MURLIDHAR JALAN Vs. INCOME TAX OFFICER, DIBRUGARH

JUDGEMENT

(1.) THIS is an application under article 226 of the Constitution of India praying for - (a) a writ of mandamus calling upon the respondents to withdraw, cancel or forbear from giving effect to the notices issued against the applicant under section 46 (5A) of the Income Tax Act; (b) a writ of certiorari calling upon the respondents to send for the records of the case and the proceedings be thereafter quashed; (c) a writ of prohibition calling upon the respondents to cancel or to forbear from giving effect to or in any way taking any steps in respect of the notices issued under section 46 (5A) of the Income Tax Act.

(2.) THE petitioner carries on business and is regularly assessed to Income Tax under the Income Tax Act, hereinafter called the Act. Under section 5 (4) of this Taxation on Income (Investigation Commissioner) Act, 1947, the case of the petitioner was referred to the Income Tax Investigation Commission. An application was then made under section 8A of the said Income Tax Investigation Commission Act, and the case of the petitioner was settled. The total quantum of Income Tax alleged to have escaped assessment was estimated by the Commission at Rs. 19,81,302 and the amount which was found payable under the terms of the settlement was determined at Rs. 14,77,644.

(3.) OUT of this demand of Rs. 6,46,777 a sum of Rs. 2,89,777 was paid till the 31st January, 1956. By a decision of the Supreme Court sub -section (4) of section 5 of the Taxation on Income (Investigation Commission) Act of 1947 was held to be ultra vires, void and unenforceable as offending against the provisions of article 14 of the Constitution. The effect of this decision was that the settlement arrived at between the petitioner and the Department under section 8A of the Act became void.