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T.A. Rajendran Vs. Commissioner of Income-tax and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKerala High Court
Decided On
Case NumberO.P. No. 271 of 1984
Reported in[1987]163ITR231(Ker)
AppellantT.A. Rajendran
RespondentCommissioner of Income-tax and ors.
Appellant Advocate A.X. Varghese and; Thomas Chazhukkaran, Advs.
Respondent AdvocateStanding Counsel for respondent No. 1
Cases Referred(See Barrs v. Bethell
.....226 of constitution of india - income tax raid - assessee used his influence and got investigating officer transferred - petition challenging validity of transfer in public interest - facts and material furnished were not sufficient to establish existence of extraneous consideration in transfer - material produced not sufficient to prove malafide exercise of power - held, transfer valid. - - the petitioner asserted :the transfer of file as well as of the 2nd respondent were made in order to spoil the enquiry so as to give a clean chit to 3rd respondent who is having fiscal and amorous connection with the 4th respondent. the commissioner by his communication dated august 4, 1983, recommended his request and suggested the appointment of shri k. it cannot be assumed, without more, that..........the 1st respondent, the commissioner of income-tax to retain the 2nd respondent--k.r.k. menon, the income-tax officer--'in his position as investigator and assessor against the 3rd respondent'. the 3rd respondent is described as p. n. sankara-narayanan, partner, m/s. p. k. nanu ezhuthassan & sons, west fort, trichur. shri. k. karunakaran, the hon'ble chief minister of the government of kerala, is the 4th respondent.2. according to the petitioner, there have been proceedings by the income-tax authorities, including a raid, against the 3rd respondent. exhibits p-3 and p-4 are the letters exchanged between the 3rd respondent and the income-tax officer. under exhibit p-3 dated november 30, 1983, the 3rd respondent wanted a copy of the statement taken from him by the department. on december.....

Sukumaran, J.

1. The editor of the newspaper 'Navab' filed this writ petition on January 10, 1984, seeking a writ of mandamus against the 1st respondent, the Commissioner of Income-tax to retain the 2nd respondent--K.R.K. Menon, the Income-tax Officer--'in his position as investigator and assessor against the 3rd respondent'. The 3rd respondent is described as P. N. Sankara-narayanan, Partner, M/s. P. K. Nanu Ezhuthassan & Sons, West Fort, Trichur. Shri. K. Karunakaran, the Hon'ble Chief Minister of the Government of Kerala, is the 4th respondent.

2. According to the petitioner, there have been proceedings by the income-tax authorities, including a raid, against the 3rd respondent. Exhibits P-3 and P-4 are the letters exchanged between the 3rd respondent and the Income-tax Officer. Under Exhibit P-3 dated November 30, 1983, the 3rd respondent wanted a copy of the statement taken from him by the Department. On December 3, 1983, the Department gave the reply pointing out that the statement sought for will be furnished on completion of the investigation. Exhibit P-2 is stated to be a copy of the representation submitted by the petitioner, before the Governor of Kerala, seeking an enquiry against the 4th respondent, the Chief Minister of the State. The representation, among other things alleged that the 4th respondent was aiding the 3rd respondent in amassing illegitimate wealth. Exhibit P-5 is a report in the Indian Express, dated January 8, 1984. It reports about the 2nd respondent having been 'shifted to a new desk in Trichur', and of another officer by name K. J. Anthappan having 'taken over Mr. Menon's responsibility including the Ezhuthassan affair.'

3. Wading through the pleadings in the writ petition, the petitioner's legal contention appears to be what is summed up in the following sentences :

'The shifting of the 2nd respondent from the assessment investigation was intentionally made by using the malevolent influence of the 4th respondent in the Union Government and the 1st respondent for the sole purpose of safeguarding the vested interests and suppressing the criminality of the 3rd respondent. The said transfer is an abuse of officialdom which will definitely hamper the fearless dispensation of official duties of Government servants. If the 4th respondent has not used his influence as the Chief Minister of the State of Kerala, the transfer of the 2nd respondent would not have taken place.'

4. On January 12, 1984, an additional affidavit was filed by the petitioner. Along with it, he filed another news item published in the newspaper 'Desabhi-mani' on January 11, 1984. That refers to a transfer of the income-tax file from Ward E, where it used to be handled, to Ward A. It is stated in this affidavit that the files ought to have been dealt with by Sri K. J. Anthappan if the object behind the transfer was to have a meticulous enquiry. The petitioner asserted :

'The transfer of file as well as of the 2nd respondent were made in order to spoil the enquiry so as to give a clean chit to 3rd respondent who is having fiscal and amorous connection with the 4th respondent.'

5. On January 12, 1984, the petition came up for preliminary hearing. As desired by me, counsel for the Income-tax Department offered to make available the relevant files so as to appraise the court about the correct situation. The files were so made available on January 17, 1984.

6. The matter was further heard on January 18, 1984. Counsel for the petitioner was informed then about the relevant facts discernible from the files. Further arguments were addressed on that day on behalf of the petitioner.

7. There is no reference in the writ petition to any of the relevant legal provisions or even of factual details disclosing the locus standi of the petitioner.

8. As noted earlier, the petitioner sought to make out that the transfer was being effected at the instance and due to the influence of the 4th respondent, who wields power in his capacity as the Chief Minister of the State. Whether, there is any basis for that assertion can be examined now.

9. It is seen from the files that Shri Anthappan had been working as Tax Recovery Officer from June 25, 1980, and that he had applied for a change to assessment work. The Commissioner by his communication dated August 4, 1983, recommended his request and suggested the appointment of Shri K. P. D. Nair as Tax Recovery Officer. This suggestion was accepted and a notification appointing Shri K. P. D. Nair as Tax Recovery Officer was seen to have been issued on November 18, 1983. It, however, transpires that in the meanwhile Shri K. P. D. Nair had been transferred to Bombay. On receipt of the notification of November 18, 1983, the Commissioner addressed a further communication on November 24, 1983, suggesting that Shri K. R. K. Menon may be appointed as Tax Recovery Officer. This recommendation appears to have been accepted by the Central Board of Direct Taxes and a notification dated December 19, 1983, appointing Shri K. R. K. Menon as Tax Recovery Officer was issued thereafter.

10. The facts and materials furnished by the petitioner are not sufficient to establish the existence of any extraneous considerations in the transfer and postings effected in the Department. It cannot be assumed, without more, that any pressure had been exerted by the 4th respondent on the Commissioner of Income-tax to bring about the transfers and postings complained of in the writ petition.

11. The note of the Commissioner contained in the file indicates that all the cases connected with M/s. Nanu Ezhuthassan and Sons have been transferred by the Inspecting Assistant Commissioner, Trichur, to the seniormost Income-tax Officer, Trichur Circle. Entrustment of an important assessment with the seniormost officer of the circle cannot normally be viewed with any suspicion.

12. I am also unable to accept the insinuation of the petitioner about a particular officer of the Department. It is to be expected that the officers will discharge their duties effectively and efficiently. The officers of the Income-tax Department carry with them a tradition and a reputation for their competence. The tradition is reflected in the oath which had been prescribed for their forerunners is office in England, under Section XXII of the then Income-tax Act there. The oath to be taken was :

'that I will judge and determine upon all matters and things which shall be brought before me under the said Act without favour, affection or malice .......'

13. Matters connected with the Income-tax authorities are dealt with under Chapter XIII of the Income-tax Act, 1961. They include power of the various authorities to transfer the cases or the officers, as exigencies require. The Supreme Court has indicated the dominant idea that should weigh with the authorities in effecting the transfer. The power of transfer is not an arbitrary one ; it is to be exercised for the more convenient and efficient collection of tax.

14. Ordinarily, complaints about transfer are made either by the assessees or by the officers. In the present case, no complaint has been made by any of the persons directly connected with transfer of the officers or the files.

15. In some situations, the courts have been reluctant to probe into complaints made against authorities without adequate investigation into the factual and legal aspects. Warner J. thus thought of providing a 'filter' to insulate such authorities which 'are particularly vulnerable to actions by busybodies and cranks'. (See Barrs v. Bethell [ 1982] 1 All ER 106 at P. 120). Although such restraint is desirable, the court should be careful not to shut out writ petitions projecting a public cause. Lord Scarman posed the question of locus standi in IRC v. National Federation of Self-employed and Small Business Ltd. [ 1981 j 2 WLR 722 (HL), and he answered (p. 747-748) :

'The courts have a role, long established, in the public law, They are available to the citizen who has a genuine grievance if he can show that it is one in respect of which prerogative relief is appropriate.'

16. The difficulties of the Crown would not deter a court in the discharge of that solemn duty. Continued, Lord Scarman, in very emphatic terms (p. 747) :

'I would not be a party to the retreat of the courts from this field of public law merely because the duties imposed upon the revenue are complex and call for management decisions in which discretion must play a significant role.'

17. Earlier, the learned Law Lord observed how 'the modern case law recognises a legal duty owed by the Revenue to the general body of the taxpayers to treat taxpayers fairly, to use their discretionary powers so that, subject to the requirements of good management, discrimination between one group of taxpayers and another does not arise ; to ensure that there are no favourites and no sacrificial victims.'

18. Whether there has been an act of favouritism or a harassing activity, on the part of the Revenue would, therefore, be within the legitimate area of enquiry for a court exercising extraordinary jurisdiction. In that sense, it would raise a question of public interest.

19. A public interest which was attempted to be projected by the writ petition persuaded me to ascertain the facts with reference to the files of the Department. The conclusion 1 have reached on the scrutiny thereof has been already indicated above.

20. Reliance had been naturally placed on a press report Exhibit P-5 in the 'Indian Express' of January 8, 1984, and another report in the 'Desabhimani' on a subsequent date January 11, 1984. Newspapers undoubtedly play a prominent and quite often useful role in the fight for public cause. The recognition of the power and influence of the press is perhaps reflected in the statement: 'It is the inveterate habit of British statesmen to listen with sensitive ears to the oracles from the Printing House Square.' (See 'The Prime Minister' by Harold Spender, page 253). In the adjudication of legal issues, extreme care and caution have necessarily to be exercised for acting upon the reports in the press. It may be that on occasions, the courts may draw on 'the ordinary experience of those who read newspapers at the present day' as did Lord Fraser of Tullybelton in the Sikh Boy's Turban's case. (See [1983] 2 WLR 620 at page 625). Referring to Law Lords of the House of Lords in that context, Lord Denning, in his latest book 'The Closing Chapter' made the following statement (see page 82) :

'I am tempted to suggest that if they do not read the newspapers, they must be sitting in an ivory tower. To my mind, that is not the right place for a judge to sit.'

21. As observed by Virginia Woolf, the daily paper is 'history in the raw'. I have considered the issues involved herein, bearing in mind the above aspects.

22. It is sufficient to note that the press reports are, in the circumstances of the case, inadequate to establish, even prima facie, a mala fide exercise of power by the 1st respondent-Commissioner of Income-tax. I dismiss the writ petition.

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