RAJANNA S Vs. AGRICULTURAL INCOME TAX OFFICER

JUDGEMENT

(1.) AS the point involved in both the writ petitions is the same, they are dealt with together.

(2.) IN both the above petitions the petitioners seek a writ of prohibition or any other appropriate writ prohibiting the First INcome-tax Officer, Circle I, Salem, from proceeding with the reassessment proceedings for the assessment year 1961-62 initiated by him in pursuance of the notices dated April 25, 1968, issued under Section 148 of the INcome-tax Act. Each of the petitioners filed his return of income for the assessment year 1961-62, that is, for the previous year ended April 12, 1961, and the said return of income was accompanied by statement of creditors which included the borrowal of Rs. 10,000 from Seth Vasumul Lalchand, Madras, and also a claim of Rs. 305 towards the interest payment said to have been made to the said banker on the said borrowing of Rs. 10,000. The INcome-tax Officer completed the assessment in each of these cases for the assessment year 1961-62 on November 28, 1962, accepting the income returned by the petitioners. Later, for the assessment year 1962-63, that is, for the previous year ended on April 13, 1962, each of the petitioners again showed a borrowing of another sum of Rs. 10,000 from the same banker. The INcome-tax Officer, however, treated the said sum of Rs. 10,000 as also the borrowal of Rs. 10,000 shown in the earlier year as the petitioners' income from undisclosed sources, as the petitioners had admitted that the borrowals were not genuine. Thus, the INcome-tax Officer treated a sum of Rs. 20,000 as the petitioners' income from undisclosed sources and assessed each of the petitioners on that basis. The petitioners filed appeals to the Appellate Assistant Commissioner of INcome-tax, Salem, who by his order dated June 23, 1967, deleted the sum of Rs. 10,000 from the petitioner's total income on the ground that the entry relating to the borrowal of Rs. 10,000 was made by the petitioners during the year ended April 12, 1961, and that, therefore, the borrowai could not be brought to tax in the assessment year 1962.63. Thereafter, the matter was taken to the Tribunal by the revenue, questioning the view taken by the Appellate Assistant Commissioner. The INcome-tax Officer also issued a notice dated April 25, 1968, to each of the petitioners under Section 148 of the INcome-tax Act proposing to reopen the original assessment for the year 1961-62 after sanction by the' Commissioner of INcome-tax. The notices under Section 148 of the INcome-tax Act are impugned in these writ petitions.

(3.) ON behalf of the petitioners, reference has bean invited to the decision of the Supreme Court in Calcutta Discount Co. Ltd. v. Income-tax Officer, . in support of their contention that where the action of an executive authority acting without, jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Court should issue appropriate orders or direction to prevent such consequences and that the existence of an alternative remedy is not, however, always a sufficient reason for refusing a party quick relief by a writ or order prohibiting an authority acting without jurisdiction from continuing such action. But, as pointed out by their Lordships of the Supreme Court in that case, if there were in fact some reasonable grounds for thinking that there had been any non-disclosure as regards any primary fact, it would have a material bearing on the question of under-assessment and that would be sufficient to give jurisdiction to the Income-tax Officer to issue a notice under Section 148 and whether those grounds were adequate or not for arriving at a conclusion that there was a non-disclosure of material facts would not be open for the court's investigation. The petitioners who want the court to hold that the Income-tax Officer has no jurisdiction to invoke Section 147 have to establish that the Income-tax Officer had no material at all before him for believing that there was no non-disclosure of certain material facts. In these cases the petitioners have admitted that there has been non-disclosure of the income chargeable to tax. The petitioners have also not disclosed as to when and in what year that income had accrued. It cannot, therefore, be said that the Income-tax Officer had no jurisdiction to proceed under Section 147 read with Section 148 for the purpose, of bringing to tax the two sums of Rs. 10,000 each admitted to be their income. The question whether the income admitted by the petitioners are to be assessed in a particular year is exclusively within the province of the Income-tax Officer and it is not open to the petitioners to ask this court to decide as to which year the income could be related and taxed as such. ONce the taxability of the income is not in dispute the assessing officer has jurisdiction to find out in which year it is to be brought to tax. The petitioners can put forward all their objections as to the assessability of the said income in a particular year and the Income-tax Officer will have to naturally consider such objections.