1974 Supreme(Cal) 61

HIGH COURT OF CALCUTTA
SANKAR PRASAD MITRA, SABYASACHI MUKHERJI
MAHABIR PRASAD PODDAR - Appellant
Versus
INCOME-TAX OFFICER, "B" WARD - Respondent
Appeal 260  Of  1971
Decided On : MARCH 4, 1974

An assessee who has invited the department to make the assessment and has an alternative remedy within the Income-tax Act cannot maintain a writ petition under Article 226 of the Constitution.

Headnote:

INCOME TAX - Reassessment - Notice - Validity - Hindu Undivided Family - Individual - Jurisdiction - Maintainability of Writ Petition.

Fact of the Case:

The assessee, Mahabir Prasad Poddar, was found to have received large sums of money in the course of business. Enquiries revealed that he was never assessed to tax in any capacity. Notices were issued under Section 139(2) of the Income-tax Act, 1961, for the assessment year 1962-63, on the information that he had received Rs. 2,33,763.53 from the Indian General Navigation and Railway Co., Calcutta. Mahabir Prasad Poddar was examined under Section 131 of the Income-tax Act, 1961, and thereafter, notices under Section 148 of the Income-tax Act, 1961, were issued in respect of the assessment years 1958-59 to 1961-62 and on March 7, 1963, notices under section 148 of the Income-tax Act, 1961, were issued for the year 1957-58. All the said notices were addressed to Mahabir Prasad Poddar as such without indicating in what capacity the said notices were issued. For one relevant year, however, that is to say, for the assessment year 1957-58, sanction had to be obtained from the Commissioner of Income-tax for reopening of the assessment and it is undisputed that such sanction was obtained for that year for being addressed to Mahabir Prasad Poddar as an individual. In response to the aforesaid notices returns were filed by the said Mahadir Prasad Poddar as individual and income was shown to have been derived from certain businesses. In the said returns no claim was made that the businesses in question belonged to any Hindu undivided family. As mentioned hereinbefore, prior to the issuance of the aforesaid notices, Mahabir Prasad Poddar was examined under Section 131(2) of the Income-tax Act, 1961, and in the said examination also Mahabir Prasad Poddar did not claim that the businesses and the income belonged to any Hindu undivided family and not to him in his individual capacity. Thereafter, there was an application for voluntary disclosure on July 12, 1965, and in that disclosure petition it was stated that there was a Hindu undivided family consisting of his sons and other legal descendants and Mahabir Prasad Poddar claimed to be the karta of the said family. As mentioned hereinbefore until that time Mahabir Prasad Poddar nor any Hindu undivided family of which Mahabir Prasad Poddar was a karta, was ever assessed to any tax. In the said disclosure petition it was claimed that the income belonged to the Hindu undivided family and should be spread over certain years. On August 26, 1966, the Income-tax Officer wrote to Mahabir Prasad Poddar enclosing notice under Section 143(2) of the Income-tax Act, 1961, for the assessment years 1957-58 to 1963-64 and also asking him to file returns for the years 1964-65 and 1965-66. Mahabir Prasad Poddar on September 26, 1966, wrote to the Income-tax Officer stating that the Hindu undivided family had not filed any returns for the years 1957-58 to 1963-64 and/or 1964-65 and 1965-66. The said Hindu undivided family filed returns for the said years 1952-53 to 1965-66 stating that the income might be determined as per the decision of the Commissioner of Income-tax, West Bengal III, in respect of the disclosure petition. Accepting the aforesaid returns the Income-tax Officer on February 21, 1967, completed the assessment for the assessment year 1962-63, determining the status of the assessee as a Hindu undivided family. Similarly, on February 28, 1967, assessments for the assessment years 1959-60, 1960-61 and 1961-62 were completed in the status of the Hindu undivided family. On March 31, 1967, the assessee preferred appeals in respect of the aforesaid assessments before the Appellate Assistant Commissioner and challenged the assessments on the ground that there should have been two assessments in respect of the said years, one in the status of the individual and the other in the status of the Hindu undivided family. It was not contended before the Appellate Assistant Commissioner that the assessments in question on the Hindu undivided family were illegal or irregular in view of the fact that no notice had been given to the said Hindu undivided family under Section. 148 of the Income-tax Act, 1961. On December 27, 1967, the appeals were disposed of by the Appellate Assistant Commissioner, It was held by the said Appellate Assistant Commissioner that the Income-tax Officer was justified in completing the assessment in the status of the Hindu undivided family for all the assessment years in question. It has been stated in paragraph 9 of the petition to this court that no appeal had been preferred from the decision of the Appellate Assistant Commissioner. On March 18, 1969, Mahabir Prasad Poddar made this application in this court under Article 226 of the Constitution describing himself as for self and as karta of the Hindu undivided family. A rule nisi was issued. Thereafter, the application came up for hearing before K. L. Roy J. and by a judgment delivered and order passed on December 4, 1970, Mahabir Prosad Poddar v. Income-lax Officer, the learned judge has dismissed this application and discharged the rule nisi. This appeal has been preferred from the aforesaid judgment and order of K. L. Roy J., dated December 4, 1970.

Finding of the Court:

The court held that the assessment of the Hindu undivided family was not without jurisdiction and that the assessee was not entitled to maintain the writ petition under Article 226 of the Constitution.

Issues: 1. Whether the assessee was entitled to maintain the writ petition under Article 226 of the Constitution? 2. Whether the reassessment of the Hindu undivided family was without jurisdiction?

Ratio Decidendi: 1. The court held that the assessee was not entitled to maintain the writ petition under Article 226 of the Constitution because: (a) He had invited the department to make the assessment on the Hindu undivided family and, therefore, could not be aggrieved by the order of the authorities. (b) He had an alternative remedy within the Income-tax Act, which he had resorted to and had not preferred any further appeal therefrom. (c) He was guilty of contrary and inconsistent stand before the revenue authority. (d) There was no explanation as to why a year and three months after the order of the Appellate Assistant Commissioner this application was moved to the court. 2. The court held that the reassessment of the Hindu undivided family was not without jurisdiction because: (a) The notice served on Mahabir Prasad Poddar without indicating the capacity and status was sufficient in the facts and circumstances of the case. (b) The assessment could be made in the status of individual and not in the status of association of persons.

Final Decision: The appeal was dismissed with costs.