U.C.Rekhi, J -
(1.) RULE nisi was issued directed against the Income-tax Officer, 1st F Ward, New Delhi, prohibiting him from proceeding against the petitioner till the decision of the petition by this Court. This RULE was issued on the 15th March, 1950, and was served on the Income-tax Officer on the 31st March.
(2.) THE applicant contends that he belonged to Rawalpindi and had all along been residing and doing business there till the partition of the Punjab in 1947. He was carrying on the business of running a hotel at Muttee in the district of Rawalpindi and he was also doing contract business there. He stated that although he had all his immovable property in the district of Hazara (now Pakistan) and all his other valuable assets were in Pakistan he had to quit that country owing to communal disturbances after the partition and he had now come to live in India. He also stated that he had been assessed to income-tax at Rawalpindi and for the year of assessment 1943-44 the tax was assessed by the Income-tax Officer, A Ward, Rawalpindi, against which order he had filed an appeal before the Income-tax Appellate Tribunal, Lahore, and that he had submitted his return for the assessment years 1944-45, 1945-46, 1946-47 and 1947-48 to the Income-tax Officer, Rawalpindi, before the 15th of August, 1947, which had not so far been adjudicated upon.
In December, 1947, he goes on to state, he was required by the Income-tax Officer, H Ward, Delhi, to prove that he was an assessee of Rawalpindi and on his producing the necessary documents the said Income-tax Officer accepted his contention that he had duly been assessed and was an assessee of Rawalpindi. He proceeds to say that on the 30th of December, 1948, the Income-tax Officer, 1st F Ward, served a notice dated 30th of November, 1948, under Section 34 of the Income-tax Act calling upon him to make returns for the assessment years ending 31st March, 1945, and 31st March 1946, that similar notices were also served on him by affixation for the assessment years 1946-47 and 1947-48 and that in spite of his protests the Income-tax Officer was proceeding with the assessments. He complains that he had been writion to the said Income-tax Officer and to the Commissioner of Income-tax and to the Central Board of Revenue that assessment should not be proceeded with but no action had been taken. His objections ar : (1) that the assessment for the years 1944-45 to 1947-48 was pending before the Income-tax Officer, Rawalpindi, who was seized of the matter and, therefore, there was no question of any definite information coming into the possession of the Income-tax Officer, 1st F Ward, New Delhi, or of any discovery by him that any income chargeable to income-tax has escaped assessment or has been under-assessed or has been assessed at too low a rate or has been the subject of excessive relief; (2) the Income-tax Officer, 1st F Ward, New Delhi, has no jurisdiction to call upon him to submit fresh returns for re-assessment when there has been no assessment at all for the period in question; (3) that he has also no jurisdiction on the ground that the petitioner was, during the material time, a permanent resident of Rawalpindi and had been making returns to the Income-tax Officer of that lace; and (4) that neither under clause (3) of the Indian Independence (Income tax Proceedings) Order, 1947, the jurisdiction of the Rawalpindi Income-tax Officer had been altered nor had his case been transferred from the Dominion of Pakistan to the Dominion of India and therefore there was no jurisdiction in the Income-tax Officer, 1st F Ward, New Delhi, to assess or re-assess the income of the petitioner under Section 34 of the Income-tax Act. On these grounds he prayed for a writ of certiorari to direct the Income-tax Officer to transmit the recurs of the proceedings initiated by him to this Court and for the quashing of those proceedings and for a writ of prohibition forbidding him to continue with the proceedings that had been initiated by him. The petition was filed on the 7th of March, 1950, alough the notice was served on him in December, 1948. It is no doubt true that his right for these writs did not accrue till after the Constitution came into force this application was not made. The learned vacation Judge was available in Delhi from 27th January to 19th February and he was working in this Court from January to 19th February and he was working in this Court from 20th February to 3rd March and was available for urgent work from that date to the date of opening of the Court, i.e., 14th March, 1950.
In reply the Income-tax Officer, Mr. Ishwar Dayal, has filed an affidavit in which he state : (1) that from enquiries made by him he has discovered that Rekhi came to live in Delhi in 1926 and was residing in a house outside Kucha Ghasi Ram and had also built a house, 7/29 Darya Ganj, Delhi, and that during the relevant years he had executed a number of contracts of various officers; messes in New Delhi within his jurisdiction; (2) that on the 27th of September, 1949, the petitioner was assessed to income-tax for the year 1944-45 and in respect of the assessment year 1944-45 and the assessment had been made on the 27th of March, 1950; (3) that the respondent had jurisdiction under Sections 34 and 64 of the Income-tax Act to call for returns as the petitioner was residing in Delhi and carried on an extensive business within the jurisdiction of the respondent and had filed returns for the assessment years 1944-45 to 1947-48; (4) that at any rate the respondent had jurisdiction to assess the petitioner in respect of income, profits and gains accruing, arising or received within the area of his jurisdiction ; (5) that the legislature had entrusted the decision of the facts and law to the Income-tax Officer subject to a right of appeal and statement of the case to the HIgh Court and that on a challenge of jurisdiction of the Income-tax Officer to make the assessment it is for him or the Commissioner of Income-tax to decide upon the materials before them whether the individual is or is not liable to assessment, and (6) that the petitioner was estopped from questioning the jurisdiction in regard to the place of assessment as he had submitted the returns; at any rate no writ could issue with regard to the assessment dated the 27th of March, 1950, which was made before the writ was served on him.
In the reply to the affidavit of the Income-tax Officer the petitioner admitted that he was living in Delhi some time before as a schoolmaster in D. A. V. High School, Delhi, but the house in Darya Ganj had been built by his daughter who was a teacher in the Lady Hardinge Medical College. It was further admitted that in February, 1945, he obtained a catering contract of one of the hostels in New Delhi which was in addition to his main business at Rawalpindi. It is significant that he has not denied the father allegations made by the Income-tax Officer that the petitioner had during the relevant years executed a number of contracts of various officers messes situate in New Delhi. The other paragraphs beyond reiterating what was alleged in his petition do not carry the matter any further.
The applicants contentions which were pressed before us by his counsel may be summarised as follow :-
(1) That there was no jurisdiction in the Income-tax Officer to make or proceed upon an assessment if the individual to be assessed is in fact not chargeable to income tax;
(2) that the individual was not chargeable to income-tax in the Union of India because he was not residing in India during the material time;
(3) that the Income-tax Officer cannot give himself jurisdiction to assess the petitioner by determining in the first instance that he is chargeable when in fact he is not;
(4) alternatively that if the Income-tax Officer had jurisdiction to assess him in the first instance the petitioner was not bound to challenge the decision by way of appeal and case stated as provided for in the Income-tax Act;
(5) that the information before the Income-tax Officer did not in fact or in law afford any ground for proceeding under Section 345 of the Income-tax Act nor was it "discovery" that the applicant was chargeable;
(6) that the evidence which he had produced before the Court in the form of letters and other correspondence establishes that the applicant was in fact not liable to assessment in the Union of India; and
(7) that if the Court should find itself unable to arrive at the conclusion of fact on the affidavits now submitted it should "direct pleadings in prohibition to determine the issue".
(3.) IN reply, the counsel for the INcome-tax Department contended (1) that there was suppression of material facts in the affidavit on which the rule for prohibition was made and on that ground alone the Court should refuse the writ; (2) that the object of the petitioner was not to get the assessment quashed but it was merely to prevent the INcome-tax Officer from proceeding with his assessment which would have become impossible if the assessment had not been made before the 31st of March, 1950; (3) that it is for the assessing authorities to decide in the first instance whether the applicant is chargeable to INcome-tax; (4) that if the INcome-tax has honestly come to the conclusion upon information his possession that the petitioner has escaped assessment in any year under Section 34 of the INcome-tax Act, then then it is for him to proceed in accord or certiorari; and (5) that the decision of the INcome-tax Officer can only be challenged in the manner provided for in the INcome-tax Act.
The matter has been debated in a very able manner by the counsel appearing for the parties and a large number of rulings were cited firstly to show the jurisdiction of this Court and then as to whether the petitioner had or had not made out a case for this Court to proceed. The principal is quite clear that writ of prohibition is issued only where there is something done in the absence of jurisdiction or in excess of jurisdiction (see Rex v. Swansea Income-tax Commissioners 1). In the 17th Vol. of Halsburys laws of England, Hailsham Edition, at p. 368, the matter has been put thu : "A writ of prohibition is an appropriate remedy where the facts establish clearly that on the hearing of a appeal against an assessment the only course open to the Commissioner hearing the appeal is to discharge the assessments. Where, however, there is by doubt as to the facts, the appropriate remedy is by way of appeal and not by way of writ of prohibition. A writ of prohibition is issued when there is something done in the absence of jurisdiction or in excess of jurisdiction, and is appropriate where there is question to be determined which can be determined on an appeal against an assessment."
As submitted by the counsel for Income-tax authorities, there has been suppression of material facts in the affidavit which was filed by the petitioner. He did not disclose that from February, 1945, he was carrying on catering business in New Delhi. On the other hand, the suggestion made in his petition was that he had all along been residing and carrying on business in that part of Punjab which is now Pakistan. He was carrying on hotel business at Murree and was also doing contract business there. Read howsoever sympathetically one may the affidavit of the petitioner, there is no indication there that he was at any material time in what is now the Union of India or was carrying on business there. It is not only suppression very but it is also suggestion suggestion falsi. On this ground alone, in my opinion, this rule should be discharged. The matter has been put thus in the 10th Edition of the Law of Income-tax by Konstam at p. 39 : "if there is any suppression of material facts in the affidavit, on which the rule for a prohibition is moved, the Court will refuse the writ". In the 17th Vol. of Halsburys Laws of England, Hailsham Edition, at p. 369, it is state : "Urberrima fields is essential where an application is made for a rule nisi for a writ of prohibition, and therefore if there is a suppression of material facts in the applicants affidavit the Court will refuse the writ without going into the merits. "Lord Cozens-Hardy, M. R., in King v. General Commissioners for the Purposes of the INcome Tax Act for the Distinct of Kensington 1 has said that the rule of the Court requiring uberrima fields on the part of an applicant for an ex-parte injunction applied equally to the case of an application for a rule nisi for a writ of prohibition and, therefore, there having been a suppression of material facts by the applicant in the affidavit, the Court would refuse a writ of prohibition without going into the merits of the case. On this ground alone the petitioner is not entitled to a writ from this Court".