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Havukal Estate Company, Kotagiri Nilgiris Vs. Income-tax Officer, Circle I, Ootacamund - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberWrit Petn. No. 3225 of 1967
Judge
Reported inAIR1972Mad337
ActsIncome-tax Act - Sections 147; Constitution of India - Article 226
AppellantHavukal Estate Company, Kotagiri Nilgiris
Respondentincome-tax Officer, Circle I, Ootacamund
Excerpt:
- .....as the earlier officer allowed the deduction, the officer who took a different view for the later year or years cannot assume jurisdiction to issue a notice under section 147 of the income-tax act to reopen a closed assessment as if there was an escapement in it. this is opposed by the revenue on the ground that the respondent has jurisdiction to issue the notice and a writ of prohibition cannot issue at this stage as the petitioner cannot say that the respondent cannot enquire into the subject-matter for want of jurisdiction.2. i agree with the revenue. it cannot be said that this is a case which poses a total or complete absence of jurisdiction on the part of the officer to issue the notice challenged herein. obviously, as stated in the counter-affidavit, the income-tax officer who.....
Judgment:
ORDER

1. The petitioner took on lease a tea estate known as 'Rajarajeswari Estate' measuring about 54-41 acres for a period of ten years from its owners by lease deed dated 21st October, 1964. Inter alia the petitioner was obliged to pay a monthly rent to the owners in consideration of the lease obtained by him. In the year 1965-66 the petitioner claimed a sum of Rs. 13,364, amongst others as Revenue expenditure though this represented the annual rent paid by him to the landlords. This was accepted by the Income-tax Officer and by his order dated 24-2-1966, the rent was accepted as an allowable deduction. It is common ground that for the subsequent years the original Income-tax authority did not accept this amount paid by way of rent as Revenue expenditure and disallowed the expenditure and expressed the view that it ought to be disallowed. With this object in view, the respondent gave a notice dated 23-9-1967 calling upon the petitioner as to way the earlier order for the year 1965-66 should not be reopened as there was escapement of assessment while the assessment order was passed for that year. On receipt of this notice the petitioner has come up to this Court for the issue of a writ of prohibition stating that, as the earlier Officer allowed the deduction, the officer who took a different view for the later year or years cannot assume jurisdiction to issue a notice under Section 147 of the Income-tax Act to reopen a closed assessment as if there was an escapement in it. This is opposed by the Revenue on the ground that the respondent has jurisdiction to issue the notice and a writ of prohibition cannot issue at this stage as the petitioner cannot say that the respondent cannot enquire into the subject-matter for want of jurisdiction.

2. I agree with the Revenue. It cannot be said that this is a case which poses a total or complete absence of jurisdiction on the part of the Officer to issue the notice challenged herein. Obviously, as stated in the counter-affidavit, the Income-tax Officer who succeeded the earlier Officer was of the view that the allowance of the expenditure in the earlier year was wrong and that that matter required rescrutiny in view of certain decisions of the Supreme Court and other material. It was in such a situation that the respondent initiated the proceedings under Section 147(d) on the basis of information made available to him both on record and otherwise. That cannot be said to be an unreasonable attitude on the part of the respondent. Certainly, it cannot be said that the impugned notice was issued without jurisdiction. As a writ of Prohibition is one to interdict the exercise of jurisdiction and as the petitioner can succeed only if he establishes that in no circumstances such action by the respondent can be countenanced, such a writ cannot issue from this Court under Art. 226. In the instant case, it cannot be said with certainty that there is no material on which the Income-tax Officer has acted and this is not a case where the notice was issued without jurisdiction or without statutory authority. In these circumstances, the rule nisi is discharged and the writ petition is dismissed. No costs.

3. Writ petition dismissed.


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