1. In respect of the assessment year 1948-1949 L. Rajeshwar Parshad of Ambala Cantonment was assessed to income-tax at Rs. 8,947/- and this tax he paid in due course. In March 1953, however, this assessment was reopened by the Income-tax Officer under Section 34 of the Income-tax Act and an additional sum of Rs. 4,60,545/9/- was held due from the assessee.
The Income-tax Officer further ordered that the amount be paid by 30-3-1953 but later this time was extended till 31-7-1953. Meanwhile on 21-4-1953 the assessee filed an appeal against the additional assessment.
2. On 28-7-1953 the assessee having failed to get further relief from the Income-tax Officer approached the Inspecting Assistant Commissioner and the officer allowed the assessee to pay the amount in instalments of Rs. 1,00,000/- each month.
The assessee was not satisfied and in September 1953 therefore he approached the Commissioner of Income-tax. That Officer considered the whole matter and made an order on 14-10-1953 directing the assessee to make a token payment of Rs. 10,000/-at once and staying the recovery of the balance till the decision of the assessee's appeal by the Appellate Tribunal.
A direction was also made that in the meantime the assessee will undertake not to sell certain shares and Government securities held by him. Nothing further happened for about a year. In November 1854, however the Commissioner of Income-tax sent a notice to L. Rajeshwar Parshad asking him to show cause why the order previously made on 14-10-1953 should not be cancelled.
On 16-4-1955 the assessee's appeal was dismissed by the Appellate Assistant Commissioner and he thereupon appealed to the Appellate Tribunal. In the meantime the Commissioner of Income-tax proceeded to consider the question of cancelling the previous order staying the recovery of income-tax and on 25-7-1955 the Commissioner made an order requiring the assessee, L. Rajeshwar Parshad, to pay up the amount by 15-9-1955.
Aggrieved with this L. Rajeshwar Parshad moved this Court for a, writ under Article 226 of the Constitution for Quashing the order of the Income-tax Commissioner. The main ground taken was that the previous order of the Income-tax Commissioner staying recovery of income-tax till the decision of the appeal by the Appellate Tribunal was a final order revising certain previous orders and that order had been made under Section 33A of the Income-tax Act and the Commissioner had no power to review that order and replace it by another and when therefore he did so on 25-7-1955 he exceeded his jurisdiction.
This argument found favour with Bishan Narain J. who dealt with the writ petition and who therefore allowed it and quashed the order of the Income-tax Commissioner dated 25-7-1955. Hence the present appeal by the Income-tax Commissioner under Clause 10 of the Letters Patent.
3. Mr. Sikri's first contention in support of the appeal is that the orders of the Income-tax Commissioner were, neither judicial nor quasi-judicial but merely executive or administrative orders and not therefore subject to judicial review by way of certiorari. This matter was raised before the learned Judge but he considered it of no particular importance and therefore declined to go into it.
To me, however, it appears that the question is important for if the order of the Income-tax Commissioner was merely executive or administrate order, no question of certiorari would arise and no other writ would be appropriate. .
4. To appreciate Mr. Sikhri's argument it is necessary to refer to certain provisions of the Income-tax Act. Section 5 of the Act sets up certain Income-tax authorities starting with the Central Board of Revenue and going down to Income-tax Officer and Inspector of Income-tax. The assessment of income-tax is in the first instance made by the Income-tax Officer concerned. An appeal from his order lies to an Appellate Assistant Commissioner and from his order to an Appellate Tribunal.
The proceedings concerning the assessment of tax are undoubtedly quasi-judicial proceedings as the rights and liabilities of the assessee are determined on a consideration of certain facts and the law applicable to those facts. There are then provisions for the collection of tax so assessed. Section 29 provides for a notice of demand in respect of the tax found due under the Act. Section 45 then says :
'45. Any amount specified as payable in a noticeof demand under Sub-Section (3) of Section 23A or under Section 29or an order under Section 31 or Section 33, shall be paid withinthe time, at the place and to the person mentionedin the notice or order, or if a time is not so mentioned, then on or before the first day of the secondmonth following the date of the service of thenotice or order, and any assessee failing to payshall be deemed to be in default, provided that,when an assessee has presented an appeal under Section 30, the Income-tax Officer may in his discretiontreat the assessee as not being in default as longas such appeal is undisposed of.'
Then follows Section 46 thus:
'46(1) When an assessee is in default in making a payment of income-tax, the Income-tax Officer may in his discretion direct that, in addition to the amount of the arrears, a sum not exceeding that amount shall be recovered from the assessee by way of penalty.'
And Sub-Section (2) of Section 46 says:
'46(2) The Income-tax Officer may forward to the Collector a certificate under his signature specifying the amount of arrears due from an assessee, and the Collector, on receipt of such certificates, shall proceed to recover from such assessee the amount specified therein as if it were an arrear of land revenue.'
The Scheme of the Act thus is that after assessment a notice of demand goes to the assessee fixing the time of payment, and if payment is not made the assessee might be treated as in default and certain penalty may be levied and the Income-tax Officer is authorised to send a certificate to the Collector in respect of the amount due and the Collector then proceeds to recover the amount as arrears of land revenue.
There is no express provision in the Act authorising the Income-tax Officer or for that matter any other Income-tax authority to extend the period for payment, but since, it is entirely within the discretion of the Income-tax Officer to treat the assessee as in default or otherwise, the implication clearly is that the Income-tax Officer may not insist on payment according to the notice of demand and might extend the time. Sub-Section (7) of Section 46 of the Act gives the same indication for it says:
'46(7) Save in accordance with the provisions of Sub-Section (1) of Section 42, or of the proviso to Section 45, no proceedings for the recovery of any sum payable under this Act shall be commenced after the expiration of one year from the last day of the financial year in which any demand is made under this Act :
Provided that the period of one year herein referred to shall :
(i) Where an assessee has been treated as not teeing in default under Section 45 as long as his appeal is undisposed of, be reckoned from the date on which the appeal is disposed of;
(ii) * * *(iii) where the date of payment of tax has been extended by an Income-tax authority, be reckoned from the date up to which the time for payment had been extended;
(iv) where the sum payable is allowed to be paid by instalments, from the date on which the last of such Instalments was due.'
These provisions clearly contemplate the possibility of extension of time for payment by not only the Income-tax Officer but by any Income-tax authority and further contemplate the possibility of payment by instalments. It is agreed before us that the power to extend time for payment vests in every Income-tax authority and similarly any Income-tax authority may allow payment to be made by instalments.
The Act nowhere enacts what matters are to be taken into consideration for extending the period of time or allowing instalments and the power, as I have already said, is given to every Income-tax authority. The question that arises is this : when an assessee approaches an Income-tax authority, not necessarily the Income-tax Officer concerned, and asks for accommodation by extension of, time for payment of tax or for instalments, does he ask the Income-tax authority to exercise any judicial or quasi-judicial power, and when the Income-tax authority extends time or grants instalments, does that authority decide any matter judicially or quasi-judicially.
There is nothing in the Act to indicate thatthose matters are to be decided in a judicial orquasi-judicial manner and on general considerationsit is difficult to see how the decision can be termeda judicial or quasi-judicial decision. No right requiring determination is really in dispute at thatstage of the proceedings.
There are no parties to the dispute. The authority has merely to consider whether it should allow the tax to be collected in the ordinary manner or whether some latitude should be allowed to the assessee. Viewed in this light it appears to me that the matter is purely administrative connected with the collection of tax, the rights and liabilities in respect of which have already been determined, and when therefore the Income-tax authority shows latitude to the assessee it is merely exercising its administrative or executive power.
It is significant in this connection that this power is given not only to the Tribunals set up for making the assessment of tax but also to other Income-tax authorities who have no hand in the matter of assessment but are merely concerned with the proper administration of the Act.
5. It was contended on behalf of the respondent that in the present case at any rate the Commissioner of Income-tax when he made his first order took into consideration several matters and gave various reasons for coming to the conclusion that certain accommodation should be allowed to the assessee and before doing so he actually heard arguments on behalf of the assessee and it should therefore be held that he was deciding the matter in a quasi-judicial manner and doing so under Section 33A of the Act which gives certain revisional powers to the Commissioner.
I am unable to see any force in this contention, It is in my opinion wholly unnecessary to go to Section 33A and the learned counsel for the respondent frankly conceded that even if Section 33A were not there at all, the Commissioner of Income-tax like any other Income-tax authority will still have power of extending time for payment of tax as this is implicit in several other provisions of the Act.
The circumstance that the Commissioner in this particular case made a fairly lengthy order is of no particular importance as it is obvious that whenever any executive or administrative power is exercised by any authority it cannot be done without considering several matters which may appear relevant. No decision of any kind concerning human affairs can be made without some process of_ reasoning involving the consideration of several facts and the mere circumstance therefore that several facts were taken into consideration when a particular order was made cannot be a ground for holding that the order was judicial or quasi-judicial.
The learned Single Judge found that the only power the Commissioner of Income-tax had was under Section 33A of the Act as there was no other express provision enabling him to make any order. As I have already pointed out, such a power is implicit in other provisions of the Act and it was not sought to be maintained before us that without Section 33A such power could not be exercised and to the respondent himself some accommodation was afforded by the Inspecting Assistant Commissioner who has no express power either under Section 33A or any other Section of the Act.
The argument therefore that all the powers of the Commissioner of Income-tax are contained in Section 33A of the Act does not appear sound. The Income-tax Commissioner is charged with the duty of administering the Act and has therefore administrative power to show latitude to deserving assessees and when therefore he did so in the present case he was in my opinion merely exercising his administrative or executive power and he did not decide any matter in a judicial or quasi-judicial capacity, This court has therefore no jurisdiction to interfere. On this finding alone the rule issued in this case should in my opinion be discharged.
6. The alternative argument put forward by Mr. Sikri was that assuming for a moment that the act of the Commissioner was a quasi-judicial act, it should be held in view of the nature of the act that the Commissioner had continuing jurisdiction over the matter and could in altered circumstances recall the order.
Mr. Sikri pointed out in this connection that if the view adopted by the learned Single Judge were to prevail, it would come to this that once a Commissioner of Income-tax agrees to extend time for payment of income-tax, he cannot subsequently modify that order, although he may in view of pressing circumstances be of opinion that the asses-see deserves further extension of time or some other kind of latitude.
It is admitted that the concept of continuing jurisdiction is known to the law and there axe matters which by their nature demand that the authority concerned should have power to vary and modify orders previously made in exercise of such jurisdiction. The rule is based on public convenience and it seems to me that extending time for payment of income-tax or granting instalments are such matters about which the competent authority must be deemed to have continuing jurisdiction.
A contrary, view would lead to considerable inconvenience. It may occur for instance that a particular time the Income-tax Commissioner may think that instalments should not be granted to a particular assessee and the Commissioner may therefore refuse the request, but in altered circumstances lie may think that instalments should be granted, but if it be that having declined the matter once he has no power of modifying his order, there would be no way of affording relief.
Mr. Gosain for the respondent when faced with this situation admitted that the Income-tax Commissioner having once extended time for payment of income-tax would even subsequently be entitled to extend it still further and possibly entitled to grant instalments in a case in which he may have previously declined to do so. He maintained, however, that he has no power of curtailing his previous order because in that case he would really and truly be reviewing his own order which he is not entitled to do.
It is difficult to appreciate the distinction thus sought to be made. It can either be that the Commissioner having once exercised his power in respect of a matter is not competent to exercise the same power again or that he can continue to exercise the power and modify his previous order.
The reasonable view would seem to be the one advocated by Mr. Sikri and in my opinion it is the correct view to adopt. Even therefore if I were to hold that the act of the Commissioner was in its nature a quasi-judicial decision, I am not persuaded that he could not subsequently modify or recall it.
It is not of course competent for us to enter into the merits of the order to discover whether it was in the circumstances justified or not. It appears to me therefore that the order of the Income-tax Commissioner, against which the respondent is aggrieved, cannot be questioned in the present proceedings.
I would therefore allow this appeal and set aside the order of the learned Single Judge and dismiss the respondent's petition and discharge the rule, but considering the circumstances leave the parties totheir own costs, throughout.
7. I agree.