- (1.) The facts leading up to this appeal may briefly be narrated. Gujarat Cotton Mills Co. Ltd., hereinafter called the Company, is a limited company having its registered office at Ahmedabad. In the year 1938 the Company appointed Messrs, Pira Maj Girdhar Lal and Co. hereinafter called the Agency Firm, as its Managing Agency. On February 28, 1938, a formal agreement was entered into between the Company and the Agency Firm. The said Agency Firm was formed under an instrument of partnership, dated February 26, 1938, with II partners - 3 of them are compendiously described as the "Bombay Group" and the remaining 8 of them as the "Kanpur Group". With certain variations in the constitution of the Agency Firm, the said firm functioned as the Managing Agents of the Company till September, 1946. In September 1946 the shareholding of the partners of the Agency Firm in the Company was as follows: Kanpur Group 32,500 shares. Bombay Group 26,362 shares. Because of certain differences between the partners, they decided among themselves to sell their shares and to surrender their Managing Agency. On September 7, 1946, the said 11 partners entered into an agreement with the firm of Messrs, Chattu Ram and sons of Bihar, hereinafter called the Purchaser Firm. Under that agreement it was provided that 65,012 shares held by the 11 partners of the Aency Firm, directly or through their nominees, should be sold to the Purchaser Firm at Rs. 65 per share and that the Agency Firm should before November 15, 1946, resign its office of Managing Agency of the Company. It was a condition of the agreement that it should have operation only after the Purchaser Firm or its nominees were appointed as the Managing Agents of the Company. On October 30, 1946, the Company held its General Body Meeting and accepted the resignation of the Agency Firm and by another resolution appointed the Purchaser Firm as the Managing Agents in its stead. In terms of the agreement, the Purchaser Firm paid for the entire shareholding of the partners of the Agency Firm at Rs.65 per share. The appellant is a Hindu undivided family. Its Karta was one Dwarkanath and the present karta is his son Ramji Prasad. The said family was one of the 11 partners of the Agency Firm belonging to the Kanpur Group. Out of the total shareholding the appellant held 11,230 shares. It received the price for the said shares at the rate of Rs. 65 per share. It was assessed to income-tax for the year 1948-49 and the Income-tax Officer by his order dated June 5, 1952, assessed the excess amount of Rs.2,98,909 realized by the assessee under the head "income from business", i.e, the difference in the amount for which it purchased the shares and that for which it sold them. On appeal, the Appellate Assistant Commissioner of Income-tax confirmed the same. On further appeal, the Income-tax Appellate Tribunal, Delhi Bench, held that the said receipt had to be taxed as "capital gains" under S. 12B of the Income-tax Act, 1922, and directed the Income-tax Officer to modify the assessement in accordance with its order. The assessee made an appliction under S. 35 of the Income-tax Act to the Tribunal for further directions and the Tribunal, by its order, dated March 26, 1954, amended its previous order, dated August 3, 1953, by substituting the word "processed" in place of the word "assessed" in its previous order. The assessee raised various contentions before the Income-tax Officer, inter alia, that the said incme was not liable to be taxed under S. 12B of the Income-tax Act under the head "capital gains" and that in any case in order to determine the amount of capital gains the market value of the shares only should be taken into consideration, as the price of Rs. 65 per share included also the consideration for the relinquishment of the managing agency rights. The Income-tax Officer rejected the said contentions of the assessee. He re-determined the assessable income under the heading "capital gains" but did not issue a notice of demand as prescribed in S. 29 of the Income-tax Act. After making an instructions attempt to get suitable directions from the Appellate Tribunal, on March 5, 1956, the assessee filed an application before the Income-tax Officer to issue a notice of demand under S. 29 of the Income-tax Act so that it might prefer an appeal against the same to the appropriate authority. But the Income-tax Officer refused to issue any such notice. The assessee preferred an appeal against that order to the Appellate Assistant Commissioner under S. 30 of the Income-tax Act and that was dismised on March 8, 1957, on he ground that it was not maintainble. Meanwhile on September 27, 1956, the appellant filed an application before the Commissioner of Income-tax under S. 33A (2) of the Income-tax Act for revising the order of the Income-tax Officer, dated September 28, 1955. On March 28, 1959, the Commissioner dismissed the revision petition on two grounds, namely, (i) that it was not clear whether the revision petition under S. 33A of the Income-tax Act was maintainable and (ii) on merits. It may be noticed that long before the revision petition was dismissed, the appeal filed by the assessee against the order of the Income-tax Officer to the Appellate Assistant Commissioner was dismissed on March 8, 1957. On November 18, 1957, the attention of the Commissioner was also drawn to the fact that the Bombay High Court in the case of a reference to that Court at the instance of the Bombay Group held that the market value of the shares should be taken into consideration to ascertain the excess realized on the sale of the shares of the assessee for the purpose of capital gains tax. The Commissioner ignored that decision in dismissing the revision. Thereafter, on July 28, 1959, the assesse filed Writ Application No. 2071 of 1959 in the High Court of Judicature at Allahabad, inter alia, for a writ of certiorari or any other direction or order of like nature to quash the order of the Income-tax Commissioner, Lucknow, dated March 28, 1959, and the Order of the Income-tax Officer dated September 28, 1955, and for a writ of mandamus or any other order or direction of the like nature directing the Commissioner to pass a fresh order in accordance with the decision of the Bombay High Court and direct the Income-tax Officer to pass a fresh order in accordance with law and to issue a notice of demand as required by S. 29 of the Income-tax Act. The High Court dismissed the said application in limine mainly on the following 8 grounds: (1) the affidavit filed in support of the writ petition was highly unsatisfactory and on the basis of such an affidavit it was not possible to entertain the petition; (2) the facts given in the affidavit were incomplete and confused; and (3) even on merits, there was no force in the revision petition. Hence the appeal.
(2.) Mr. A. V. Viswanatha Sastri, learned counsel for the appellant, contended that the affidavit filed in support of the petition was in accordance with law, and that, even if there were any defects, the Court should have given in opportunity to the appellant to rectify them; and that the High Court should have held that the revision against the order of the Income-tax Officer to the Commissioner was maintainable under S. 33A of the Act; as the appeal against that order to the Appellate Assistant Commissioner was not maintainable and that it should have directed the Commissioner to entertain the revision and dispose of it in accordance with law directing the Income-tax Officer to issue a notice of demand under S. 29 of the Income-tax Act. He further contended that the High Court went wrong in holding that the facts in the Bombay decision were different from those in the present case, for the facts in both the cases were the same and in fact they arose out of the same transaction, namely, the sale of the shares by the Agency Firm to the Purchaser Firm.
(3.) Mr. Gopal Singh, learned counsel for the Revenue, while supporting the order of the High Court raised a preliminary objection, namely, that the order of the Commissioner under S.33A of the Income-tax Act was an administrative act and, therefore, no writ of certiorari would lie to the High Court to quash that order under Art. 226 of the Constitution.;