The Judgment of the Court was as follows:
B.C Mitra, J.:— By a deed dated June 22, 1930, the appellant was appointed the Mutwalli of a Wakf Estate by one Md. Ibrahim Barry, since deceased. By an earlier deed dated February 5, 1927, the said Md. Ibrahim Barry had dedicated two properties, namely, premises No. 11, Lindsay Street, Calcutta and No. 8, Kanai Seal Street, Calcutta, as Wakf properties. Besides the properties mentioned above, which were dedicated as Wakf, and of which the appellant is the Mutwalli, the appellant is the owner of certain other properties. In January, 1937, the said Md. Ibrahim Barry died. Under the said deed of Wakf, the appellant and his sons and daughters are the beneficiaries.
1. The gross income of the Wakf estate is alleged to be Rs. 34,000/- per year. For the income tax assessment years 1958–59, 1959–60 and 1960–61, the income derived from the said personal properties of the appellant, was lumped together with the income derived from the Wakf Estate, and the appellant was assessed as an individual on the said aggregate income. The appellant preferred an appeal from the order of assessment to the Appellate Assistant Commissioner, who by his order dated December 29, 1962, directed that the appellant should be taxed separately in respect of the income arising from the said Wakf Estate. By the said order a further direction was given that Rs. 19,676/-, Rs. 20,670/- and Rs. 21,564/- should be excluded from the appellant's individual assessment for the assessment years 1958–59, 1959–60 and 1960–61 respectively the income of the Wakf Estate for those years. Pursuant to this direction of the Appellate Assistant Commissioner separate assessments were made under S. 23(3) of the Income Tax Act, (hereinafter referred to as the Act) for the income arising from the Wakf Estate and notices of demand under S. 29 of the Act for the years, 1958–59, 1959–60, 1960–61 and 1961–62 had been issued to the appellant. For the assessment year 1958–59, the income from the Wakf Estate was assessed as “Wakf Estate of the late Ibrahim Bary through Mutwalli Shaik Md. Shaffi Barry”, in the status of association of persons. The tax was computed at the maximum rate under the first proviso to S. 41(1) of the Act on the ground that the shares of the beneficiaries under the Wakf were not determinate. Being aggrieved by this assessment order the appellant has preferred an appeal to the Appellate Assistant Commissioner, which is pending. For the assessment years 1959–60, 1960–61 and 1961–62, also the tax was computed at the maximum rate. But while for the assessment year 1958–59, it was stated in the assessment order that it was made under S. 23(3) and S. 41(1) of the Act, in the assessment orders for the years 1959–60, 1960–61 and 1961–62 there is no reference to S. 41(1) of the Act. But it is mentioned that the assessments were made under S. 23(3) of the Act, and the tax was again levied at the maximum rate. The appellant felt aggrieved by the computation of the tax at the maximum rate for the the said three assessment years, and instead of preferring an appeal, as he had done in case of the assessment for the year 1958–59, he moved this Court under Art. 226 of the Constitution and obtained a rule nisi. This rule was discharged by Banerjee, J., by a judgment and order dated July 7, 1964, and this appeal is directed against this judgment and order.
2. Mr. I.P Mukherjee, learned counsel for the appellant, contended that in the assessment orders for the years 1959–60, 1960–61 and 1961–62 there was an error of law apparent on the face of the records and therefore, this Court had jurisdiction to quash the said orders by issuing appropriate writs and orders. He referred to the assessment order for the year 1958–59, which is to be found at pages 100-102 of the Paper Book, and submitted that the appellant was assessed as an association of persons consisting of the appellant himself and his sons and daughters. The total income of the Wakf properties was taken to be Rs. 19,676/-, as directed by the order of the Appellate Assistant Commissioner dated December 29, 1962. He submitted that in this order it was held that the shares of the beneficiaries under the Wakf deed were not determinate. On this basis the tax was calculated at the maximum rate and the maximum rate prescribed by the Finance Act, 1960, was 25 per cent.
3. Mr. Mukherjee next argued that in regard to the assessments for the years 1959–60, 1960–61 and 1961–62 which are the subject-matter of this appeal, the Income Tax Officer firstly failed to indicate in the order that the assessments were made under S. 41(1) of the Act as he should have done, and he also failed to hold that the beneficiaries under the Wakf Estate were an indeterminate class of persons. It was argued that it was only after it was held that the beneficiaries were not determinate, that the tax could be computed at the maximum rate of 25 per cent. There was nothing in the assessment orders to indicate that the Income Tax Officer came to the conclusion that the beneficiaries were an indeterminate class of persons and that being so, tax at the maximum rate could not be computed, but having been so computed, there was an error of law, apparent on the face of the records. Mr. Mukherjee further argued that the authority to compute the tax at the maximum rate was derived from the first proviso to S. 41(1) of the Act and in order to invoke and apply this proviso, the taxing authority must hold that the beneficiaries were an indeterminate class of persons. Without holding that the benefieiaries are an indeterminate class of persons, the maxmium rate could not be applied.
4. The substance of this contention is that the authority to compute the tax at the maximum rate is derived from the first proviso to S. 41(1) of the Act. Tax had in fact been computed at the maximum rate, without indicating in the orders that the assessments were made under S. 41(1) of the Act. The only indication in the assessment orders, Mr. Mukherjee argued, as to the law on which the assessment orders were made, was a referrence to S. 23(3) of the Act. As there was nothing in the orders to show that they were made under S. 41(1) of the Act, and as there was no finding that the beneficiaries were an indeterminate class of persons, Mr. Mukherjee argued, the tax could not be computed at the maximum rate. But as the tax had been computed at the maximum rate without indicating that this was done under S. 41(1) of the Act, there was an error of law apparent on the face of the records. The Income. Tax Officer, Mr. I.P Mukherjee argued, was bound to give reasons as to why the tax was computed at the maximum rate. The asssesment orders, it was argued, must show on the face of them, that the computation of tax at the maximum rate was justified. If the orders did not show any reason or justification for computation of the tax at the maixmum rate, such orders would be liable to be quashed by appropriate writs, as there would be ah error of law apparent on the face of the records.
5. Mr. I.P Mukherjee next contended that as the assessments were made under S. 23(3) of the Act, his client would be entitled to the benefit of the slab or scale prescribed by paragraph A of Part I of the First Schedule to the Finance Act, 1960. But instead of doing that, the Income Tax Officer imposed the maximum rate, prescribed by paragraph C of Part I of the First Schedule to the Finance Act, 1960. This could be done, Mr. I.P Mukherjee argued, if only the assessments were made under S. 41(1) of the Act and there was a finding Tinder the first proviso to S. 41(1), that the beneficiaries of the Wakf were an indeterminate class of persons. As there was no such finding the said paragraph C could not be invoked and the tax could not be computed at the maximum rate. In support of this contention Mr. I.P Mukherjee relied upon a decision of the House of Lords in (1) Society of Medical Officers of Health v. Hope (Valuation Officer), (1960) A.C 551. In that case there was a dispute with regard to valuation of a property for the purpose of local rates and taxes. On appeal to the local Valuation Court, that Court decided that the property was exempt from valuation for the purpose of local rates under a different statute. After several years a hew valuation list was prepared and the property which was previously held to be exempt was again entered in the valuation list. Exemption was again claimed on the basis of the statute. While dealing with this question it was held that a decision of a local Valuation Court did not create an estoppel, per rem judicatam when the valuation list which was the subject of an earlier decision had come to the end of its statutory life and a new quinquennial valuation list was brought into existence, even if it was shown that there had been no change of circumstances. This decision is of no assistance to Mr. I.P Mukherjee. In the assessment for the year 1958–59 the order was made under S. 23(3) and S. 41(1) of the Act. In the assessment for the subsequent years, namely, 1959–60, 1960–61 and 1961–62 the Income Tax Officer had computed the tax at the maximum rate without specifying in the orders of assessment that S. 41(1) was invoked and applied. There is nothing on record to show that in making the orders of assessment for the years 1959–60, 1960–61 and 1961–62 the Income Tax Officer had computed the tax at the maximum rate because that rate was applied in the order for the earlier year, namely, 1958–59. There is no question of estoppel involved in this appeal and therefore, the decision mentioned above has no application to this case.
6. Turning now to the principal contention of Mr. I.P Mukherjee, namely, that there was an error of law apparent on the face of the record, in the failure or omission of the Income Tax Officer to mention in the assessment orders that they were made under S. 41(1) and also in his failure to state in the said assessment orders that in his opinion the beneficiaries of the Wakf Estate were an indeterminate class of persons, it has to be seen if the statute imposes upon the Income Tax Officer a duty to specify the particular section under which the assessments were made. Is it incumbent upon the Income Tax Officer to specify the section of the Income Tax Act, 1922, under which the assessment orders were made? Is it again incumbent on the Income Tax Officer to state in the order that the tax was calculated at the maximum rate because the beneficiaries under the Wakf Estate were an indeterminate class of persons? There would be an error of law if, and only if, the statute-imposed upon the Income Tax Officer a duty to disclose or specify the sections under which the powers of taxing the income were exercised or a duty to specify the reasons which induced him to impose the tax at a particular rate.
7. Mr. S. Mukherjee, learned counsel for the respondents, contended that there was no substance in the appellant's contention, namely, that in the assessment order the sections of the Act on the basis of which the orders were made, must be set out or that the reasons for computing the tax at the maximum rate must be stated. He referred to the assessment order and computation of income for the year 1959–60 which is annexure ‘G’ to the petition and submitted that the total income for the year was taken to be Rs. 20,886/- and in that order the total demand for tax was also shown at Rs. 6318.94 nP. He also referred to the notice of demand for the same year under S. 29 which is annexure ‘F’ to the petition, in which also the demand of Rs. 6318.94 nP. as tax for that year was made. He submitted that the assessment order made it quite plain that the tax was levied at the maximum rate. Similarly he also referred to the assessment order and computation of income for the year 1960–61 which is annexure ‘I’ to the petition and in which the income was taken to be Rs. 23,993/- and the total tax was computed at Rs. 7437.46 nP. He also referred to the notice of demand for the year 1960–61 under section 29 of the Act which is annexure ‘H’ to the petition and in which the demand of Rs. 7437.46 was made for income tax. Mr. S. Mukherjee submitted that in this year also the assessment order and the demand notice under S. 29 made it plain that tax was computed at the maximum rate. The same submission was made with regard to the assessment order and notice of demand for the year 1961–62, which are annexures “J” and “K” to the petition
8. Mr. S. Mukherjee argued that it was not incumbent on the Income Tax Officer to set out in the assessment order the particular section of the Act under which the assessment was made or to set out therein the grounds on which the order was made. The computation of tax for the year 1959–60, 1960–61 and 1961–62 was sufficient determination, by the Income Tax Officer as required by the Act. Failure or omission, Mr. S. Mukherjee argued, to quote the section of the Act under which the assessment was made or to set out the reasons for making the assessment at the maximum rate could not be treated as an error of law apparent on the face of the records, justifying interference by this Court by issue of writs or orders under Art. 226 of the Constitution.
9. Mr. Mukherjee next argued that if the Income Tax Officer had the jurisdiction to make the order failure or omission on his part to refer to the Section under which the order was made, cannot vitiate either the proceedings or the order made. The basic question, Mr. S. Mukherjee, argued, was if the Income Tax Officer had the jurisdiction to make the order, and if he had, omission to quote the Sections under which the order was made would not make the same void. In support of this contention he referred to a deciof the Supreme Court in (2) L. Hazari Mal Kuthiala v. Income Tax Officer, Special Circle, Ambala, 41 I.T.R 12. In that case a wrong statute was quoted by the Commissioner of Income Tax who instead of making the order under the Patiala Income Tax Act, had made an order under the Indian Income Tax Act and this order was challenged on the ground that it was ultra vires, as it was not made under the Patiala Act. It was held that the exercise of a power would be referable to the jurisdiction which conferred validity upon it and not upon a jurisdiction under which it would be nugatory and that the order of the Commissioner was not invalid merely because it was not made under the Patiala Act. Mr. S. Mukherjee submitted that a reference to a particular statute or a Section thereof was immaterial in determining the question of validity of an order made by the taxing officer, if he had jurisdiction to entertain the matter and make the order. In our opinion, this contention of Mr. S. Mukherjee is well founded.
10. Mr. S. Mukherjee next contended that the failure or omission on the part of the Income Tax Officer to give reasons for computing the tax at the maximum rate did not justify this Court in issuing a writ under Art. 226 of the Constitution to quash the findings of the Income Tax Officer. It was argued that so long as the Income Tax Officer had made a determination according to the procedure laid down in law, and so long as he had jurisdiction to make the order, omission or failure to give reasons for the order, was no ground for challenging the validity of the order itself. In support of this contention Mr. S. Mukherjee relied upon another decision of the Supreme Court in (3) Syed Yakoob v. K.S Radhakrishnan, A.I.R (1964) S.C 477. There is good deal of force in this contention of Mr. S. Mukherjee. The statute has not imposed upon the Income Tax Officer a duty to set out the reasons or to quote the section under which the power of making the assessment was exercised. Mr. S. Mukherjee also relied upon a Special Bench decision of the Madras High Court in (4) Gunda Subbayya v. Commissioner Of Income-Tax, Madras, A.I.R (1939) Mad. 371, in which while considering a similar question, namely, the duty of the Income Tax Officer to disclose the grounds on which the order was made, it was held that although it was desirable that the Income Tax Officer should indicate in his order the material on which he made the assesment, he could not be compelled to do so. In this case the demand notices and the assessment orders make it clear that the assessments were made at the maximum rate. That, in our opinion, is a sufficient determination by the Income tax Officer of the appellant's liability to income tax at the maximum rate.
11. Banerjee, J., was entirely right in rejecting the appellant's contention that the failure to indicate the reason for applying the maximum rate of tax was such an error apparent on the face of the records as to justify an order quashing it by the issue of the writ of certiorari. In doing so he relied upon, amongst other authorities, a passage in Halsbury (3rd Ed.) Vol. 11, Art. 118 which is as follows:—
“Where upon the face of the proceedings themselves it appears that the determination of the inferior tribunal is wrong in law, certiorari to quash will be granted. The tribunal is not (unless required by statute) obliged to set out in its adjudication the reasons which led it to its decision, but if it does state them, the superior Court will consider the question whether they are right in law and if they are wrong in law will quash the decision.”
12. This passage sets out in brief the circumstances in which the findings or the decision of a Tribunal can be quashed by a writ of certiorari.
13. Mr. S. Mukherjee next contended that the appellant's writ petition was misconceived. He argued that the writ jurisdiction of this Court could not be invoked by the appellant for the purpose of his alleged grievances with regard to the assessment orders made. The Income Tax Act, 1922, provided a complete machinery for relief to an assessee, who was aggrieved by an order of assessment of the Income Tax Officer. The appellant should have, Mr. Mukherjee argued, taken recourse to the relief provided in the statute instead of seeking a discretionary relief in the special jurisdiction of this Court under Art. 226 of the Constitution. In support of this contention Mr. S. Mukherjee relied upon a decision of the Supreme Court in (5) C.A Abraham v. Income Tax Officer, Kottayam, A.I.R (1961) S.C 609. In our opinion, Mr. S. Mukherjee's contention is well founded. The appellant appears to be aggrieved by an order of the Income Tax Officer. In respect of the assessment order for the year 1958–59 he was also similarly aggrieved, but he preferred an appeal as provided in the Act, In our opinion, there is no reason at all why he should not have sought the relief which he claimed in his petition under Art. 226, by preferring appeals against the orders of the Income Tax Officer for the three subsequent years. If the appellant has been wrongly assessed and his liability has been computed and fixed at a higher rate, the appellate authority under the Act would have been competent to deal with his grievance, and give him relief, if he was entitled to any. The jurisdiction of this Court under Art. 226 of the Constitution cannot be invoked for agitating matters of the nature which has been raised in this appeal. The learned counsel for the appellant sought to rest his case on the contention that there was an error of law apparent on the face of the record, in the failure of the Income Tax Officer to quote the provisions of the Act and set out the reasons in the order made. That, in our opinion, can by no means be treated as an error of law apparent on the face of the records.
14. Mr. S. Mukherjee next argued that even assuming that the order made by the Income Tax Officer was irregular and was also wrong in imposing liability for tax at a higher rate, those are matters concerning the merits of the orders of assessment and such irregularity could not be regularised nor could the error be rectified by this Court in exercise of its jurisdiction under Art. 226 of the Constitution. In support of this contention, Mr. S. Mukherjee relied upon two decisions of the Supreme Court in (6) W. Narayana Chetty v. The Income Tax Officer, Nellore, A.I.R (1959) S.C: 213 and in (7) Shivram Poddar v. Income Tax Officer, Central Circle, 51 I.T.R 8232. Mr. S. Mukherjee relied upon the passage in Shivram Poddar's case at page 829 of the report which runs as follows:—
“It is for the revenue authorities to ascertain the facts applicable to a particular situation, and to grant appropriate relief in the matter of assessment of tax. He-sort 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 arose, 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 revenue authorities, the party approaching the Court has often to ask the Court to make assumption of facts which remain to be investigated by the revenue authorities.”
15. In our opinion the appellant's petition under Art 226 of the Constitution must be held to be misconceived. The extraordinary jurisdiction of this Court under Art, 226 of the Constitution cannot be invoked for agitating grievances of the nature which have been canvassed before us in this appeal. It was not a case where the jurisdiction of the Income Tax Officer was challenged either on the ground that he had no jurisdiction or on the ground that he exceeded the jurisdiction which the statute had conferred upon him. The appellant's case was that failure or omission to specify the provisions of the statute, or the reasons for the order, constitute an error of law apparent on the face of the records. The petition under Art. 226 of the Constitution by the appellant was, as held by the Supreme Court in Shivram Poddar's case, an attempt to bypass the provisions of the Income Tax Act.
16. There remains only one other matter to be dealt with before I conclude. Mr. I.P Mukherjee referred to the, order of the Appellate Assistant Commissioner dated December 29, 1962, which is annexure ‘C’ to the petition and is to be found at pp. 30-32 of the Paper Book. He argued that the Appellate Assistant Commissioner had directed that a sum of Rs. 19,676/- should be excluded from the assessment for the year 1958–59 and should be assessed separately. This was done as appears from the assessment order at pp. 100-102 of the Paper Book.
17. But for the years 1959–60 and 1960–61, the Appellate Assistant Commissioner's direction was that two sums of Rs. 20,670/- and Rs. 21,564/- were to be excluded, as the income of the Wakf property. But, it was argued, that for the year 1959–60, the Income Tax Officer had raised the income from Rs. 20,670/- to Rs. 20,886/- and for the year 1960–61 the income was raised by the Income Tax Officer from Rs. 21,564/- to Rs. 23,993/-. Relying upon these figures, Mr. I.P Mukherjee contended that the Income Tax Officer violated the clear direction of the Appellate Asssitant Commissioner and had arbitrarily raised the income as mentioned above. In our opinion, there is no merit in this contention. It is true that the Appellate Assistant Commissioner by his said order had directed that the two sums of Rs. 20,670/- and Rs. 21,564/- were to be set apart as being the income of the Wakf property, But the order of the Appellate Assistant Commissioner was not a determination of the income of the Wakf properties for the years 1959–60 and 1960–61. There was no direction by the Appellate Assistant Commissioner to the Income Tax Officer that the income of the Wakf properties for the years 1959–60 and 1960–61 should be taken to be Rs. 20,670/- and Rs. 21,564/-. It was for the Income Tax Officer, who was dealing with the assessment, to fix the income unless there was a direction upon him by the appellate authority to treat a particular income as the income of the estate. There was, however, no such direction and therefore, it cannot be said, as contended by Mr. I.P Mukherjee, that there was a violation by the Income Tax Officer of the order made by the Appellate Assistant Commissioner. But even assuming that there was violation of the order, the fact that the Income Tax Officer proceeded on the footing of a higher income of the estate than the income mentioned in the order of the Appellate Assistant Commissioner, cannot be regarded as an error of law apparent on the face of the record, so as to enable this Court to interfere with the orders made by the Income Tax Officer by issuing a writ of certiorari.
18. For the reasons mentioned above, this appeal fails and is accordingly dismissed. Each party to pay its own costs.
Bose, C.J:— I agree.
C.R.D