RASIKLAL AMRITLAL DOSHI Vs. A NUNDY

JUDGEMENT

(1.) This is a petition under article 226 of the Constitution praying for an appropriate writ for quashing the notice of demand and the consequent recovery proceedings instituted on the basis of the said demand.

(2.) The petitioner is a permanent resident of Jamnagar and has been all along doing business at Jamnagar. On March 30, 1955, he was served with a notice under sec. 34 of the Income-tax Act for the assessment year 1946-47 by the Income-tax Officer, B. ward, Jamnagar. Subsequently, in November, 1955, the case of the petitioner instituted on the said notice, which was served on him on March 30, 1955, was transferred by the Central Board of Revenue to the Additional Income-tax Officer, Section III (Central), Bombay, the first respondent herein. On or about January 27, 1956, the petitioner was informed of the said transfer and subsequently notices under sections 22(4) and 23(2) were issued on February 6, 1956, and served on the petitioner on February 9, 1956. The petitioner did not comply with these notices and the Income-tax Officer proceeded to make a best judgement assessment u/s. 23(4) of the Income-tax Act. On March 29, 1956, the petitioner was served with a notice of demand u/s. 29 of the Indian Income-tax Act intimating to him that a sum of Rs. 97,2223-7-0 had been determined as payable by him and calling upon him to make the payment in respect of the said demand as directed therein. No order of assessment, however, was supplied to the petitioner along with this notice of demand. The petitioner made repeated requests to respondent No. 1 to furnish him with the assessment order for the assessment year 1946-47 and ultimately on May 7, 1956, the prtitioner was informed that the alleged assessment order of 1946-47 was not traceable. Thereafter if appears that recovery proceedings were commenced by the Department by issuing a certificate u/s. 46(1) of the Indian Income-tax Act to respondent No. 2 the Additional Collector of Bombay. On August 16, 1960, prohibitory orders were issued by the second respondent in the said recovery proceedings. The petitioner requested respondent No. 1 to withdraw the said recovery proceedings alleging that they were illegal but the first respondent declined to do so. The petitioner thereafter filed the present petition on November 12, 1960, praying for a writ to quash the notice of demand and the recovery proceedings and for directions restraining the respondents from taking any further action in pursuance of the said notice of demand.

(3.) The petitioner's case is that the notice of demand u/s. 29 can be issued only when any tax is due in consequence of any order passed under or in pursuance of the Act and where such order does not exist no notice of demand can be issued. The petitioner avers that in the present case there has been no assessment order passed by the Income-tax Officer and consequently he had no jurisdiction to issue a notice of demand or to institute recovery proceedings on the basis of the said notice of demand. In reply to the petition, an affidavit has been filed by the first respondent, the Additional Income-tax Officer, Section III (Central), Bombay. The first contention set up in this affidavit is that the petitioner is not entitled to maintain a writ application under article 226 of the Constitution because he has the remedy by way of an appeal available to him under the Income-tax Act. It is then contended that the petitioner's allegation that there was no assessment order passed is not correct. It was urged that in view of the letter, which was sent to the petitioner on May 7, 1959, informing him that the assessment order was not traceable and in view of the presumption applicable to the due performance of all official acts, it should be presumed that the assessment order as was required to be passed was duly passed in the present case. It was also contended in the alternative that under the provisions of sec. 23(4) what was required to be done by the Income-tax Officer was to make the assessment to the best of him judgement and determine the sum payable by the assessee on the basis of such assessment; and that such assessment was duly made by the Income-tax Officer and the sum payable by the petitioner on the basis of such assessment was also duly determined by him. An exact copy of the assessment form for 1946-47, which was available on the records of the office and which was signed by the officer who had made it, was sent to the petitioner by the Department on May 27, 1960. It was contended that the said assessment form which was duly signed by the Income-tax Officer and a copy whereof was served on the petitioner could be construed as an assessment order made u/s. 23(4) so as to enable the petitioner to avail himself of the remedies open to him in law. It was, therefore, contended that the notice of demand dated March 29, 1955, was not a nullity but was issued on the basis of a valid assessment order made by the Income-tax Officer.