Case: Income Tax Officer, Lucknow Vs. Messrs S.B. Singhar Singh and Sons and Another

1956 presumably with a view to ensure that at the time of its presentation, none of the members of the Tribunal who had originally decided the assessees appeals, was there to hear the application; that even in this inordinately delayed application, review and rectification was not asked for in a straight forward manner but it was disguised as an application for decision of the appeals which on account of non-decision of Ground No. 1 were alleged to be still pending; that the writ petition was filed after an abnormal delay of ten years; that a perusal of the assessment orders made by the Excess Profits Tax Officer and the Assistant Appellate Commissioner, and even the memoranda of appeals filed before the Tribunal shows that at no stage the assessee furnished complete accounts or even a statement showing variation in the capital during the relevant periods. It is emphasised that all that the assessee said in the memoranda of appeals was that he was "prepared" to furnish a statement of such computation and accounts. It is further pointed out that no certificate of Shri Surinderjit Singh, Advocate who is supposed to have argued the appeals before the Tribunal, was filed. It is maintained that the only reasonable inference from these circumstances was that Ground No. 1 was not pressed or argued at all by Shri Surinderjit Singh before the Tribunal who consequently, did not think it necessary to deal with it.Mr. Sampath, appearing for the assessee-respondent has not been able to deny the existence of the circumstances pointed out by Mr. Ahuja. His argument is that in the affidavit accompanying the writ petition, the deponent had sworn that Ground No. 1 was, in fact, argued before the Tribunal and that this sworn statement had been believed by the High Court. This being the case, it is argued, this Court should not re-o pen the question as to whether Ground No. 1 was, in fact, argued or not before the Tribunal. According to Mr. Sampath, over 5 years delay in making the application dated April 2, 1956, partly stood explained by the circumstance that he had made a representation to the Board supplemented by the assessees letter of May 24, 1954 to the Income-tax Officer, seeking relief on the basis of Ground No. 1. 10. We find a good deal of force in the submissions made by Mr. Ahuja. The sheet-anchor of the assessees case in the writ petition was that at the hearing of the appeals, his Counsel had argued Ground No. 1 set out in the memoranda of appeals, but the Tribunal did not consider it at all. The question whether or not this Ground had been argued, was one of fact. The tell-tale circumstances enumerated by Mr. Ahuja, unerringly lead to the conclusion that, in all probability, Ground No. 1 was not argued by the Counsel, possibly because he was aware that in the absence of a complete statement of accounts showing variations in the capital during the relevant periods, a contention rounded on Ground No. 1 would be an exercise in futility. It is noteworthy that at no stage before the Revenue authorities or the Tribunal, did the assessee categorically say that he had actually produced a com plete statement of accounts and computation of the increase and decrease in capital. All that he said in his Additional Grounds of appeal before the Assistant Appellate Commissioner and the Appellate Tribunal in G round No. 1, was that he was prepared to file such a statement. Shri Surinderjit Singh, Counsel who argued the appeals, has not thought it fit to certify that Ground No. 1 was actually argued, and not abandoned, by him. The a ffida- vit of another person who could not be the best informed person on this point, was of little value and could hardly displace the irresistible inference arising from the surrounding circumstances and the conduct of the assessee, namely, that his Counsel had not argued on Ground No. 1, at all and had thus given it up.In the light of what has been observed above, we are of opinion that the High Court could not justifiably interfere in the exercise of its extraordinary jurisdiction under Article 226 of the Constitution with the appellate orders of the Tribunal. In any case, the question as to whether the omission to record a finding on Ground No. I by the Tribunal was due to the failure of the appellant to urge that ground or due to a lapse on the part of the Tribunal, which deserved rectification, was a .matter entirely for the authorities under those Taxation statutes. It will be well to recall once more what this Court speaking through J.C. Shah J. (as he then was, ) had stressed in Shivram Poddar v. Income-tax Officer ([1964] 51 I.T.R. 823, 829 (S.C.))."Resort to the High Court in exercise of its extraordinary jurisdiction conferred or recognised by the Constitution in matters relating to assessment, levy and collection of income-tax may be permitted only when questions of infringement of fundamental rights arise, or where on undisputed facts the taxing authorities are shown to have assumed jurisdiction which they do not possess. In attempting to bypass the provisions of the Income-tax Act by inviting the High Court to decide questions which are primarily within the jurisdiction of the revenue authorities, the party approaching the court has often to ask the Court to make assumptions of facts which remain to be investigated by the revenue authorities." 11. In the instant case, the High Court had assumed jurisdiction on the assumption that a certain ground had been urged before the Income-tax Appellate Tribunal which had arbitrarily refused to consider the same and record a finding thereon. This assumption, in our opinion, stood thoroughly discounted by the concomitant circumstances of the ease, including the dilatory and questionable conduct of the assessee. This was therefore not a fit ease for the exercise of its special jurisdiction under Article 226 by the High Court.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]We find a good deal of force in the submissions made by Mr. Ahuja. The sheet-anchor of the assessees case in the writ petition was that at the hearing of the appeals, his Counsel had argued Ground No. 1 set out in the memoranda of appeals, but the Tribunal did not consider it at all. The question whether or not this Ground had been argued, was one of fact. The tell-tale circumstances enumerated by Mr. Ahuja, unerringly lead to the conclusion that, in all probability, Ground No. 1 was not argued by the Counsel, possibly because he was aware that in the absence of a complete statement of accounts showing variations in the capital during the relevant periods, a contention rounded on Ground No. 1 would be an exercise in futility. It is noteworthy that at no stage before the Revenue authorities or the Tribunal, did the assessee categorically say that he had actually produced a com plete statement of accounts and computation of the increase and decrease in capital. All that he said in his Additional Grounds of appeal before the Assistant Appellate Commissioner and the Appellate Tribunal in G round No. 1, was that he was prepared to file such a statement. Shri Surinderjit Singh, Counsel who argued the appeals, has not thought it fit to certify that Ground No. 1 was actually argued, and not abandoned, by him. The a ffida- vit of another person who could not be the best informed person on this point, was of little value and could hardly displace the irresistible inference arising from the surrounding circumstances and the conduct of the assessee, namely, that his Counsel had not argued on Ground No. 1, at all and had thus given it up.In the light of what has been observed above, we are of opinion that the High Court could not justifiably interfere in the exercise of its extraordinary jurisdiction under Article 226 of the Constitution with the appellate orders of the Tribunal. In any case, the question as to whether the omission to record a finding on Ground No. I by the Tribunal was due to the failure of the appellant to urge that ground or due to a lapse on the part of the Tribunal, which deserved rectification, was a .matter entirely for the authorities under those Taxation statutes. It will be well to recall once more what this Court speaking through J.C. Shah J. (as he then was, ) had stressed in Shivram Poddar v. Income-tax Officer ([1964] 51 I.T.R. 823, 829 (S.C.))"Resort to the High Court in exercise of its extraordinary jurisdiction conferred or recognised by the Constitution in matters relating to assessment, levy and collection of income-tax may be permitted only when questions of infringement of fundamental rights arise, or where on undisputed facts the taxing authorities are shown to have assumed jurisdiction which they do not possess. In attempting to bypass the provisions of the Income-tax Act by inviting the High Court to decide questions which are primarily within the jurisdiction of the revenue authorities, the party approaching the court has often to ask the Court to make assumptions of facts which remain to be investigated by the revenue authorities."In the instant case, the High Court had assumed jurisdiction on the assumption that a certain ground had been urged before the Income-tax Appellate Tribunal which had arbitrarily refused to consider the same and record a finding thereon. This assumption, in our opinion, stood thoroughly discounted by the concomitant circumstances of the ease, including the dilatory and questionable conduct of the assessee. This was therefore not a fit ease for the exercise of its special jurisdiction under Article 226 by the High Court.