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Jatashankar Dayaram v. The Commissioner Of Income-Tax
Factual and Procedural Background
This petition was placed before the High Court by the Prothonotary and Senior Master at the instance of the respondents to decide a preliminary question: whether a pauper petition is maintainable in respect of an application by an assessee under s. 256(2) of the Income-tax Act, 1961 for compelling the Income Tax Appellate Tribunal to draw up a statement of the case and refer it to the High Court.
The petitioner filed the petition in forma pauperis seeking a direction to the Income Tax Tribunal under s. 256(2) to draw up and refer a statement of case, specifying certain questions of law. The tax amount in dispute was a little over Rs. 20,000 and the Court-fees payable under item No. 16 of Schedule I to the Bombay Court-fees Act, 1959 were Rs. 390. The petitioner stated he lacked sufficient means to pay the fees and sought permission to sue as a pauper.
The petition was opposed by the Commissioner of Income-tax, who contended that the provisions of the Code of Civil Procedure (CPC) do not apply to proceedings under s. 256(2) and that Order XXXIII of the CPC is therefore inapplicable, making an in forma pauperis application unavailable in this context. The Court considered precedents and statutory provisions, applied s. 141 of the Civil Procedure Code, and ultimately held that Order XXXIII is applicable by virtue of s. 141; the petition was not dismissed on the preliminary point and was remitted to the Prothonotary and Senior Master to investigate whether the petitioner is in fact a pauper. Costs of the reference were ordered to be costs in the pauper petition.
Legal Issues Presented
- Whether a pauper petition (filing in forma pauperis under Order XXXIII, CPC) is maintainable for an application by an assessee under s. 256(2) of the Income-tax Act, 1961 seeking a statement of the case from the Income Tax Appellate Tribunal and its reference to the High Court.
- Whether the provisions of the Code of Civil Procedure, specifically Order XXXIII, are applicable to proceedings under s. 256(2) of the Income-tax Act by virtue of s. 141 of the Civil Procedure Code.
- Whether the provisions of Order XXXIII of the Civil Procedure Code are purely procedural (and therefore capable of being applied under s. 141) or whether they confer substantive rights that would prevent their application to s. 256(2) proceedings.
Arguments of the Parties
Respondent's Arguments (Commissioner of Income-tax; represented by Mr. Shastri)
- The provisions of the Code of Civil Procedure do not apply to proceedings under s. 256(2) of the Income-tax Act; therefore Order XXXIII of the CPC has no application to such proceedings.
- Consequently, no application for leave to sue as a pauper (in forma pauperis) can be filed in respect of applications under s. 256(2).
- Reliance was placed on several High Court decisions (from Andhra Pradesh, Allahabad and Calcutta) holding that provisions like Order XXII (CPC) or the Code as such were not applicable to references under the Income-tax Act, 1922, with the effect that references did not abate on the death of an applicant and related procedural provisions were inapplicable; those decisions were invoked to support non-applicability of CPC provisions to Income-tax references.
- Also relied on Somanna v. Chinnayya ([1945] A.I.R. Mad. 107) where a single Judge held that Order IX, r. 9, CPC applied only to suits and that s. 141 could not be invoked to make the CPC applicable in its entirety to other proceedings; this was cited to argue limits on s. 141's reach.
Petitioner's Arguments (represented by Mr. Thacker)
- Section 141 of the Civil Procedure Code provides that the procedure in the Code in regard to suits shall be followed, so far as it can be made applicable, in all proceedings in any Court of civil jurisdiction. An application under s. 256(2) to the High Court is a proceeding in a Court of civil jurisdiction and not merely a continuation of Income-tax proceedings; therefore s. 141 applies.
- Order XXXIII (which governs pauper suits and applications) contains procedural provisions (for example, postponement of payment of Court-fees and related rules) and does not confer any substantive right on the litigant; consequently, Order XXXIII can be applied to proceedings under s. 256(2) by virtue of s. 141.
- Reliance was placed on the Supreme Court decision in Ram Chandra v. State of U.P. ([1966] A.I.R S.C. 1888) where s. 24 CPC was applied to a reference by virtue of s. 141, and on High Court decisions (Bombay and Madras) applying Order XXXIII to probate and administration proceedings under the Indian Succession Act by virtue of s. 141.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Commr. of Inc.-Tax v. I.D. Varshani, 1952 23 I.T.R. 163 (Allahabad High Court) | Held that O. XXII, CPC was not made applicable to a reference under s. 66 (Income-tax Act, 1922); reference did not abate on death of applicant. | The Court noted this decision and observed that that judgment does not show s. 141 was argued or considered there. |
| Commr. of Inc.-Tax v. Gulam Hyderkhn, 1961 46 I.T.R. 463 (Andhra Pradesh High Court) | Held that provisions of O. XXII would not be attracted to a reference under s. 66 (Income-tax Act, 1922) and the assessee's position could not be equated to that of a defendant/respondent. | The Court recorded this authority and observed that s. 141 does not appear to have been considered in that decision. |
| Commr. of Inc.-Tax v. Gourishankar Lal Singha, 1966 63 I.T.R. 711 (Calcutta High Court) | Reached a similar conclusion as the other High Courts regarding non-applicability of certain CPC provisions to Income-tax references; involved death during pendency of application for leave to appeal. | The Court referred to this decision and noted that s. 141 was not apparently considered in it. |
| Somanna v. Chinnayya, [1945] A.I.R. Mad. 107 | Held that Order IX, r. 9, CPC applies only to suits; s. 141 cannot be used to make the CPC applicable in its entirety (including substantive rights) to other proceedings. | The present Court expressed disagreement with parts of this reasoning but recorded that it was not necessary to decide the issue of whether Order IX, r. 9 is procedural or substantive for the present case. |
| Anandrao v. Krishnaji, 1962 65 Bom. L.R. 417; S.C. [1964] A.I.R. Bom. 232 | Chandrachud, J. held that Order IX, r. 8, CPC would apply (by reason of s. 141) where an application under a statutory postponement-of-execution Act had been dismissed for default. | Referred to as contrasting authority supporting the applicability of CPC provisions via s. 141. |
| Ram Chandra v. State of U.P., [1966] A.I.R. S.C. 1888 (Supreme Court) | Applied provisions of s. 24, CPC to a reference made by a Magistrate to a civil court under s. 146(1) of the CrPC by virtue of s. 141 CPC. | Relied upon by the petitioner; the Court cited it as an instructive example of s. 141 bringing CPC provisions into other proceedings. |
| In re The Will of Dawubai Haji Khan (Starling, J.) | Held that an executor unable to obtain possession or pay fees may petition for probate in forma pauperis; s. 647 (equivalent to present s. 141) made suit procedure applicable to miscellaneous civil proceedings including probate/administration. | Used by this Court (and cited with Palani Gramani) to support application of Order XXXIII via s. 141 to probate/administration proceedings, analogously supporting application to s. 256(2) proceedings. |
| Palani Gramani v. Manickammal, [1938] A.I.R. Mad. 486 | Held that an application for probate or letters of administration (a proceeding in a Court of civil jurisdiction) could be subject to the provisions of Order XXXIII, CPC by virtue of s. 141. | Followed and cited by this Court as precedent supporting applicability of Order XXXIII to non-suit civil proceedings under s. 141, analogized to s. 256(2) applications. |
Court's Reasoning and Analysis
The Court proceeded in a stepwise manner:
- The Court examined the nature of an application under s. 256(2) of the Income-tax Act when made to the High Court and concluded that it is an independent proceeding before a Court of civil jurisdiction. The Court rejected the respondent's contention that such an application is merely a continuation of proceedings before the Income-tax authorities or the Income-tax Appellate Tribunal.
- Having classified the proceeding as one in a Court of civil jurisdiction, the Court turned to s. 141 of the Civil Procedure Code, which provides that the procedure in the Code in regard to suits shall be followed so far as it can be made applicable in all proceedings in any Court of civil jurisdiction. The Court held that s. 141 applies to s. 256(2) applications.
- The Court then considered whether Order XXXIII of the CPC (which governs proceedings in forma pauperis) contains procedural provisions that can be applied under s. 141 or whether it confers substantive rights, which would prevent its application. The Court analysed the provisions of Order XXXIII (rules concerning institution by a pauper, procedure for permission, postponement of Court-fees, recovery of Court-fees if the pauper succeeds/fails/abates) and concluded that these are procedural mechanisms intended to postpone payment of Court-fees to facilitate access to justice for a poor litigant rather than to confer substantive rights on the litigant.
- On that basis the Court held that Order XXXIII would be applicable to proceedings other than suits in the High Court by virtue of s. 141 and thus applicable to an application under s. 256(2) of the Income-tax Act.
- In reaching that conclusion the Court reviewed the case law relied upon by both parties. The Court noted that several High Court decisions that had found certain CPC provisions inapplicable to Income-tax references did not appear to have considered s. 141. The Court also discussed Somanna v. Chinnayya and expressed disagreement with parts of the reasoning in that decision (specifically the view that s. 141 could not be invoked to make CPC provisions applicable), but observed that it was not necessary to decide an ancillary question in that matter for the present case.
- The Court relied upon authorities where s. 141 had been applied to make CPC procedural provisions applicable in other non-suit civil proceedings (including Ram Chandra v. State of U.P. and probate/administration authorities like In re The Will of Dawubai Haji Khan and Palani Gramani v. Manickammal) as support for applying Order XXXIII to s. 256(2) proceedings.
- Concluding that Order XXXIII is procedural and applicable via s. 141, the Court held that the preliminary objection that a pauper petition is not maintainable cannot succeed. The Court therefore remitted the petition to the Prothonotary and Senior Master to investigate whether the petitioner is in fact a pauper.
Holding and Implications
Holding: The Court concluded that, by virtue of s. 141 of the Civil Procedure Code, the procedural provisions of Order XXXIII of the Code (governing institution of proceedings in forma pauperis) are applicable to applications made under s. 256(2) of the Income-tax Act, 1961. Accordingly, the preliminary contention that a pauper petition is not maintainable in respect of such an application was rejected.
Direct effects on the parties:
- The petition cannot be dismissed on the preliminary point that a pauper petition is not maintainable.
- The petition was remitted to the Prothonotary and Senior Master for an investigation into whether the petitioner is in fact a pauper.
- Costs of the reference were ordered to be costs in the pauper petition.
The opinion does not discuss broader implications at length; it addresses the direct effect on the present petition and the immediate procedural consequences specified above.
Nain, J.:— This petition has been placed before the Court by the learned Prothonotary and Senior Master of this Court at the instance of the respondents to decide a preliminary question as to whether a pauper petition is maintainable in respect of an application by an assessee under s. 256(2) of the Income-tax Act, 1961, for compelling the Income Tax Appellate Tribunal to draw up a statement of the case and refer it to the High Court.
2. Petitioner has filed the above petition in forma pauperis for a direction to the Income Tax Tribunal to draw up a statement of the case and raise and refer to this Court certain questions of law specified in the petition under s. 256(2) of the Income-tax Act. The amount of tax in dispute is a little over Rs. 20,000 and the amount of Court-fees payable under item No. 16 of Schedule I to the Bombay Court-fees Act, 1959, is Rs. 390. The petitioner states that he is not possessed of sufficient means to enable him to pay the fees payable by law and he may therefore be granted permission to sue in forma pauperis. This petition is opposed on behalf of the Commissioner of Income-tax. It is contended on behalf of the respondent that the provisions of the Code of Civil Procedure do not apply to proceedings under s. 256(2) of the Income-tax Act; consequently O. XXXIII of the Code of Civil Procedure has no application to these proceedings and no application can be filed in forma pauperis.
3. My attention has been drawn to s. 131 of the Income-tax Act, which confers powers of a Court when trying a suit on Income Tax Officers, Appellate Assistant Commissioners, Inspecting Assistant Commissioners and Commissioners for the purposes of discovery and inspection, enforcing the attendance of any witnesses and issuing commissions. My attention has also been invited to ss. 261 and 262 of the Income-tax Act. Section 261 provides for an appeal to the Supreme Court from any judgment of the High Court on a reference under s. 256 of the Income-tax Act. Section 262 makes the provisions of the Code of Civil Procedure, 1908 relating to appeals to the Supreme Court applicable in the case of appeals under s. 261. It is contended that there is no provision in the Income-tax Act, which makes any of the provisions of the Code of Civil Procedure applicable to applications under s. 256(2) of the Income-tax Act made to the High Courts. It is therefore contended that O. XXXIII of the Code of Civil Procedure does not apply to such applications and a petition to apply under s. 256(2) in forma pauperis is not maintainable.
4. Mr. Shastri for the respondent has invited my attention to three judgments, one of Andhra Pradesh High Court, one of Allahabad High Court and one of Calcutta High Court, wherein it has been held that where an applicant under s. 66 of the Income-tax Act, 1922 (which corresponded to s. 256 of the Income-tax Act, 1961) died during the pendency of a reference before the High Court, the reference did not abate because the provisions of the Code of Civil Procedure were not applicable to references under the Income-tax Act, 1922.
5. In the case of Commr. of Inc.-Tax v. I.D Varshani . 1952 23 I.T.R 163. the applicant had died not during the pendency of an application to compel a reference but during the pendency of the reference itself. A Division Bench of the Allahabad High Court held that there was no provision either in the Indian Income-tax Act, 1922 or in the rules made thereunder for bringing on the record the legal representatives of an assessee and that O. XXII of the Civil Procedure Code, 1908 had not been made applicable to a reference under s. 66 of the Income-tax Act and, therefore, the reference did not abate. If the Commissioner had not applied to bring the legal representatives of the deceased assessee on record within ninety days of his death the Court was entitled to consider whether it would answer the reference at all. The judgment does not show that any argument was based on s. 141 of the Civil Procedure Code or that the said section was at all considered.
6. In the case of Commr. of Inc.-Tax v. Gulam Hyderkhn . 1961 46 I.T.R 463., a Division Bench of the Andhra Pradesh High Court took a similar view holding that the provisions of O. XXII would not be attracted to a reference under s. 66 of the Income-tax Act, 1922 and the position of an assessee in a reference under s. 66 could not be equated to that of a defendant or respondent. In this case also the provisions of s. 141 do not appear to have been considered.
7. In the case of Commr. of Inc.-Tax v. Gourishankar Lal Singha . 1966 63 I.T.R 711., a Division Bench of the Calcutta High Court took the same view as the Allahabad and Andhra Pradesh High Courts, after referring to the said decisions. In that case, the assessee had died during the pendency of an application for leave to appeal to the Supreme Court against the judgment of the High Court, on a reference under s. 66 of the Income-tax Act. In this case also the provisions of s. 141 of the Code of Civil Procedure do not appear to have been considered.
8. Reliance was also placed on behalf of the respondent on the judgment of a single Judge in Somanna v. Chinnayya . [1945] A.I.R Mad. 107., holding that no application lay for restoration of petition under s. 73, Madras Village Courts Act which had been dismissed for default. In that case it was observed that there was no provision in the Civil Procedure Code or the Madras Village Courts Act for restoration of petitions dismissed for default. Order IX, r. 9, Civil Procedure Code applies in terms only to suits and therefore it was not applicable to petitions under s. 73, Madras Village Courts Act. It was further held that s. 141, Civil Procedure Code could not be invoked because it only empowered the Judge to regulate judicial proceedings by rules of procedure in the Civil Procedure Code and it did not make Civil Procedure Code applicable in its entirety including provisions conferring substantive rights. It held that the remedy under O. IX, r. 9, Civil Procedure Code was not a matter of procedure, but was a substantive right. I am afraid, I do not share the views of the learned Judge on this point. However, it is not necessary for me to decide in this matter whether the provisions of O. IX, r. 9 of the Civil Procedure Code are procedural or contain substantive rights. In fact in case of Anandrao v. Krishnaji . 1962 65 Bom. L.R 417, S.C [1964] A.I.R Bom. 232. Chandrachud, J. took the view that where an application under the Madhya Pradesh Temporary Postponement of Execution of Decrees Act had been dismissed for default, the provisions of O. IX, r. 8 of the Civil Procedure Code would apply by reason of the provisions contained in s. 141 of the Civil Procedure Code.
9. Section 141 of the Civil Procedure Code provides that the procedure provided in the Code in regard to suits shall be followed as far as it can be made applicable in all proceedings in any Court of civil jurisdiction. I have no doubt that an application under s. 256(2) of the Income-tax Act, 1961 made to the High Court is a proceeding in a Court of civil jurisdiction. I am unable to accept the argument made on behalf of the respondent that such application is merely a continuation of proceedings before Income-tax Authorities or before the Income-tax Appellate Tribunal. In my opinion, it is an independent proceeding before a Court of civil jurisdiction. Section 141 would, therefore, apply. One has however to see whether the provisions of O. XXXIII, Civil Procedure Code are procedural provisions or they confer any substantive rights.
10. Order XXXIII, r. 1 of the Code of Civil Procedure provides that any suit may be instituted by a pauper. Rule 2 provides for an application for permission to sue as pauper. Rule 8 states that where application is granted, it shall be numbered and shall be deemed to be the plaint in the suit except that the plaintiff would not be liable to pay the Court-fees on such plaint. Rule 10 provides that where the plaintiff succeeds in the suit, the amount of Court-fees shall be recoverable by the State Government from the pauper and shall be a first charge on the subject-matter of the suit. Rule 11 provides that where the plaintiff fails in the suit or is dispaupered or that the suit is withdrawn or dismissed, the Court shall order the plaintiff to pay the Court-fees which would have been paid by the plaintiff if he had not been permitted to sue as a pauper. Rule 11(a) provides that where the suit abates by the death of the plaintiff, the amount of Court-fees shall be recoverable from the estate of the deceased-plaintiff. These provisions show that the payment of Court-fees is only postponed to facilitate a poor litigant getting justice before paying the Court-fees. As against this, a man of means has to pay the Court-fees before he seeks justice. In my opinion, the stage at which the State recovers Court-fees from a poor litigant has been left to the discretion of the Court under the provisions of O. XXXIII of the Civil Procedure Code. Order XXXIII, Civil Procedure Code does not confer any substantive right on the litigant. Provisions of O. XXXIII would, therefore, be applicable to proceedings other than suits in the High Court by virtue of s. 141 of the Code of Civil Procedure and they would therefore be applicable to an application under s. 256(2) of the Income-tax Act.
11. Mr. Thacker on behalf of the petitioner invited my attention to the judgment of the Supreme Court in the case of Ram Chandra v. State of U.P . [1966] A.I.R S.C 1888. where the provisions of s. 24 of the Code of Civil Procedure were made applicable to a reference made by a Magistrate to a civil Court under s. 146(1) of the Code of Criminal Procedure by virtue of s. 141 of the Civil Procedure Code. But the cases more in point are two judgments one of the Bombay High Court and the other of Madras High Court to which I will refer presently.
12. In In re The Will of Dawubai Haji Khan7 Starling, J. held that where an executor is not in possession of the property of his testator and cannot get possession of it, and where he has not himself the means of paying the necessary fees, he may be allowed to petition for, and if entitled thereto, to obtain probate in forma pauperis. The learned Judge held that it was not a suit in the ordinary acceptation of the term, though, if a caveat were entered, it would be changed into a suit. The learned Judge was of the opinion that under s. 647 (s. 141 of the present Civil Procedure Code) which provided that the procedure for suits prescribed by the Civil Procedure Code “shall be followed, so far as it can be made applicable, in all proceedings in any Court of civil jurisdiction other than suits and appeals” made the provisions of the Code applicable to all miscellaneous civil proceedings including the one under ss. 237 and 261 of the Indian Succession Act. This was followed by Gentle, J. in Palani Gramani v. Manickammal . [1938] A.I.R Mad. 486. The learned Judge observed (p. 488):
“I see no reason why an application by a petitioner for grant of probate or letters of administration, which, is clearly a proceeding in a Court of civil jurisdiction, cannot be subject to the provisions of O. 33, Civil P.C….”
13. The learned Judge applied the provisions of s. 141 of Civil Procedure Code to these proceedings.
14. It will thus be seen that the Bombay and Madras High Courts have made the provisions of O. XXXIII, Civil Procedure Code applicable to probate and administration proceedings under the Indian Succession Act, by virtue of s. 141. In my opinion, by virtue of s. 141 of the Civil Procedure Code, the provisions of O. XXXIII of the Civil Procedure Code are equally applicable to applications under s. 256(2) of the Income-tax Act and the present petition cannot be dismissed on the preliminary point that a pauper petition is not maintainable. The petition will now go back to the learned Prothonotary and Senior Master for investigation as to whether the petitioner is in fact a pauper. Costs of this reference shall be costs in the pauper petition.
15. Order accordingly.
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