LAHIRI, J. -
(1.)BEFORE P. B. Mukherji J. the only ground that was urged by the appellant was that the revenue sought to be realized was revenue belonging to the British Indian Government and it could be realized by its successor, the Indian Government, in the manner by which the British Indian Government could have realized it and within the time limit prescribed by the Indian Income-tax Act as it stood prior to the introduction of section 34(1). This point had been decided against the appellant in several cases recited in the judgment of P. B. Mukherji J. In view of the decisions in those cases Dr. Pal raised the three points, which I have already enumerated, in support of the appeal. Mr. Meyer appearing for the respondents has contended before us that the points taken in the appeal by Dr. Pal were abandoned by the the appellant by implication before the trial judge and so the appellant is not entitled to raise those points for the first time in appeal. Mr. Mitter who appeared in the trial court and who is appearing before us with Mr. Pal states that before the trial judge he did not expressly abandon any of the points taken by his client in its petition, but, in view of the opinion of the trial judge he did not press those points.
(2.)OUT of deference to Dr. Pal we have allowed him to develop the points which his client has taken in its application under article 226 of the Constitution. The first point relates to the constitutional validity of section 34(1A) of the Indian Income-tax Act. Dr. Pal argues that it violates article 14 of the Constitution by selecting only the period between September I, 1939, and March 31,1946, for its operation to the exclusion of the earlier period. It is contended that if it was the intention of the Legislature to reopen assessments which had become final by lapse of time, provision should have been made for reopening all previous assessments irrespective of the question whether the relevant previous year falls within the period specified above. I have already said that section 34(1A) of the Indian Income-tax Act imposes two restriction upon the power of the Income-tax Officer : (a) the relevant previous year must fall between September 11939, and March 31, 1946, and (b) the income which has escaped assessment amounts or is likely to amount to one lakh of rupees or more. No objection is raised by the appellant about the pecuniary restriction, but it is contended that the time-limit is arbitrary and discriminatory.
Authorities are numerous on the point that article 14 of the Constitution does not prohibit reasonable classification for legislative purposes. What it forbids is differential treatment of persons or things which belong to the same class or category. If a statute deals equally with all persons within the same class, it cannot be challenged on the ground of violating the equal protection clause. In all the decision of the supreme Court on this point it has been laid down that two condition must be fulfilled to satisfy the test of permissible classification : (1) the classification must be based on an intelligible differentia and (2) the differentia must have a rational relation to the object of the statute or, in other words, there must be a nexus between the differentia and the object of the statute. It is unnecessary to cite all the authorities bearing on the point. It is enough for the present purpose to refer to decision of the Supreme Court in the case of Ram Krishna Dalmia v. Justice S. R. Tendolkar, in which Das C.J. has made an exhaustive classification of all the cases decided by the Supreme Court under article 14 of the Constitution. There it has been pointed out that there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles (see the observations in the above case at page 297)
For the purpose of deciding the first point I shall have to consider whether the Income-tax (Amendment) Act (XXXIII of 1954) satisfies the test laid down by the Supreme Court in the above decision and whether the assessee has established that there has been transgression of the constitutional principles. In order to determine the basis of the classification we have to consider the preamble to the Income-tax Act (Amendment) Act (XXXIII) of 1954 and also to consider the statement of objects and reasons for the purpose of ascertaining what was the evil which the statue intended to remedy. The preamble to the Amendment Act states that the object of the Act was to "provide for the assessment or reassessment of persons who have to a substantial extent evaded payment of taxes during a certain period and for matters connected therewith." The statement of objects and reasons, as published in the Gazette of India Extraordinary, part II, section 2, No. 41, dated September 3, 1954, page 535 shows that the object of the Bill seeking to amend the Indian Income-tax Act was to enable investigations to be made into certain cases of tax evasion during war-time. "A number of such cases has been referred to the Income-tax Investigation Commission under section 5(1) of the Investigation Commissioner Act. A number of the cases was subsequently referred to the Commission under section 5(4) of the Act. As the Supreme Court has held the latter provision to be invalid, an Ordinance had to be promulgated to amend the Indian Income-tax Act so as to provide for the application of the normal machinery to such cases." From this it is clear that the Legislature selected the period between September 1, 1939, and March 31, 1946 because that was the period which coincided with the continuance of the Second World War which created abnormal conditions, caused a phenomenal rise in the prices of all commodities and thereby created opportunities for tax evasions on a large scale. If the Legislature selects such a period for investigation, it must be held that the classification is based upon an intelligible differentia.
(3.)THE next question is whether there is a nexus between this differentia and the object of the statue. THE object of the statute, as I have already said, is to provide for the assessment and reassessment of persons who have to a substantial extent evaded the payment of taxes and for the purpose of achieving that object section 34(1A) has authorized the Income-tax Officer, with the approval of the Central Board of Revenue, to issue certain notices and to take certain action. In my opinion, there is a rational relation between the differentia and the object of the statute. It is to be noticed that the assessee has stated nothing in its application under article 226 of the Constitution to show that it is similarly circumstanced with assessee in respect of assessment prior to September 1, 1939, and it has, therefore, completely failed to discharge the onus which lay upon it of proving that there was a clear transgression of the constitutional principles. For all these reasons I have no hesitation in overruling the first point urged by Dr. Pal in support of the appeal.
The second point taken by Dr. Pal is that the assessee has not been given a copy of the reasons which induced the Income-tax Officer to issue notices under section 34(1A). It appears that by a letter dated July 13, 1955, the assessee asked the Income-tax Officer to give it an inspection of the records for the purpose of enabling it to comply with the notice under section 34(1A) of the Income-tax Act. But this request of the assessee was not complied with by the Income-tax Officer. In the application under article 226 there is a prayer for a mandamus directing the Income-tax Officer to give inspection of the material in his possession, the reasons recorded by the Income-tax Officer and the order or direction of the Central Board of Revenue expressing its satisfaction upon the reasons given by the Income-tax Officer. Before this court Dr. Pal based his right to get a copy of the reasons of the Income-tax Officer entirely upon section 76 of the Indian Evidence Act. According to that section, "every public officer having the custody of a public docume nt, which any person has a right to inspect, shall give that person on demand a copy of it on payment of the legal fees therefor." There is no averment in the application under article 226 of the Constitution to the effect that the copy asked for is in the custody of the respondents or any of them. Mr. Meyer has contended before us that the executive head of the Income-tax Department in the State of West Bengal is the Commissioner of Income-tax, West Bengal, who has not been impleaded in the present proceeding. He has also argued that the reasons recorded by the Income-tax Officer under section 34(1A) of the Indian Income-tax Act were presumably forwarded to the Central Board of Revenue and the record of reasons is presumably in the custody of the Central Board of Revenue which has not also been impleaded in the present proceeding. The point was not raised by the appellant in the trial court and, in the circumstances of this case, it is impossible for us to give any relief to the appellant in this respect. In this view of the matter, it is unnecessary for us in the present case to decide the question whether the record of reasons of the Income-tax Officer is a public document within the meaning of section 76 of the Indian Evidence Act or the assessee had a right to inspect the same.