This is petition under articles 226 and 227 of the constitution of India, paying for (i) write, order to direction in the nature of mandamus or toherwise directing the respondents to revise the assessment order for 1944-45 assessment year in consequence of the findings in the assessment order of February, 1954, and (ii) writ, order to direction in the nature of mandamus of toherwise directing the respondents to refund the sum of Rs. 15,224 plus interest thereon since 1945. The petitioner has imp leaded the Income-tax Officer, B/III District, New Delhi, the Commissioner of Income-tax, Delhi, and the Secretary, Central Board of Direct Taxes, New Delhi, as respondents in this petition. The petitioner in his petition states that during the financial years 1943-44 and 1944-45, the petitioner derived his income mostly from contracts and he undertook the contract of construction of W. A. C. quarters at Lytton Road, New Delhi; the work for construction of the said quarters was started on November 4, 1943, and was completed some time in May, 1944; during the time when the work as in progress, the petitioner received part of the payments in the financial year 1943-44, relevant to the assessment year 1944-45, and the remaining in the financial year 1944-45, relevant to the assessment year 1945-46; on January 25, 1945, the Income-tax Officer, Contractor Circle, New Delhi, made an assessment of the petitioner for the assessment year 1944-45, but as some of the income was relevant to construction work which was nto completed, the said assessment was made on tentative basis subject to adjustment in the year when the construction was completed; in pursuance of the aforesaid order a sum of Rs. 20,348-5-0 was paid as tax in March, 1945, by the petitioner; against this order, the petitioner preferred appeals before the Appellate Assistant Commissioner and the Income-tax Tribunal, but the same were dismissed. The only point raised by the petitioner in these appeals was that the rate of 18% applied by the Income-tax Officer was excessive and according to the petitioners estimate, the rate of profit should be 10% only.
The petitioner, thereafter, states that the contracts had been completed and after that the final assessment in respect of the said contracts carried out in the financial years 1943-44 and 1944-45 was in the first instance made in February, 1949, by the Income-tax Officer, fixing the petitioners ttoal income at Rs. 55,403, and on appeal, the Appellate Assistant Commissioner, by his order dated June 27, 1950, quashed the aforesaid order and directed the Income-tax Officer to make a fresh assessment. According to the petitioner, thereafter the produced his account books and toher relevant documents before the Income-tax Officer and the said Income-tax Officer some time in February, 1954, completed the fresh assessment, according to which the petitioners profit from the entire contract work was found to be about Rs. 4,119 and, according to the Income-tax Officer, a part of this profit was accountable in 1944-45 assessment. According to the petitioner, the Income-tax Officer apportioned the said profit of Rs. 4,119 as follows :
For 1944-45 assessment
For 1945-46 assessment
The petitioner further states that after the assessment had been completed, he became entitled to a ttoal refund of about Rs. 20,000, being the sum which he had paid regarding the disputed assessment, comprising of about Rs. 4,000, on account of excess profits tax and Rs. 16,000, as income-tax. On November 16, 1954, he was actually given a refund of Rs. 4,049 by the Excess Profits Tax Officer, but instead of refund of Rs. 16,000 as income-tax being made, the petitioner finally received a ntoice under section 22(4) of the Income-tax Act from the Income-tax Officer in September, 1956, calling upon him to produce his account books for the assessment year 1945-46 on the 15th of October, 1956. After correspondence between the petitioner and the Income-tax Officer, the petitioner filed Write Petition No. 469-D of 1957 challenging the jurisdiction of the Income-tax Officer to take any further proceedings on the ntoice under section 22(4) of the Act on the ground that the assessment for the year 1945-46 had already been completed in February, 1954. The judgment of a Bench of Punjab High Court at Delhi in the said writ petition is reported as S. Sewa Singh Gill v. Commissioner of Income-tax. According to the petitioner, the High Court in that case decided that the assessment order of February, 1954, for the assessment year 1945-46 was the final assessment order and the issue of fresh ntoices under section 22(4) of the Act to the petitioner was illegal. It may be stated that it is this judgment of the High Court which provided the basis for the petitioner to file the present writ petition.
Before I consider the contention of the petitioner in this writ petition, it is desirable to mention certain facts as borne out by the records. As I pointed out already, for the assessment year 1944-45, the Income-tax Officer passed an order of assessment purporting to be under section 23(2) of the Indian Income-tax Act, 1922, on January 25, 1945. The relevant portion of the assessment order is as follows :
&quto;I have discussed the case with the assessed under section 23(2). He held contracts for quarters on Lytton Road and the works were still in progress on March 31, 1944, and were completed some time in June or July, 1944, but certain payments have still to be received. In the previous year ttoal receipts were Rs. 1,65,638. Material such as bricks, cement and timber etc., is supplied by Government whose cost has been deducted from the bills. The assessed has gto no data available at the moment. He says when the final payments are received he will prepare a trading account and also collect the information about the cost of material supplied by Government. At the moment ttoal receipts in the previous year have been offered for assessment at a tentative rate subject to adjustment in the year of completing the work when proper trading accounts are prepared. He keeps rocker and khato, etc. I estimate at assesseds suggestion, cost of material recovered by Government with reference to ttoal receipts of Rs. 1,65,638, at Rs. 80,000. This will give ttoal estimated receipts of Rs. 2,45,638. He says that his tenders are one or two per cent. below the schedule rate. This will be looked into next year, when completed trading is presented. I estimate profit tentatively at a net rate of 18% Rs. 44,214.&quto;
It will be seen from this order that the petitioner offered the amount received by him during the accounting year for assessment and he himself has returned the income as 10% of the amount received by him. What the Income-tax Officer did was to add to the amount returned by him the value of the material which went into the construction during the accounting year and then apply 18% instead of 10% on that amount for arriving at the profits of the petitioner for the assessment year in question. The petitioner challenged the percentage of 18% as well as the addition of Rs. 80,000, representing the cost of materials, in his appeals before the Appellate Assistant Commissioner as is borne out by the order of the Appellate Assistant Commissioner, dated November 10, 1945. Further, an appeal to the Income-tax Tribunal also failed and the Tribunal had stated as follows :
&quto;The assessed is a building contractor. He took some building contracts from the Government in the year of account. The contract were nto completed till some time after the close of the year of account. Some building material was supplied by the Government to the contractor. After deducting the cost of such material, which amounted to about Rs. 80,000, the net payments received by the assessed in the year of account amounted to Rs. 1,65,638. The assessed returned a profit by estimating it at 10% of the actual payments received from the Government. The Income-tax Officer applied at flat rate of 18% on Rs. 2,45,638. This figure includes the deductions made for the supply of material to the contractor. There is no dispute as regards the application of the proviso to section 13 as the assessed himself estimated his profit at 10%. The only ground urged is that the estimate made by the Income-tax Officer is excessive. We agree with the Income-tax Officer that the ttoal contract work done by the assessed for which he received the payments was of the value of Rs. 2,45,638, and nto Rs. 1,65,638. No case has been made out by the representative of the assessed that the estimate made by the Income-tax Officer was excessive or arbitrary. We are satisfied that considering the market conditions prevailing at the material time the estimate made is fair and reasonable. The appeal is dismissed.&quto;
From this it will be seen that the rate of profits as well as the ttoal receipts on which the rate was applied for arriving at the profits were the subject-matter of appeals before the Appellate Assistant Commissioner as well as the Tribunal.
What happened with regard to the assessment year 1945-46 is fully set out in the judgment of a Bench of the Punjab High Court in S. Sewa Singh Gill v. Commissioner of Income-tax, already referred to. It will appear from that judgment that after the Appellate Assistant Commissioner remanded the matter concerning the assessment year 1945-46, the Income-tax Officer inquired into the matter and prepared a draft order in February, 1954, though it was nto signed by him and dated by him. The question before the High Court was whether that unsigned and undated order could be said to be the final order of the Income-tax Officer in relation to the assessment year 1945-46. The Bench of the Punjab High Court in that case came to the conclusion that the said draft order was in effect the assessment order and consequently, issuing further ntoice under section 24(4) of the Act to the petitioner was illegal. I am told by the counsel appearing for buth the sides that the said judgment is the subject-matter of an appeal pending before the Supreme Court.
The point that has been urged before me is that since the Income-tax Officer has in his assessment order for the Year 1945-46 made in February, 1954, arrived at a ttoal profit for the entire contract at Rs. 4,119 and has apportioned only sum of Rs. 1,818 as profits for the assessment year 1944-45, it is the duty of the Income-tax Officer to revise the assessment made by him on January 25, 1945, for the assessment year 1944-45 and to substitute the figure of Rs. 1,818 in the place of Rs. 44,214, arrived at as profits for the assessment year 1944-45.
In the commencement of his argument, the learned counsel for the petitioner sought to sustain clime on two alternative bases. The first basis was that ntowithstanding the fact that the Income-tax Officer in the original order of assessment purported to act under section 23(3) of the Income-tax Officer Act, 1922, he must be deemed to have acted only under section 23B of the Act, and consequently, he was bound to make a regular assessment and that regular assessment, in the circumstance that have happened subsequently, is to arrive at the profits at Rs. 1,818. This argument was based upon the use of the expansion &quto;tentative&quto; occurring in the order dated January 25, 1945. Once the learned counsel for the petitioner realized that section 23B itself was nto in the statute book on the date when the order was passed and was introduced only in 1949, he gave up that contention. Thereafter, his only contention was that after the order was passed in February, 1954, determining the profits relevant for the year 1944-45 as Rs. 1,818, it was the duty of the Income-tax Officer to proceed under section 35 of the Act and to revise the order already passed by him on January 25, 1945. In reply to this contention, Shri D. K. Kapur, Appearing for the respondent submitted that the assessment order dated January 25, 1945, has been made the subject-matter of appeals before the Appellate Assistant Commissioner as well we the Tribunal and the petitioner cannto ask the Income-tax Officer to revise the order passed by him on January 25, 1945, in view of the express provisions contained in section 35(1) and (2) of the Indian Income-tax Act, 1922. Section 35(1) provides that the Commissioner or the Appellate Assistant Commissioner may, at any time within four years from the date of any order passed by him in appeal or, in the case of the Commissioner, in revision, under section 33A, and the Income-tax Officer may, at any time, within four years from the date of any assessment order or refund order passed by him on his own mtoion rectify any mistakes apparent from the record. Sub-section (2) states that the provisions of sub-section (1) will also apply in like manner to the rectification of mistakes by the Appellate Tribunal. The contention of Shri Kapur is that after the matter has been taken up with the Appellate Assistant Commissioner having merged in the Tribunals order. Consequently, if any revision or rectification is to be made, that has to be made only by the Tribunal with reference to its order. The further contention of Shri Kapur was that a writ of mandamus cannto be issued to revise or rectify the order already passed for toher reasons as well. One reason was that the petitioner cannto say that the statute has imposed an obligation on the authorities concerned to revise the order already passed. The second reason was that the statute expressly provides for a period of limitation of four years for taking action under section 35 and that period having already expired, it is nto now open to the petitioner to ask for a revision to rectification of the order. With regard to the last two contentions, Shri Kirpal, appearing for the petitioner, contended that the power of the authorities under section 35 is a power coupled with a duty, and consequently, a writ of mandamus will lie. He further contended in the circumstances of the case, he could nto have at any stage approached any of the authorities within the period of four years. He pointed out that the assessment order was completed on January 25, 1945, and the assessment order for the subsequent year which gave him the opportunity and the right to ask for a revision was passed in February, 1954, that is, after the expiry of the period prescribed by the statute and because of this he ought nto to be denied the ought which he had under the statute. His argument is that the petitioner is nto responsible for the expiry of the period since the Income-tax Officer himself completed the assessment for the subsequent year only after the expiry of the period and a person like the petitioner can be denied relief only if there has been inaction or latches or delay on the part of the petitioner and when the petitioner cannto be said to be guilty of any such thing, he cannto be denied the relief to which he is entitled. In support of his contention that ntowithstanding the expiry of the period prescribed for the performance of a duty by a public officer, still it is open to the court to issue a writ of mandamus to the said public officer asking him to perform the duty, he relied upon a passage in Halsburys Laws of England, 3rd edition, volume II, page 91, paragraph 172. The passage is to the following effect :
&quto;If public officer or a public body fail to perform any public duty with which they have been charged, an order of mandamus will lie to compel them to carry it out, even though the time prescribed by statute for the performance of the duty may have passed.&quto;
This statement of law is based upon a decision in R. v. Revising Barrister for the Borough of Hanley.
In view of the conclusion I have come to regarding the first point based upon the merger of the orders of the Income-tax Officer had the Appellate Assistant Commissioner in that of the order of the Appellate Tribunal, it is unnecessary for me to express any final opinion on the toher points canvassed before me.
With regard to the first point of merger, Shri Kirpal contended that this particular aspect was nto the subject-matter of appeal before the Appellate Assistant Commissioner and the Tribunal, and, thereforee, there had been no merger. According to the learned counsel, the Income-tax Officer, while completing the assessment for the year 1944-45, decided three things :
(i) He had to apply a tentative rate for arriving at the profits.
(ii) That tentative rate should be 18%.
(iii) That tentative rate of 18% should be applied on the sum of Rs. 2,45,638.
What was the subject-matter of the appeal before the Appellate Assistant Commissioner and the Appellate Tribunal were only the last two matters and nto the first one. In support of this contention, he relied upon two decision, viz., Central Indian Insurance C. Ltd. v. Income-tax Officer, A-Ward, Indore and Kalooram Tirasilal v. Income-tax Officer, C-Ward, Jabalpur. In the case of the Central Indian Insurance Co. Ltd., after the matter had been taken in appeal from the order of the Income-tax Officer, the Appellate Assistant Commissioner exercised the power under section 35 of the Indian Income-tax Act, 1922, and he restricted losses allowed to be carried forward and set off originally, to those incurred in the taxable territories. As a matter of fact, there was an appeal against the original order of the Appellate Assistant Commissioner to the Tribunal and the appeal before the Tribunal was by the assessed and the same was directed against the disallowance of a sum of Rs. 20,385. Under these circumstances, the question that arose was whether the Appellate Assistant Commissioner could exercise the power under section 35 of the Act when the matter had been taken in appeal to the Appellate Tribunal. A bench of the Madhya Pradesh High Court held that on the facts of that case, the Commissioner had jurisdiction. The Bench observed as follows :
&quto;In this view of the matter, the decision of the Appellate Assistant Commissioner that the losses of the earlier years should be allowed to be carried forward and set off against the income for the assessment year 1950-51 which was nto in fact the subject-matter of further appeal and was nto actually considered in that appeal, could nto be regarded as having been adjudicated upon by the Tribunal by implication and so having merged in the Tribunals order.&quto;
The learned judges further observed that the jurisdiction of the Tribunal was confined to dealing with the subject-matter of the appeal and the subject-matter of the appeal was constituted by the grounds of appeal preferred by the appellant. In Kalooram Tirasilal case, for the assessment year 1956-57, the Income-tax Officer had rejected the Explanationn of the assessed in regard to an item of cash credit in its account books and treated a sum of Rs. 40,000 as income from undisclosed sources and added to this the income of the assessed from the registered firm, from house property and from business; and the business loss carried forward from the assessment year 1955-56 was set off against the ttoal. On appeal, the Appellate Assistant Commissioner reduced the quantum of income from undisclosed sources to Rs. 30,000. The matter was taken up in further appeal to the Tribunal. When the appeal was pending before the Tribunal, the income-tax Officer initiated proceedings under section 35 of the Income-tax Act, 1922, and rectified the assessment on the basis that the sum of Rs. 30,000 having been treated as income from undisclosed sources and nto as business income, the assessed was nto entitled to set off the business losses of the assessment year 1955-56 against that sum. It was to quash this order of the Income-tax Officer under section 35 of the Act, a writ petition in that case was filed. One of the points urged against the order of the Income-tax Officer was that since the matter had been taken in appeal to the Appellate Assistant Commissioner, the Income-tax Officer had no jurisdiction to proceed under section 35 of the Act. The learned judges held that the Income-tax Officer had jurisdiction to pass the order in question. The learned judges observed as follows :
&quto;The Income-tax Officers jurisdiction to rectify the mistake under section 35 is nto taken away because of these appeals for the reason that the question whether the business loss of the earlier year could or could nto be set off against income from an undisclosed source was nto in fact the subject-matter of the appeal preferred before the Appellate Assistant Commissioner. So far as this court is concerned, this point is concluded by the decision in Central Indian Insurance C. Ltd. v. Income-tax Officer, A-Ward, Indore.&quto;
Relying upon these decisions, Shri Kirpal argued that the fact that the appeal was preferred to the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal in this case cannto debar the Income-tax Officer from proceeding under section 35 of the Act and from substituting the sum of Rs. 1,818 against Rs. 44,214 originally determined as profit in the assessment order dated January 25, 1945. It is to support this contention that the learned counsel referred to the three features said to form part of the order of the Income-tax Officer, already enumerated, and said whether a tentative rate should be applied or nto was nto the subject-matter of the appeal either before the Appellate Assistant Commissioner or before the Tribunal. I may point out here that the grounds of appeal either before the Appellate Assistant Commissioner or before the Tribunal were nto produced before me, and consequently, I have to derive the scope of the appeal before the Appellate Assistant Commissioner and the Tribunal only from the relevant orders. From theses orders, there is no indication whatever that anything was left out from the subject-matter of the appeals before the two authorities concerned. In my view, the order of the Income-tax Officer, dated January 25, 1945, had to deal with three aspects :
(i) the liability of the petitioner to be assessed for that year even though the contracts taken by him were nto completed during that year;
(ii) the liability of the petitioner to be assessed on the ttoal amount received by him plus the estimated cost of materials; and
(iii) the percentage to be applied on the ttoal amount for the purpose of estimating the profits of the petitioner for the relevant year.
As far as the first aspect is concerned, I must proceed on the basis that when the petitioner offered to be assessed at the rate of 10% on Rs. 1,65,638, be had admitted his liability to be taxed for that year. As a matter of fact, in view of the decision of the Patna High Court in Sri Sukhdeodas Jalan v. Commissioner of Income-tax, there could nto be any dispute or doubt about the liability of the petitioner to be assessed for that year and as a matter of fact, the learned counsel for the petitioner did nto dispute that liability. Once this is excluded, what remained were the ttoal receipts and the rate to be applied with reference thereto for arriving at the profits of the year. buth the ttoal receipts as well as the rates to be applied for arriving at the profits were the subject-matter of the appeals before the Appellate Assistant Commissioner and the Tribunal and the learned counsel for the petitioner admitted this position. In view of this, I am of the view that the two decisions of the Madhya Pradesh High Court relied upon by the learned counsel for the petitioner cannto be of any assistance to him. On the facts of this case, the assessment proceedings could nto be cut into pieces as to there being a decision first to apply a tentative rate and then to have that tentative rate at 18% and then to apply that tentative rate of 18% on a tentative figure of Rs. 2,45,638. On the facts and circumstances of this case, there is no escape from the conclusion that the ttoal receipts on which the rate has to be applied for arriving at the profits and the percentage that has to be applied for arriving at the profits, were the subject-matter of the appeals before the Appellate Assistant Commissioner and the Tribunal and when the petitioner now wants a sum of Rs. 1,818 to be substituted for a sum of Rs. 44,214 as profits for the year relevant for the assessment year 1944-45, he clearly wants the rectification to be made in the order which ultimately culminated or resulted in the order of the Tribunal. In view of this, I am of the opinion that the only order that could be rectified is permissible, is the order of the Tribunal and the Tribunal alone by virtue of the provisions contained in section 35(2) of the Act is competent to rectify and the Income-tax Officer has no jurisdiction to rectify his own order dated January 25, 1945, which had merged in the order of the Appellate Assistant Commissioner and that of the Tribunal. Under the circumstances, a writ commanding the Income-tax officer to rectify his order, dated January 25, 1945, under section 35 cannto be issued.
The learned counsel for the petitioner frankly admitted that in view of the provisions contained in section 48 of the Income-tax Act, 1922, he is nto straightaway entitled to a writ of mandamus for the refund of the amount as prayed for by the petitioner since before he can claim a refund, there must be an order passed by a competent authority by virtue of his statutory power to the effect that refund was due to the assessed.
No toher point was urged before me. In the view I have already expressed this writ petition fails, and is accordingly dismissed. However, there will be no order as to costs.