T.N. Sivaraj Rahim Sakshi Fakhir Sahib Vs. State of Tamil Nadu - Court Judgment

Mishra, J.

1. In these two tax cases, common contentions are raised and, accordingly, they are disposed of together.

It appears that a statutory notice under the Tamil Nadu Agricultural Income-tax Act (for short the 'Act') under section 16(2) was issued to the petitioner but he failed to respond. The Agricultural Income-tax Officer, accordingly, proceeded to levy tax on the basis of judgment assessment and also decided to impose penalty under section 20(2) of the Act. When a notice issued under section 20(3) of the Act, however, was received by the petitioner, he appeared with a petition paying for recall of the best judgment assessment on the ground, inter alia, that his Karwari was under eye medical treatment and, therefore, the return of income was not filed within time. The said application found favour with the taxing officer, who recorded as follows :

'In the absence of the karwari who was managing the lands, the contention of the assessee that he was unable to prepare the return is found reasonable. Further, as he was under treatment when the notice was served to appear for enquiry and the notice under section 20(3) to impose penalty, it is learnt that the assessee was physically unable to file the return in time and appear for enquiry. In view of the reasons stated in his petition, the assessment orders finalised under section 17(4) of the Act are hereby ordered to be cancelled.'

After cancellation of the order under section 17(4) of the Act, opportunity was given to the petitioner to file his return and after examination of the return, he was assessed to tax under the Act. However, suo motu exercising power under section 34 of the Act, the Commissioner of Agricultural Income-tax, Madras, decided to go into the merits of not only the assessment arrived at on the basis of the return of the petitioner but also as to the correctness or otherwise of the order under which the assessment under section 17(4) of the Act was recalled. He, accordingly, gave notice to the petitioner. It appears that the notice was served upon some one described as the adheenakartha. No one, however, appeared on behalf of the petitioner before the Commissioner. After recording that the assessee did not choose to comply with the notice under section 16(2) of the Act and he failed to file return of income for the assessment years 1972-73 and 1973-74, the Commissioner of Agricultural Income-tax held that the question of reopening of the assessment made under section 17(4) of the Act for these assessment years did not rise in this case. He added, 'since it was considered that the reopening of assessment under section 19 of the Act is irregular in this case, the case was taken on file on suo motu revision and a show-cause notice was issued in this office SMRP. Nos. 24 and 25 of 1977-A1, dated July 16, 1977 and served on the adheenakartha on July 30, 1977 to show cause as to why the above four orders should not be set aside within 15 days from the date of the receipt of the notice. The assessee did not respond to the notice so far. The case was posted for hearing on October 12, 1977, at Madras. The notice of hearing was also served on the adheenakartha on October 3, 1977. He did not also appear on the date of hearing. Hence, as ex parte order is passed on materials available on record.'

2. Coming to the merits, the Commissioner has found that the assessment records reveal that the statutory notices under section 16(2) of the Act were duly served and the assessments were made under section 17(4) of the Act by the Agricultural Income-tax Officer, but reopened under section 19 of the Act on the application of the assessee on the ground that his karwari (agent) was under treatment for eye defect and hence the return called for could not be prepared and filed in response to the notices. He then observed :

'... A perusal of the medical certificate produced by the assessee shows that he was ill during the period from September 14, 1973 to December 14, 1973. In fact, if he was willing to file returns of agricultural income, he might have filed them between the period from December 16, 1973, to October 28, 1974, i.e., prior to the date of finalisation of assessment under section 17(4) of the Act. He had not done so. It is, therefore, evident that the assessee was not prepared to avail of the opportunity afforded. Thus, it is clear that the action of the Agricultural Income-tax Officer in having reopened the earlier assessment orders made under section 17(4) of the Act on application by the assessee under section 19 of the Act if not correct and it is against the provisions of the Act.'

Having said so, the Commissioner has set aside the order with respect to the assessment years 1972-73 and 1973-74 and restored the original assessment under section 17(4) of the Act.

3. We do not think it is necessary in these cases to examine any of the provisions of the Act beyond stating that the Commissioner decided to interfere with an order passed on November 12, 1974, on October 19, 1977, and that too, on the ground that, in his opinion, the cause shown by the petitioner for recall of the best judgment assessment order was not sustainable. The Agricultural Income-tax Officer who had examined the sufficiency or otherwise of the cause found merit in the cause shown, in the sense that he accepted the plea that the notices were served and the assessee was obliged to submit his return, but some enquiries revealed that there had been some sort of exemption ordered under section 4(b) of the Act and a fresh return was needed in view of the amendment by Act 4 of 1973, but the assessee was unable to prepare the return because his karwari was ill. The Commissioner has, however, found fault with the said reason saying that the karwari was ill during the period September 14, 1973, and December 14, 1973, and that he has sufficient time even thereafter to file the return, if any, before, the finalisation of assessment under section 17(4) of the Act. This, in some cases, may appear to be a good reason to interfere with any order of assessment provided it is found that the assessee was guilty of supprestio veri or suggesio falsi. The petitioner cannot be faulted for what happened in the course of the hearing of the matter before the taxing officer. All that he did was that he invoked the jurisdiction for recall of the order of assessment and brought, in support of his case, a medical certificate showing that his karwari was ill. The Officer concerned accepted the cause as good enough and sufficient to recall the best judgment assessment. Ordinarily, it is not permissible for a revisional court to exercise its suo motu power to examine sufficiency or otherwise of any cause shown unless it is very necessary. We are satisfied that the Commissioner had no such necessity to go into the validity or otherwise of the order recalling the best judgment assessment, particularly when the petitioner was assessed on the basis of his returns and no fault was ever found with the returns submitted by him.

4. In the result, these tax cases are allowed. The orders of the Commissioner dated October 19, 1977, are quashed and the orders of the Agricultural Income-tax Officer dated January 25, 1975, are restored. No costs.