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1965 Supreme(Cal) 254
High Court Of Calcutta
Bose, B.C. Mitra, JJ.
C I T West Bengal – Appellant
Versus
Rampiyari Knemka – Respondent
Decided On: December 23, 1965
Advocate Appeared:
Gouri Mitter, N.Khaitan, S.Mukherjee
The principles of natural justice require that a person be given a fair opportunity to be heard before a decision is made that affects their rights.
Headnote:
INCOME TAX - Reassessment - Notice - Service - Validity - Principles of natural justice - Violation - Assessment orders - Setting aside - Validity.
Fact of the Case:
The appellant, the Commissioner of Income Tax, issued a notice to the respondent under Section 33b of the Income Tax Act, 1922, proposing to reassess her income for the years 1953-54 to 1960-61. The notice was served on the respondent's son, who was not authorized to receive any letter on her behalf. The respondent challenged the validity of the notice and the reassessment orders passed by the appellant, contending that the principles of natural justice had been violated.
Finding of the Court:
The court held that the service of the notice was valid, as the respondent had actual knowledge of the notice. However, the court held that the appellant had violated the principles of natural justice by making the reassessment orders without giving the respondent a proper opportunity to be heard. The court found that the appellant had made serious charges against the respondent, including fraud and collusion, without giving her any notice of these charges. The court also found that the appellant had relied on materials collected behind the respondent's back in making the reassessment orders.
Issues: 1. Whether the service of the notice under Section 33b of the Income Tax Act, 1922, was valid. 2. Whether the appellant violated the principles of natural justice in making the reassessment orders.
Ratio Decidendi: 1. The court held that the service of the notice was valid, as the respondent had actual knowledge of the notice. The court relied on the fact that the notice was served on the respondent's son, who was living with her at the time, and that the respondent had acknowledged receipt of the notice. 2. The court held that the appellant violated the principles of natural justice in making the reassessment orders without giving the respondent a proper opportunity to be heard. The court found that the appellant had made serious charges against the respondent, including fraud and collusion, without giving her any notice of these charges. The court also found that the appellant had relied on materials collected behind the respondent's back in making the reassessment orders.
Final Decision: The court allowed the appeal, set aside the judgment and order of the trial court, and discharged the rule.
1. THIS is an appeal against a judgment and order of Sinha, J., dated March 19, 1964, whereby a rule nisi issued in a petition under Art. 226 of the Constitution was made absolute. The facts involved in this appeal, and the questions of law, are similar to what was raised and dealt with by us in our judgment in Appeal from original Order No. 186 of 1965, (5) Sm. Bagsu Devi Bafna v. The Commissioner of Income Tax, West Bengal and Ors. (infra) in which, however, Banerjee, J., had discharged the rule. In the appeal now before us, the rule was made absolute.
2. I shall briefly refer to the facts before dealing with the judgment of the trial Court. The appellant filed a return regarding her income for the year 1960-61 sometime in February, 1961, pursuant to a notice under section 22 (1) of the Income Tax Act, 1922, (hereinafter referred to as the Act ). Thereupon the income tax officer called for the returns of earlier years. The appellant filed such returns for the years 1953-54 to 1959-60. On February 18, 1961, the assessment orders were passed for the years 1953-61. On January 20, 1963, the commissioner of Income Tax, the: appellant No. 1 herein, issued a notice on the respondent under Section 33b of the Act. The contents of this notice as set out in the judgment of the trial court are as follows: -
"On calling for and examining the records of your case for the assessment years 1953-54, 1954-55, 1955-56, 1956-57, 1957-58, 1958-59, 1959-60 and 1960-61 and other connected records I consider that the orders of assessment passed by the income-tax Officer, 'd' Ward, Howrah on 18-2-61 are erroneous tin so as they are prejudicial to the interests of revenue for the following reasons amongst others. 2. Enquiries made revealed that no business was carried on by you as alleged in the Returns. Also. the Income-tax Officer was not justified in accepting the initial capital, the income from business, the acquisition and sale of jewellery, etc. without any enquiry or evidence whatsoever.
I, therefore, propose to pass such orders thereon as the circumstances of the cases justify after giving you an opportunity of being heard under the powers vested in me under section 33b of the Income-tax Act, 1922. The cases will be heard at 11 A. M. on 7-2-63 at my above office when you are requested to produce the necessary evidence in support of your contentions. Objections in writing accompanied by the necessary evidence, if any received on or before the appointment for personal hearing will also be duly considered.
3. PLEASE note that no adjournment of the hearing will be granted. " on January 29, 1963, the notice was served by an inspector of the income tax department at premises No. 48, Nandalal Mitra Lane, Howrah that being the address given by the respondent in her returns. One R. S. Khemka, the repondent's son, received the notice. This notice was also sent under registered postal cover to the said address and one Gitabhai Khemka, the respondent's daughter, received the same and signed the acknowledgement receipt. On February 2, 1963, the said R. S. Khemka sent back the two covers unopened containing the notices, to the appellant No. 1 with a letter in which he stated that a notice was served on him for Sm. Rampiyari Khemka. He also stated in the letter that the husband of the lady died on January 19, 1963, that the lady was out of Calcutta, that he was neither authorised to receive any letter on the lady's behalf, nor was he in a position to communicate with her. it was further stated that he was unwilling to accept the cover, but had to accept the same owing to the importunities of the department's inspector. But he could not transmit the cover to the lady. It is to be noticed that in this letter the son suppressed the fact that the lady concerned was his mother. Regarding the cover delivered to Gitabhai Khemka the said r. S. Khemka staled that it was delivered by the peon to his minor sister by misrepresentation and distortion of facts.
