M.L. Jain, J.
1. The facts of this writ petition appear to be that the petitioners Bombay Decide and General Agencies, Alwar are a partnership firm whose partners are Narpendra Singh Jain at present an Excise officer in Delhi and one Su an Chand Jain. The concern is managed by Satyendra Singh Jain who is an uncle of Narpendra Singh Jain. It is alleged that Shanti Prasad Jain, who is the husband of the sister of Satyendra Singh and aunt of Narpendra Singh Jain and is the managing director of the Aligarh Electric Supply Co.; Aligarh, sent Rs. 4,00,000/- in the last week of April, 1969, to the petitioners. The assessment of the income of the petitioners for the year 1973 74 was to be completed by the I.T.O. Alwar by the 31st March, 1976, as required by Section 153 of the Income tax Act, 1961. It was claimed that these Rs. 4,00,000/- were kept in the home chest account and were received as a guarantee mone from the Aligarh firm for supply of stores material to the said Aligath from in expectation of orders It was further alleged that this amount was returned on 30-3-71 by the petitioners to Shanti Prasad Jain who is said to have passed a receipt on the same day to the petitioners. This return of money was rot believed by the I.T.O. and on 1-3-76 the I.T.O. issued a letter to the petitioners that this money was utilised by them in some profit earning activity resulting in an alleged profit at the rate of 15 percent By his latter dated 8-3-76, the I.T.O. however proposed to apply a rate of 25 percent on the utilised on of the funds of said Rs. 4 00,000/-.
2. By hip draft assessment order prepared under Section 144B On. 29.3.76, the I.T.O. proposed that the rate of 15 percent shall be substituted by 25 percent because in these times business men are able to earn a net profit even after raising loans bearing interest at the rate of 12 percent to 18 percent. The petitioner were earring much more profiles on their investment. The profits calculated by him thus were increased from Rs. 21 260/- to Rs. 1,92,027/-. The I.T.O. prepared a draft assessment order and sent it to the petitioners on 29.3.76. In his forwarding letter the I.T.O. invited objections from the petitioners on the proposed draft under Section 144B.
3. The I.T.O. forwarded the draft order to the Inspecting Assistant Commissioner, who by his letter dated 19-4-76 wrote to the petitioners to put forward their view point and to show cause why directions prejudicial to them be not issued by him; the directions being in the matter of disposal of the points referred to in the draft assessment order. The petitioners were requited to respond to the letter personally or through the duly authorised representative or by a letter in writing by 10 a.m. on 7576 at his camp office Alwar. Since the Inspecting Assistant Commissioner could hold his cam at Alwar On. 7.5.76, be asked the petitioners to file a written statement in his office at Jaipur by 10-5-76 He also expressed his willingness to come to Alwar in case the petitioners wanted to have the matter decided in Alwar.
4. On 94.6.76 the petitioners, however, filed the writ petition praying therein that the I.T.O. and the Inspecting Assistant Commissioner be directed not to proceed with the impugned proceedings under Section 144B initiated by the aforesaid draft assessment order dated 29 3 76 and the aforesaid two notices issued by the Inspecting Assistant Commissioner and that the draft assessment order and the aforesaid two notices be quashed. They also prayed for a writ of certiorari for quashing of the proceedings for the assessment year 1973-74. They further prayed for a writ of prohibition against, the respondents to forebear from giving any effect to or from taking any step in pursuance of the proceedings for the assessment year 1973 74.
5. The main grounds on which the aforesaid prayers are sought in this writ petition are:
(1) The ITO raised the estimated profits from Rs. 21,260/-to 1,92,027/- in order to clutch at jurisdiction under Section 144B because he can act under that Section only if there is variation in the income which exceeds an amount of Rs. 1 00,000/- fixed by the Board under Sub-Section (6) of Section 144B In order to bring his act within the mischief of Section 144B, the I.T.O. proposed to make an addition of Rs. 1,92,027/-. It was a malafide act on his part. This was being done in order to get over the limitation of two years fixed by Section 153 Income tax Act within which period the assessment must have been completed
(2) ID arriving at the rate of 25 percent upon the aforesaid amount of Rs. 4 00,000/-, the I.T.O. acted upon conjectures, suspicion and surmises. He had no material and certainly no proper material before him and applied a rule of thumb.
(3) Through out the proceedings taken by the ITO under Section 144B, the I.T.O. was guided, directed and in fact instructed at every stage of the proceedings by the Inspecting Assistant Commissioner, who inspite of being a superior and impartial authority as contemplated by the Act, is alleged to have done the drafting of all the material letters and some of them had even been typed in his office at Jaipur. The I.T.O. was only a name lender and surrendered his judicial functions to the will of the Inspecting assistant Commissioner. As a matter of fact the I.T.O. abdicated his jurisdiction in favour of the Inspecting Assistant Commissioner and that has vitiated all his proceedings.
(4) The Inspecting Assistant Commissioner having developed a bias against the petitioners in the aforesaid manner has disentitled himself to issue any demotions to the ITO prejudicial to the petitioners under Section 144 B.
6.The learned Counsel for the petitioners has cited the following rulings to support his aforesaid contention; namely; Madhya Pradesh Industries v. Income tax Officer : 57ITR637(SC) , Lai Chand Bnagat Ambics Ram v. Commissioner of Income-tax Bihar and Orissa (1959) 37 I.I.R. 288 and Narayan Das Kedar Nath v. Commissioner of Income-tax : 22ITR18(Bom) . The substance of these cases is that the Income-tax authorities cannot act upon mere surmises, contactors and suspicions, nor can they issue notices just by way of a fishing inquiry without any material before them.
7. In Union of India v. Shiv Shankar Sita Ram : 95ITR523(All) it was observed that the assessment proceedings are judicial in nature. An officer or authority upon whom jurisdiction has been conferred to make an order judicially has t& act independently. He cannot act on the advice given by an out sider even though that stranger may be an authority higher in rank.
8.In Dinshaw Darabshaw v. Commissioner of Income-tax Officer acts in quasi judicial capacity and he ought to conform to the more elementary rule of judicial procedure and in particular to conduct the case himself & allow some body esle even his superior-officer to take the conduct of proceedings out of his bands.
9. Commissioner of Police v. Gordhan Das : 1SCR135 and State Ram Joshi v. State of Rajasthan 1970 R.L.W. 256 were further relied upon in this connection.
10. I have considered all aspects of this case and it appears to me that the writ petition is far too early for the purpose of invoking the extra-ordinary jurisdiction of this Court under Article 226 and 227 of the Constitution. The provisions of Section 144B are that the I.T.O. is empowered to act under that Section notwithstanding anything contained in the Act. Therefore, the draft assessment order proposed by him cannot be considered a malafide attempt to clutch at jurisdiction which be does not possess. In his detailed draft order the to has coma to the tentative conclusion that the amount of Rs. 4,00,000/- received by the petitioners, was not in the nature of a guarantee money as claimed by the petitioners and he disbelieved that a businessman will keep Rs. 4,00,000/- uncared for in an unsecured, unguarded place in a home chest and not utilise the same for purposes of profit earning activity. The petitioners have got ample opportunity to show to the Inspecting Assistant Commissioner that the tentative conclusions to which the Income-tax officer has arrived were merely conjectural and baseless, before any prejudicial order is passed against the petitioners. It appears to me that prima facie there was enough material before the I.T.O. which he has elaborately discussed In his long drafted order to allow him to come to a tentative conclusion that the firm should hive earned the profits at the rate of 25 percent on the aforesaid sum of Rs. 4,00,000/-. Indeed the receipt passed by Shanti Prasad Jain on 30.3.71 was also liable to be rejected in view of several circumstances detailed by the I.T.O. in his order. Merely because the Inspecting Assistant Commissioner afforded guidance to the ITO as to how to proceed in the matter under Section 144B, ail) not amount to saying that the ITO was acting malafide or under the influence of a superior officer in the exercise of his quasi judicial functions.
11. As regards the allegation that the Inspecting Assistant Commissioner was biased against the petitioners, it will be a case for asking the Commissioner of Income-tax or the Board under Section 127 of the Income-tax. Act to transfer the case to some other I.T.O or to some other Inspecting Assistant Commissioner. The learned Counsel for the petitioners has an objection in this respect to make. He cited U.P. State v. Mohammed Noor : 1SCR135 wherein it was observed that the fact that the aggrieved party has another adequate remedy may be taken into consideration by the superior court in arriving at a conclusion as to whether it should in exercise of its discretion issue a writ of certiorari to quash the proceedings and decision of inferior courts subordinate to it. Ordinarily, the superior court will decline to interfere until the aggrieved party has exhausted its statutory remedies if any. But this rule requiring exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a rule of law. The existence of other legal remedies is net per se a bar to the issue of writ of certiorari and in a proper case a may be the duty of the superior court to if sue a writ of certiorari to correct the errors of an inferior court or tribunal called upon to exercise judicial or quasi-judicial functions and not to relegate the petitioner to other legal remedied available to him If the inferior court or tribunal by discarding all principles of natural justice and all accepted rules or procedure arrives at a conclusion which shocks the sense of justice and fair play or if the inferior court or tribunal acts wholly without jurisdiction or patently in excess of jurisdiction or manifestly conducts the proceedings in a manner which is contrary to the rules of natural justice and all accepted rules of procedure which offends the superior court's sense of fair play, the superior court may, quite properly exercise its power of issue the prerogative writ of certiorari to correct the error of the court or tribunal of first instance. It was urged that it being a case of lack ct jurisdiction and the draft order having been made in violation of principles natural justice in as much the ITO prepared the draft order on the basis of guess work, imagination, conjectures, suspicion and surmises, it was not necessary for the petitioners to apply for transfer or the case or to await the assessment order but they have a right to request this Court to issue proper writ of direction for quashing the draft order and resultant proceedings.
12. It was also submitted that in Ajanta Industries v. Central Board of Direct Taxes : 102ITR281(SC) transfer of a case was disfavored because the case was likely to be heard in a place different from the usual place of residence or office where ordinarily assessments are made and a great deal of inconvenience and even monetary loss is likely to be involved.
13. I have considered the matter and it now appears tome that there being more than one I.T.O. and more than one Inspecting Assistant Commissioners in Jaipur Range, there will be no such difficulty as aforesaid if a transfer of the case is asked for and allowed. I have not been able to find even prima facie that the I.T.O. was acting without jurisdiction in preparing the impugned draft assessment order nor does it appear to me that any principles of natural justice has been violated nor anything has been disclosed which can be said to be shocking to the conscience of this court. It also do not feel inclined to agree that in the circumstances so disclosed, the Inspecting Assistant Commissioner is biased against the petitioners. It is also clear that the petitioners bad not exhausted all the statutory remedies available to them.
14. Considering all the facts and circumstances and arguments in the case, I do not consider it a fit case for invoking the extraordinary jurisdiction available to this Court under Articles 226 and 227 of the Constitution. The petition is accordingly dismissed summarily.