Salil Kumar Datta, J.
1. This rule is directed against an order of the Commissioner, Presidency Division, dated December 29, 1971, whereby the order of the Tax Recovery Officer, Calcutta and 24-Parganas, dated August 28, 1971, was set aside with certain directions.
2. The facts as stated in the petition in short are as follows :
Bhimji Nathubhai was at the material time assessed in the jurisdiction of the Income-tax Officer, 'C' Ward, Dist. IV(3), Calcutta. The assessee was a partner of the firm, Nathubhai Odhavji & Co. and New Bihar Biri Leaves Co., Calcutta. On August 21, 1965, Bhimji Nathubhai died leaving his widow, Bai Muktaben Bhimji, and his sons as his heirs and legal representatives. Bai Muktaben Bhimji as the legal heir of the deceased made a voluntary disclosure on January 29, 1966, declaring the income of the deceased at Rs. 3,09,500. The said disclosure was accepted by the Commissioner of Income-tax, West Bengal III, and the acceptance was communicated to the Income-tax Officer, ' C ' Ward, District IV(3), Calcutta, on July 11, 1966. The Income-tax Officer issued a demand notice for Rs. 1,89,292 in the name of Bai Muktaben Bhimji as the legal representative of the deceased and on October 27, 1966, the assessee paid a sum of Rs. 18,929.
3. As the balance remained unpaid, the Income-tax Officer issued a certificate under Section 222(1) of the Income-tax Act, 1961, on March 21, 1968, in the name of Bai Muktaben Bhimji for Rs. 1,98,136 which included Rs. 27,772 as interest under Section 220(2) of the Act. Thereafter, a sum of Rs. 20,000 was paid leaving a balance of Rs. 1,78,136 due. The Income-tax Officer, thereafter, communicated to the Tax Recovery Officer the names of the opposite parties as the legal heirs and representatives of the deceased assessee, informing that about Rs. 4 lakhs was due to the deceased from the firms mentioned above. The Tax Recovery Officer was further requested to proceed with the recovery of arrear taxes on the basis of the information furnished.
4. Thereafter, the Tax Recovery Officer issued notice of demand to each of the four legal representatives mentioned above. The opposite party No. 1objected to the said action and such objection was considered and rejected by the Tax Recovery Officer. It was held that the notice of demand under the Income-tax Act, 1961, for the assessment year 1965-66 and the notice of demand under the Finance (No. 2) Act of 1965 were in respect of separate and distinct liabilities and as such it could not be said that the latter demand was wiped out by the other demand. The next objection related to the authority of Bai Muktaben to make the disclosure in respect of the deceased and it was held that in view of Section 224 of the 1961 Act, the Tax Recovery Officer was not entitled to enter into the correctness of the assessment made by the Income-tax Officer. For the same reason, the jurisdiction of the Commissioner could not be assailed. The petition of objection of the opposite party No. 1 was, accordingly, dismissed by order dated August 23, 1971.
5. Against this order, an appeal was preferred by the opposite party No. 1 before the Commissioner, Presidency Division, who held that as the opposite party No. 1 was not served with any notice earlier, depriving him of the recourse to appeal to the prescribed authority, the order of the Tax Recovery Officer accordingly could not be sustained which was accordingly set aside. Liberty was given to the officers of the income-tax department to assess the amount payable by the appellant after giving the opposite party No. 1 due opportunity for hearing as authorised by law. The appeal was accordingly allowed. This rule as already stated is against this decision.
6. As the case was taken up for hearing, it transpired that the rule stood discharged against the opposite party No. 3. It was contended on behalf of the opposite party No. 1 by Mr. Banerjee that, in view of the above, the entire rule has abated, as otherwise there would be conflict of orders since the opposite party No. 3 would not be bound by such order. Mr. Pal appearing for the petitioner submitted that the estate of the deceased was fully represented by the remaining opposite parties. Further demands for due amount were made on the opposite parties and they were individually and severally liable for the same. At the highest the order as may be passed in the rule may not affect the said opposite party as held in Nani Bai v. Gita Bai : 1SCR479 . In this case also names of some legal representatives of a defendant were ordered to be struck off; even then it was held that there was no question of abatement of the suit or appeal. The only question which might or might not be ultimately found to be material on proper investigation would be whether the decree to be passed in this case would be binding on those who had not been served. On the authority of this decision, it is obvious that it could not be said that the entire rule before us had abated.
7. It may be relevant to consider the relevant provision's of the finance (No. 2) Act of 1965. Section 24 makes a provision for voluntary disclosuresof income chargeable to tax under the Indian Income-tax Act, 1922, or the Income-tax Act, 1961, for any assessment year prior to the assessment year 1965-66, for which a person has failed to furnish a return as required tinder those Acts or which he has failed to disclose on a return filed by him on or before 19th August, 1965, under either of the Acts or which has escaped assessment by reason of omission or failure on the part of such person to make a return under those Acts or to disclose fully and truly all material facts necessary for assessment. The object of the said provision introduced by the said section is to facilitate voluntary disclosure of wealth, by enabling in such cases the reduction or waiver of the statutory minimum penalty imposable in certain cases. A declaration in accordance with Sub-section (2) is to be made to the Commissioner setting out the amount declared with certain particulars and the income-tax shall be charged on the amount of the voluntarily declared income as provided in Sub-section (3) as if such income were the total income of the declarant. Sub-section (4) says that if such sum or portion thereof had already been detected by the concerned Income-tax Officer prior to the declaration, the Commissioner after giving an opportunity to the party of being heard may make an order that the whole or part of the income disclosed had been or deemed to have been detected. Such order is subject to reconsideration by the Board under Sub-sections (5) and (6) where the applicant would have an opportunity of being heard and the Board will pass orders as it thinks fit.
8. The Commissioner shall forward the declaration with a copy of his order, if any, under Sub-section (4) to the Income-tax Officer who shall thereupon determine the sum payable as income-tax by the declarant in accordance with Sub-section (3) and shall serve him a notice of demand under Section 156 of the Income-tax Act, 1961, and provisions of Chapter XV and Chapter XVII-D of, and the Second Schedule and Third Schedule to, that Act as far as may be apply as if the said sum was payable under that Act.
9. The learned Commissioner in his judgment under challenge has held that the opposite party had not been served with any notice earlier and in consequence had no opportunity to prefer any appeal prescribed under the Income-tax Act, 1961, and thereby he was deprived of a legal remedy. It may be noted that under the provisions of Section 24, Sub-section (7), the Commissioner has to forward the declaration, with a copy of his order under Sub-section (4) if any (which is not the case here) and the Income-tax Officer shall thereupon determine the sum payable as income-tax by the declarant under Sub-section (3), and, thereafter, serve notice of demand under Section 156 and in case of default, take proceedings for recovery. For determining the income-tax payable on declaration of income contemplated under Section 24 of the Finance (No. 2) Act, 1965, which is accepted unless thereis a proceeding under Sub-section (4), there is no scope for any hearing of appeal. Accordingly, the direction in the impugned judgment on the authorities of department ' to assess the amount payable by the opposite party after giving him due and proper opportunities for a hearing as authorised by law ' is without any legal basis and must be and is set aside as no such hearing is authorised or contemplated in law. We, accordingly, make the rule absolute and set aside the impugned order, as the learned Commissioner never had the jurisdiction to pass an order with directions on the revenue which under the law have no legal warrant or statutory basis, notwithstanding the fact that the rule stands discharged against one of the opposite parties.
10. Mr. Banerjee raised several contentions about the legal validity of the disclosure made by Bai Muktaben. It was stated that she had no authority to make the declaration, there was no scope for making a declaration so as to bind the heirs of the deceased assessee, that such disclosure could be made if at all by the firm of which the deceased assessee was a partner and the income, if any, was of the firm. Further, there was no order indicating the acceptance of disclosure by the Commissioner while in respect of the following year, another person had been accepted by the revenue as karta of the Hindu undivided family.
11. It transpires from the affidavit-in-opposition of the opposite party No. 2 over which there is no dispute that the Income-tax Officer, 'D' Ward, District IV(3), Calcutta, in compliance with the directions contained in the impugned judgment of the Commissioner to the extent permissible in law issued demand notices under Section 156 on the remaining three legal heirs of the deceased being opposite parties Nos. 1 to 3 before us, as also notices under Section 226(3) on the aforesaid firms. Thereafter, in view of the default, three certificates against the said opposite parties Nos. 1 to 3 dated September 4 and 5, 1972, have been issued by the Income-tax Officer to the said Tax Recovery Officer in respect of tax due on the basis of the disclosure. The opposite parties before us, needless to mention, will be at liberty to take steps in respect thereof, in accordance with law on grounds urged before us and also on grounds as may be available to them and we express no opinion in respect thereof.
G.N. Ray, J.
12. I agree.