A C PAUL Vs. TAX RECOVERY OFFICER TIRUNELVELI

JUDGEMENT

(1.) THE petition is mainly concerned with the interpretation to be placed on sub-s. (7) of s. 220 read with the Explanation to that section of the I. T. Act, 1961 (hereinafter called "the Act" ). Certain other points had also been argued at the time of the hearing of the case. One of such points was that Circular No. 25 dated July 25, 1969 (See [1969] 73 ITR (St) 23)issued by the CBDT should be quashed as discriminative and violative of art. 14 of the Constitution or that the same concession that had been granted to assessees who had income arising or accruing in Pakistan must be extended to the writ petitioner. THE other points urged, we do not consider that we should pronounce upon in this judgment. We shall now refer to certain essential facts for disposing of the main question as well as the reasoning based on art. 14 of the Constitution of India. THE petitioner-assessee seems to be a very enterprising person who left the country early in life and who established a fairly successful business at Colombo in Ceylon. He had considerable income accruing or arising from his business in Colombo. He had also income accruing to him in India. Statements have been filed which are in the typed set of papers showing Indian income as a percentage of total world income as assessed in India. This is at p. 1 of the typed set of papers. From this, it is seen that from the year 1951-52 onwards, the writ petitioner had been assessed to income-tax on considerably large amounts and that the percentage of Indian income to total world income ranged from 2. 48 to 11. 57 for the years which have been referred to therein. THE circular to which we adverted categorically stated thus ". . . assessees having income in Pakistan, which cannot be brought into India, should be asked to pay tax only on the Indian income by treating it as the total income for the purposes of the Income-tax act. THE balance of the tax should be stayed by the Income-tax Officer under section 220 (7 )."

(2.) ADMITTEDLY, as is clear from what we have already stated, the income arising in India and that which had accrued or arisen in Ceylon varied to such an extent that it may be stated that the income arising in India was comparatively negligible We do not consider it necessary to refer to any other facts though the counter-affidavit, the reply-affidavit and the additional counter-affidavit that have been filed in the case have referred to very many matters and very many figures, and that taxes have been imposed not only in relation to the years with which we are concerned in this petition but also in regard to subsequent years. For the collection of tax alleged to be due for the years with which we are concerned, coercive steps were taken which had reached the stage of sale by the issue of the sale proclamation dated November 18, 1974. It was at this juncture that the petitioner first applied to the first respondent, the Tax Recovery Officer, then the CIT, Madras (second respondent)and thereafter to the Central Board of Direct Taxes for relief and one of the points taken before the Board was that the benefit of the circular which gave relief to income-tax assessees who had income accruing in Pakistan should be extended to the petitioner as well. But the request of the petitioner was not granted and the TRO proceeded with the coercive steps for the collection of taxes and the sale proclamation was issued and it was then that this court was approached by the petitioner and the prayer in this writ petition is for the issue of "a writ of mandamus or order or direction in the nature of a writ forbearing the first respondent from proceeding with the threatened recovery proceedings pursuant to the sale proclamation dated november 18, 1972".