RADHAKRISHNA RUNGTA Vs. INCOME TAX OFFICER SEVENTH

JUDGEMENT

(1.) IN this application under article 226 of the Constitution, the petitioners has prayed for a writ in the nature of mandamus or other appropriate writ, order or direction, directing the respondent, who is the 7th Income -tax Officer, C -II Ward, Bombay, to compute the loss and to notify the first petitioner firm of the said computation or to take up and complete the assessment of the first petitioner firm for the assessment years 1958 -59 and 1959 -60 before the 31st of March, 1963, and 31st of March, 1964, respectively. They have also prayed for a further writ requiring the respondent to consider the applications for the renewal of the registration of the first petitioner firm for the assessment years 1958 -59 and 1959 -60 and, if the said applications are found to be in accordance with law, to grant the first petitioner a renewal of registration before the 31st of March, 1963, and 31st of March, 1964, respectively.

(2.) THE first petitioner firm is a partnership firm consisting of the second and third petitioners as its partners. This firm was formed from the first day of Samvat year 2012, which is the relevant previous year for the assessment year 1957 -58. The firm has succeeded to a proprietary concern of the second petitioner who carried on business in the name of Radhakrishna Brijlal Rungta. The partnership deed embodying the partnership is dated 5th April, 1956. On or about 1st of May, 1956, the first petitioner firm filed its application for registration of the firm for the assessment year 1957 -58. According to the petitioners after the public notice under section 22(1) had been issued in April, 1957, for the assessment year 1957 -58, individual notices under section 22(2) for the said assessment year were served on the first petitioner firm, the first of them, on the 27th September, 1957, by the 7th Income -tax Officer, C -II Ward, Bombay, and the second on the 4th December, 1957, by the 3rd Income -tax Officer, C -II Ward, Bombay. The return for the said assessment year 1957 -58 was filed by the first petitioner firm on the 27th January, 1960. For the subsequent assessment years, viz. 1958 -59 and 1959 -60, with which we are concerned in the present petition, the notices under section 22(1) were issued in the month of April, 1958, and in the month of April, 1959, respectively. Individual notices under section 22(2) for the said two years were not issued to the first petitioner firm. The returns, however, for the said year were filed by the first petitioner firm on the 23rd February, 1960, and 29th March, 1962, respectively. Both these returns were loss returns showing a loss of Rs. 1,13,394 for the assessment year 1958 -59 and Rs. 1,02,360 of the assessment year 1959 -60. On the 25th of June, 1958, the first petitioner had also filed its application for renewal of registration of the firm for the assessment year 1958 -59 and it had also filed a similar application for the next assessment year on the 11th of January, 1959.

(3.) THEREAFTER , on 13th June, 1962, the first petitioner requested the respondent to take up the assessment for the assessment years 1958 -59 and 1959 -60 for which it had already filed its loss returns. On the 4th January, 1963, the respondent informed the first petitioner firm that the returns of income for the assessment years 1958 -59 and 1959 -60 were not valid returns, which could be acted upon and that the returns, therefore, had been merely filed. It was pointed out in the said letter that the returns in order to be valid ought to have been filed within the time prescribed by section 22(2A) of the Act. After this intimation was given to the petitioner firm by the respondent the present petition has been filed by the petitioners on the 4th of February, 1963. The petitioners' case is that the returns, which have been filed by the first petitioner firm for the assessment years 1958 -59 and 1959 -60 are good and valid returns under the Act and the respondent is petitioner firm. The petitioners say that the Income -tax Officer was in error in taking the view that the returns not having been filed within the time specified in section 22(2A) they were not valid returns. According to the petitioners, section 22(2A) of the Act has no application to the present case, because that provision applies to a person or an assessee, who is not served with a notice under section 22(2) of the Act at any time. Inasmuch as the assessment year 1957 -58, it was not an assessee to whom the provisions of section 22(2A) applied. Their further case is that even if section 22(2A) may have relevance or application to the petitioners' case, the only effect at the worst of the said provision is that the petitioner firm would not be entitled to the benefit of carrying forward the loss. The said provision, however, did not preclude it from filing a loss return subsequent to the period mentioned in the said sub -section. According to the petitioners, the loss returns submitted by the 1st petitioner for the assessment years 1958 -59 and 1959 -60 were, at any rate, good and valid returns under section 22(3) of the Act and the Income -tax Officer was bound to take up those returns and proceed to pass assessment orders thereon. The petitioners complain that the refusal of the Income -tax Officer to perform the statutory obligation cast on him of entertaining the returns submitted by them and proceeding to pass assessment order on the said returns has prejudiced the petitioners and is also likely to cause further prejudice to them. The petitioners, therefore, say that they are entitled to a writ in the nature of mandamus or other appropriate writ, order or direction requiring the respondent to perform the statutory duty of taking up the returns filed by the first petitioner firm and proceed to assess them.