JUDGMENT
Ramratna Singh, J.
1. These three appeals by the same plaintiff arise out of three suits governed by a judgment of the Additional Subordinate Judge of Hazaribagh dismissing the suits for a declaration and permanent injunction against certain income-tax authorities. The admitted facts are these. The plaintiff namely, the Raja Bahadur of Ramgarh, is a resident of village Padma in the district of Hazaribagh. He was assessed income-tax at Hazaribagh from some time in 1937 to August 1940. Before 1987, he was a minor under the guardianship of the court-of-wards. From September, 1940 to September, 1944, he was assessed at Patna, as his cases were transferred to that place. From October, 1944 to July 1947 he was again assessed at Hazaribagh to which place his cases were transferred The three suits relate, however, to the assessment for the years 1948-49, 1949-50 and 1950-51. On the 1st August, 1947, the Commissioner of Income-tax, Bihar and Orissa, issued an order under Section 5 of the Indian Income-tax Act transferring the plaintiff’s assessment cases from Hazaribagh to Patna.
On the 26th April, 1948 the Income-tax Officer, Special Circle, Patna, Charge III, to whom these cases had been transferred, issued to the plaintiff notices under Section 22(2) of the Act, calling upon him to submit returns in respect of the three years in question within a certain period. The income-tax returns for 1948-49, 1949-50 and 1950-51 were filed before that officer by the plaintiff on the 4th January, 1949, the 26th December 1949 and the 11th February, 1961, respectively. On the 24th October, 1950, the plaintiff had filed an application before the Commissioner of Income-tax requesting him to transfer his cases from Patna to Hazaribagh. There is, however, difference between the parties as to whether subsequently the plaintiff requested the Commissioner to transfer the cases either to Hazaribagh or to any other place near Padma. On the 21st April, 1961. the Commissioner, in exercise of his powers under Section 5(6) of the Act, transferred the plaintiff’s cases along with the cases of a large number of assessees from Patna to Ranchi. The Income-tax Officer of Ranchi had been dealing with the cases from the 1st May, 1961 to the 18th August 1952, when the Central Board of Revenue transferred the cases under Section 5(7A) of the Act from Ranchi to Calcutta
The plaintiff appeared before the income-tax Officer, Calcutta, under protest and questioned his jurisdiction to deal with his assessment cases for any of the years in question. In spite of the objection, however, the Calcutta Officer completed assessment for 1948-49 under Section 23(3) of the Act on the 26th March, 1953. Thereupon, the plaintiff filed a suit on the original side of the Calcutta High Court against the said income-tax officer of Calcutta praying for declaration and injunction, but he withdrew the suit on the 29th May, 1956. In respect of the year 1949-50. the Calcutta Income-tax Officer made an assessment under Section 23(4) of the Act; and thereupon the plaintiff filed an application under Article 226 of the Constitution of India in the Calcutta High Court, but the same was rejected on the 27th August, 1954. On the 24th March, 1955, the Calcutta Officer assessed the plaintiff, under Section 23(3) of the Act. for 1950-51.
On the 28th November, 1951, the plaintiff filed a petition before the Supreme Court under Article 32 of the Constitution for a declaration that Section 5(7a) of the Act as well as the order of transfer passed by the Central Board of Revenue was unconstitutional On the 23rd March 1956. the Supreme Court quashed the impugned order of the Central Board of Revenue dated the 18th August, 1952 and granted an injunction restraining the income-tax authorities from realising any money on the basis of the assessment orders passed by the Calcutta Officer.
In the meantime, the plaintiff had also preferred appeals against the assessment orders passed by the Calcutta Officer to the Appellate Assistant Commissioner, who had kept the appeals pending on account of the case in the Supreme Court. On the 15th January, 1958, the Appellate Assistant Commissioner set aside the assessment orders for the three years in question on account of the decision of the Supreme Court. Some time in March, 1957, the Income-tax Officer of Ranchi issued notices under Section 34 of the Act on the plaintiff in respect of the three years in question and these notices were served on the 25th March, 1957 by affixation.
On the 8th May. 1957, the Commissioner of Income-tax. Bihar and Orissa, transferred the assessment files of the plaintiff under Section 5(7A) of the Act to Hazaribagh with effect from the 15th May, 1957 and the plaintiff received a copy pf that order on the 12th May. 1957 The Income-tax Officer, Hazaribagh, thereupon sent a registered letter to the plaintiff informing him of the service of notices under Section 34 and also requesting him to submit his returns of income for these years. This letter was received by the plaintiff on the 18th July, 1957 There was further correspondence between the plaintiff and the Income-tax Officer Hazaribagh but the plaintiff did not submit any return On the 4th November, 1957 the plaintiff filed an application before the Patna High Court under Article 226 of the Constitution for a writ against this Income-tax Officer. Subsequently, he withdrew the application and filed the present suits on the 6th February, 1959 against the Union of India (defendant No. 1), the Central Board of Revenue (defendant No. 2), the Commissioner of Income-tax, Patna (defendant No. 3), and Income-tax Officers of Ranchi and Hazaribagh (defendants 4 and 5).
2. In all the three suits, the plaintiff has sought for a declaration that no assessment can be legally made under Section 34 of the Act in respect of any of the three years in question on account of the decision of the Supreme Court and the bar of limitation, there being no question of escaped assessment. There is also a consequential relief for permanent injunction against the defendants. It was also asserted that the orders of transfer of the cases of the plaintiff from Hazaribagh to Patna and again from Patna to Ranchi were null and void. There is one more assertion, namely, that the notices under Section 34 had not been properly served on the plaintiff.
The defendants, who filed a joint written statement in each suit, asserted, on the other hand, that the orders of transfer passed by the Income-tax Commissioner of Patna were valid and that after the decision of the Supreme Court the cases of the plaintiff for the three years in question were those of escaped assessment within the meaning of the expression in Section 34 of the Indian Income-tax Act. It was further asserted that the civil court had no jurisdiction to entertain the suits. The defendants also alleged that the notices had been properly issued by the Income-tax Officer of Ranchi after obtaining the approval of the Commissioner of Income-tax to proceed under Section 34 and that they were properly served on the plaintiff
3. The question of jurisdiction of the Civil Court was decided by the learned Additional Subordinate Judge against the plaintiff: and, therefore the question whether the proceedings taken under Section 34 of the Income tax Act were legal or void was left open Consequently, the suits were dismissed The learned Subordinate Judge further found that the Income-tax Officer submitted to the Commissioner a proposal for proceeding under Section 34 after recording reasons therefor and that the Commissioner had approved the proposal, as required by Section 34. He also held that the notices had been properly served on the plaintiff through his servant The last two findings were not challenged during the arguments in this Court.
4. The plaintiff-appellant has challenged the finding regarding the jurisdiction of the civil court mainly on two grounds.
5. The first ground urged by Sri Lalnarain Sinha is that the Ranchi Income-tax Officer was not competent to take any action in the assessment proceedings in question, inasmuch as there was no valid and operative transfer to that officer of the proceedings pending before the Patna Income tax Officer for the reason that the Commissioner’s notification dated the 21st April, 1951, which was prospective in effect, had merely the effect of distribution and allocation of business. This notification of the Commissioner of Income-tax was made under Sub-section (6) of Section 5 of the Income-tax Act. Under this sub-section, an Income-tax Officer, shall perform his functions in respect of such persons or classes of persons or of such incomes or classes of income or in respect of such areas as the Commissioner of Income-tax may direct”. After allocation of work under this sub-section, an Income-tax Officer is competent to exercise all his powers for the assessment of income-tax on any assessee within the jurisdiction assigned to him by the order of the Commissioner. The Commissioner is also competent to reallocate or redistribute the work allotted to one Income-tax Officer to another Income-tax Officer (Sarupchand Hukumchand, a firm v. Commissioner of Income-tax, 1949-17 ITR 213: (AIR 1949 Bom 178) ). The said notification covered a large number of areas called circles and an equal number of Income-tax Officers and their jurisdiction covers almost the entire State of Bihar. From the preamble to this notification, it appears that with effect from the 1st May, 1951 the distribution and allocation of work among the Income-tax Officers mentioned in a particular column of the schedule appended to the notification was made in accordance with the last column of the schedule bearing the heading ‘jurisdiction’. The jurisdiction of the Special Circle, Ranchi Income tax Officer, in this schedule reads thus:
“All E. P. T., B. P. T. and I. T. cases of the revenue districts of Ranchi, Singhbhum-Manbhum, Palamau and Hazaribagh in the State of Bihar now specially assigned to the present I. T. O., Spl. Circle, Charge 11, Patna, and such other cases as may from time to time be similarly assigned hereafter to him.”
Sri S.N. Dutta, therefore, contended rightly that the Ranchi Officer had jurisdiction after the 1st May, 1951 to deal with all income-tax cases of the revenue districts assigned to him. This contention is well founded and is supported by authorities.
6. In M.M. Ispahani Ltd. v. Commissioner of Excess Profits Tax, (1952) 21 ITR 490 : (AIR 1953 Cal 314), the distinction between Sub-section (5) and Sub-section (7A) of Section 5 of the Act was clearly pointed out. With reference to an argument that an order for transfer of a case could only be made under Sub-section (7A), their Lordships of the Calcutta High Court observed:
“It, however, appears that Section 5(7A) deals only with the transfer of a particular case from one Income-tax Officer to another Under Section 5(5) the Commissioner of Income-tax is given the power to transfer a class of cases from one Income-tax Officer to another.”
In L. Hazari Mal Kuthiala v. Income-tax Officer, Special Circle, Ambala Cantt., (1961) 41 ITR 12: (AIR 1961 SC 200), their Lordships of the Supreme Court in dealing with the scope of Sub-section (5) and Subsection (7A), observed that the provisions of Sub-section (7A), which empower the Commissioner of the Central Board of Revenue to transfer any pending case, “are to be read as not prejudicing the general powers granted by Sub-section (5) and vice-versa. It was further observed that “there was nothing to prevent the Commissioner, acting under Sub-section (5), to arrange that the case of an assessee shall be disposed of by a particular Income-tax Officer”. The aforesaid observations afford a guide; and from these observations it may reasonably be inferred that, though an order under Sub-section (5) could deal only with distribution and allocation of work among the Income-tax Officers, by implication such an order would also amount to transfer of a class of cases from one Income-tax Officer to another. In Bidi Supply Co. v. Union of India, 1956-29 ITR 717: ( (S) AIR 1956 SC 479) there was an omnibus general notification under Subsection (7A) to the effect that the Central Board of Revenue would “hereby transfer the case of Biri Supply Company, 3/1 Madan Street, Calcutta, from the Income-tax Officer. …. Calcutta, to the Income-tax Officer, Special Circle, Ranchi”. In the majority judgment of the Supreme Court, it was observed that the omnibus wholesale order made in this case was not contemplated or sanctioned by Subsection (7A) and that this sub-section contemplated only the transfer of a particular case actually pending before an Income-tax Officer. In other words, the transfer of a class of cases or those of a class of assessees, without reference to any particular case, cannot be made under Sub-section (7A). An omnibus transfer is, therefore, contemplated by Sub-section (5). Sri Lalnarain Sinha referred to a decision of the Supreme Court in Lalji Haridas v. Income-tax Officer, (1961) 43 ITR 387 (SC), in which it had been conceded by the parties that an order of transfer of a case from Jamnagar to Bombay by the Central Board of Revenue was illegal and consequently the subsequent orders of transfer by the Commissioner of Bombay was illegal; but this decision is of no help, as it does not show for what reasons the first order of transfer was illegal, Sri Sinha also relied on certain decisions dealing with the consequences of any modification in the territorial jurisdiction of a civil court under the relevant provisions of the Civil Procedure Code, 1908 and the Bengal, Agra and Assam Civil Courts Act, 1887, namely, Chockalinga Pillai v. Velayudha Madaliar, AIR 1925 Mad 117 and Ramier v. Muthu Krishna Ayyar, AIR 1932 Mad 418 and Ram Sunder v. Amrit. AIR 1923 Pat 242 (1).
On the other hand, Sri S.N. Dutta relied on
behalf of the respondent on decisions in Chaturbhuj Marwari v. A.W. Walker, (1909) 13 Cal
WN 265, Bachu Koer v. Golab Chand, (1900)
ILR 27 Cal 272 and Suban Rai v. Kesho Pd.
Singh, AIR 1930 Pat 230. It is, however, un
necessary to discuss these decisions, because
the provisions regarding jurisdiction, territorial
and pecuniary, of the civil courts are different
from those relating to the jurisdiction of the
Income-tax authorities contained in Section 6 of the
Income-tax Act.
7. In view of the foregoing discussions, I am of the opinion that the order of the Commissioner dated the 21st April, 1961 made under Sub-section (6) of Section 5 of the Act was valid and by this order the assessment cases of the plaintiff were legally transferred to the Income-tax Officer of Ranchi.
8. It is then remarkable that the validity of the transfer order or the competence of Ranchi Officer was never raised before the institution of the present suits and even then ultimately it was not challenged before the trial Court. It was alleged in paragraph 21 of the plaints that, in transferring the cases of the plaintiff from Patna to Ranchi, without notice the Commissioner of Income-tax acted contrary to the principle of law and natural justice and that the order of transfer was null and void. On the other hand, in paragraph 24 of the written statements, the defendants asserted that the transfer in question was according to the wishes of the plaintiff for his convenience. On this point, no issue was, however, raised in these suits apparently because (as stated in paragraph 10 of the judgment of the trial court) “the validity of that order”–that is, the said order of transfer–“has not been challenged by the plaintiff” it is true that in his petition dated the 24th October, 1950 (Ext. 4) presented to the Commissioner of Income-tax that, while his cases were pending before the Income-tax Officer of Patna, he requested the Commissioner to transfer the same to Hazaribagh mainly for the reason that his income had been much reduced on account of certain facts stated in the petition and was not, therefore, required to be assessed any longer in the Special Circle at Patna; but in the judgment of the Supreme Court dated the 20th March, 1956, which is an enclosure to the plaints, it is stated that the plaintiff had applied for transfer of his cases near Padma, that is, either at Hazaribagh or Ranchi and the proceedings were accordingly transferred to Ranchi In his letter to the Income-tax Officer of Hazaribagh dated the 21st July, 1957, the plaintiff referred to his petition for transfer of the cases from Patna and said that “the authorities have appreciated my difficulties and transferred my assessment case to the Income-tax Officer, Ranchi. This indicates that he was satisfied with the order of transfer of his cases to Ranchi. Thus, the plaintiff consented to the transfer.
9. It was also submitted by Sri Lalnarain Sinha that the statement in the decision of the Supreme Court that he wanted the cases to be transferred from Patna either to Hazaribagh or Ranchi is not correct, in view of the prayer in his petition dated the 24th October. 1950. But on the meagre materials on the record, it is not possible to accept this submission.
The question now raised regarding the validity of the transfer from Patna to Ranchi is a matter of substance and. in view of the fact that the plaintiff did not ultimately challenge the validity of the transfer even before the trial Court, though such a challenge was initially made in paragraph 21 of the plaints the defendants did not bring on the record ail the materials available to meet this challenge. Sri Lalnarain Sinha submitted that the question of materials is irrelevant, because once the case was taken up by one Income-tax Officer, no other Income-tax Officer could take cognizance thereof without a valid order of transfer; but, as found earlier, there was a valid order of transfer.
Sri Lalnarain Sinha then submitted that consent of the assessee could not confer jurisdiction on the Ranchi Officer. This is true; but there is no question of jurisdiction by consent. What is needed is a valid order of transfer; and that is there. There was, however, a waiver on the part of the plaintiff in respect of the place of assessment under Section 64 of the Income-tax Act, which deals with the place of assessment. It may be mentioned incidentally that, according to both the parties, the Act as amended up to 1940 applies to the present case. The relevant provisions of this section are as follows:
“64. Place of Assessment. (1) Where as assessee carried on a business, profession or vocation at any place, he shall be assessed the Income-tax Officer of the area in which that place is situate or where the business, profession or vocation is carried on in more places than one, by the Income-tax Officer of the area in which the principal place of his business, profession or vocation is situate.
(2) In all other cases, an assessee shall be assessed by the Income-tax Officer of the area in which he resides
(3) Where any question arises under this section as to the place of assessment, such question shall be determined by the Commissioner, or, where the question is between places in more States than one, by the Commissioners concerned or, if they are not in agreement, by the Central Board of Revenue:
Provided that, before any such question is determined, the assessee shall have had an opportunity of representing his views;
xx xx xx x*
Provided further that if the place of assessment is called in question by an assessee the Income-tax Officer shall, if not satisfied with the correctness of the claim refer the matter for determination under this sub-section before assessment is made.
(4) Notwithstanding anything contained in this section, every Income-tax Officer shall have all the powers conferred by or under this Act on an Income-tax Officer in respect of any income, profits or gains accruing or arising or received within the area for which he is appointed.
(5) The provisions of Sub-section (1) and Sub-section (2) shall not apply and shall be deemed never at any time to have applied to any assessee-
(a) on whom an assessment or re-assessment for the purposes of this Act has been, is being or is to be made in the course of any case in respect of which a Commissioner of Income-tax appointed without reference to area under Sub-section (2) of Section 5 is exercising the functions of Commissioner of Income-tax, or
(b) where by any direction given or any distribution or allocation of work made by the Commissioner of income-tax under Subsection (6) of Section 6, of in consequence of any transfer made under Sub-section (7A) of Section 5, a particular Income-tax Officer has been charged with function of assessing that assessee, or
xx xx xx xx”
It will be noticed that under the last proviso to the Sub-section (3) any objection to the place of assessment has to be made by the assessee to the Income-tax Officer, who shall thereafter refer the matter for determination to the higher authorities. Hence, the absence of any objection at any time before the institution of these suits did amount to waiver to the place of assessment, that is, Ranchi in the present case
10. Further, the question of place of assessment is procedural or administrative. Subsection 5(b) of Section 64 lays down that Subsection (1) and Sub-section (2) thereof do not apply to the case where there is an order under Section 5(6). Having considered the relevant subsections of Section 64, the Federal Court said in Wallace Brothers & Co., Ltd. v. Commissioner of Income-tax, Bombay, Sind and Baluchistan, (1945) 13 ITR 39: (AIR 1946 FC 9) :
“These provisions clearly indicate that the matter is more one of administrative convenience than of jurisdiction and that in any event it is not one for adjudication by the court.”
This view of the Federal Court was approved by the Supreme Court in Pannalal Biniraj v. Union of India, (1957) 31 ITR 565 at pp. 579 880 : ( (S) AIR 1957 SC 397 at pp. 405-406) and in Taomal v. Commissioner of Income-tax and Excess Profits Tax, (1959) 36 ITR 9: (AIR 1969 SC 742). In the latter case their Lord ships of the Supreme Court quoted the observation of the Federal Court and said:
There was nothing in the Bidi Supply case, (1966) 29 ITR 717: ( (S) AIR 1956 SC 479), which in any way detracts from the efficacy of the decision of the Federal Court in Wallace Brothers’ case, (1945) 13 ITR 39 at p. 45: (AIR 1945 FC 9 at pp. 18-14). We have already said that the Bidi Supply case, 1966-29 ITR 717: ( (S) AIR 1956 SC 479), deals with the vires of Section 5(7A)”.
It is, therefore, now well settled that the place of assessment determined by the Commissioner cannot be challenged in the civil court. It has also been held in Wallace Brothers’ case, 1946-13 ITR 39: (AIR 1945 FC 9) that there can be waiver as to the machinery (that is procedure) of taxation. Hence, the plaintiff-appellant cannot be allowed to raise the. question in these suits.
11. In any view of the matter, therefore, the first ground urged by Sri Sinha is without any merit and it must be over-ruled.
12. The second ground urged on behalf of the plaintiff-appellant is that there is nothing in the Income-tax Act to prevent the civil courts from from entertaining the present suits inasmuch as no assessment has been made as yet and the Income-tax Officer has acted against certain provisions of Section 34.
18. The civil court is a court of plenary jurisdiction and the courts are competent under Section 9 of the Civil Procedure Code to try all suit of civil nature “excepting suits of which their cognizance is either expressly or impliedly barred”. In Secretary of State v. Mask & Co., AIR 1940 PC 105, their Lordships of the Judicial Committee said:
“It is settled law that the exclusion of the jurisdiction of the civil courts is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied. It is also well settled that even if jurisdiction is so excluded, the civil courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure.”
Their Lordships of the Judicial Committee quoted with approval the following observation of Willys, J. in Wolverhampton New Water Works Co. v. Hawkesford, (1859) 6 CB (NS) 336: 7 WR 464:
“Where the statute creates a liability not existing at common law, and gives also a particular remedy for enforcing it. . . .. With respect to that class it has always been held that the party must adopt the form of remedy given by the statute.”
Their Lordships of the Judicial Committee, who were dealing in that case with the provisions of the Sea Customs Act, observed that, inasmuch as by Ss. 188 and 191 of the Act a precise and self contained code of appeal is provided in regard to obligations which were created by the statute itself, and it enables the appeal to be carried to the supreme head of the executive Government, the jurisdiction of the civil courts was barred, particularly in view of Section 188, which provided that “every order passed in appeal under this section shall, subject to the power of revision conferred by Section 191 be final”. It was further observed that the determination of the question relating to the exclusion of the jurisdiction of the civil courts must rest on the terms of the particular statute which is under consideration, and decisions on other statutory provisions are not of material assistance, except in so far as general principles of construction are laid down.
14. In view of the principles stated above, we have to examine at first whether the jurisdiction of the civil courts is barred expressly or impliedly by the provisions of the Income-tax Act. A review of the Income-tax Act shows that the liability of a person to pay the tax is fixed by the charging sections, namely, Sections 3 and 4, themselves and he is to be assessed with a certain amount of tax, in accordance with the procedure contained in the machinery sections which commence from Section 22. The assessment orders of Income-tax Officers are then subject to review on appeals and revisions before the Appellate Assistant Commissioner, the Commissioner and the Appellate Tribunal.
The time when the tax is payable is provided
by Section 45; and Section 46 lays down the mode and
time of recovery. The Appellate Tribunal can
refer a case to a High Court under Section 66 and
in certain cases appeals lie to the Supreme Court
under Section 66A. Then comes Section 67 which expressly bars the jurisdiction of the civil courts
in certain respects. But, it will be noticed
that, apart from Section 67, the Income-tax Act is
a comprehensive code; and, therefore, if a
person is liable to pay tax under the charging
sections, the assessment proceedings can be questioned only in the manner prescribed by
the machinery sections. This view is sup
ported by authorities. In an appeal arising out
of a civil suit (Raleigh Investment Co. Ltd. v.
Governor General in Council, AIR 1947 PC 78:
1947-15 ITR 332), their Lordships of the Judicial
Committee said that the Income-tax Act “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 the
Act was ultra vires. Effective and appropriate machinery is therefore, provided by the
Act itself for the review on grounds of law of
any assessment 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 The only doubt indeed in their
Lordships’ mind, is whether an express pro
vision was necessary in order to exclude jurisdiction in a civil court to set aside or modify
an assessment” that is, Section 67 Their Lordships
further said that the “assessment made under
the Act” used in Section 67 “is an assessment finding
its origin in an activity of the assessing officer
acting as such. 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” In an appeal
against the judgment of the Patna High Court
on a reference under Section 66(1) of the Income-tax
Act (Chatturam v. Commissioner of Income-tax.
Bihar, AIR 1947 FC 32 1947-15 ITR 302) their
Lordships of the Federal Court repelled an
argument that the notice under Section 22 of the
Act was the foundation of the jurisdiction of
the Income-tax Officer and said that the liability to pay the tax was founded on Section 3 and 4
of the Act, which are the charging sections, and
the machinery sections to determine the amount
of tax start from Section 22 They quoted with approval the observation of Lord Dunedin in
Whitney v. Inland Revenue Commissioners,
1926 AC 37 which reads thus
“Now, there are three stages in the imposition of a tax. There is the declaration of liability, that is the part of the statute which determines what persons in respect of what property are liable. Next there is the assessment Liability does not depend on assessment, that ex hypothesi has already been fixed But assessment particularizes the exact sum which a person liable has to pay. Lastly come the methods of recovery if the person taxed does not voluntarily pay.
Their Lordships also referred to an observations of Sargant, L.J. in In re, Williams, (not reported), to this effect:
“I cannot see that the non-assessment prevents the incidence of the liability, though the amount of the deduction is not ascertained until assessment. The liability is imposed by the charging section, namely, Section 38 (of the English Act) the words of which are clear. The subsequent provisions as to assessment and so on are machinery only. They enable the liability to be quantified, and when quantified to be enforced against the subject, but the liability is definitely and finally created by the charging section and all the materials for ascertaining it are available immediately.”
Lastly, their Lordships of the Federal Court said:
“In Attorney General v. Aramayo, (1925), 9 Tax Cas 445, it was held by the whole court that there may be a waiver as to the machinery of taxation which enures against the subject. In India these well considered pronouncements are accepted without reservation as laying down the true principles of taxation under the Income-tax Act.”
In Chatturam Horiram Ltd. v. Commissioner of Income-tax, B. & O., (1955) 27 ITR 709 : ( (S) AIR 1955 SC 619), the Supreme Court approved the observations of the Federal Court regarding the scheme of the Act. With reference to Sections 3, 4 and 6 of the Income-tax Act, the Supreme Court observed further that “the income of an assessee attracts the quality of taxability with reference to the standing provisions of the Act but the payability and the quantification of the tax depend on the passing and application of the Annual Finance Act.”
15. On behalf of the appellant, it was submitted that Raleigh’s case, 1947-15 ITR 332 : (AIR 1947 PC 78), is no more a good authority in view of the decisions of the Supreme Court in the State of Tripura v. Province of East Bengal, (1951) 19 ITR 132: (AIR 1951 SC 23), which deals with a case under the Bengal Agricultural Income-tax Act. Section 66 of the Bengal Act (corresponding to Section 67 of the Income-tax Act) barred suits in civil courts “to set aside or modify any assessment made under this Act”. Their Lordships held that the suit before them was not hit by that provision. The appeal before the Supreme Court was against the judgment of the Calcutta High Court reversing the findings of the Subordinate Judge in a suit instituted by the Ruler of Tripura State on whose manager a notice has been served under the Bengal Act to submit return in respect of the Ruler’s agricultural income Reliefs sought were for a declaration that the Bengal Act in so far as it purported to impose a liability to pay agricultural income-tax on the plaintiff as a Ruler of an Indian State was ultra vires and void and for a perpetual injunction to restrain the defendants, that is, the Government, from taking any steps to assess the plaintiff to agricultural income-tax. Thus assessment had not been made and the suit had been instituted soon after the service of notice. Their Lordships assumed the allegations in the plaint regarding the question of jurisdiction to be correct and held that the notice requiring a return of income to be furnished for assessment under the Act was a step fraught with serious consequences to the assessee and if the assessment proposed was illegal and invalid by reason of the Act itself being ultra vires in so far as it purported to make the rulers of Indian States liable to taxation thereunder as contended by the plaintiff, the service of such notice marked the commencement of a wrongful act against the plaintiff by the Bengal Government and, therefore, the plaintiff was entitled to institute an action in a civil court for injunction restraining its completion. Their Lordships said that Section 65 of the Bengal Act did not affect the maintainability of the suit before them inasmuch as it was not a suit “to set aside or modify an assessment”. They distinguished Raleigh’s case, 1947-15 ITR 332: (AIR 1947 PC 78) on the ground that the suit in that case was not to set aside or modify an assessment but it was for repayment of a certain amount of money out of the amount which Raleigh Company had paid to the Income-tax authorities under protest after completion of the assessment. That is why it has been observed by the Assam High Court in Hardeodas Jagannath v. Income-tax Officer, Shillong, (1961) 43 ITR 562: (AIR 1960 Assam 162) and by the Bombay High Court in S. C. Prashar v. Vasantsen Dwarkadas, (1956) 29 ITR 857: ( (S) AIR 1956 Bom 530), that the effect of the decision in Raleigh’s case, 1947-15 ITR 332: (AIR 1947 PC 78) has been considerably modified by the Supreme Court in Tripura case. But the only modification in Raleigh’s case, 1947-15 ITR 332 : (AIR 1947 PC 78) is in respect of the first part of Section 67 of the Indian Income-tax Act which bars a suit “to set aside or modify an assessment. The same comment applies to a decision of the Patna High Court in Inderchand v. Secretary of State, (1941) 9 ITR 673: (AIR 1942 Pat 87) an appeal arising out of a suit, because that suit by the assessee being for recovery of a certain amount of money refundable to him on the ground that the same could not be adjusted by the Income-tax Officer against an arrear of tax which was not ‘legally recoverable’ from him was not a suit ‘to set aside or modify an assessment’.
16. In other respects, however, the observations of the Privy Council still hold good. This view finds support from a recent decision of the Supreme Court in the Central Potteries Ltd., Nagpur v. State of Maharashtra decided on the 30th March 1962, (Civil Appeal No. 205 of 1961 not yet reported (since reported in AIR 1966 SC 932). It was an appeal arising out of a suit for refund of certain amounts paid by the plaintiff appellant as sales tax under the Central Provinces & Berar Sales Tax Act, 1947. The plaintiff was registered as a dealer in July, 1947 and thereafter he submitted returns and paid taxes up to the 80th June, 1961. Subsequently, however, it brought the suit mainly on the ground that the sales tax officer who granted the registration certificate to it as a dealer was not authorised to do so under the Act and consequently all the assessments and recoveries of tax were illegal and void. The High Court held that it was not necessary to decide the legality or otherwise of its registration as a dealer, because even if the registration was invalid, that fact did not affect its liability to be assessed to sales tax. The Supreme Court upheld this view on the ground that the liability arose under Section 4 of the Act, which was the charging section, irrespective of whether the registration under Section 8 was valid or not.
Their Lordships made the following significant observation:
“In this connection, it should be remembered that there is a fundamental distinction between want of jurisdiction and irregular assumption of jurisdiction, and that whereas an order passed by an authority with respect to a matter over which it has no jurisdiction is a nullity and is open to collateral attack, an order passed by an authority which has jurisdiction over the matter, but has assumed it otherwise than in the mode prescribed by law, is not a nullity. It may be liable to be questioned in those very proceedings, but subject to that it is good, and not open to collateral attack. Therefore, even if the proceedings for assessment were taken against a non-registered dealer without the issue of a notice under Section 10 (1), that would be mere irregularity in the assumption of jurisdiction and the orders of assessment passed in these proceedings cannot be held to be without jurisdiction and no suit will lie for impeaching them on the ground that Section 10 (1) had not been followed”.
This principle explains the decision in Tripura case. There the liability of the Ruler of Tripura, a native State, to pay the tax under the charging section was itself in dispute and the Agricultural Income-tax authorities had not the right to decide this jurisdictional fact. In other words, there was a complete lack of jurisdiction in those authorities. The same principle explains the decision in Punjab Province v. Federation of Pakistan, (1957) 32 ITR 198 (FC Paid), wherein the liability of the Province to pay income-tax under the charging sections was in dispute.
17. In the present suits, the plaintiff-appellant does not challenge his liability under the charging sections, but he has challenged the action under Section 34 of the Income-lax Act. Hence, in view of the principle laid down in the latest decision of the Supreme Court, the suits cannot be entertained by the civil courts.
18. I shall now examine the question of jurisdiction with reference to Section 67 of the income-tax Act. The first part thereof lays down that “no suit shall be brought in any civil court to set aside or modify any assessment made under the Act”. According to the observation of the Supreme Court in Tripura case, this part does not affect the present suits. But the effect of the second part of the section has still to be considered. It says that “no prosecution, suit or other proceeding shall lie against any officer of the Government for anything in good faith done or intended to be done under this Act.” It will be noticed that this part speaks of any past as well as future acts.
It was argued on behalf of the appellant that the whole of this part applies to only tortious acts of Government servants and reliance was placed on certain decisions. Only one of these decisions, namely, Kesarichand Kaverlal v. S. H. G. Nayudu, (1942) 10 ITR 413: (AIR 1943 Mad 167), refers to the tortious acts of some income tax officers. But there is no discussion of Section 67 of the Income-tax Act, as it was held that these officers were protected by Section 270 of the Government of India Act. The decisions in Commissioner of Buxar Municipality v. Bhagwan Das, AIR 1950 Pat 8 and in State of Rajasthan v. Rikhabchand Dhariwal, AIR 1961 Raj 64 refer to tortious acts of municipal servants and Govt. servants. But the relevant sections of the Municipal Act as well as those of the Rajasthan Public Safety Ordinance speak of past acts, and not of future acts. No authority has been cited in respect of any provision of any Act in which the words “or intended to be done” are used as in Section 67 of the Income-tax Act. These words cannot apparently refer to a tortious act, because a suit for damages in respect of a tortious act must relate to a past act and not to an unknown future act.
Mr. Dull contended, and I think rightly that the words “intended to be done” in Section 67 of the Income-tax Act refer to any act which may be done by an officer of the Government under that Act in future and therefore, these words should include even an assessment proceeding to be completed in future under Section 34. In the Secretary of State for India v. V.M. Meyyappa Chettiar, (1936) 4 ITR 341: (AIR 1837 Mad 241), Varadachariar, J. (then of the Madras High Court), said “but it seems possible that the word ‘intended’ was used only to signify ‘futurity’ so as to preclude suits for injunction in respect of proceedings ‘intended’ to be taken by the income-tax authorities”. This question was considered by Fazl Ali, J. in the Triptira case. It may be mentioned that he differed from the majority judgment. So far as the first part is concerned, the majority judgment must prevail. But the majority judgment did not discuss the significance of the second part of Section 65 of the Bengal Act, which corresponds to Section 67 of the Income-tax Act Originally, a Government servant namely, an Income-tax Officer, also had been impleaded as a defendant in the Tripura suit, but as appears from the judgment of Patanjali Sastri, J., “the name of the Income tax Officer originally impleaded as the second defendant had been struck off the record.” Hence, he observed that no question in regard Jo the ‘liability’ of that officer arose The word ‘liability’ used here did not mean a liability in respect of a tortious act as is evident from the preceding sentence which reads thus
“……the Province of Bengal was undoubtedly liable to be sued for injunction restraining it from proceeding with the assessment. …”
A provision similar to the second part of Section 67 was, however, discussed by Fazl Ali, J. The relevant part of Section 65 of the Bengal Act read thus:
“No suit or other proceeding shall lie against any officer of the Crown for anything in good faith .. . .intended to be done under this Act.”
After quoting it, his Lordship observed that this part of the section clearly excluded the jurisdiction of the civil court to prevent the Income-tax officer from proceeding with assessment and he quoted the observation of Varadachariar, J., in the case of 1936-4 ITR 844: (AIR 1937 Mad 241), which 1 have already referred to. His Lordship further observed:
“It is true that in terms the provision concerns the Income-tax Officer only, but it could hardly have been the intention of the Legislature that though that officer is not liable to be restrained from proceeding with an assessment, the provision which ensures such result may be rendered nugatory by permitting an injunction to be claimed against the Provincial Government or the State .. .. … . There is no reference to the Provincial Government or the State at all in the first or the second part of the section, but the section as a whole concerns only with excluding the jurisdiction of the civil court in regard to certain acts done or intended to be done in connection with the assessment of agricultural income-tax, and, on a fair construction, it must be held to bar all suits in connection with such assessment. If I may say so with respect, I entirely agree with this observation of his Lordship so far as it relates to the second part of the section. It will be ridiculous and illogical to suggest that assessment once completed cannot be called in question in a court of law, but proceedings may be taken in a civil court to prevent assessment altogether
Mr. Iyenger submitted that the observation of Sir Fazl Ali cannot prevail over the majority judgment. If is not quite correct to say that those observations run counter to the majority judgment. As observed before, the other Judges did not deal with the effect and implication of the second part of Section 67, and, hence, the observations of an eminent judge like Sir Fazl Ali must be given the weight and the respect they deserve.
Mr. Iyenger also contended that in the present cases the Ranchi officer did not act in good faith in issuing the notice under Section 34 of the Income-tax Act; and he relied on the aforesaid Rajasthan decision in which it was held that inasmuch as the Commissioner merely reproduced the third ground of the relevant section in the detention order without any material before him, he had not acted in good faith. But in the present case the Income-tax officer of Ranchi had a very good material, namely, the decision of the Supreme Court quashing the assessment proceedings of the Calcutta Officer. According to the definition in the General Clauses Act of 1897, “if a thing is done honestly, it is deemed to be done in good faith, notwithstanding some negligence. The act of the Ranchi officer is, in my opinion, covered by this definition. Hence, the second part of Section 67 is a bar to the present suits. Sri Lalnarain Sinha contended that the jurisdiction of the civil courts could not be excluded simply because of the fact that appeals and revisions are provided up to the Supreme Court in the Income-tax Act; and he cited certain decisions in support of this view. He relied on the following observation of the Privy Council in Bennett & White (Calgary) Ltd. v. Municipal District of Sugar City, 1951 AC 786 :
“In their Lordships’ judgment the effect of these authorities is that a tax payer called on to pay a tax in respect of certain property has a right to submit to the ordinary courts the question whether he is taxable in respect of that property unless his right to do so has been clearly and validly taken away by some enactment, and that the fact that the statute which authorises assessment allows an appeal or a series of appeals against assessments to other tribunals is not sufficient to deprive the taxpayer of that right.”
But this observation, which was based on some decisions in respect of assessments made by municipalities of Canada, was made on account of the particular provisions of the statutes concerned. The charging sections in those statutes provided that the assessment could be made when the person concerned was at the time of assessment taxable in respect of any properly situated within the municipality; and there was an exemption clause as well. The scheme of the Act was that “if some one is found to he the owner or in legal possession of personal property, he shall be liable.” It was held that a person, who did not hold any property or whose property was covered by the exemption clause, could not be made liable for the payment of any tax and, therefore, if the authorities had made any assessment against him, he could challenge the assessment before the ordinary courts Inasmuch as the assessment was without jurisdiction on the ground that the jurisdictional fact, namely, the liability to payment of tax under the charging sections, which empower the assessing authority to make assessment, was wanting. The finality clauses in the relevant statutes were all dependent on the above jurisdictional fact; and it was in this context that the aforesaid observation was made.
19. On the same principle, a Full Bench of this Court observed in Patna Municipal Corporation v. Ram Bachan Lal, AIR 1961 Pat 142 (FB) that a local authority, an administrative authority or any tribunal of limited jurisdiction cannot assume jurisdiction to do anything or to pass any order by arriving at a wrong decision on facts, which are known as preliminary or jurisdictional facts. Their Lordships were discussing the effect of Sub-section (4) of Section 117 and Section 119 of the Bihar and Orissa Municipal Act, 1922. Sub-section (4) of Section 111 reads thus:
“(4) The decision of the Committee or of a majority of the members thereof, in such cases shall be final.”
Section 119 lays down;
“No objection shall be taken to any assessment or valuation in any other mariner than in this Act is provided.”
It was held that the use of the word ‘final’ in Sub-section (4) of Section 117 would bar the jurisdiction of the civil courts only if the committee had acted with jurisdiction or, in other words, if the decision of the committee on the existence of the jurisdictional facts was correct; and the jurisdictional facts in that case were (1) that the holding had been incorrectly valued or assessed; and (2) that the incorrect valuation or assessment had been made by reason of fraud, misrepresentation or mistake.
In Chairman of Giridh Municipality v. Srish Chandra Mozumdar, (1908) ILR 35 Cal 859, the decision turned on Sections 85 and 116 of the Bengal Municipal Act which merely said that “no objection shall be taken to any assessment or rate in any other manner than in this Act is provided”. The relevant clause of Section 85, the charging section, empowered the Commissioner to impose “(a) tax upon persons occupying holdings within the municipality according to the circumstances and properly within the municipality”. The salary of the assessee was Rs. 300 a month and out of it he spent Rs. 150 per month. He was assessed on the salary; but he contended that he was liable to be assessed on the monthly expenditure and the assessment was, therefore, ultra vires. It was held that the jurisdictional fact contained in Section 85 could be enquired into by the civil court.
As was observed by Varadachariar, J. in 1936-4 ITR 341: (AIR 1937 Mad 241), “in cases where the relevant statute contains a specific provision limiting or excluding the jurisdiction of civil courts, the determination of the ambit of the civil court’s jurisdiction must prima facie rest upon the language used in the excluding provision. Even here, when the language is not sufficiently definite or comprehensive, its interpretation is naturally influenced by the presumption against intention to oust the jurisdiction of the civil courts, especially when personal liability and rights of property are concerned. One well known class of cases where statute law had advisedly enacted only a restricted exclusion of civil jurisdiction is that relating to taxation by local or municipal bodies”.
In Kahamidannissa Begum v. The Secretary of State, (1887) ILR 14 Cal 67 a question arose whether any departure had been made by Act IX of 1847 from the underlying principle that the liability to assessment under a land revenue law of the country had always been treated and declared to be a matter for courts of justice, either by reason of the general scheme of the Act or by the specific provision in Section 9 of the Act. The majority Judges of the Calcutta High Court, constituting the Full Bench approached this question from the point of view that because of the declared policy of the Indian Legislature for at least 66 years, they should not adopt a construction involving a departure from it unless the Legislature had expressed such intention in clear and unmistakable language. As regards Section 9, they held that it only referred to suits for damages.
This method of approach was approved by the Judicial Committee on appeal in the Secretary of State v. Fahamidannissa Begum, (1890) ILR 17 Cal 590 (PC). Regarding Section 9, which provided that “except as regards proprietary rights to islands, no suit or action in any court of justice shall lie against the Government, or any of its officers, on account of anything done in good faith in the exercise of the powers conferred by this Act,” their Lordships said that full effect can be given to the section without holding that it deprives the owner of a permanently settled estate of that right of appeal which is given to him in order that he may have determined in a civil court the justness of the demand of the Revenue Authorities.
In Emperor v. Vimlabai Deshpande. AIR 1946 PC 123. the facts found were these. The detenu was arrested originally by a police officer under Rule 129(1) of the Defence of India Rules. Then a temporary order of detention was made by the Provincial Government It was held in a case under Section 491. Criminal Procedure Code, that, in the absence of a reasonable suspicion, the arrest by the police officer was illegal and, as the temporary detention by Government was to be made of a person validly arrested by the police, the detention order was also illegal. On behalf of the Government, reliance had been placed on Sub-section (1) of Section 16 of the Defence of India Act. which provided that “no order made in exercise of any power conferred by or under this Act shall be called in question in any court” It was held that, as the arrest and the detention order were invalid, they were not made in exercise of a power conferred by the Act. This case is clearly distinguishable. Thus, none of the above decisions apply to the present case.
20. Much stress was laid by Sri Sinha on the second sentence of the passage quoted at p. 15 of this judgment from the decision of the Judicial Committee in AIR 1940 PC 105. But it is not alleged in the present case that the fundamental principles of judicial procedure have not been complied with by the Income-tax Officer and it is now admitted that notices under Section 34 were properly served on the plaintiff through his agent. And it follows from the observation of Willies, J., reproduced at p 16 of this judgment that the question whether the provisions of the Income-tax Act have been complied with or not can be considered only after the remedies given by the Act have been exhausted.
21. The last argument urged on behalf of the appellant was that the action of the Income-tax Officer issuing notices under Section 34 was without jurisdiction inasmuch as there was absence of certain preliminary conditions, which constitute jurisdictional facts. The relevant provisions of Section 34, as amended in 1948, read thus :
“34. Income escaping assessment: (1) if–(a) the Income-tax Officer has reason to believe that by reason of the omission of failure on the part of an assessee to make a return of his income under Section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income-tax have escaped assessment for that year, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive (sic) relief under the Act, or excessive loss or depreciation allowance has been computed, or
(b) notwithstanding that there has been no omission or failure as mentioned in Clause (a) on the part of the assessee, the Income-tax officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income-tax have escaped assessment for any year, or have been under assessed, or assessed at too low a rate, or have been made the subject of excessive loss or depreciation allowance has been computed.
He may in cases falling under Clause (a) at any time within eight years and in cases falling under Clause (b) at any time within four years of the end of that year serve on the assessee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under Sub-section (2) of Section 22 and may proceed to assess or reassess such income profits on gains or recompute the loss or depreciation allowance and the provisions of this Act shall, so far as may be apply accordingly as if the notice were a notice issued under that sub-section.
Provided that-
(1) the income-tax officer shall not issue
a notice under this sub-section unless he has
recorded his reasons for doing so and the Com
missioner is satisfied on such reasons recorded
that it is a fit case for the issue of such notice;
xx xx xx xx
Explanation–Production before the Income-tax officer of account-books or other evidence from which material facts could with due diligence have been discovered by the Income tax Officer will not necessarily amount to disclosure within the meaning of this section ”
22. It is admitted that the provisions of proviso (1) were complied with (see also Exts C to C2 and E to E2). But it was argued that inasmuch as the conditions contained in the substantive part of Sub-section (1) did not exist, the action of the Income-tax Officer of Ranchi was without jurisdiction and, therefore, the civil court is competent to entertain the present suits Reliance was placed on the following observations of the Supreme Court in Calcutta Discount Co. Ltd. v. Income-tax Officer, (1961) 41 ITR 191: (AIR 1961 SC 372):
“To confer jurisdiction under this section to issue notice in respect of assessments beyond the period of eight years, from the end of the relevant year, two conditions have, therefore, to be satisfied……. Both these conditions are conditions precedent to be satisfied before the income-tax officer could have jurisdiction to issue a notice for the assessment or reassessment beyond the period of four years, but within the period of eight years, from the end of the year in question.
“The position, therefore, is that if there were in fact some reasonable grounds for thinking that there had been any non-disclosure as regards any primary fact, which could have a material bearing on the question of ‘underassessment’, that would be sufficient to give jurisdiction to the income-tax officer to issue the notices under Section 84. Whether these grounds were adequate or not for arriving at the conclusion that there was a non-disclosure of material facts would not be open for the court’s investigation. In other words, all that is necessary is that the Income-tax Officer had when he assumed jurisdiction some prima facie grounds for thinking that there had been some non-disclosure of material facts.”
“Clearly it is the duty of the assessee who wants the court to hold that jurisdiction was lacking, to establish that the Income-tax Officer had no material at all before him for believing that there had been such non-disclosure.”
But this was a writ case where the jurisdiction of the High Court to interfere is very wide and even irregular assumption of jurisdiction may also come within its purview. For a suit in a court of law, however, there must be complete lack of jurisdiction. This is made clear also by the following observation of their Lordships in the same case:
“Mr. Sastri mentioned more than once the fact that the company would have sufficient opportunity to raise this question, viz., whether the Income-tax Officer had reason to believe that under-assessment had resulted from nondisclosure of material facts, before the Income-tax Officer himself in the assessment proceedings, and, if unsuccessful there before the Appellate Officer or the Appellate Tribunal or in the High Court under Section 66(2) of the Indian Income-tax Act. The existence of such alternative remedy is not however always a sufficient reason for refusing a party quick relief by a writ or order prohibiting an authority acting without jurisdiction from continuing such action.
*****
When the Constitution confers on the High Court the power to give relief it becomes the duty of the Court to give such relief in fit cases and the courts would be failing to perform their duty if relief is refused without adequate reasons. In the present case we can find no reason for which relief should be refused.”
In this connection, the following observation of the Supreme Court in Himmatlal Harilal v. State of Madhya Pradesh, AIR 1954 SC 403 at p 405 is also pertinent:
“The learned Advocate General of the State did not in the situation, and very properly, challenge the correctness of the decision of the High Court on this point, and contended that the Explanation was clearly ‘ultra vires’ the State Legislature.
He however contended that on the principle enunciated by the Privy Council in AIR 1947 PC 78, jurisdiction to question assessment otherwise than by the use of the machinery expressly provided by the Act, was inconsistent with the Statutory obligation to pay, arising by virtue of the assessment and that the liability to pay the sales tax under the Act is a special liability ereated by the Act itself which at the same time gives a special and particular remedy which ought to be resorted to and therefore, the remedy by a writ ought not to be allowed to be used for evading the provisions of the Act especially a fiscal Act. It was also said that the conditions requisite for the issue of a writ of mandamus were not present in the case and that it was not within the scope and purpose of Article 226 of the Constitution to decide an academic question.
In our opinion, the contentions raised by the learned Advocate General are not well founded.
It is plain that the State evinced an intention that it would certainly proceed to apply the penal provisions of the Act against the appellant if it failed to make the return or to meet the demand and in order to escape from such serious consequence threatened without authority of law, and infringing fundamental rights, relief by way of a writ of mandamus was clearly the appropriate relief.”
23. In my opinion, in the Calcutta Discount Company’s case, 1961-41 ITR 191: (AIR 1961 SC 372) their Lordships never intended to abolish the well known distinction between complete lack of jurisdiction and irregular assumption of jurisdiction.
While irregular assumption of jurisdiction may be a valid ground for interference under Article 226 of the Constitution, it cannot furnish a ground for a civil suit. The distinction has been clearly pointed out in the unreported decision of the same court in (Civil App. No. 205 of 1961): (since reported in AIR 1966 SC 932) an appeal arising out of a suit. The observations of the Federal Court in (1947) 15 ITR 302: (AIR 1947 FC 32) approved by the Supreme Court in (1955) 27 ITR 709: ( (S) AIR 1955 SC 619) quoted above show that the foundation of the jurisdiction of the Income-tax Officer is the liability to pay and not the machinery of assessment.
24. Only six decisions relating to civil suits in respect of taxation matters have come to our notice. Of these, the assessees’ suits which resulted in the decisions in Raleigh Investment Co. Ltd. (1947) 15 ITR 332: (AIR 1947 PC 78); (1951) 19 ITR 132: (AIR 1951 SC 23) and (1941) 9 ITR 673: (AIR 1942 Pat 87), were decreed inasmuch as the liability of the assessee to pay the tax was itself in dispute, while the remaining three suits, which resulted in the decisions in (1936) 4 ITR 341: (AIR 1937 Mad 241) Raja Visheshwar v. Province of Bihar, (1951) 2 STC 129: (AIR 1952 Pat 129) and the unreported decision in Civil Appeal No. 205 of 1961: (since reported in AIR 1966 SC 932) in which the assessees had challenged the machinery of taxation as distinguished from the liability to pay were dismissed as not entertainable by the civil courts.
26. The facts of the Central Potteries Ltd. have already been mentioned. In the Secretary of State for India, (1936) 4 ITR 341: (AIR 1987 Mad 241) the plaintiff, who was assessed to Income-tax in British India on the income received by him from his business in Burma, instituted a suit for declaration that he was not liable to be assessed under the Income-tax Act inasmuch as he was a resident in a French territory when the income accrued to him. The income-tax authorities had found after proper inquiry that he was residing in British India during the period in question and had assessed him to income-tax accordingly.
It was held that (1) the assessing authorities had power to decide the question about residence and, as they had found after due inquiry that he was a resident of British India the civil court had no jurisdiction to entertain the suit and (2) the fact that the assessee had been assessed under Section 23(4) and had no other remedy would not give him a right to maintain a suit of this nature in the Civil Court. Stoddart, J. (of the Madras High Court) observed. “That a statutory tribunal or authority which has to arrive at a decision as to the existence or non-existence of certain facts before proceeding to lake further action under the statute, is acting within its jurisdiction in making that decision and is immune from civil proceedings to quash that decision except such as are prescribed by the statute is established beyond all controversy” In support of this principle, the learned Judge referred to Rex v. Commissioner for Special Purposes of the Income-tax. (1888) 21 QBD 313: Rex v. Bloomsbury income-tax Commissioners, (1915) 3 KB 768. and several other English decisions. He quoted the following observation of Lord fisher in (1888) 21 QBD 313.
“When a 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 stale of facts exists and if they exercise
the jurisdiction without its existence what they
do may be questioned But there is another
state of things. The Legislature may en
trust 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. It is an erroneous application of the
formula, to say that the tribunal cannot give
themselves jurisdiction by wrongly deciding
certain facts, because the Legislature gave
them jurisdiction to determine all the facts including the preliminary facts on which the
farther exercise of their jurisdiction depends.
This observation was emphatically approved in (1915) 3 KB 768 wherein Lord Reading C.J. said:–
“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 facts ……. . The exigencies of the State require that there should be a tribunal to deal ……..with all such questions and to decide them finally. …… 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 on wrong conclusion of fact, and this obligation rests equally upon a person who contends that he is not chargeable as upon a person who admits that he is chargeable but not to the extent of the assessment made upon him.”
In (1951) 2 STC 129: (AIR 1952 Pat 129) the plaintiff, who was the proprietor of an estate, possessed extensive zirat fields on which he grew grains like paddy, khesari etc. and after meeting his personal requirements, the plaintiff sold a portion of the excess stock which was not required to be stored for consumption. The Sales tax authorities served the plaintiff with a notice that he should get himself registered as a “dealer” under the Bihar Sales Tax Act, 1944, but the plaintiff denied that he was a dealer and requested them to withdraw the notice. On their refusal to do the same, the plaintiffs instituted a suit against the Province of Bihar for a declaration that he was not a dealer and restraining them from proceeding with the assessment and realising any tax from him. It was held by the Patna High Court that the suit was not maintainable inasmuch as the assessee had a complete remedy under the provisions of the Bihar Sales Tax Act.
26. It will be noticed that it was held in these cases that the decision in respect of facts contained in the machinery provisions was within the jurisdiction of the taxing authorities. Section 34 of the Income tax Act is certainly a machinery provision and the Income-tax Officer can act under that section if he has reasons to believe certain facts. If he comes to an arbitrary decision, that is when there is no material for such a belief, then his decision may be set aside by the tribunals provided under the Act.
In Commissioner of Income-tax, Bombay v. Ramsukh Motilal, (1955) 27 ITR 54: ( (S) AIR 1955 Bom 227) Chagla C. J. said in a reference under Section 66 of the Income-tax Act that assessment proceedings taken on the basis of a defective notice under Section 34 were null and void. Mr. Iyenger relied on his observation that though “Section 22 (2) is a procedural section and the failure to give notice or a defect in a notice is a procedural defect, in the case of Section 34 it is not a procedural defect, but it is a failure to comply with a condition precedent to the assumption of jurisdiction. But, as stated earlier, it was a decision under Section 66 of the Act; and this observation cannot be used to support the contention that a Civil suit lies to challenge the action of the Income-tax Officer under Section 34 of the Act.
27. In conclusion I am of the opinion that the Civil Court has no jurisdiction to enquire into the question whether Section 34 or the other machinery provisions of the Act have been complied with or not.
28. I shall assume, however, for the sake of argument that the civil court can enquire into the applicability or otherwise of sub Section (1) of Section 34 in the present case. One of the conditions for the applicability of Subsection (1) of Section 34 and this condition is common to both the clauses of this sub-section, is that the Income-tax Officer has reason to believe that income has escaped assessment. Mr. Iyenger submitted that there was no question of any assessment escaping inasmuch as the returns filed by the plaintiff appellant before the Patna Officer under Section 22 were pending on the day the notices under Section 34 were issued by the Ranchi Officer, the proceedings taken in Calcutta having been declared void by the Supreme Court, on account of the illegality of the order of transfer made by the Central Board of Revenue. He further submitted that the only course open to the Ranchi Officer was to take up the assessment proceedings under Section 23 from the stage at which they had been transferred from Ranchi to Calcutta.
In support of his submission, he relied on certain decisions, namely Commissioner of Income-tax, Bombay City II v. Ranchhoddas Karsondas, (1959) 36 ITR 569 : (AIR 1959 SC 1154), Mannalal Modi v. Commissioner of Income-tax B. & O., (1956) 29 ITR 30: (AIR 1956 Orissa 87), Raman Chettiar v. Commissioner of Income-tax, Madras, (1961) 42 ITR 700 (Mad) and S.M. Muthiah Thevar v. Commissioner of Income-tax Madras, (1960) 39 ITR 107: (AIR 1960 Mad 398). But the facts of all these eases were different, because assessment had not been done on the basis of the returns and action had been taken under Section 34 after ignoring the returns. In the present case, however, the Calcutta Officer had considered and disposed of the plaintiff’s returns and made assessments, which were set aside by the Supreme Court at the instance of the plaintiff.
29. Much stress was laid by Mr. Iyenger on the decision in Lachhiram’s case, AIR 1931 Cal 545 (8B). The facts of the case were these. A notice was served under Section 22 (2) by the Income-tax Officer of the district in which the assessee’s place of business was situate. Thereafter the Commissioner made over the assessee’s case to special Income-tax Officer. While the appeal of Lachhiram was pending before the Assistant Commissioner against the assessment made by the Special Officer, it was held by the Calcutta High Court in another case that the order making over the cases to the Special Income-tax Officer was without jurisdiction and the assessment made by the Special Officer was nugatory. On account of that decision of the High Court, the assessment case of Lachhiram was again made over to the proper Income-tax Officer who proceeded with the case at a stage, up to which he had previously proceeded with it and made the assessment. In answer to an argument advanced on behalf of Lachhiram that, as much as more than one year had expired from the end of the financial year concerned, the Income-tax Officer could lake action only under Section 34, Rankin C. J., with whom the other Judges of the Special Bench agreed, repelled this argument on the ground that “Income has not escaped assessment if there are pending at the time proceedings for the assessment of the assessee’s income which have not vet terminated in a final assessment thereof.” This observation was justified as the assessment proceeding was still pending before the Assistant Commissioner.
30. This observation of Rankin C.J. was approved by the Judicial Committee in Rajendra Nath v. Commissioner of Income-tax, Bengal, (1934) 2 ITR 71: (AIR 1934 PC 30). The facts of that case were these. In pursuance of notices served under Section 22 (2) two companies namely. Burn & Company and Martin & Company, filed different returns of their incomes. In 1928, meanwhile, the Income-tax authorities thought that Martin & Company had purchased Burn and Company and made an assessment on Martin & Company in respect of the joint income of the two companies. Martin & Company appealed and the High Court ultimately held that each of the two companies should have been, assessed separately. The assessment of Martin & Company was accordingly amended by eliminating the income of Burn and Company and the Income-lax Officer assessed Burn and Company in 1930 on their income returned in 1928. Thus, in this case also the return was still pending; and that is why the Judicial Committee said, while repelling an argument that Section 34 applied, that income which had been duly returned for assessment could not be said to have escaped assessment within Section 34, though it had not been taxed within the assessment year.
Mr. Iyenger relied on a passage in that decision and contended that once a return has been submitted by the assessee. Section 34, would not apply. The passage reads thus: —
“The fact that Section 34 requires a notice to be served calling for a return of income which has escaped assessment strongly suggests that income which has already been duly returned for assessment cannot be said to have ‘escaped’ assessment within the statutory meaning”
But the correct interpretation of the passage does not support his contention. This passage and other observations in the cases of Lachhiram, AIR 1981 Cal 545 (SB) and Rajendranath Mukherjee, 1934-2 ITR 71: (AIR 1984 PC 30) were considered by the Supreme Court in Kamal Singh v. Commissioner of Income-tax, Bihar, (1959) 35 ITR 1: (AIR 1959 SC 257 and Kameshwar Singh v. State of Bihar, (1959) 87 ITR 388: (AIR 1959 SC 1303) a case against the decision of the Patna High Court under Section 25 (1) of the Bihar Agricultural Income-tax Act, 1938. With reference to these observations, the Supreme Court said in Kamal Singh’s case. 1959-35 ITR 1: (AIR 1959 SC 257).
“In other words, the conclusion of the Privy Council was that so long as assessment proceedings are pending against an assessee and no final order has been passed thereon, it would be premature to suggest that any income of the assessee has escaped assessment. It is only after the final order levying the tax has been passed by the Income-tax Officer, that it would be possible to predicate that any part of the assessee’s income has escaped punishment …… It would be difficult to accept the contention that according to the Privy Council. Section 34 would be inapplicable whereever notice under Section 22 (2) has been issued against an assessee, a return has been submitted by him and a final order has been passed by the Income-tax Officer in the said assessment proceedings. To say that so long as assessment proceedings are pending, it is impossible to assume that any income has escaped assessment is very much different from saying that income cannot be said to have escaped assessment wherever assessment proceedings have been taken and a final order have been passed on them.”
The facts in Kamal Singh’s case. 1959-35 ITR 1 (AIR 1959 SC 257), were these Following the decision of the Patna High Court in a certain case, the Income-tax Officer omitted to bring to assessment for 1945-46 a certain sum representing interest on arrears of rent due to the assessee in respect of agricultural land. Subsequently the Privy Council set aside the decision of the High Court, holding that such interest was act agricultural income and, as a result of that decision the Income tax Officer initiated re-assessment proceedings under Section 34 (1) (b) of the Income tax and brought the aforesaid sum to tax It was held by the Supreme Court that the action of the officer was right inasmuch as it was a case of escaped assessment In Kameshwar Singh’s case it was held that the Agricultural Income-tax Officer was competent under Section 25 of the Bihar Agricultural Income-tax Act (corresponding to Section 34 of the Income-tax Act) to assess on item of income which he had omitted to tax earlier, even though in the return that income was included and the Agricultural Income-tax Officer then thought that it was exempt. With reference to the observations in Rajendranath Mukharjee’s case their Lordships’ said:–
“The facts of the case were entirely different. The income was returned, and was not yet proceeded when the notice under Section 34 was issued The key to the case is furnished by the approved by their Lordships of the observation of Rankin C. J. in ILR 58 Cal 909 (912): (AIR 1931 Cal 545 at p. 546) that; income has not escaped assessment if there are pending at the time proceedings for the assessment of the assessee’s income which have not yet terminated in a final assessment thereof. Their Lordships held that the expression ‘has escaped assessment’ should not be read as equivalent to ‘has not been assessed’ because so to do “gives too narrow a meaning to the word ‘assessment’ and too wide a meaning to the word escaped.’
That those observations were related to the facts then before their Lordships is clear from the following passage:
‘To say that the income of Burn & Company which in January 1928 was returned for assessment and which was accepted as correctly returned, though it was erroneously included in the assessment of Martin & Company has ‘escaped’ assessment in 1927-28 seems to their Lordships an inadmissible reading. . . . Their Lordships find it sufficient for the disposal of the appeal to hold, as they do, that the income of Burn & Company did not ‘escape assessment’ in the year 1927-29 within the meaning of Section 34. If was in the context or the pendency of assessment proceedings that the remarks were made, and the matter is decisively cleared of any doubt by the following passage: ‘It may be that if no notice calling for a return under Section 22 is issued within the tax year then Section 34 provides the only means available to the Crown of remedying the omission, but that is a different matter.’ ”
31. From the foregoing discussions, it is manifest that no action under Section 34 can be taken when a return submitted by an assessee is still pending and undisposed of but Section 34 may sometimes be applicable in case the final order had been passed in the assessment proceedings.
But what is the position, if the final order is subsequently set aside as was done in the present case? In this connection, Mr. Iyenger relied on certain observations in the decision of the Supreme Court in (1955) 27 ITR 709: ( (S) AIR 1955 SC 619). The facts of this case were these. The assessee had been assessed to income-tax which was reduced on appeal and was set aside by the Income-tax. Appellate Tribunal on the ground that the Indian Finance Act, 1939, was not in force during the assessment year in Chota Nagpur. On a reference, the decision on the Tribunal was upheld by the High Court Subsequently, the Governor of Bihar promulgated Bihar Regulation IV of 1942 and thereby brought into force the Indian Finance Act of 1939 in Chota Nagpur retrospectively with effect from March 30, 1939. This Ordinance was assented to by the Governor General on February 8, 1944, the Income-tax Officer passed an order in pursuance of which proceedings were taken against the assessee under the provisions of Section 34 and they resulted in the assessment of the assessee to income-tax. The contention which was raised by the assessee was that the notice issued against him under Section 34 was invalid. The Court held that it was a case of chargeable income escaping assessment and was not a case of mere non-assessment of tax.
In that case, Jagannadhadas, J., observed that, though earlier assessment proceedings had been taken, they had failed to result in a valid assessment owing to some “lacuna other than that attributable to the assessing authorities, notwithstanding the chargeability of income to tax”. Hence, Mr. Iyenger submitted that it is only when income could be shown to have escaped assessment owing to some lacuna other than that attributable to the assessing authorities that Section 34 can be invoked. The decision of the Supreme Court in Kamal Singh’s case, 1959-35 ITR 1: (AIR 1959 SC 267) explains the observations in Chatturam’s case, 1955-27 ITR 709: ( (S) AIR 1955 SC 619). The Supreme Court said in Kamal Singh’s case. 1959-35 ITR 1: (AIR 1959 SC 257):
“Mr. Sastri says that it is only in cases where income can be shown to have escaped assessment owing to some lacuna other than that attributable to the assessing authorities that Section 34 can be invoked. We do not think that a fair reading of the judgment can lead to this conclusion. The observations on which reliance is placed by Mr. Sastri have naturally been made in reference to the facts with which the court was dealing and they must obviously be read in the context of those facts. It would be unreasonable to suggest that these observations were intended to confine the application of Section 34 only to cases where income escapes assessment owing to reasons other than those attributable to the assessing authorities Indeed Jagannadhadas, J., has taken the precaution of adding that it was unnecessary to lay down what exactly constitutes escapement from assessment and that it would be sufficient to place their decision on the narrow ground to which we have just referred.” It was finally held (1) that the word “information” in Clause (b) of Section 34 (1) included information as to the true and correct state of the law, and so would cover information as to relevant judicial decisions; and (2) that the word “escaped” in Clause (b) of Section 34 (1) was not confined to cases where no return had been submitted by the assessee or where in come had not been assessed owing to inadvertence or oversight or other lacuna attributable to the assessing authorities. It will be noticed (sic) from a reading of Clauses (a) and (b) of Section 34 (1) that there is practically no difference in the two clauses except in respect of the preliminary conditions for their applicability. Hence, the scope of the word “escaped” given by the Supreme Court would apply to Clause (a) also.
32. Two propositions emerge from the foregoing discussions, (1) When a return is submitted by an assessee and it has not resulted in an assessment, that is, the return is still pending and undisposed of, no action can be taken under Section 34 of the Act; and (2) in case assessment proceedings have after submission of the return resulted in an assessment but on account of some lacuna, attributable to the assessing authorities or not, the assessment has become invalid, that is, the assessment proceedings have failed to result in a valid assessment owing to such lacuna, action may be taken under Section 34 of the Act.
33. In the present case, the returns were submitted by the plaintiff appellant before the Income-tax Officer at Patna and they formed a part of the plaintiff’s assessment cases Though the cases were transferred to the Ranchi Officer initially, they were transferred to the Calcutta Officer before the Ranchi Officer could take further action in the assessment proceedings. The Calcutta Officer, however, made assessments on the plaintiff-appellant in all the three cases after taking into consideration the returns submitted by him at Patna. Thus, the returns had been disposed of and they were no longer pending. The plaintiff-appellant went to the Supreme Court under Article 32 of the Constitution against the assessment order and he also preferred an appeal to the Appellate Income-tax authority But the latter had to stay his hands on account of the petition pending before the Supreme Court. It was held by the Supreme Court that the orders of the Central Board of Revenue transferring the cases from Ranchi to Calcutta were absolutely without jurisdiction and. therefore, the proceedings of the Calcutta Officer resulting in the assessment orders were also without jurisdiction. Automatically, therefore, the appeals before the Income-tax appellate authority succeeded. It is therefore, obvious that the assessment proceedings against the plaintiff resulted in an invalid assessment owing to the illegal order of the Central Board of Revenue. As the lacuna was attributable to the Central Board of Revenue, there was an invalid assessment and the returns submitted by the plaintiff before the Patna Officer had spent themselves and they were no more alive Hence, it was a case of ‘escaped’ assessment within the meaning of the word in Section 34 of the Income-tax Act and the Income tax Officer of Ranchi was justified in taking action under that section.
34. It is true that, after the decision of the Supreme Court the proceedings were revived before the Ranchi Officer at the stage at which they were transferred to Calcutta: but the returns could not be deemed to have remained pending or undisposed of Ft was then contended that the assessment proceedings before the Calcutta Officer could not be deemed to have terminated, as an appeal was pending before an Income-tax authority: and reliance was placed on Kamakshya Narain Singh v. Commissioner of Income-tax. Bihar, (AIR 1947 FC 48), where it was observed.
“The assessment proceedings had not come to an end nor were they dead. The appellant had kept the proceedings alive by filing appeals and the proceedings were thus pending for decision.”
But the facts of that case were completely different. The appellant of that case who is also the appellant in the present case, was assessed to income-tax for 1939-40 on the 14th February 1940. An appeal before the Appellate Assistant Commissioner was dismissed on the 30th March 1942. It transpired then that the relevant Finance Act had not been applied to the area concerned as required by Section 92 of the Government of India Act, 1935 In order to overcome this difficulty, the Governor made a Regulation on the 30th June 1942 to apply the Finance Act with retrospective effect Then the Income-tax Tribunal before whom an appeal by the appellant against the assessment was pending, dismissed the appeal on the 31st March 1943. It was argued on behalf of the appellant that, inasmuch as the first appeal before the Appellate Assistant Commissioner had been dismissed on the 3rd March 1942, the proceedings had come to an end and, therefore, the making of the Regulation by the Governor could not put life into what was already dead. This argument was repelled by the Federal Court with the observation quoted above. In the present case, however the assessment proceedings of Calcutta in the plaintiff’s cases cannot, in view of the decision of the Supreme Court, declaring the order of transfer made by the Central Board of Revenue to be void, be deemed to have been kept alive on account of the appeal before an Income tax Authority.
35. In view of the finding that the returns filed by the plaintiff-appellant were not pending, the Ranchi Officer could not have proceed ed in the ordinary course under Section 23 Now, the question is whether he had reasons to believe that income had escaped assessment. The principal common fact in both Clauses (a) and (b) of Section 34(1) is that income has escaped assessment for any year or has been under assessed or assessed at too low a rate The difference between the two clauses is that Clause (a) contemplates a case where this result was caused by an omission or failure on the part of the assessee to make a return under Section 22 or “to disclose fully and truly all material facts” necessary for assessment whereas Clause (b) contemplates a case where such escape from assessment or under assessment occurred in spite of there having been no omission or failure and the Income tax Officer has in his possession some information leading to this conclusion In the present case, the plaintiff had admittedly submitted the returns under Section 22 and these returns were considered and disposed of by the Calcutta Officer. But he did not disclose fully and truly all material facts necessary for assessment. because he submitted “nil” returns, ordinarily so-called, that is, returns enabling the assessee to escape any assessment. That these returns were not true is evident from the fact that the Calcutta Officer had assessed against the plaintiff a tax of more than thirty lacs of rupees for the assessment year 1948-49, more than eleven lacs of rupees for the assessment year 1949-50 and more than two lacs of rupees for the assessment year 1950-51. The Income tax Officer Ranchi. had, therefore, reasons to believe that the plaintiff had escaped assessment in respect of these years on account of his non-disclosure of full and true material facts. So few as Clause (b) is concerned, the decisions of the Federal Court and the Supreme Court referred to earlier show that the decision of the Supreme Court quashing the Calcutta proceedings in the present case amounted to such information as is contemplated by this clause Clause (b), however, applies only to these cases in which more than four years have not elapsed after the assessment year in question. But it was held by the Supreme Court to a writ proceeding in (1961) 43 ITR 387 (SC) that the question of limitation under Sub-section (1) of Section 34 ought to be raised before the Income-tax authorities and it is not a point which can be legitimately agitated in the proceedings. It is obvious that if such a question cannot be raised in. a writ proceeding, it cannot also be raised in the civil court. The Supreme Court did entertain the plea of limitation in (1959) 36 ITR 569: (AIR 1959 SC 1154). but this view was taken in an appeal Id the Supreme Court under Section 66A of the Income tax Act. Assuming, however, that the plea of limitation in respect of Clause (b) can be entertained by the Civil Court, the Income-tax Officer of Ranchi had sufficient materials to act under Clause (a) of Sub-section (1) of Section 34. It must, therefore, be held that the Ranchi Officer had reasons to believe that income had escaped assessment in the three cases of the plaintiff.
36. No other point was raised on behalf of the appellant But Sri S.N. Dutt submitted on behalf of the respondents that the prayer for injunction in these suits is barred by Clauses (d) and (i) of Section 56 of the Specific Relief Act. Clause (d) lays down that an injunction can be granted to interfere with the public duties of any department of the Central Government or any State Government. It is true that under this Clause (d) of Section 56(1) no injunction can be granted against a department of Government, including individual officers of the department so as to interfere with their public duties authorised by law but where the department or its officers exceed or abuse the powers conferred upon them by the legislature, this clause cannot apply Clause (i) provides that injunction cannot be granted, when equally efficacious relief can certainly be obtained by any other usual mode of proceeding except in a case of breach of trust. The words “equally efficacious relief” are significant. It cannot, in my opinion be said that a relief before tribunals like those provided in the Income-tax Act is as efficacious as a relief which can be granted by the civil court For instance, if it is found that the present suits can be entertained by the civil court, and that the action of the Ranchi Officer issuing notices under Section 34 was, without jurisdiction, then the remedy granted by the civil court will save the assessee from harassment involved in going to different tribunals provided in the Income-tax Act. Hence, these provisions of Section 56 shall operate against the prayer for the grant of injunction against the defendants-respondents in the present suits only on the finding that action of the Ranchi Officer under Section 34 of the Income-tax Act was not without jurisdiction.
37. To sum up, my findings are these:
(1) The cases of the plaintiff-appellant were validly transferred from Patna to Ranchi and the Ranchi Officer was competent to entertain these cases.
(2) The civil court has no jurisdiction to entertain these suits because of the scheme of the Income-tax Act and the second part of Section 67 of that Act.
(3) Even assuming for the sake of argument that these suits can be entertained by the civil court, the conditions precedent for taking action under Section 34 of the Income-tax Act were in existence and, therefore, the proceedings taken by the Income-tax Officer under Section 34 cannot be said to be without jurisdiction”.
38. In the result, the appeals are dismissed with costs.
Kanhaiya Singh, J.
39. I agree.