Case: Income Tax Officer 'A' Ward, Calcutta Vs. Ramnarayan Bhojnagarwala

KRISHNA IYER, J.1. This is really a case where litigation would have been avoided, had the concerned Income-tax Officer carried out the directions issued by the Appellate Assistant Commissioner, with quick dispatch to determine the ownership of the deposit in the Bank account as between the respondent before us and his nephew Madanlal.2. The FactsThere was a Bank account in which a huge sum was seen as lying in deposit. The assessing authority proceeded on the footing that the amount represented the income of one Madanlal, in whose name the Bank account stood. He contested his ownership and urged that really this sum belonged to his uncle who is the respondent before us. Any way his contention was over-ruled by the Income-tax Officer, but, in appeal, the Appellate Assistant Commissioner set aside the order and directed that the Income-tax Officer do determine the real ownership of the bank deposit. This was done in September 1970. It is admitted before us that although we are in October 1975, the Income Tax Officer has not yet determined the real ownership of the deposit as between the uncle and the nephew. There is no valid reason why the Income Tax Officer should have delayed so long and indeed administrative officers and tribunals are taking much longer time than is necessary, thereby defeating the whole purpose of creating quasi-judicial tribunals calculated to produce quick decisions, especially in fiscal matter. Five years to dawdle over the decision of a small matter directed by an appellate authority amounts to indiscipline subversive of the rule of law. We hope that the Administration, takes serious notice of delays caused by tax officers lethargy, under some pretext or other, in speeding up enquiries into incomes and finalizing assessments. The mere fact that a Writ Petition was pending in the High Court, especially in the background of no stay having been granted, shows that the alibi of a High Court proceeding cannot be successfully put forward by the Income-tax Officer for his slow motion in settling the question directed by his Appellate Officer. Law must move quick not merely in the Courts but also before tribunals and officers charged with the duty of expeditious administrative justice. We emphasize this because if the Income Tax Officer had fixed the ownership of the deposit years ago, maybe the respondent before us might not have had to go up in litigation in High Court and the Income Tax Department itself would not have had to proceed against him.We have no doubt that either the uncle or nephew must pay the tax under normal circumstances and they cannot play off one against the another to defeat the claims of the Revenue. Even so, High Court has dispose d of this case in appeal before the Division Bench on certain assumptions and representations, for which counsel for the Income-tax Department was largely responsible. The result is that there has been no investigation into the basic question raised before the High Court by the respondent that the Income Tax Officer had no jurisdiction to start proceedings under Section 148 on the scorce that he had no reasonable belief, which is the sine qua non for the initiation of such proceedings. This question remains to be decided by the High Court.

Decision reasoning: 1[ds]It is admitted before us that although we are in October 1975, the Income Tax Officer has not yet determined the real ownership of the deposit as between the uncle and the nephew. There is no valid reason why the Income Tax Officer should have delayed so long and indeed administrative officers and tribunals are taking much longer time than is necessary, thereby defeating the whole purpose of creating quasi-judicial tribunals calculated to produce quick decisions, especially in fiscal matter. Five years to dawdle over the decision of a small matter directed by an appellate authority amounts to indiscipline subversive of the rule of law. We hope that the Administration, takes serious notice of delays caused by tax officers lethargy, under some pretext or other, in speeding up enquiries into incomes and finalizing assessments. The mere fact that a Writ Petition was pending in the High Court, especially in the background of no stay having been granted, shows that the alibi of a High Court proceeding cannot be successfully put forward by the Income-tax Officer for his slow motion in settling the question directed by his Appellate Officer. Law must move quick not merely in the Courts but also before tribunals and officers charged with the duty of expeditious administrative justice. We emphasize this because if the Income Tax Officer had fixed the ownership of the deposit years ago, maybe the respondent before us might not have had to go up in litigation in High Court and the Income Tax Department itself would not have had to proceed against him.We have no doubt that either the uncle or nephew must pay the tax under normal circumstances and they cannot play off one against the another to defeat the claims of the Revenue. Even so, High Court has dispose d of this case in appeal before the Division Bench on certain assumptions and representations, for which counsel for the Income-tax Department was largely responsible. The result is that there has been no investigation into the basic question raised before the High Court by the respondent that the Income Tax Officer had no jurisdiction to start proceedings under Section 148 on the scorce that he had no reasonable belief, which is the sine qua non for the initiation of such proceedings. This question remains to be decided by the High Court.