SARJOO PROSAD, C. J. - (1.) THIS is an application for an appropriate writ or direction on the respondent, the Income-Tax-Officer, 'b' Ward, Jaipur, restraining him from proceeding to realise the amount of Rs. 9,121. 37 Np. said to be due from the petitioner on account of income-tax assessment and penalty.
(2.) THE petitioner is a firm, carrying on business in electrical goods, sanitary fittings and P. W. D. contracts, in the name and style of Messrs. Surajmal Durgalal, having its office situate in Tripolia Bazar, Jaipur. THE petitioner used to be assessed as a registered firm and consequently the individual partners of the firm were separately assessed for the income accrued to the business. It is alleged that on account of some error on the part of the petitioner's counsel, the application for registration of the petitioner's firm, which was due to be renewed on the 30th of June, 1959, could not be presented in time. It was presented in February, 1960, with the result that the petitioner's application for registration was refused and the Income-tax-Officer proceeded to assess the petitioner as an unregistered firm for the assessment year 1959-60. THE petitioner had shown in its return an income of Rs. 37,183/-but the Income-tax-Officer assessed the petitioner on an income of Rs. 56,260/- and the tax thus levied on the total income as an unregistered firm came to a sum of Rs. 20,285. 09 Np. THE order of assessment was made on the 21st of May, 1960, and is an annexure to the petition. THE petitioner preferred an appeal under sec. 30 of the Income-tax Act challenging the assessment on various grounds. It also filed a separate appeal against the order refusing its prayer for registration. THE latter appeal against the order refusing registration was summarily dismissed on 18th July, 1960; but the other appeal against the order of assessment was disposed of on the 3rd of September, 1960, by the Appellate Assistant Commissioner, who gave a partial relief to the petitioner in respect of the tax assessed. THE petitioner has preferred an appeal against both the appellate order to the Appellate Income-tax Tribunal and these appeals are still pending. It appears that after the dismissal of the petitioner's appeal under sec. 26 A of the Income-tax Act against the order refusing registration of the firm on 18th July 1960, the Income-tax Officer under letter dated 22nd July, 1960, required the petitioner to deposit the amount of Rs. 20,285. 09, the tax due, on or before 28th of that month, failing which he warned that a penalty under sec. 46 (1) of the Act would be imposed. The petitioner replied that since the main appeal itself had not been disposed of and was still pending before the Assistant Commissioner, the Income-tax Officer should not treat the petitioner in default until the appeal against the! assessment order itself was disposed of. The petitioner further pleaded that originally he had been allowed time to deposit the income-tax dues till the disposal of the appeal before the Appellate Assistant Commissioner of Income-tax or the 31st of October 1960, whichever was earlier; and, therefore, the demand should not be recovered from him until the 31st of October, 1960. The Income-tax Officer replied this letter of the petitioner under letter dated 2n|d August, 1960, in modification of his earlier demand. The Officer wrote to the petitioner to pay by the 20th of the month at least a sum of Rs. 12,630/-which was the tax due on the undisputed income of Rs. 37,828/-, as given in the return of the petitioner, as against the total amount assessed. At the same time the Officer added in his letter that if the petitioner did not cooperate in depositing the amount demanded, no further accomodation would be available to him. In response to this the petitioner sent another letter on the 23rd of August, 1960, enclosing a cheque for Rs. 9,130/- towards the payment of the demand. It also indicated that there was a sum of Rs. 2,500/- refundable to the petitioner by the Department on account of certain deduction allowed in respect of its earlier assessments, and it prayed that the said amount may be adjusted towards the current demand; and any balance left after making these adjustments, the petitioner promised to make good in the first week of September, 1960. On the nth of September, 1960, the Income-tax Officer sent another notice to the petitioner. It should be remembered that by that time his appeal before the Assistant Commissioner of Income-tax against the assessment order had also been decided on 3rd September 1960, and the assessment slightly varied. Therefore, in this letter the Income-tax Officer informed the petitioner that a sum of Rs. 8,721. 37 remained payable, after adjusting the payment of Rs. 9, 130/- made by the petitioner on the 24th of August, 1960. It was requested to pay the balance demand of Rs. 8,721. 37 np. by the 20th of Sept. 1960, positively, failing which a penalty would be imposed. The Officer reminded the petitioner that no application for extension of time or stay of tax would be entertained any further. In relation to the refund claimed by the petitioner to be adjusted towards his dues, it was pointed out that these refunds were payable to the partners of the firm and, therefore, could not be adjusted Against the current demand of the firm itself. Further correspondence appears to have taken place between the parties thereafter and when the petitioner did not pay the amount, the Income-tax Officer passed an order on the 2nd of November, 1960, imposing a penalty of Rs. 400/- on the petitioner under sec. 48 (1) of the Income-tax Act and directed the total amount of Rs. 9,181. 37, including the penalty to be paid on or before the 20th of November, 1960. The Officer held that the assessee had been adopting delaying tactics on one plea or another, though he had been repeatedly given time to pay the demand even by the 31st of October, 1960, vide his letter dated 26th October, 1960; but when that order also was not complied with, the Officer held the petitioner clearly liable for imposition of a penalty. The learned counsel for the petitioner contends that the order imposing penalty and refusing to extend time to the petitioner to pay the amount assessed is without jurisdiction. The order of penalty should be, therefore, quashed and a mandamus issued to the Income-tax Officer to exercise a judicial discretion in the matter as required by law, which, according to the petitioner, he has ostensibly refused to exercise. Section 45 of the Income-tax Act vests the Income-tax Officer with a descretion to treat the assessee as not being in default as long as his appeal under sec. 30 of the Income-tax Act is undisposed of; but the exercise of the discretion is coupled with a duty and when an appropriate occasion arises the Officer is bound to exercise it and not refuse to act. The discretion contemplated by the section has to be exercised in a reasonable and judicial manner having regard to relevant circumstance of the case; and in so doing the Income-tax Officer should act with fairness and objectivity. He has to remember that if he treats the assessee as a defaulter, he can also in his discretion impose upon him a penalty and an appeal lies against an order making any such imposition. Administrative expedience may of course require the Income-tax Officer to Collect the tax as expeditiously as possible; but in exercising his discretion under sec. 45 of the Act he must not only look to the interest of the Department as a tax-gatherer but he should also consider whether in a given case fairness demands that he should stay his hands untill the assessee's appeal under sec. 30 of the Act has been disposed of. In doing so he may take into account, the amount of the assessment, the circumstances of the assessee, whether there are any substantial questions involved in the appeal and whether the assessee has a just claim to the postponement of the realisation of the demand. Where, therefore, the Officer does not exercise his discretion judicially or refuses to exercise any discretion at all or acts arbitrarily or with some mala fide intention, an appropriate writ may be issued to the Officer compelling him to exercise the obligation which rests upon him under the Act; but where he has eyercised his discretion and that discretion is not based upon extraneous considerations this Court in a writ application is not expected to interfere. The statute in such cases can provide a right of appeal to the assessee and whether in the given circumstances the description should or should not have been exercised in favour of the assessee or against him is a matter to be rectified in appeal. The above principle appears to be well-settled. In Vetcha Sreeramamurthy Vs. Income-tax Officer (1) Viswanatha Sastri J. held as follows: "though it is not within the province of the Court to give general directions or lay down general rules for the exercise of the power conferred by sec. 45 and though this Court is not authorised to sit as a Court of appeal for review of orders passed by Income-tax Officer under that section, still there may be occasion for this Court's interference by a writ of mandamus. If an Income-tax Officer declines to hear and consider the application of an assessee under sec. 45 for an order of stay of collection of the tax pending an appeal from the order of assessment, he fails to perform a duty cast on him by the section and which is enforceable by mandamus, In such a case the Officer refuses to exercise a jurisdiction given to him. It is true that a mandamus will not be issued by the Court where there is no obligation or duty imposed by statute on a public officer and the performance or non performance of an act is left to his absolute discretion. " Mr. Tyagi contends that the Income-tax Officer instead of considering his application for time on merits, repeatedly told the petitioner in his letters dated 2nd August, 1960, and 8th September, 1960, that no accomodation would be allowed and no applicat:on for extension of time or stay of tax would be entertained. For the Department, however, it is pointed out that it would not be fair to level against the Income-tax Officer any charge that he refused to exercise his discretion under sec. 45 of the Act. On the contrary, according to the learned counsel for the Department, the Income-tax Officer repeatedly granted time to the petitioner and it is only when even after his appeal had been disposed of by the Appellate Assistant Commissioner and he refused to make payment within the time repeatedly granted to him that the Income-tax Officer proceeded to treat him as a defaulter. The assessee's appeal against the question of assessment was disposed of by the Assistant Commissioner on 3rd September, 1960, and he was asked to pay the balance of the sum of Rs. 8,721. 37 by the 20th of September, 1960. This the assessee did not deposit by that date, but adopted the plea that he had been granted time till the 31st of October, 1960. It would appear that this claim of the petitioner was not altogether correct, as the learned counsel argues, because by the earlier letter dated 22nd July, 1960, he was informed that he had been allowed time to deposit the income-tax "till the disposal of appeal before the Appellate Assistant Commissioner of Income-tax or 31st October, 1960, whichever is earlier". Even then it appears that under letter dated 26th October, 1960, he was finally allowed time by the Income-tax Officer to pay the demand by 31st October, 1960. Inspite of all this indulgence the petitioner did not comply with the demand and applied for further time, which was rejected by the Income-tax Officer. In the circumstances, it is pointed out that the officer did exercise a valid discretion in the matter and it was not open to the petitioner to claim extension for payment of the demand, even after his appeal under sec. 30 of the Act had been decided by the Assistant Commissioner of Income-tax. We are inclined to think that on the facts of this case it cannot be assumed that the Income-tax Officer had refused to exercise his discretion under the Act. It is true that in some of the letters the Officer did tell the assessee that his application for time would not be considered and that no further accommodation would be given ; but these observations were made after the disposal of his appeal on the merits of the assessment on 3rd September, 1960. The Department contends that the discretion to be exercised by the Income-tax Officer is confined to the period during which an appeal is pending under sec. 30 of the Act and does not extend beyond that period. The petitioner has of course preferred appeals against the orders of the Assistant Commissioner to the Appellate Income-tax Tribunal and those appeals are pending under sec. 33 of the Act ; but sec. 45 refers merely to an appeal under sec. 30 of the Act and does not refer to an appeal under any other section so that the Income-tax Officer is not bound to act under the section when an appeal is pending before the Appellate Tribunal. As sec. 45 stood earlier it also included an appeal under section 38-A of the Act, but that provision has since been deleted. It may be that administratively any of these officers of the Department from the Income-tax Officer upwards may regulate the payment of the tax due, because it is their responsibility to collect the taxes and for facilities of realisation grant extension of time or even instalments to certain assessees as pointed out in the decision in Commissioner of Income-tax, Punjab Vs. L. Rajeswar Parshad (2), but any such extension of time would not be within the meaning of sec. 45 of the Act and refusal to exercise any discretion administratively is not a matter for consideration by this Court in a writ of this nature. So far as the order imposing the penalty is concerned, the petitioner had a right of appeal against that order. It is not in every case that the remedy under the law can be said to be onerous merely because it requires a deposit of the tax as a condition precedent to the presentation of the appeal. The penalty imposed in this case is a sum of Rs. 400/- only and was not so heavy that the petitioner could not easily deposit this amount and prefer an appeal against the order. It cannot, therefore, be said that the remedy provided under the Act was an inadequate or illusory alternate remedy. Here there is no question of any vires of the legislation and it would not be appropriate for this Court to intervene and issue a writ of certiorari, even though an alternate remedy was open to the party concerned. [see M/s. Jethmal Ram Swaroop Vs. The State (3)]. It also appears that by obtaining a rule from this Court the petitioner has gained much more time than it wanted. It had applied only for a month's time before the Income-tax Officer as a last resort and that time would have expired by the end of November, 1960. We do not find, therefore, that on the facts of this case there is any justification for Our interference with the discretion exercised by the Income-tax Officer, merely because appeals are pending before the Appellate Tribunal. The policy of the law appears to be that ordinarily the taxing authorities should proceed to realise the tax due from the assessee and mere presentation of an appeal cannot operate to stay realisation of the assessment made unless in the exercise of a wise discretion under sec. 45 of the Act the Income-tax Officer stays his hands, until the disposal of the appeal under sec. 30 of the Act, or on administrative grounds the taxing authorities feel satisfied that it would be fair and equitable to postpone the realisation of the amount assessed or to realise it in instalments. Even in case of a reference made to the High Court under sec. 66 of the Act, the law requires that income-tax shall be payable in accordance with the assessment made in the case, provided that if the amount of tax is reduced as a result of assessment, the amount overpaid has to be refunded with such interest as the Commissioner may allow. We, therefore, think that no ground has been made out for our interference in a case of this nature. The application has no force and must be rejected with costs. .;