made by the Income-tax Officer. Appeal from the order of the Income-tax Officer lay to the Deputy Commissioner of Income-tax as provided in section 40 and the Deputy Commissioner was to dispose of the appeal in the manner provided in section 41. Second appeal from the order of the Deputy Commissioner lay to the Commissioner in case the Deputy Commissioner enhanced the assessment as provided in section 42. Section 43 provided for revision by the Commissioner. Section 2 Provided that Government might by general or special notification in the Gazette direct that the powers conferred on the Income-tax Officer and the Deputy Commissioner under the Act in respect of any specified case or classes of case be exercised by the Deputy Commissioner and the Commissioner respectively. It was also provided that for the purposes of any case in respect of which such a notification applied reference in the Act or in any rules made thereunder to the Income-tax Officer and the Deputy Commissioner should be deemed to be reference to the Deputy Commissioner and the Commissioner respectively. By a notification issued by the Government of Cochin in all cases in which the income of the assessee exceeded Rs. 7,000 a year the assessment had to be made by the Deputy Commissioner.

Under the Indian Act, the hierarchy of Income-tax Authorities consists of the Central Board of Revenue, Commissioner of Income-tax, Appellate Assistant Commissioners of Income-tax and Income-tax Officers. There is also the Appellate Tribunal. Under that Act assessment has to be made by the Income-tax Officer in all cases. From his order appeal is provided for to the Appellate Tribunal. The Commissioner of Income-tax is given the power of revision subject to certain conditions. The Central Board of Revenue has general powers of supervision. The provision relating to reference to the High Court applies only to orders of the Appellate Tribunal. Under the Taxation Laws (Extension to Merged States and Amendment) Act, 1949, (Section 7) any reference in the law of any Merged State to an officer, authority, Tribunal or Court shall be construed as a reference to the corresponding officer, authority, Tribunal or Court appointed or constituted under the Indian Act, and if any question arises as to who such corresponding officer, authority, Tribunal or Court is the decision of the Central Government thereon shall be final. The Officer corresponding to the Income-tax Officer under the Cochin Act May be taken to be the Income-tax Officer under the Indian Act and the Officer corresponding to the Deputy Commissioner to be the Appellate Assistant Commissioner. The powers of revision in the Commissioner. The powers of the Commissioner in respect of second appeal must be deemed to have vested in the Appellate Tribunal and the powers of revision in the Commissioner of Income-tax.

But as mere the Notification of the Government of Cochin the Deputy Commissioner was to function as the Income-tax Officer in cases in which the income of the assessee exceeded Rs. 7,000. As stated already the Officer corresponding who has got only appellate is the Appellate Assistant Commissioner who has got only appellate jurisdiction under the Indian Act. Although the present case is one in which the assessment had to be made by the Deputy Commissioner under the Cochin Act it was the Income-tax Officer under the Indian Act who passed the assessment order. From the order of the Deputy Commissioner appeal lay to the Commissioner and that only in cases in which the assessment was enhanced by the Deputy Commissioner. Although the authority under the Indian Act corresponding to the Commissioner in respect of appeals is the Appellate Tribunal the appeals in this case were heard by the Appellate Assistant Commissioner. As a result of these complications the assessee could not be sure whether he had a right of second appeal to the Appellate Tribunal. The assessee, therefore, filed revision petitions to the High Court can be made under the Indian Act only in respect of the order of the Appellate Tribunal. Although the Cochin Act provided for reference in respect of the order of the Commissioner passed in revision the assessee could apply for a reference only when the order was prejudicial to him within the meaning of section 43(2).

Again, under the Cochin Act, the application for reference had to be made to the Commissioner even in respect of orders passed by the Deputy Commissioner. In the case of an order passed by the Commissioner under section 43 reference lay only on a question of law arising out of that order and not on a question of law arising out of a previous order under section 41 revised by the order under section 43. In this uncertain state of affairs nobody could be expected to the sure of the procedure that should be adopted in respect of assessments made under the Cochin Act by the Income-tax Authorities under the Indian Act. If, in the circumstances, the assessee though that the only remedy available to him under the Cochin Act was to file revision petitions before the Commissioner from the orders of the Appellate Assistant Commissioner, we do not think that he can be penalised for that. Having filed revision petitions he could not apply for a reference in respect of the order of the Commissioner unless the order was prejudicial to him.

38. It can now be taken to be well settled that the existence of an alternative remedy is not by itself a ground for the High Court to refuse to exercise the jurisdiction vested in it under article 226 of the Constitution although the High Court will always take that fact also into consideration in deciding whether in a particular case it should exercise that jurisdiction. The question will depend upon the facts and circumstances of each case. The law was thus laid down by his Lordship S. R. Das, J. (as he then was), in Rashid Ahmen v. Municipal Board, Kairana "There can be no question that the existence of an adequate legal remedy is a thing to be taken into consideration in the matter of granting writs, but the powers given to this Court under article 32 are much wider and Not confined to issuing prerogative writs only." In Krishnankutty v. State of Tranvancore-Cochin his Lordship Koshi, J.(as he then was), observed. Nor do I feel inclined to dispose of this petition on the narrow ground that the petitioner if aggrieved has other remedies. No doubt that is a consideration which the Court should keep in mind in seeking to exercise its jurisdiction under article 226.

But the decision of the supreme Court, cited earlier, viz., Rashid Ahmed v. Municipal Board of Kairana, shows that the availability of other emedies creates no legal bar to the court exercising the jurisdiction under article 226." To the same effect is the observation of Subramanian Iyer, J., in N. E.S. Corporation v. Industrial Tribunal. The learned Judge said : "Assuming an appeal will lie, that circumstance will not debar this court from quashing the proceedings which are obviously the result of usurpation of jurisdiction and which are vitiated by an error apparent on the face of the record." It is true that a different view was taken by the learned Judge in Padmanabha Menon Krishna Menon v. Income-tax Commissioner. That was a case in which the assessee filed an appeal from the order of assessment by the Income-tax Officer and while the appeal was pending filed a petition under article 226 of the Constitution. The learned Judge found that there was no error apparent on the face of the record in the order of the Income-tax Officer. As a additional reason for refusing interfere in the exercise of the extraordinary jurisdiction of the High Court it was pointed out that the petitioner had other effective remedy and that he had availed himself of that remedy. The scope of this decision was considered by the same learned Judge in Lakshmana Shenoi v. Income-tax Commissioner. It was observed : "The learned Advocate-General during the course of his argument invoked Padmanabha Menon Krishna Menon v. Income-tax Commissioner in support of his contention. All that that decision has laid down is that a resort to the High Court for relief under article 226 of the Constitution cannot be permitted when there is no illegality or fatal irregularity in the pursuit of the procedure provided by the Act or usurpation or excessive exercise of jurisdiction." In the Full Bench case Subramania Iyer, J., discussed the question with reference to decided cases and said : "We do not consider the existence of an alternative remedy a bar to the issue of a writ of prohibition in appropriate case. This is a conclusion well supported by judicial decisions and dicta spread over a long period of years." Reference may also be made to the following observation of Chagla, C.J., in Abdul Majid v. P. R. Nayak : "When there is an alternative adequate and specific remedy, it is always a factor which the court must take into consideration in deciding whether a writ of certiorari should or should not issue. If the court finds that a fundamental principle of justice has been violated that is an important factor which the court should also take into consideration and if it finds that a fundamental principle of justice has been violated it should not refuse to issue a writ merely on the ground that there is an alternative adequate remedy in existence." 39. So far as this case is concerned, the petitioner has at present no other remedy available to him. Section III of the Cochin Income-tax Act provided that no suit "shall be brought in any civil court to set aside or remedy by way of an application to the Commissioner for reference to this Court in respect of the order of the Appellate Assistant Commissioner we do not think that in the circumstance of this case his failure to resort to that remedy is a sufficient ground for us to refuse to interfere with the decision of the Income-tax Authorities in the exercise of the jurisdiction vested in us under article 226 of the Constitution. This is a case in which the Income-tax Authorities failed to decide the primary question they were called upon to decide, i.e., whether the donations received by the Monastery for the construction of the college and Mass stipends are "income" within the meaning of the Income-tax Act. They were clearly under a misapprehension as to the effect of the deletion of clause (iii) of section 5, sub-section (3), of the Cochin Income-tax Act, 1117, by the Amendment Act of 1122. They misunderstood the character of Mass stipend. They misconceived the meaning of the expression "receipt of a casual and non-recurring nature" in clause (vii) of section 5, sub-section (3). These are errors apparent on the face of the record which go to the root of the matter, and we think that this is a fit case in which we should interfere in the exercise of the jurisdiction vested in us under article 226 of the Constitution. We therefore allow this petition and order the issue of a writ of certiorari quashing the orders of the respondents assessing the petitioner to income-tax for the years 1123, 1124 and 1125. We make no order as to costs.


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