Mr. U.C Rekhi v. The Income-Tax Officer Ist F Ward, New Delhi .

Kapur, J.:— On the application of U.C Rekhi rule nisi was issued directed against the Income-Tax Officer, Ist ‘F’ Ward, New Delhi, prohibiting him from proceeding against the petitioner till the decision of the petition by this Court. This rule was issued on the 15th March, 1950 and was served on the Income-tax Officer on the 31st March.

2. The applicant contends that be belonged to Rawalpindi and had all along been residing and doing business there till the partition of the Punjab in 1947. He was carrying on the business of running a hotel at Murree in the district of Rawalpindi and he was also doing contract business there. He stated that although he had all his immovable property in the district of Hazara (now Pakistan) and all his other valuable assets were in Pakistan he had to quit that country owing to communal disturbances after the partition and he had now come to live in India. He also stated the that he had been assessed to income-tax at Rawalpindi and for the year of assessment 1943–1944 the tax was assessed by the Income-tax Officer ‘A’ Ward, Rawalpindi, against which order he had filed an appeal before the Income-tax Appellate Tribunal, Lahore and that he had submitted his return for the assessment years 1944–1945, 1945–1946, 1946–1947 and 1947–1948 to the Income-tax Officer, Rawalpindi, before the 15th of August 1947, which had not so far been adjudicated upon. In December 1947, he goes on to state, he was required by the Income-tax Officer, ‘H’ Ward, Delhi, to prove that he was an assessee of Rawalpindi and on his producing the necessary documents the said Income-tax Officer accepted his contention that he had duly been assessed and was an assessee of Rawalpindi. He proceeds to say that on the 30th of December 1948 the Income-tax Officer, 1st ‘F’ Ward, served a notice dated 30-11-48 under section 34 of the Income-tax Act calling upon him to make returns for the assessment years ending 31st March, 1945 and 31st March, 1946, that similar notices were also served on him by affixation for the assessment years 1946–1947 and 1947–1948 and that in spite of his protests the Income-tax Officer was proceeding with the assessments. He complains that he had been writing to the said Income-tax Officer and to the Commissioner of Income-tax and to the Central Board of Revenue that assessment should not be proceeded with but no action had been taken. His objections are: (1) that the assessment for the years 1944–1945 to 1947–1948 was pending before the Income-tax Officer, Rawalpindi, who was seized of the matter and, therefore, there was no question of any definite information coming into the possession of the Income-tax Officer, 1st ‘F’ Ward, New Delhi, or of any discovery by him that any income chargeable to income-tax has escaped assessment or has been under assessed or has been assessed at too law a rate or has been the subject of excessive relief; (2) the Income-tax Officer, 1st ‘F’ Ward. New Delhi, has no jurisdiction to call upon him to submit fresh returns for re-assessment when there has been no assessment at all for the period in question; (3) that he has also no jurisdiction on the ground that the petitioner was during the material time, a permanent resident of Rawalpindi and had been making returns to the Income-tax Officer of that place; and (4) that neither under clause (3) of the Indian Independence (Income-tax Proceedings) Order, 1947 the jurisdiction of the Rawalpindi Income-tax Officer had been altered nor had his case been transferred from the Dominion of Pakistan to the Dominion of India and therefore there was no jurisdiction in the Income-tax Officer, 1st ‘F’ Ward, New Delhi, to assess or re-assess the income of the petitioner under section 34 of the Income-tax Act. On these grounds he prayed for a writ of certiorari to direct the Income-tax Officer to transmit the records of the proceedings initiated by him to this Court and for the quashing of those proceedings and for a writ of prohibition forbidding him to continue with the proceedings that had been initiated by him. The petition was filed on the 7th of March, 1950, although the notice was served on him in December 1948. It is no doubt true that his right for these writs did not accrue till after the Constitution came into force but there is no explanation why soon after the Constitution came into force this application was not made. The learned Vacation Judge was available in Delhi from 27th January to 19th February and he was working in this Court from 20th February to 3rd March and was available for urgent work from that date to the date of opening of the Court, i.e, 14th March, 1950.

3. In reply the Income-tax Officer, Mr. Ishwar Dayal, has filed an affidavit in which he states (1) that from enquiries made by him he has discovered that Rekhi came to live in Delhi in 1926 and was residing in a house outside Kucha Ghasi Ram and had also built a house, 7/29 Darya Garj, Delhi and that during the relevant years he had executed a number of contracts of various officers' messes in New Delhi within his jurisdiction; (2) that on the 27th of September 1949 the petitioner was assessed to income-tax for the year 1944–1945 and in respect of the assessment year 1945–1946 the assessment had been made on the 27th of March 1950; (3) that the respondent had jurisdiction under sections 34 and 64 of the Income-tax Act to call for returns as the petitioner was residing in Delhi and carried on an extensive business within the jurisdiction of the respondent and had filed returns for the assessment years 1944–1945 to 1947–1948; (4) that at any rate the respondent had jurisdiction to assess the petitioner in respect of income, profits and gains accruing, arising or received within the area of his jurisdiction; (5) that the legislature had entrusted the decision of the facts and law to the Income-tax Officer subject to a right of appeal and statement of the case to the High Court and that on a challenge of jurisdiction of the Income-tax Officer to make the assessment it is for him or the Commissioner of Income-tax to decide upon the materials before them whether the individual is or is not liable to assessment and (6) that the petitioner was estopped from questioning the jurisdiction in regard to the place of assessment as he had submitted the returns; at any rate no writ could issue with regard to the assessment dated the 27th of March 1950 which was made before the writ was served on him.

4. In his reply to the affidavit of the Income-tax Officer the petitioner admitted that he was living in Delhi some time before as a Schoolmaster in D.A.V High School, Delhi, but the house in Darya Ganj had been built by his daughter who was a teacher in the Lady Hardinge Medical College. It was further admitted that in February 1945 he obtained a catering contract of one of the hostels in New Delhi which was in addition to his main business at Rawalpindi. It is significant that he has not denied the other allegations made by the Income-tax Officer that the petitioner had during the relevant years executed a number of contracts of various officers' messes situate in New Delhi. The other paragraphs beyond reiterating what was alleged in his petition do not carry the matter any further.

5. The applicant's contentions which were pressed before us by his counsel may be summarised as follows:—

(1) That there was no jurisdiction in the Income-tax Officer to make or proceed upon an assessment if the individual to be assessed is in fact not chargeable to income-tax;

(2) that the individual was not chargeable to income-tax in the Union of India because he was not residing in India during the material time;

(3) that the Income-tax Officer cannot give himself jurisdiction to assess the petitioner by determining in the first instance that be is chargeable when in fact he is not;

(4) alternatively that if the Income-tax Officer had jurisdiction to assess him in the first instance the petitioner was not bound to challenge the decision by way of appeal and case stated as provided for in the Income-tax Act;

(5) that the information before the Income-tax Officer did not in fact or in law afford any ground for proceeding under section 34 of the Income-tax Act nor was it ‘discovery’ that the applicant was chargeable;

(6) that the evidence which he had produced before the Court in the form of letters and other correspondence establishes that the applicant was in fact not liable to assessment in the Union of India; and

(7) that if the Court should find itself unable to arrive at the conclusion of fact on the affidavits now submitted it should “direct pleadings in prohibition to determine the issue”.

6. In reply, the counsel for the Income-tax Department contended (1) that there was suppression of material facts in the affidavit on which the rule for prohibition was made and on that ground alone the Court should refuse the writ; (2) that the object of the petitioner was not to get the assessment quashed but it was merely to prevent the Income-tax Officer from proceeding with his assessment which would have become impossible if the assessment had not been made before the 31st of March 1950; (3) that it is for the assessing authorities to decide in the first instance whether the applicant is chargeable to income-tax; (4) that if the Income-tax Officer has honestly come to the conclusion upon information in his possession that the petitioner has escaped assessment in any year under section 34 of the Income-tax Act, then it is for him to proceed in accordance with law and there car, be no challenge by way of prohibition or certiorari; and (5) that the decision of the Income-tax Officer can only be challenged in the manner provided for in the Income-tax Act.

7. The matter has been debated in a very able manner by the counsel appearing for the parties and a large number of rulings were cited firstly to show the jurisdiction of this Court and then as to whether the petitioner bad or had not made out a case for this Court to proceed. The principle is quite clear that a writ of prohibition is issued only where there is something done in the absence of jurisdiction or in excess of jurisdiction (see Rex v. Swansea Income Tax Commissioner . 1925 2 K.B 250 at p. 254.). In the 17th Vol. of Halsbury's Laws of England, Hailsham Edition, at p. 368 the matter has been put thus; “A writ of prohibition is an appropriate remedy where the facts establish clearly that on the hearing of an appeal against an assessment the only course open to the Commissioner hearing the appeal is to discharge the assessments. Where, however, there is any doubt as to the facts, the appropriate remedy is by way of appeal and not by way of writ of prohibition. A writ of prohibition is issued when there is something done in the absence of jurisdiction or in excess of jurisdiction and is appropriate where there is a question to be determined which can be determined on an appeal against an assessment.”

8. As submitted by the counsel for income-tax autborities, there has been suppression of material facts in the affidavit which was filed by the petitioner. He did not disclose that from February 1945 he was carrying on catering business in New Delhi. On the other hand, the suggestion made in his petition was that he had all along been residing and carrying on business in that part of Punjab which is now Pakistan. He was carrying on hotel business at Murree and was also doing contract business there Read howsoever sympathetically one may the affidavit of the petitioner, there is no indication there that he was at any material time in what is now the Union of India or was carrying on business there. It is not only suppressio veri but it is also suggesstio falsi. On this ground alone, in my opinion, this rule should be discharged. The matter has been put thus in the 10th edition of the Law of Income-tax by Konstam at p. ???: “If there is any suppression of material facts in the affidavit on which the rule for a prohibition is moved, the Court will refuse the writ”. In the 17th Vol. of Halsbury's Laws of England, Hailsham Edition, at p. 369 it is stated: “Uberrima fides is essential where an application is made for a rule nisi for a writ of prohibition and therefore if there is a suppression of material facts in the applicant's affidavit the Court will refuse the writ without going into the merits.” Lord Cozens-Hardy M.R, in The King v. The General Commissioners for the purpose of the Income Tax Acts for the District of Kensington . 1917 K.B 486. has said that the rule of the Court requiring uberrima fides on the part of an applicant for an ex-parte injunction applied equally to the case of an application for a rule nisi for a writ of prohibition and, therefore, there having been a suppression of material facts by the applicant in the affidavit, the Court would refuse a writ of prohibition without going into the merits of the case. On this ground alone the petitioner is not entitled to a writ from this Court.

9. On behalf of the Respondent the view submitted is that the Legislature has entrusted the decision of the facts and the law subject to appeal and the statement of the case to ibis Court to the Income-tax Officer and that on a challenge of the jurisdiction of the Income-tax Officer to make the assessment it is for him and on appeal for the authorities given in the Income-tax Act to decide upon material facts before them whether the individual is or is not chargeable to income-tax. Their decision, it was submitted, is final upon the facts but it is open to review on the appeals provided by the Income-tax Act and by the High Court upon a case stated.

10. The judgment, therefore, must depend upon the meaning that I would attribute to the language of section 34 of the Income-tax Act. It says “If in consequence of definite information which has come into his possession the Income-tax Officer discovers that income, profits or gains chargeable to income-tax have escaped assessment in any year, * * * the Income-tax Officer may, in any case in which he has reason to believe that the assessee has concealed the particulars of his income or deliberately furnished inaccurate particulars thereof, at any time within eight years and in any other case at any time within four years * * * serve on the person liable to pay income-tax * * “. What then is the meaning to be given to the word “discover” in this section? Is it sufficient that the Income-tax Officer honestly arrives at the conclusion based upon the material before him that the applicant had escaped income-tax or must the facts be established by sufficient legal evidence to justify the conclusion of the Income-tax Officer. The whole argument resolves itself into the single question whether section 34 is to be applied as looked in its operation to a person who in the judgment of this Court is in fact and in law chargeable or whether it applies to a person who the Income-tax Officer honestly has reason to believe is so chargeable.

11. In Rex v. Kensington Income-tax Commissioner . 1913 3 K.B 870. the expression “discover” was construed by Bray, J., to mean “If he comes to the conclusion on the information before him” and Lush, J., said that it means “if he is satisfied” and Avory, J., said that it means “If he has reason to believe”.

12. Mr. Tek Chand in this connection submitted firstly, that the Income-tax Officer cannot give himself jurisdiction to assess a person under section 34 by determining in the first instance the facts and the law which would be applicable and secondly, that there was no material at all before the Income-tax Officer, with regard to the latter point, the affidavit of the officer shows that he had material before him on which he founded his opinion and, therefore, I do not think that this point is available to the petitioner. With regard to the other point as to who is to determine whether the Income-tax Officer has or has not jurisdiction my opinion is that the contention of the petitioner is again without force. The point which the petitioner wishes to make is that the Income-tax Officer cannot give himself jurisdiction by a wrong decision of facts.

13. Lord Esher M.R, considered that formula in Reg v. Commissioners for Special Purposes of the Income-tax . 21 Q.B.D 313 at p. 319. and said:—

“When an inferior Court or tribunal or body, which has to exercise the power of deciding facts, is first established by Act of Parliament, the Legislature has to consider what powers it will give that tribunal or body. It may in effect say that, if a certain state of facts exists and is shown to such tribunal or body before it proceeds to do certain things, it shall have jurisdiction to do such things, but not otherwise. There it is not for them conclusively to decide whether that state of facts exists and, if they exercise the jurisdiction without its existence, what they do may be questioned and it will be held that they have acted without jurisdiction. But there is another state of things which may exist. The Legislature may intrust the tribunal or body with a jurisdiction, which includes the jurisdiction to determine whether the preliminary state of facts exists as well as the jurisdiction; on finding that it does exist, to proceed further or do something more. When the Legislature are establishing such a tribunal or body with limited jurisdiction, they also have to consider, whatever jurisdiction they give them, whether there shall be any appeal from their decision, for otherwise there will be none. In the second of the two cases I have mentioned it is an erroneous application of the formula to say that the tribunal cannot give themselves jurisdiction by wrongly deciding certain facts to exist, because the Legislature gave them jurisdiction to determine all the facts, including the existence of the preliminary facts on which the further exercise of their jurisdiction depends; and if they were given jurisdiction so to decide, without any appeal being given, there is no appeal from such exercise of their jurisdiction.”

14. Most respectfully I would say that this dictum states accurately the principle applicable to such cases and this was the opinion of Lord Reading, C.J, in Rex v. Bloomsbury Income Tax Commissioners . 1915 3 K.B 768 at p. 783.. In Allen v. Sharp . 2 Ex. 352. Parke B. at p. 363 draws the distinction between the case then under consideration and cases under the statutes relating to poor rate and his observations are important and I would quote him in extenso:—

“On a careful consideration of these Acts of Parliament, they seem to me to differ from the Statute of Elizabeth (Poor Relief Act, 1901, 43 Eliz. c. 2), as to poor rate and that the Legislature intended that the assessment of the assessors appointed by the Commissioners should be final and conclusive, unless appealed from, in the first place, to the Commissioners and further if necessary, to the Judges of the superior Courts. It would be singular if there were no such provisions; for, what a flood of litigation would follow, if every subject of the Crown, who was dissatisfied with the judgment of the assessors, had a right to dispute the propriety of their assessment in an action against the Collectors. * * Without referring to the statutes, I should say, a priori, that the object of the Legislature was to make the decision of the assessor final and binding, unless disputed in the manner pointed out. On reading the statutes I come to the same conclusion. By the 9th section of the 43 Geo. 3, c. 99, the Commissioners are to meet and appoint assessors, who are to bring in their certificates of assessments verified on oath; and the assessors are thereby ‘required, with all care and diligence, to charge and assess themselves and all other persons chargeable with the said duties’. If the language had been ‘to charge and assess all such persons as they honestly and bona fide, after due care and diligence, believed to be chargeable’, their assessment would beyond all question, be final.”

15. And he found that under Statutes 43 Geo. 3, c. 99 and c. 161, the only remedy was by appeal to the Commissioners. It was argued in that case that the Legislature meant that the decision should be final only in respect of such persons as were liable to be rated but were rated for too much. Parke B., held that such a construction would be too narrow.

16. Avory, J., in Rex v. Bloomsbury Income Tax Commissioners said:—

“In such a case it is an erroneous application of the formula to say that the tribunal cannot give themselves jurisdiction by wrongly deciding certain facts to exist, because the Legislature gave them jurisdiction to determine all the facts including the existence of the preliminary facts on which the further exercise of their jurisdiction depends” and he relied on Colonial Bank of Australasia v. Willam . 1874 L.R 5 P.C 417.. The learned Judge continued:—

“The principle of law to be applied in this case is that laid down by Tindal, C.J in Vave v. Mountain . 1840 L.R Man. & G. 257. (approved and adopted by Lord Denman C.J in Reg v. Bolton . 1841 1 Q.B 66 at p. 75.), where he says, dealing with a question of the jurisdiction of Magistrates, ‘But if the charge be of an offence over which, if the offence charged be true in fact the Magistrate has jurisdiction, the Magistrate's jurisdiction cannot be made to depend upon the truth or falsehood of the facts, or upon the evidence being sufficient or insufficient to establish the corpus delicti brought under investigation,’ and that the remedy for any person aggrieved by an assessment made under section 52 either by reason of his being chargeable at all, or by reason of it being excessive, by appeal to the General Commissioners and by special case.”

17. In Rex v. Bloomsbury Income-tax Commissioners, Lord Reading, C.J, said at pp. 784 and 785:—

“In my view an examination of the Income-tax Acts shows that the scheme of the Legislature is to entrust the decision of the facts to a tribunal of persons specially selected for the locality and who are often in a better position than the Courts to determine the questions of fact, sometimes very complicated, which may arise. The exigencies of the State require that there should be tribunal to deal expeditiously and at comparatively little expense with all such questions and to decide them finally, reserving always to the individual the right to have the Commissioners' decisions on points of law reviewed by the Courts. The obligation is placed, for reasons of expediency, upon the person assessed to appeal to the Commissioners if he wishes to rid himself of an assessment which is, in his view, based upon wrong conclusions of fact and this obligation rests equally upon a person who contends that he is not chargeable as upon a person who admits that re is chargeable but not to the extent of the assessment made upon him.

I am therefore of opinion that it is for the Commissioners to decide whether or not a person assessed by the Additional Commissioners, after ‘discovery’ by the surveyor, is in fact chargeable. But there must be information before the surveyor which would enable him, acting honestly, to come to the conclusion that a person is chargeable.”

18. Avory, J., who gave a concurrent judgment said at p. 891:—

“For these reasons I come to the conclusion that the surveyor has jurisdiction to ‘discover’ and the Additional Commissioners have jurisdiction to make an assessment in a case where the person charged denies that he is carrying on trade in the district and disputes any liability to the duties and the question remains to be considered whether in this particular case there is any ground for saying that the Additional Commissioners have exceeded or that the General Commissioners are about to exceed their jurisdiction.”

19. Mr. Tek Chand strongly relied on Rex v. Commissioners for the General purposes of the Income-tex for Kensington . 1914 3 K.B 429.. I cannot do better than give the scope of the rule laid down in this case by quoting the judgment of Avory, J., in Rex v. Bloomsbury Income Tax Commissioners at p. 791

“Much reliance was placed in the argument for the applicant * * * and the decision of the Court of appeal in Rex v. Kensington Income-tax Commissioner and it was contended that the jurisdiction of the Commissioners under this section could only attach to a person who was in fact shown to be engaged in trade, adventure, etc., in their district, but in my opinion this section and the decision of the Court of appeal only provide for and determine the particular Commissioners by whom the assessment is to be made in the various cases mentioned in the section and do not carry the argument any further.”

20. In Rex v. Swansea Income-tax Commissioners where the applicants were assessed to income-tax by the General Commissioners under Sch. D. Case I, of the Income-tax Act, 1918, on an amount computed on their average profits for three preceding years and at the time the assessment was made it was impossible for the applicants to ascertain whether there would be a balance of profits for the year it question and no notice of appeal against the assessment was given and after the time for appealing had expired, the applicants alleged that they had ascertained that their business had resulted in a loss and upon these facts they obtained a rule for a writ of prohibition it was held that prohibition would not lie to the General Commissioners, who had acted in accordance with their statutory duty in making the assessment and had not exceeded their jurisdiction. At p. 256 Lord Hewart, C.J, said:—

“The whole argument falls to the ground unless it is found or admitted that in the year referred to there was a less and it is suggested, with an appearance of seriousness, that this Court is the tribunal which should undertake the task of deciding whether there has been a loss or not and for that purpose the Court ought to direct an issue or order pleadings to be delivered. In other words, the argument involves this, that this Court is to undertake the very task which in the clearest language the statute has imposed upon the General Commissioner. That argument is put forward, paradoxically enough, in an argument for a writ of prohibition which is based upon a lack or an excess, of jurisdiction in the Commissioners in entertaining the very question which under the statute they have to undertake. It is quite clear to my mind that this Court cannot entertain the question whether there has been a loss in this particular year.”

21. Avory, J., in a concurring judgment relied on the observation of Lord Esher M.R, in Reg v. Commissioners for Special purposes of the Income-tax and held that it was for the body of Commissioners to decide in accordance with their statutory duty.

22. In Rex v. Inspector of Taxes for Parish of Kingaland . 8 T.C 327. the Lord Chief Justice said in regard to a question whether there should be a writ of prohibition where the surveyor says that he discovers that a person chargeable has been allowed a deduction not authorised by law:—

“I think it is a fact that the question which had to be determined here was a question at the outest within the jurisdiction of the surveyor and if there is exception taken to the additional first assessment which he has accordingly made, there is a clear right of appeal under the Act and that right of appeal is at this present moment being pursued by the applicants in this case. I think, therefore, that the application for the writ of prohibition manifestly fails.”

23. Lush, J., said at p. 330:—

“Now dealing with that case the position is this; the applicants have to show, in order to entitle themselves either to a writ of prohibition or a writ of certiorari, that the surveyor had no jurisdiction to enquire into the matters into which be did enquire and to come to the conclusion to which he in fact came.”

24. Dealing with section 125 which seems to correspond to section 34 of the Indian Income-tax Act the learned Judge said:—

“Here the section manifestly gives to the surveyor, if he makes this discovery, the power to deal the assessment. If he honestly comes to the conclusion that a mistake has been made, it matters nothing so far as his jurisdiction to amend the assessment is concerned, that he may have come to an erroneous conclusion, whether on law or on fact. His jurisdiction to amend is correctly and rightly exercised, even though he has taken an erroneous view of the law with regard to the mistake in allowance that has been made.”

25. He further said:—

“So that, whether one looks at the application for a writ of prohibition or the application for a writ of certiorari, one finds that in each case jurisdiction is given to the surveyor to investigate the matters and to come to a conclusion, whether it is upon a matter of law or upon a matter of fact. That being so, it seems to me that both these applications necessarily fail.”

26. In Rex v. The General Commissioners of Income-Tax for the Division of St. Marylebone . 13 T.C 746. Mr. Schlesinger, a British subject, carried on a business in London until the end of 1920, when he gave up the business and went to South Africa. At that time and until November, 1926, he was the lessee of a flat within the Division of Marylebone. During 1926 assessments to income-tax in respect of profits from foreign possessions were made by the Marylebone Commissioners for each of the seven years 1920–1921 to 1926–1927 inclusive. Thereupon Mr. Schlesinger applied for a Rule nisi calling on the Marylebone Commissioners to show cause why a writ of prohibition should not be awarded to prohibit them from proceeding on the assessments on the grounds that—

(1) he was not ordinarily resident within the Commissioners' Division when any of the assessments were made,

(2) as regards the year 1920–1921 his liability had already been finally determined and

(3) as regards subsequent years, he had been since 31st December, 1920, resident and domiciled in South Africa and not resident or ordinarily resident in the United Kingdom.

27. A Rule nisi as regards the six years 1920–1921 to 1925–1926 inclusive was granted. As regards the year 1926–1927, against the assessment for which notice of appeal had been given, the Court refused to grant a Rule nisi.

28. It was held that the subject's liability to assessment depended on questions of fact which it was the Commissioners' function to determine and that there was no evidence to show that the Commissioners would be bound to determine those questions in the subject's favour.

29. A perusal of these English authorities thus show that (1) if the Legislature has given to the Income-tax Officer the power under section 34 to do a certain act in consequence of information which comes into his possession and the discovery made by him therefrom it is not for this Court to undertake the very task which in the clearest language the Legislature has chosen to impose upon the Income-tax Officer; (2) the proper remedy for an assessee who feels aggrieved by the action of an Income-Tax Officer under section 34 is to take the matter in appeal and then have a case stated to the High Court in accordance with the provisions of the Income-tax Act; and (3) it is not excess of jurisdiction if the Income-tax Officer gives himself jurisdiction to assess a person by determining in the first instance that the case falls within section 34 of the Income-tax Act.

30. In India the matter has been decided in certain cases although the cases are not very numerous because of the existence of section 226 in the Government of India Act of 1935 and corresponding provisions in previous Acts taking away the jurisdiction of the original side of the High Court from entertaining applications in regard to revenue but a great deal of assistance can be derived from a judgment of their Lordships of the Privy Council in Raleigh Investment Co. Ltd. v. The Governor-General in Council . A.I.R 1947 P.C 78.. In that case, a suit had been brought by an assessee claiming repayment of a part of a larger sum of money under an assessment to income-tax made upon it. The basis of the claim was that in the computation of assessable income effect had been given to a provision of the Income-tax Act which in the submission of the appellant was ultra vires the Indian Legislature. Lord Uthwatt delivering the judgment of their Lordships said at p. 81:—

“In their Lordships' view it is clear that the Income-tax Act, 1922, as it stood at the relevant date, did give the assessee the right effectively to raise in relation to an assessment made upon him the question whether or not a provision in Act was ultra vires. Under section 50, an assessee whose only ground of complaint was that effect had been given in the assessment to a provision which he contended was ultra vires might appeal against the assessment. If he were dissatisfied with the decision on appeal—the details relating to the procedure are immaterial—the assessee could ask for a case to be stated on any question of law for the opinion of the High Court and, if his request were refused, he might apply to the High Court for Order requiting a case to be stated and to be referred to the High Court (see section 30 and Secretary of State for India in Council v. Meyappa Chettiar . 4 I.T.R 341). It cannot be doubted that included in the questions of law which might be raised by a case stated in any question as to the validity of any taxing provision in the Income-tax Act to which effect has been given in the assessment under review. Any decision of the High Court upon that question of law can be reviewed on appeal. Effective and appropriate machinery is therefore provided by the Act itself for the review on grounds of law of any assessment. It is in that setting that section 67 has to be construed.

“In their Lordships' view the construction of the section is clear. Under the Act the Income-tax Officer is charged with the duty of assessing the total income of the assessee. The obvious meaning and in their Lordships opinion the correct meaning, of the phrase ‘assessment made under the Act is an assessment finding its origin in an activity of the assessing officer acting as such. The circumstance that the assessing Officer has taken into account an ultra vires provision of the Act is in this view immaterial in determining whether the assessment is made under the Act’. The phrase describes the provenance of the assessment: it does not relate to its accuracy in point of law. The use of the machinery provided by the Act, not the result of that use, is the test.”

31. His Lordship further said:—

“The result of an enquiry into the merits of the assessment is, on the appellant's construction, to determine whether jurisdiction existed to embark on the enquiry at all. Jurisdiction is made to depend not on subject-matter but on the correctness of the suitor's contention as respects subject-matter. The language of the section is inapt to justify any such capricious method of determining jurisdiction.

“In conclusion their Lordship would observe that the scheme of the Act is to set up a particular machinery by the use of which alone total income assessable for income-tax is to be ascertained. The income-tax exigible is determined by reference to the total income so ascertained and only by reference to such total income. Under the Act (section 45) there arises a duty to pay the amount of tax demanded on the basis of that assessment of total income. Jurisdiction to question the assessment otherwise than by use of the machinery expressly provided by the Act would appear to be inconsistent with the statutory obligation to ray arising by virtue of the assessment. The only doubt, indeed, in their Lordships' mind, is whether an express provision was necessary in order to exclude jurisdiction in a civil Court to set aside or modify an assessment.”

32. This is a very strong case. It shows that in their Lordships' opinion even if section 67 of the Income-tax Act did not exist, the proper course open to an assessee would be to proceed under the provisions of the Income-tax Act and not have recourse to other proceedings.

33. In Besant v. Advocate General of Madras . I.L.R 43 Mad. 146 P.C. the question was whether a writ of certiorari could issue in a case under the Press Act. Their Lordships at p. 160 referred to section 22 of the Act which provides,—

“22. Every declaration of forfeiture purporting to be made under this Act shall, against all persons, be conclusive evidence that the forfeiture therein referred to has taken place and no proceeding purporting to be taken under this Act shall be called in question by any Court, except the High Court on such application as aforesaid and no civil or criminal proceeding, except as provided by this Act, shall be instituted against any person for anything done or in good faith intended to be done under this Act.”

34. It was contended before their Lordships on behalf of the appellant that as the writ of certiorari had not in terms been taken away the right to it remained notwithstanding the very express but still general words of this section. Lord Phillimore in delivering the judgment of their Lordships said:—

“However that might be according to English law, where there is no such revision procedure as in India, their Lordships see no reason for narrowing the express words of the Indian Act. Certorari according to the English rule is only to be granted where no other suitable remedy exists. If the order of the Magistrate were a judicial order, it would have been made in the exercise either of his civil or of his criminal jurisdiction and procedure by way of revision would have been open.

“Even were it to be said that the order was of that quasi judicial kind to which certiorari has sometime been applied in England or in India, the Press Act may quite reasonably have intended to take it away and there is no reason why full effect should not be given to its language.”

35. This would show that on a true construction of the various sections of the Income-tax Act the extraordinary remedy by writ of certiorari or prohibition would not be available to the assessee. Although the words of section 67 of the Income-tax Act are not as wide as that of section 22 of the Press Act, ??? their Lordships of the Privy Council in Raleigh Investment Co. Ltd. v. The Governor General in Council said:—

“Under the Act there arises a duty to pay the amount of tax demanded on the basis of that assessment of total income. Jurisdiction to question the assessment otherwise than by use of the machinery expressly provided by the Act would appear to be inconsistent with the statutory obligation to pay arising by virtue of the assessment.”

36. In my opinion, these words clearly bar the remedy which the petitioner seeks in this case.

37. The Madras High Court have in Secretary of State for India in Council v. Meyyappa Chettiar considered the English cases that I have referred to above. In that case, a suit was brought for a declaration that the plaintiff was not liable to be assessed to income-tax on the income received by him from his business in Saigon (Indo-China) and for recovery of tax levied from him in the previous years. It was held in that case that the assessing officer had power to determine the question of the plaintiff's residence in British India and the consequent receipt of the profits in question in British India and that, as he did make an enquiry as to the facts relating to the plaintiff's residence in British India and it could not be said that he did not, or could not honestly come to the conclusion that the plaintiff was a resident of British India and received in British India the income remitted from Saigon, the plaintiff's suit was barred by section 67 of the Act and was not maintainable. Varadachariar, J., who delivered the main judgment, relied on the English cases that I have referred to above.

38. Khosla, J. and myself in the matter of Janda Rubber Works16 (Civil Miscellaneous No. 46-L of 1949) held that proceedings under the Companies Act could not be taken against the income-tax authorities because of the prohibition of section 226 of the Government of India Act of 1935. We also held that a writ of prohibition or certiorari would not be available to a complaining assessee.

39. There is another impediment in the way of the petitioner. His allegation that he is not liable to assessment because of the place of his assessment is a matter which under section 64 of the Income-tax Act is to be decided by the Income-tax Commissioner. In sub-section (3) of that section it is provided that if any question arises under that section as to the place of assessment, such question shall be determined by the Commissioner, or, where the question is between places in more Provinces than one, by the Commissioners concerned, or, if they are not in agreement, by the Central Board of Revenue. The provisions of sub-sections (1) and (4) are also fatal to the submission of the petitioner.

40. I must, therefore, hold that the jurisdiction to proceed under section 34 is by laws vested in the Income-tax Officer who has a statutory duty imposed upon him to proceed if be makes a discovery within the meaning of section 34 of that Act. He has to determine the facts and the law in order to give him the jurisdiction to proceed and if in the determination of this he goes wrong, the proper remedy for an assessee is to go up in appeal and to have a case stated to High Court under the provisions of the Income-tax Act. The determination of the place of assessment of an assessee on the determination of which Courts in England have issued writs of prohibition is a matter to be determined by the Commissioner of Income-tax and not by the Courts. Looked at from any angle, therefore, the petition was misconceived and must therefore be dismissed. As the matter is one which has come up for the first time before this Court and the principles on which this Court will proceed had not been determined before, I would not award costs against the petitioner.

41. Harnam Singh, J.:— I agree.

42. Petition dismissed.