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1956 Supreme(AP) 122
Andhra Pradesh High Court
Judges : K.SUBBA RAO, VISWANATHA SASTRY
VETCHA SREERAMAMURTHI - Appellant
Versus
INCOME-TAX OFFICER, VIZIANAGARAM - Respondent
Decided On : 04-03-56
THE DISCRETION VESTED IN THE INCOME TAX OFFICER UNDER SECTION 45 OF THE INCOME TAX ACT IS NOT ABSOLUTE OR UNQUALIFIED AND THAT HE HAS A DUTY TO EXERCISE IT IN A PROPER CASE.
Headnote:
INCOME TAX - SECTION 45 - DISCRETION OF INCOME TAX OFFICER - SCOPE OF - MANDAMUS - WHEN CAN BE ISSUED - CIRCUMSTANCES IN WHICH IT CAN BE ISSUED - HELD, THAT THE DISCRETION VESTED IN THE INCOME TAX OFFICER UNDER SECTION 45 OF THE INCOME TAX ACT IS NOT ABSOLUTE OR UNQUALIFIED AND THAT HE HAS A DUTY TO EXERCISE IT IN A PROPER CASE.
Fact of the Case:
THE APPELLANT, AN ASSESSEE UNDER THE INCOME TAX ACT, 1922, PREFERRED AN APPEAL AGAINST THE ORDER OF ASSESSMENT PASSED BY THE INCOME TAX OFFICER. PENDING THE APPEAL, HE APPLIED TO THE INCOME TAX OFFICER FOR STAY OF COLLECTION OF THE TAX UNDER SECTION 45 OF THE ACT. THE INCOME TAX OFFICER REJECTED THE APPLICATION. THE ASSESSEE FILED A WRIT PETITION IN THE HIGH COURT FOR A WRIT OF MANDAMUS DIRECTING THE INCOME TAX OFFICER TO STAY THE COLLECTION OF THE TAX. THE HIGH COURT DISMISSED THE WRIT PETITION. THE ASSESSEE APPEALED TO THE SUPREME COURT.
Finding of the Court:
THE SUPREME COURT HELD THAT THE DISCRETION VESTED IN THE INCOME TAX OFFICER UNDER SECTION 45 OF THE INCOME TAX ACT IS NOT ABSOLUTE OR UNQUALIFIED AND THAT HE HAS A DUTY TO EXERCISE IT IN A PROPER CASE. THE COURT FURTHER HELD THAT A WRIT OF MANDAMUS CAN BE ISSUED TO COMPEL THE INCOME TAX OFFICER TO EXERCISE HIS DISCRETION IN A PROPER CASE, BUT IT WILL NOT BE ISSUED TO DICTATE TO THE OFFICER IN WHAT MANNER HE IS TO DECIDE AN APPLICATION UNDER SECTION 45 OR EXERCISE HIS DISCRETION, SO LONG AS HE EXERCISES HIS POWER HONESTLY AND IN THE SPIRIT OF THE STATUTE.
Issues: 1. WHETHER THE DISCRETION VESTED IN THE INCOME TAX OFFICER UNDER SECTION 45 OF THE INCOME TAX ACT IS ABSOLUTE OR UNQUALIFIED? 2. WHETHER A WRIT OF MANDAMUS CAN BE ISSUED TO COMPEL THE INCOME TAX OFFICER TO EXERCISE HIS DISCRETION IN A PROPER CASE?
Ratio Decidendi: 1. THE DISCRETION VESTED IN THE INCOME TAX OFFICER UNDER SECTION 45 OF THE INCOME TAX ACT IS NOT ABSOLUTE OR UNQUALIFIED. HE HAS A DUTY TO EXERCISE IT IN A PROPER CASE. 2. A WRIT OF MANDAMUS CAN BE ISSUED TO COMPEL THE INCOME TAX OFFICER TO EXERCISE HIS DISCRETION IN A PROPER CASE, BUT IT WILL NOT BE ISSUED TO DICTATE TO THE OFFICER IN WHAT MANNER HE IS TO DECIDE AN APPLICATION UNDER SECTION 45 OR EXERCISE HIS DISCRETION, SO LONG AS HE EXERCISES HIS POWER HONESTLY AND IN THE SPIRIT OF THE STATUTE.
Final Decision: THE APPEAL WAS DISMISSED.
( 2 ) THE appellant carried on business in Niger seeds, ground-nut, ground-nut kernel and jute on his own account and for commission at Vizianagaram. He had also income from other property. He was asessed to income-tax for three years. For the year 1947-48, he was assessed on 14-3-1952 to a tax of rs. 1,41,039-11-0 payable on or before the 28th of March 1952. On 22-1-1953, the Income-tax Officer forwarded to the Collector a certificate specifying the amount of arrears due from the assessce. For the assessment year 1951-52 he was assessed on 29-2-1952 to a tax of Rs. 40,230-7-0 payable on or before 25th march 1952. The relevant certificate was issued on 22-6-1953. For the assessment year 1945-46, he was assessed on 7-12-1950 toa tax of Rs. 20,113-13-0 payable on or before 31-1-1951. The relevant certificate was issued on 9-5-1951. The appellant preferred appeals in regard to the first two assessments but no appeal was filed in respect of the third. The total tax payable by him amounted to Rs. 1,70,083-15-0. Out of that amount, a sum of rs. 1900/- was realised. In regard to the 1945-46 assessmeat, another sum of rs. 8000/- was levied as penalty under Section 46 (2) on two occasions.
( 3 ) SEVERAL adjournments were granted to the appellant for the payment of the tax but he did not pay even the admitted amount and therefore, the certificates were issued. Proceedings were taken under the Revenue Recovery Act and the sale of the properties was posted to 24-5-1954, 25-5-1954 and 26-5-1954. The petitions filed for quashing the aforesaid proceedings and for stay were dismissed by Ramaswami J. The assessee filed the above appeal on 26-5-1954 and got an interim stay of the sale of the propertie fixed for the 15th, 16th and 17th of September, 1954.
( 4 ) THE assessee alleges that he was questioning the validity of the assessment for 1951-52 for the reason that the assessment was made on the basis of a joint family when to the knowledge of the Income-tax Officer there was a division in the family. He attacked the assessment for the year 1947-48, on the ground that the 1st respondent had no right to reject registered deeds accepted and acted upon by him in the matter of the assessment of another firm and thereby collected tax twice over from him and the other firm. The income-tax Officer filed a counter stating that neither during nor after the completion of the assessment for the year 1951-52 did the assessee or any one of the several members of the family filed any application under Section 25-A claiming that a partition had taken place among the members of the family and, therefore, they were treated as a Hindu undivided family for the purpose of the Act. He also denies that there was a partition in the family. As regards the objection that the income from the business carried on by another firm was included in his income though, as a matter of fact, that firm was separately assessed, the Income-tax Officer pointed out that the said firm was assessed to tax only by way of abundant caution and that the said firm was asked not to pay the tax till the assessee s appeal was disposed of. The Income-tax Officer also alleges that, though several adjournments were granted to the assessee for the payment of tax, he did not care to pay even the admitted tax for the assessment year 1945-46, though four years have elapsed since the completion of the assessment. It may be me
