S CHATTANATHA KARAYALAR Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS is a petition under article 226 of the Constitution for the issue of a writ of certiorari, calling for the records relating to the assessment of the petitioner to income-tax for the year of account 1946-47 (M.E. 1122) under the provisions of section 47 of the Travancore Income-tax Act, 1121, quashing the same, and for allied reliefs. The petition was originally filed in the High Court of Travancore-Cochin. Rule nisi was issued by that court. As the assessment was made by the Income-tax Officer, Nagercoil, which place, by virtue of the States Reorganisation Act, became part of the Madras State, the petition was transferred to the file of this court The petitioner is a resident of Shencottah. Admittedly, during the year of account, he was a karta of a joint Hindu family, which, amongst its other properties, had a business in the manufacture and sale of salt. The family was also entitled to a share in an unregistered firm, styled S.M.K.M. Allom. It is claimed that, about four years subsequent to the year of account, the family ceased to be undivided. But the statutory enquiry under section 25A of the Income-tax Act, has not yet been completed, and it is unnecessary, for the purpose of this petition, to pursue that matter

(2.) IN regard to the assessment for the year of account 1946-47, there was a dispute as to the officer who was to assess the petitioner. The Commissioner of INcome-tax, Mysore cum Travancore-Cochin, who had jurisdiction over the assessment relating to the petitioner, passed an order on 7th August, 1959, that the INcome-tax Officer, Nagercoil, should be the officer to assess the income of the assessee. Thereupon, the INcome-tax Officer, Nagercoil, assessed the petitioner to income-tax on 22nd September, 1950

(3.) BEFORE considering the objections it has to be seen whether in the circumstances of the case, the petitioner, who has not availed himself of the remedies provided under the Income-tax Act, would be entitled to the issue of a writ of certiorari under article 226 of the Constitution. The Income-tax Act provides an appeal against an order of assessment and further remedies in case the assessee is aggrieved by the order of the appellate authority. The existence of an alternative remedy has always been considered as a material circumstance to be taken into account, when a court is called upon in the exercise of its discretion to issue a writ of certiorari under article 226 of the Constitution. If the petitioner was aggrieved with the order of the first respondent, whether it was a case of improper assumption of jurisdiction, want of sufficient opportunity to put forward his case of erroneous or excessive assessment, he had at least three remedies under the Income-tax Act itself. (1) The petitioner could have raised objections and got the question of the jurisdiction of the Income-tax Officer, Special Circle, Trivandrum, settled immediately after the receipt of the notice of re-assessment. (2) If the notice had not been properly served or if he had no reasonable opportunity to put forward his case he could have applied to the Income-tax Officer under section 27 of the Indian Income-tax Act, or the corresponding provision in the Travancore Act, if that was necessary. (3) He could have appealed against the order of assessment. He did none of these but was content with writing a half-hearted letter a year after the service of notice on 16th July, 1956, objecting to the jurisdiction of the officer. That letter in a way would amount to a submission to the officer's jurisdiction, notwithstanding an objection thereto, which the Income-tax authorities were competent to decide, as it requested time for producing the accounts and participating in the enquiry. Further the transfer of the file relating to the petitioner was made as early as 1953. That officer presumably assessed the petitioner, at least, for subsequent years, till 1956. It does not appear that at any earlier stage there was any objection to the annual assessments. The circumstances referred to above would appear to show that there was a submission to the jurisdiction of that officer. These considerations would by themselves be sufficient for us to decline to exercise our discretion in favour of the petitioner in the exercise of the jurisdiction under article 226. But there is one further reason more decisive than the others, namely, that the issue of any writ at this stage quashing the order of assessment, would place the Income-tax Department in a disadvantageous position, as the proceedings for re-assessment could not be started de novo. The period within which re-assessment proceedings could be initiated under section 34 (section 47 of the Travancore Income-tax Act) has long since expired. If the petitioner had invoked any of the three alternative remedies, to which reference was made, it would have been open to the Department to rectify the mistake, if any, and to proceed with the assessment of the escaped income. It would not be so, if we were to exercise our discretionary jurisdiction under article 226. We should, therefore, decline to issue the writ sought, even if the petitioner is otherwise entitled to itIn this view, it would be unnecessary to deal with the various contentions urged, on behalf of the petitioner. But as the question has been argued before us, we shall proceed to deal briefly with them. It was first contended that the Commissioner of Income-tax had no jurisdiction to transfer the file relating to the assessee from the Income-tax Officer, Nagercoil, to the various officers mentioned previously. The argument proceeded on the following lines. On the date when the transfer was made, the assessment in regard to the year 1947-48, had been completed and, there being no pending proceedings, the Commissioner would have no power to transfer under section 7(8) of the Travancore Income-tax Act. Secondly, the order of transfer was general in its terms and unrestricted in regard to the period, and should for that reason as well be considered illegal. The re-assessment proceedings relating as they do to the assessment year 1947-48 (M.E. 1123) though started in 1955, would be governed entirely by the provisions of the Travancore Income-tax Act, and that, as section 7(8) of the Act did not authorise a general order of transfer, the various orders, which contravened that requirement should be held to be invalid. The Income-tax Officer, Special Circle, Trivandrum, would therefore have no power to initiate proceedings