KOYA Vs. AITO

JUDGEMENT

(1.) The petitioner is an assessee to income tax for the assessment years 1954-55 to 1958-59. Notices u/s 34(1)(a) of the Indian Income Tax Act, 1922 were issued to the petitioner and after hearing his objections assessments were made in relation to what was found by the assessing authority to be income that had escaped assessment. These proceedings were initiated because it was found that the assessee had made certain investments during the years 1954-55 to 1958-59 in his name as well as in the name of his wife amounting to Rs. 47,000/- and odd. The income returned by the assessee was much lower. The explanation offered by the assessee was that though he was only an employee under a timber dealer, he used to get considerable amounts of Bhakshis or 'mamool' from his employer's customers and that his wife had savings From the sale of embroidered cloth and that the investments made came out of his savings from Bhakshis received by him as well as from his wife's savings. These explanations were rejected and reassessments were made. Consequent on this, notices were issued to the petitioner to show cause why action should not be taken u/s 28(1) (c) of the Indian income tax Act, 1922. Tire petitioner objected to this. Notwithstanding the objection, penalty orders Ex. P3, P3(a) P3(b), P3(c) and P3(d) have been passed against the petitioner for the years 1954-55 to 1958-59.respectively. These orders were appealed against and the appeals were rejected by orders that have been produced as Ex. P4, P4(a), P4(b), P4(c) and P4(d). The orders imposing the penalty state:

(2.) Apart from the fact that the explanation was rejected, there were no materials available before the income tax Officer to enable him to hold that what was treated as escaped income was really the income of the assessee. The approach made by the officer and by the appellate authority is also opposed to the view expressed by this court. This constitutes a patent error in the orders impugned before this Court and these orders will have to be vacated.

(3.) Counsel on behalf of the revenue has asserted that the series of orders, Ex. P4, P4 (a), P4 (b), P4 (c), and P4(d) being appealable orders, this Court should not exercise its jurisdiction under Art. 226 of the Constitution. He further urges that the income tax Act provides a complete machinery for assessment of tax and imposition of penalty and for obtaining relief in Respect of any improper ordered passed by the income tax Authorities and this Court should not encourage the tax payers to invoke the jurisdiction under Art. 226 of the Constitution when they have adequate remedy open to them by way of appeals to the Appellate Authorities For these propositions reliance has been placed on the decision of the Supreme Court in C.A. Abraham v. income tax Officer, Kottayam and another reported in 1961/41 ITR 425 and the passage relied on reads thus: