PETITIONER: HIRDAY NARAIN Vs. RESPONDENT: INCOME-TAX OFFICER, BAREILLY DATE OF JUDGMENT: 21/07/1970 BENCH: <NAME>, J.C. BENCH: <NAME>, J.C. HEGDE, K.S. CITATION: 1971 AIR 33 1971 SCR (3) 683 1970 SCC (2) 530 ACT: Income-tax Act 1922, Ss. 16(3) (a) (ii)-If applicable in case of assessment of H.U.F, income. S. 35-Nature of power of rectification If discretionary HEADNOTE: The appellant with his five sons constituted a Hindu undivided family and up to the assessment year 1950-51 the income received by the appellant was assessed to tax as the income of the <ORG> The previous year of <ORG> for each assessment year was from October I to September 30 of the following year. The property of the Joint Family was partitioned on November 19, 1949. For the assessment year 1951-52 the income tax Officer assessed the appellant's income as that of the <ORG> in appeal, the Appellate Assistant Commissioner directed that the income earned between October I and November 18, 1949 should be treated as that of the <ORG> and excluded from the assessment. The <ORG> thereafter made two orders of assessment, assessing Rs. 18,52.00 earned upto November 18 as the income of the old <ORG> and assessing the balance also as income of a Hindu undivided family and liable to tax in the hands of the appellant by the application of s. 16(3)(a)(ii) , of the Income Tax Act , 1922. The appellant the* applied for rectification of an error in the second order of assessment under s. 35 of the Act claiming that his income assessed as that of an <ORG>. Section 16(3) (a)(ii) did not apply. The <ORG> accepted the plea that s. 16(3)(a)(ii) did not apply to an <ORG> but declined to give relief holding that for the period between November 19 1949 and September 30, 1950, the appellant should have been assessed as an, individual. A petition filed by the appellant in <ORG> under Article 226 challenging the order of the <ORG> was dismissed by a Single Judge holding, inter alia, that the appellant had not applied in revision to the Commissioner under section 33-A . A division Bench dismissed an appeal against the order of the single judge observing that the rectification under section 35 was "discretionary", and if the <ORG> thought that the proceedings were "substantially fair" he was "not bound to rectify the assessment on technical grounds". On appeal to this Court, HELD : The income from November 19, 1949 onwards being assessed to tax as-the income of a Hindu undivided family consisting of the appellant, his wife and a new born minor son. s. 16(3)(a)(ii) plainly did not apply and writs must issue for the rectification of the appellant's assessments, <CITATION> (1) 60 I.T.R. 293; <CITATION> tax, (2) 74 I.T.R. 190, referred to. [686 E-F] The High Court was wrong in assuming that exercise of the power under s. 35 to rectify an error apparent from the record was discretionary and the Income-tax Officer could, even if the conditions for its exercise were shown to exist, decline to exercise the power. If a statute invests 684 a public Officer with authority to do an act in a specified set of circumstances, it is imperative upon him to exercise his authority in a manner appropriate to the case when a party interested and having a right to apply moves in that behalf and circumstances for exercise of authority are shown to exist. Even if the words used in the statute are prima facie enabling, the Courtswill readily infer a duty to exercise power which is invested in aid of enforcement of a right-public or private-of a citizen. [688 G, 689] While accepting the appellant's plea that the income of his minor children was not liable to be included in his assessment in the status of an <ORG> his right to obtain the benefit of rectification could not be refused by changing the status on the basis of which the original assessment was made without investigating, after due notice, whether in assessing the income for the period November, 19, 1949 to September 30, 1950, a mistake in fact was committed. [688 B-C] Because a revision application could have been moved for an order correcting the order of the Income Tax Officer under s. 35, but was not moved, <ORG> was not justified in dismissing as not maintainable the writ petition, which was entertained and was heard on the merits. [688 El JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 193 and 448 of 1970.

Appeals by special leave from the judgment and order dated the September 19, 1968 of <ORG> in <ORG> of 1962.

<NAME>, <NAME> and <NAME>, for the appellant (in both the appeals).

<NAME>, Solicitor-General, <NAME>, <NAME> and <NAME>, for the respondent (in both the appeals).

The Judgment of the Court was delivered by <NAME>, J.-These appeals arise out of orders passed in peti- tions praying for a writ of mandamus to rectify orders of assessment relating to income assessed to tax for the years 1951-52 and 1952-53. The corresponding previous years for the assessment years were October 1, 1949 to September 30, 1950 and October 1, 1950 to September 30, 1951. <NAME> and his five sons were members of a Hindu undivided family. Till the assessment year 1950-51 the income received by <NAME> -was assessed to tax as the income of a Hindu undividedfamily. On November 19, 1949 the property of the joint family was partitioned between <NAME> and his. sons. In assessing the income for the assessment year 195152 the Income-tax Officer recorded an order that the property was partitioned, but he still assessed the income received by <NAME> as income of a Hindu undivided family. In appeal the Appellate Assistant Commissioner treated Rs. 18,520 earned between October 1, 1949 and November 18, 1949 as income of the former Hindu undivided family and directed that it be "excluded from the assessment". Pursuant to that order, the Income-tax Officer made two orders of assessment-(I) assessing Rs. 18,520 as income of the Hindu undivided family of <NAME> and his five sons: and (2) assessing Rs. 1,06,156 also as income of a Hindu undivided family and liable to tax in the hands of <NAME> by the application of s. 16 (3) (a) (ii) of the Indian Income-tax Act , 1922.

<NAME> then applied for rectification of a mistake in the order of assessment which he claimed was apparent from the record. He submitted that "the assessment of * * * <NAME> has been made in the status of undivided family comprising of himself and his minor son <NAME>. Section 16(3)(a)(ii) does not apply to cases of 'Hindu undivided family', but only to those of 'Individuals'. It is therefore requested that such of the income as has by mistake been included in the, assessment of the Hindu undivided family for the said year under s. 16(3) (a) (ii) may kindly be excluded under s. 35 as the mistake is apparent from record." The Income-tax Officer accepted the plea that to income assessed to tax in the hands of <NAME> in the status of a Hindu undivided family s. 16 (3) (a) (ii) of the Income-tax Act , 1922, did not apply, but he declined to give relief holding that for the period November 19, 1949 to September 30, 1950 <NAME> should have been assessed as an individual.

<NAME> then moved a petition before <ORG> under Art. 226 of the Constitution challenge in the order of the Income-tax Officer. A single Judge of <ORG> rejected the petition holding that at the stage of the original assessment the question that the, income was not liable to be assessed under s. 16 (3) (a) (ii) of the Income-tax Act was not raised and that the assessee had not applied in revision to the Commissioner under s. 33-A of the Act. A Division Bench of <ORG> confirmed that order in appeal, observing that the rectification under s. 35 of the Act was "discretionary", and if the Income-tax Officer thought that proceedings were "substantially fair" he was "not bound to rectify the assessment on technical grounds". <ORG> also observed that "it was not clear that after November 19, 1949 there was a Hindu un- divided family which <NAME> represented and therefore it was possible to say with certainty that the Income-tax Officer was wrong in proceeding on the footing that the, assessment could be supported as assessment of an individual".

With special leave, <NAME> has appealed to this Court.

In respect of the period November 10, 1949 to September 30, 1950 the income was assessed in the hands of <NAME> in the status of a Hindu undivided family. Section 16 of the Indian Income-tax Act,1922, by sub-s. (3)(a)(ii) provides "In computing the total income of any individual for the purpose of assessment there shall be included-

(a) so much of the income of a wife or minor child ofsuch individual as arises directly or 'indirectly-

(ii) from the admission of the minor to the benefits of partnership in a firm of which such individual is a partner".

(ii) from the admission of the minor to the benefits of partnership in a firm of which such individual is a partner."

Income for the period November 19, 1949 to September 30, 1950 being assessed to tax as the income of a Hindu undivided family and not of an individual, s. 16 (3) (a)

(ii) plainly did not apply and the income of the minor children of <NAME> could not be included in the income of <NAME> assessed as a Hindu undivided family.

Under the Income-tax Act it is not predicated of a Hindu undivided family as a taxable entity that it must consist of two or more male members : <CITATION> , Mysore;(') see also <CITATION> (') (a case under the Wealth Tax Act ). <NAME> received a share in the properties of the Hindu undivided family of which he and his wife were members. It may again be noticed that before the previous year expired, <NAME>'s wife gave birth to a son on April 6, 1950. We are therefore unable to agree that the income accruing between November 19, 1949 and September 30, 1950 could be assessed in the hands of <NAME> as an individual.

(1) 60 I.T.R. 293. (2) 74 I.T.R. 190.

But the Solictor-General submitted that <NAME> had filed his return in the status of an individual, and since the Appellate Assistant Commissioner had also passed an order when he directed separate assessment of the total receipts during the year October 1, 1949 to September 30, 1950 as the income of two distinct assessable entities, the Income-tax Officer was bound to assess the income for the period November 19, 1940 to September 30, 1950, as the income of <NAME> as -an individual, and to that income, the income of his minor children arising out of the partnership to which they were admitted was liable to be added under s. 16(3)(a)(ii) of the Income-tax Act, and the Tax Officer was entitled and indeed bound to rectify the assessment when his attention was invited to the error. There is no clear evidence on the record about the status in which <NAME> submitted the return of income. If the order of assessment made by the Income-tax Officer furnishes any indication, the return was probably filed in the status of a Hindu undivided family. By the order dated December 16, 1953 the total income of the relevant year was ordered to be assessed in the hands of <NAME> in the status of a Hindu undivided family. It is true that in the appeal before the Appellate Assistant Commissioner it was contended by <NAME> that the Income-tax Officer "had erred in including a sum of Rs. 18,520 to the income of the appellant (<NAME>)as an 'Individual' and in not assessing it separately as the income of the 'Hindu undivided family'." The Appellate Assistant Commissioner observed that the income of Rs. 18,520 related to the period when the family of the appellant was undivided, but by an order under s. 25-A the Income-tax Officer- had held that the appellant and his sons had partitioned the property of the family. He therefore directed that the amount of Rs. 18.520/which belonged to -the erstwhile Hindu undivided family be excluded from the assessment which accordingly stood reduced from Rs.. 1,24,676 to Rs. 1,06,156. The Appellate Assistant Commissioner did not direct that the status in which the income was sought to be assessed for the period November 19, 1949 to September 30, 1950 be altered. Pursuant to the order of the Appellate Assistant Commissioner the -Income-tax Officer assessed the income for that period as income of a Hindu undivided family represented by <NAME>. There was in fact an existing Hindu undivided family of which, for a part of the period <NAME> and his wife were members, and for the rest, besides the two, their infant son was a member. The order of the Income-tax Officer is subject to a proce- dural infirmity as well. In rejecting the application under s. 35 the Income-tax Officer apparently assumed that in an applica-

tion made by an assessee he could exercise his power suo motu and modify the status of the assessee even without giving an opportunity to the assessee to establish that the order assessing him in the status of a Hindu undivided family was in law correct. <NAME> had claimed that the income of his minor children was not liable to be included in his assessment in the status of a Hindu undivided family. There was no defence to the claim for rectification on the merits of that application. Right to obtain the benefit of rectification could not be refused by changing the status on the basis of which the original assessment was made without investigating, after due notice, whether in assessing the income for the period November 19, 1949 to September 30, 1950 a mistake in fact was committed. able. It is- true that a petition to revise the order could be moved before the Commissioner of Income-tax. But <NAME> moved a petition in <ORG> and <ORG> entertained that petition. If <ORG> had not entertained his petition, <NAME> could have moved the Commissioner in revision, because at the date on which the petition was moved the period prescribed by s. 33A of the Act had not expired. We are unable to hold that because a revision application could have been moved for an order correcting the order of the Income-tax Officer under s. 35, but was not moved, <ORG> would be justified in dismissing as not maintainable the petition which was entertained and was heard on the merits <ORG> observed that under s. 35 of the Indian Income-tax Act, 1922, the jurisdiction of the Income-tax Officer is, discretionary. If thereby it is intended that the Income-tax Officer has discretion to exercise or not to exercise the power to rectify, the view is in our judgment erroneous. Section 35 enacts that the Commissioner or Appellate Assistant Commissioner or the Income-tax Officer may rectify any mistake apparent from the record. If a statute invests a public Officer with authority to do an act in a specified set of circumstances, it is imperative upon him to exercise his authority in a manner appropriate to the case when a party interested and having a right to apply moves in that behalf and circumstances for exercise of authority are 'shown to exist. Even if the words used in the statute are prima facie enabling the <ORG> will readily infer a duty to exercise power which is invested in aid of enforcement of a right -public or private-of a citizen. In <NAME> v. Bishop of <ORG>(') it was observed by <NAME>, L.C., at pp. 222-223 that the words "it shall be lawful" con-

(1) (1880) 5 A.C. 214.

ferred a faculty or power, and they did not of themselves do more than confer a faculty or power. But there may be some- thing in the nature of the thing empowered to be done, some- thing in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is -reposed to exercise that power when called upon to do so." Lord <NAME> observed in the same case at pp. 244-245 that the enabling words give ,a power which prima facie might be exercised or not, but if the .object for which the power is conferred is for the purpose of effectuating a right there may be a duty cast upon the donee of the power to exercise it for the benefit of those who have that right when required on their behalf. Lord <NAME> and Lord <NAME> made similar observations at pp. 229 and 235. Exercise of power to rectify an error apparent from the re- cord is conferred upon the Income-tax Officer in aid of enforcement of a right. The Income-tax Officer is an officer concerned with assessment and collection of revenue, and the power to rectify the order of assessment conferred upon him to ensure that injustice to the assessee or to the <ORG> may be avoided. It is implicit in the nature of the power and its entrustment to the authority invested with quasi-judicial functions under the Act, that exercise of the power was discretionary and the Income-tax from the record is brought to his notice by a person concerned with or interested in the proceeding.

<ORG> was, in our judgment, in error in assuming that exercise of the power was discretionary and the Income- tax Officer could, even if the conditions for its exercise were shown to exist, decline to exercise the power. For the assessment year 1952-53 the assessee is also en- titled to relief claimed by him.

The appeals must therefore be allowed and the order passed by <ORG> set aside. Writs will issue directing that the assessment of <NAME> for the years 1951-52 and 1952-53 be rectified by deleting the income of his minor sons included under s. 16 (3(a)(ii) of the, Income-tax Act , 1922 from assessment. The appellant will be entitled to his costs in this <ORG> and in <ORG>. One hearing fee.

<ORG> allowed. 13 Sup. CI/70-15


CASE NO.: Appeal (civil) 5928-5929 of 2004 PETITIONER: TAMIL NADU HOUSING BOARD RESPONDENT: <NAME> & ORS DATE OF JUDGMENT: 15/03/2007 BENCH: C.K. THAKKER & <NAME> JUDGMENT:

J U D G M E N T [with C.A. No. 5932 of 2004, C.A. No. 5938 of 2004, C.A. No. 5933 of 2004 and C.A. No. 5934 of 2004] P.K. BALASUBRAMANYAN, J.

1. Forty-three writ petitioners, the contesting respondents in these appeals, approached <ORG> with W.P. No. 1109 of 2000 praying for the issue of a writ of mandamus directing the State of Tamil Nadu, its officers and <ORG> to re-convey the lands comprised in Survey Nos. 237, 238/1, 238/2 and 238/3 in all 2.43 acres, in Padi village presently in Ambattur Taluk and for passing such further orders as deemed by the court to be fit and proper. The Writ Petition was filed through a power of attorney. It was stated that the properties belonged to one <NAME> and it was inherited by his four sons and their successors. It was asserted that the writ petitioners were the absolute owners of the property as legal heirs and are in lawful possession and enjoyment of the said property. The writ petitioners were in joint possession and they were the joint owners of the property. The land was sought to be acquired for housing purposes. It was conceded that a notification under Section 4(1) of the Land Acquisition Act was published on 12.7.1975 followed by a declaration under Section 6 of that Act on 29.11.1978, followed up by an Award on 7.10.1992. It was stated that the petitioners reliably understood that the appropriate authorities had passed orders for dropping the Scheme for which the acquisition was made. Thus, the valuable lands of the petitioners were kept idle and it caused great hardship to them. For 21 years no progress had been made. If the lands that were acquired were not being used for the purpose for which it was intended to be utilised, the writ petitioners could very well put the land to their own use. The piece of land was a low lying area and a large amount has been spent by the writ petitioners recently for filling up and raising the level of the land. A representation was made to the Secretary to the Government in <ORG> for taking steps under Section 48 of the Land Acquisition Act, de-notifying or excluding the lands from acquisition. But unfortunately, the request of the writ petitioners has not been considered favourably. The lands had not been taken possession of by the respondents. The writ petitioners had earlier filed W.P. No. 19162 of 1999 before <ORG> praying for the issue of a writ of mandamus directing the respondents therein not to interfere with the peaceful possession of the writ petitioners. But the said Writ Petition was dismissed as not pressed with liberty given to the petitioners to file a fresh Writ Petition incorporating a proper prayer. Hence the present Writ Petition was being filed. We have already adverted to the prayer that was made.

2. The respondents in the Writ Petition submitted that earlier, an application had been made by the writ petitioners under Section 48B of the Land Acquisition Act as amended in the State of Madras, but the said request had been rejected by the Government. It is significant that there is no challenge to such a rejection in the Writ Petition and no prayer for a writ of certiorari to quash such an order. It was also contended that the Scheme was very much alive and the lands are intended to be utilised for the purpose for which the acquisition was made. The delay in putting it to use was because of various litigations that had been initiated. The possession of the lands had been taken and made over to <ORG>. The writ petitioners were not entitled to any relief. The competence of the writ petitioners to maintain the Writ Petition was also questioned.

3. The learned single judge proceeded on the basis that the Writ Petition was filed for the issue of a writ of mandamus directing the respondents therein to re-convey the lands involved in the Writ Petition in terms of Section 48B of the Act as inserted in the State of Tamil Nadu. The court proceeded to state that by way of earlier order dated 2.7.1999, a notification in respect of other lands acquired for the purpose of the Scheme had been quashed and re-conveyance ordered and since there was no further development in respect of the lands which were taken possession of by <ORG>, there should not be any impediment in the way of the respondents in disposing of the representation of the writ petitioners dated 18.3.1998 seeking re-conveyance of the lands under Section 48B of the Land Acquisition Act. The learned Judge did not advert to the fact that a request made earlier in that behalf by the writ petitioners, stood rejected and there was no challenge to that rejection. The learned single judge ended up by directing the State of Tamil Nadu to pass appropriate orders on the representation given on behalf of the writ petitioners within three months from the date of receipt of a copy of his judgment.

4. The writ petitioners went up in appeal against the decision of the learned single judge. <ORG> even without issuing notice to <ORG> to which the property had been transferred by the <ORG> according to the <ORG> and the <ORG>, proceeded to direct the <ORG> of Tamil Nadu and its officers to re-convey the concerned lands to the writ petitioners  appellants. The Tamil Nadu Housing <ORG> sought to challenge this order in this Court by way of Petition for Special Leave to Appeal (Civil) No. 2813 of 2002. The Petition for Special Leave to Appeal was dismissed as withdrawn in the light of the statement of the learned counsel for <ORG> that the <ORG> intended to file a petition for Review in <ORG>. Thereafter, the <ORG> filed a review petition in <ORG> essentially contending that Section 48B had no application; that it had not been heard or notice issued to it before the allowing of the writ appeal and that the order in the writ appeal deserves to be reviewed. <ORG>, without properly adverting to the aspects that arose for decision, simply dismissed the review petition and also closed a contempt of court case filed by the writ petitioners by granting further time to the <ORG> to comply with the directions contained in the order of <ORG> dated 7.12.2001. The Tamil Nadu Housing <ORG> has come up with Civil Appeal Nos. 5928-5929 of 2004 and Civil Appeal No. 5932 of 2004 challenging the orders on the review petition, original judgment and in the contempt of court case. The <ORG> of Tamil Nadu has filed the three appeals C.A. Nos. 5934, 5938 and 5933 of 2004 challenging the orders of <ORG> that are the subject of challenge by <ORG> in its appeals.

5. Learned counsel for the contesting respondents relying on the decision in <ORG> Vs. <NAME> & Ors. [(2006) 8 S.C.C. 555] raised a contention that the appeals by <ORG> being appeals against the orders in review petition were not maintainable since <ORG> had withdrawn the earlier Petition for Special Leave to Appeal filed by it against the original order reserving only liberty in itself to seek a review in <ORG>. On the facts and in the circumstances of the case on hand, however, in our considered opinion, the withdrawal of earlier Petition for Special Leave to Appeal by <ORG> cannot stand in the way of our examining the correctness of the decisions rendered by <ORG> in view of the fact that the State of Tamil Nadu had not earlier challenged the original order of <ORG> before this Court and now alone it seeks to challenge the original order, the order on the review petition it had filed and the order on the contempt of court case in the appeals it has filed before this Court. The principle recognised in <NAME> (<ORG>) has no application to those appeals. Learned counsel for the contesting respondents pointed out that there was delay in filing the Petitions for Special Leave to Appeal leading to those appeals. But obviously, the delay was condoned and leave granted and we now have the three appeals before us for final hearing and disposal. In these appeals, we have necessarily to examine the correctness and propriety of the directions issued by <ORG>.

6. Admittedly, the lands were acquired under the Land Acquisition Act and an Award was passed. According to the <ORG>, possession was taken after some delay in view of a number of Writ Petitions that were filed in <ORG> and the compensation payable under the Award had been deposited. There is no material on the basis of which we can hold that the proceedings under the Land Acquisition Act had not been completed. In fact, the prayer in the Writ Petition is for the issue of a writ of mandamus directing the <ORG>, its officers and <ORG> to re-convey the property to the writ petitioners, the contesting respondents herein though there is an assertion that the writ petitioners are in possession. The learned single judge proceeded on the basis that the claim of the writ petitioners was for re- conveyance of the land under Section 48B of the Land Acquisition Act as inserted in the <ORG> of Tamil Nadu. The question therefore is whether <ORG> was justified in directing the land to be re-conveyed in view of the specific stand adopted by <ORG> and the <ORG> that the Scheme was very much in operation that necessary plans have been prepared and the project got delayed only because of the judicial intervention. We may also notice that it is the specific case of the appellants that in 1998, a claim for re-conveyance made had already been rejected. The further contention by the <ORG> and the <ORG> was that possession of the lands having been made over to <ORG>, Section 48B of the Act could not be invoked or the <ORG> directed to re-convey the land to the writ petitioners. The further submission was that Section 48B contemplated re-conveyance of land only to the original owner and not to anyone else and the writ petitioners were not the original owners from whom the land was acquired. In fact, it was contended that the writ petitioners have not established that they were either the representatives or the successors-in-interest of the original owners. It was asserted that, in fact, they were mere purchasers subsequent to the acquisition.

7. The allegations in the writ petition show that the prayer made by the writ petitioners to the Government was for de-notifying the lands under Section 48 of the Act. We think it proper to extract that allegation:

"I further state that I have given a representation to the Secretary to <ORG>, Chennai - 600 009 and Secretary to <ORG>, Fort St. George, Chennai  600 009, requesting them to take necessary steps by notifying under Section 48 of the Land Acquisition Act de-notifying or excluding the lands. But unfortunately, as far requisitions of the petitioners has not been considered favourably."

Section 48 of the Act reads as under:

"Sec.48. Completion of acquisition not compulsory, but compensation to be awarded when not completed.  (1) Except in the case provided for in Section 36 , the Government shall be at liberty to withdraw from the acquisition of any land which possession has not been taken.

2. Whenever the Government withdraws from any such acquisition, the Collector shall determine the amount of compensation due for the damage suffered by the owner in consequence of the notice or of any proceedings thereunder, and shall pay such amount to the person interested, together with all costs reasonably incurred by him in the prosecution of the proceedings under this Act relating to the said land.

3. The provision of Part III of this Act shall apply, so far as may be, to the determination of the compensation payable under this section."

On the facts pleaded it is doubtful whether the Government can withdraw from the acquisition, since the case of the <ORG> and <ORG> is that possession has been taken and plans finalised to fulfil the purpose for which the acquisition was made. There is no plea in the writ petition that a request for re- conveyance was made in terms of Section 48B of the Act as amended in the <ORG> of Tamil Nadu. The said provision reads:

"48-B. Transfer of land to original owner in certain cases- Where the <ORG> are satisfied that the land vested in the <ORG> under this Act is not required for the purpose for which it was acquired, or for any other public purpose, the <ORG> may transfer such land to the original owner who is willing to repay the amount paid to him under this Act for the acquisition of such land inclusive of the amount referred to in sub-section (1-A) and (2) of Section 23 , if any, paid under this Act."

In the grounds in the writ petition it is only asserted that the writ petitioners are in possession in spite of the acquisition. There is no ground based on Section 48B of the Act though the prayer, as noticed earlier is for the issue of a writ of mandamus to reconvey the property. It is proper to notice that no foundation had been laid for seeking such a relief. There is no plea of demand, no plea of refusal and no plea of a duty in the <ORG> to re- convey.

8. We find from the order of the learned single judge dated 2.8.2001, in the Writ Petition, the following statement recorded:

"According to the petitioners the said lands were not put into use by the fourth respondent <ORG> for nearly 20 years. In the above said circumstances, when the petitioners approached the respondents for re-conveyance of the property by virtue of Section 48B of the Land Acquisition Act, it was rejected by the respondent. Again the petitioners made a representation to the respondents dated 18.3.98. Since the said representation of the petitioners has not been disposed of, the present Writ Petition came to be filed seeking for the issuance of a writ of mandamus directing the respondents to re-convey the lands situated in Survey Nos. 237, 238/1, 238/2 and 238/3 of Padi Village, Ambattur Taluk, M.G.R. District."

If the request of the writ petitioners for re-conveyance in terms of Section 48B of the Act stood rejected as apparently conceded by them before learned single judge, one finds it difficult to see how a second direction can be issued even in the absence of a challenge in the writ petition to the order of rejection and without examining the reasons contained therein. That order was also binding on the writ petitioners, so long as it was not got rid of. The order rejecting the request had become final and in a sense, it was not open to the learned single judge to issue the direction to consider an identical representation all over again. <ORG> went one step further, we regret to say, without a proper consideration of the relevant aspects. <ORG> apparently, even without giving <ORG> an opportunity of being heard, proceeded at the stage of admission itself to direct re-conveyance of the lands to the writ petitioners, whether it be on the first date of hearing itself or on the subsequent date as contended by learned counsel for the contesting respondents. If <ORG> felt that there was a case to be looked into, it should have admitted the writ appeal, issued rule nisi to the parties and thereafter heard the matter and disposed it of in the light of the relevant provisions of the Act, the law bearing on the subject and the facts obtaining. Even when <ORG> got an opportunity to correct itself on being approached by way of review, it did not utilise that opportunity.

9. It is clearly pleaded by the <ORG> and <ORG> that the Scheme had not been suspended or abandoned and that the lands acquired are very much needed for the implementation of the Scheme and the steps in that regard have already been taken. In the light of this position, it is not open to the court to assume that the project has been abandoned merely because another piece of land in the adjacent village had been released from acquisition in the light of orders of court. It could not be assumed that the whole of the project had been abandoned or has become unworkable. It depends upon the purpose for which the land is acquired. As we see it, we find no impediment in the lands in question being utilised for the purpose of putting up a multi-storied building containing small flats, intended as the public purpose when the acquisition was notified. Therefore, <ORG> clearly erred in proceeding as if the Scheme stood abandoned. This was an unwarranted assumption on the part of the court, which has no foundation in the pleadings and the materials produced in the case. The <ORG> should have at least insisted on production of materials to substantiate a claim of abandonment.

10. We have already noticed that in the Writ Petition, there are no sufficient allegations justifying interference by the <ORG>. Mere claim of possession by the writ petitioners is not a foundation on which the relief now granted could have been rested either by the learned single judge or by <ORG> of the High <ORG>. On the materials, no right to relief has been established by the writ petitioners.

11. We may also notice that once a piece of land has been duly acquired under the Land Acquisition Act , the land becomes the property of the <ORG>. The <ORG> can dispose of the property thereafter or convey it to anyone, if the land is not needed for the purpose for which it was acquired, only for the market value that may be fetched for the property as on the date of conveyance. The doctrine of public trust would disable the <ORG> from giving back the property for anything less than the market value. In <ORG> of Kerala & Ors. Vs. <NAME> & Anr. [(1997) 5 S.C.C. 432] in a similar situation, this Court observed:

"The question emerges: whether the <ORG> can assign the land to the erstwhile owners? It is settled law that if the land is acquired for a public purpose, after the public purpose was achieved, the rest of the land could be used for any other public purpose. In case there is no other public purpose for which the land is needed, then instead of disposal by way of sale to the erstwhile owner, the land should be put to public auction and the amount fetched in the public auction can be better utilised for the public purpose envisaged in the Directive Principles of the Constitution. In the present case, what we find is that the executive order is not in consonance with the provision of the Act and is, therefore, invalid. Under these circumstances, <ORG> is well justified in declaring the executive order as invalid. Whatever assignment is made, should be for a public purpose. Otherwise, the land of the <ORG> should be sold only through the public auctions so that the public also gets benefited by getting higher value."

Section 48B introduced into the Act in the State of Tamil Nadu is an exception to this rule. Such a provision has to be strictly construed and strict compliance with its terms insisted upon. Whether such a provision can be challenged for its validity, we are not called upon to decide here.

12. We are thus of the view that the writ petitioners, the contesting respondents, have not made out any case for interference by the <ORG> or for grant of any relief to them. It is therefore not necessary for us to go into the further contention raised on the scope of Section 48B of the Act, whether the writ petitioners have established any claim to the lands, whether the re- conveyance can only be to the original owners and not to others and whether if possession has already been made over to <ORG>, the <ORG> could exercise its power under that provision. We leave open those questions for the High <ORG> to consider as and when the occasion arises on it being approached in the context of Section 48B of the Act. Suffice it to say that the decision of the High <ORG> in the Writ Petition in question is totally unsustainable and deserves to be set aside.

13. We therefore allow the appeals filed by the State of Tamil Nadu and set aside all the orders passed in the Writ Petition and in the writ appeal and in the contempt of court case. We dismiss the Writ Petition filed by the writ petitioners. In view of the above position, there is no need to pass any further order in the appeals filed by <ORG>. The above decision will govern <ORG> also. The State of Tamil Nadu would be entitled to its costs from the writ petitioners in its appeals and the parties would suffer their respective costs in the appeals filed by <ORG>.


JUDGMENT <NAME> C.J.

1. These four separate appeals under Clause 10 of the Letters Patent raise a common question of law, namely whether the learned Single Judge from whose orders the appeals have been preferred was justified in sending for the record and restraining <ORG> from going ahead with the removal proceedings.

2. A Board of Officers set up to enquire into the conduct of one Major <NAME>, Garrison Engineer of Secunderabad, recorded the statements of a large number of persons, including those of the four petitioners who happened to be serving as officiating Assistant Garrison Engineers. As the petitioners appear to have made statements in which they incriminated themselves, they were placed under suspension and written statements of charges were handed over to them.

No oral enquiry was held but the explanations furnished by them were considered and the Enquiry Officer submitted his report on the basis of which Government called upon the petitioners to show cause why their services should not be terminated. The petitioners thereupon presented four separate petitions under Art. 226 of the Constitution in which they complained that the enquiry hart been conducted without notice or hearing and requested that the records of the case should be sent for and examined, that appropriate directions be issued, to the Enquiring Officer requiring him to comply with the provisions of law, and that Government should be prohibited from taking any action against the petitioners on the basis of the said report.

3. The learned Judge of this <ORG> before whom these petitions came up for hearing came to the conclusion that the provisions of Rule 6 of the Rules Regarding Discipline which correspond to Rule 55 of the Civil Services (Classification, Control and Appeal) Rules were not complied with, that the request of the petitioners for an oral hearing was not acceded to, that they were not permitted to cross-examine the witnesses on whose evidence the prosecution proposed to rely and in short that they were not afforded a reasonable opportunity of defending themselves.

He accordingly declared the findings of the Enquiry Officer to be void and of no effect and directed the respondent to afford the petitioners a proper opportunity for producing their defence. <ORG> is dissatisfied with the order and has preferred four separate appeals under Clause 10 of the Letters Patent.

4. Mr. <NAME>, who has argued the case for the petitioners with conspicuous ability, contends that an enquiry into the conduct of a <ORG> servant is completed in two stages. The first stage is concerned with the ascertaining of facts, the existence of which alone can furnish the basis for the proposed action. It consists of the formulation of charges, notice thereof, a hearing and a report.

If the report is unfavourable to the officer concerned and if Government comes to a provisional decision as to the punishment that should be awarded to him, the enquiry enters upon the second stage. A copy of the report submitted by the Enquiry Officer is sent to the Officer whose conduct is under investigation and is required to how cause why he should not be dismissed or removed or reduced in rank.

In the present case, it is contended, proceedings have been instituted against the petitioners without hearing when they are entitled to be heard and a report has been submitted which presents only one side of the picture. If the factual basis on which action is proposed to be taken is wrong and misleading, no explanations furnished by the petitioners are likely to induce <ORG> to exonerate them from blame or to impel it to alter the provisional decision at which it has already arrived.

The petitioners, it is contended, are entitled to defend themselves at two stages and as their right to defend themselves at the first stage has been violated, they are entitled to claim the protection of the <ORG>. They accordingly pray that this Court should send for the records of the proceedings and review the action of the Enquiry Officer on certiorari so that it should be in a position to determine for itself, from the contents of the record, whether the Enquiry Officer has exceeded his jurisdiction or has not proceeded according to the essential requirements of law.

In the alternative, it is prayed that a writ of prohibition should issue to the appropriate officer restraining him from proceeding further without complying with the statutory and other formalities.

5. There can be no question of a writ of prohibition being issued in this case, for it has not been alleged or proved that there has been any wrongful adjudication by an unauthorised body.

6. A writ of certiorari lies when the inferior <ORG> or tribunal has exceeded its jurisdiction or when such <ORG> on tribunal has proceeded illegally and no appeal lies. It can be issued, only to restrain the exercise of judicial functions as distinguished from ministerial and executive acts. It can be issued to <ORG>s and to officers, boards and tribunals who possess judicial or quasi-judicial powers and have to act judicially -- 'Rex v. Electricity Commissioners', (1924) 1 KB 171 (A), and in extreme cases also to purely ministerial bodies when they usurp judicial functions--'Braizie V. Fayettee County', (1884) 25 W Va 213 (B).

It cannot extend to the Questioning of annulling of acts which are ministerial, executive or legislative. It is the nature of the act sought to be restrained and not the general character of the tribunal or officer proceeded against which determines the propriety of this writ.,

7. Two questions at once arise for decision, namely--

(1) Whether an officer conducting a removal proceeding in accordance with the provisions of Art. 311 acts in an executive or administrative capacity, and (2) Whether the statutory rules by which the 'conditions of service of the petitioners are regulated have provided another adequate remedy by way of appeal or revision or other appropriate proceeding.

8. If both these questions are answered in the affirmative, it is obvious that the Enquiry Officer is not amenable to the writ of certiorari and it is not within the competence of this <ORG> to intervene at this stage.

9. 'Prima facie' the power to remove from office is an executive function, (In re. Opinion of Justices, 118 Am LR 166 at p. 169 (C)), for if a public servant holds office at the pleasure of the <ORG>, it is open to the appointing power to remove him arbitrarily without cause, or to remove him for cause, or to remove him for such cause as it may think fit or proper or upon such enquiries as it may think fit to make or in the absence of any enquiry whatever. In such a case Courts are powerless to interfere.

10. If, however, the Constitution declares --as has been declared in Article 311 -- that no person shall be dismissed or removed or reduced in rank unless he has been afforded a reasonable opportunity of being heard, the question arises whether the officer who conducts a removal proceeding against a public servant who cannot be removed without notice and hearing acts in a ministerial or Judicial capacity.

Two different views, which are diametrically opposed to each other, have been expressed. According to one view this function is purely executive or administrative containing no element of judicial power.

11. In 'People ex rel. Dougan v. District Ct.', (1383) 6 Colo 534 (D), holding that prohibition would not lie against <ORG> to prevent it from hearing charges and continuing proceedings for the removal of a city solicitor, the Court said:--

"It will be observed that the tribunal to which the writ Issues must be acting in a judicial and not merely an administrative or ministerial capacity .............. <ORG> is not a judicial body; and it is doubtful if the legislature, under the constitution, could invest it with judicial authority. In the case under consideration it was not acting or attempting to act in a judicial capacity.

The examination of charges preferred to the city solicitor, finding him guilty of malfeasance in office and removing him therefrom, by <ORG> was not the exercise of judicial power. And this is true though the offences charged may constitute cause of action cognizable by the Courts."

12. According to the other view the function is judicial or quasi-judicial. In -- 'Speed v. Detroit', (1894) 39 Am St. Rep. 555 (E), holding that prohibition would lie to prevent a common council from proceeding to investigate charges preferred against a City Counsellor, the Court said:

"Under the Constitution, the legislature may provide for the removal of municipal officers. It certainly has never been regarded in this State that the officer or body upon whom this power is conferred acts in a purely political, administrative or legislative capacity. Such officer or body acts, and must of necessity act, in a quasi-judicial capacity, and the method of procedure must be of a quasi-judicial character ..............

Such officer or body then becomes an inferior tribunal, amenable to the writ of prohibition when acting In excess of the jurisdiction conferred. In such cases it is of little consequence what name is given to the power conferred. The name cannot relieve it of its essential character."

13. While the cases cannot be reconciled, the weight of judicial opinion in America, appears to favour the proposition that where the law indicates that the power of removal shall be exercised for cause only and declares that the officers whose conduct is under investigation shall be entitled to have a written statement of the charges against him, and to be heard in his defence, then the proceeding is judicial in character because the power to hear and determine is to be exercised, as in <ORG>, only after notice and a hearing on the merits. It needs no argument" observed the <ORG> 'In matter of Nichols', 6 Abb NO 474 (P), "to prove that any proceeding Initiated to remove a person from a public office before a person or body having jurisdiction to decide upon the existence of cause for removal is judicial in its character and the tribunal to which it is presented is a <ORG> for that purpose."

The same Court proceeded to draw a distinction between removal for cause and arbitrary removal and to hold that the power to remove a person from office for cause means that a reason, must exist which is personal to the individual sought to be removed, which the law and a sound, public opinion will recognise as a good cause for his no longer occupying the place.

14. It will be seen from the above that a removal proceeding acquires the character of a judicial proceeding only if the power of removal can be exercised for cause and only if the officer is entitled to notice and hearing as a condition precedent to his removal.

15. But what is to happen if the law declares that a public servant may be removed at the will and caprice of the appointing power but at the same time requires that his services should not be terminated unless he has been afforded a reasonable opportunity of being heard. I have not been able to discover any direct authority on this point, but I entertain no doubt in my mind that the proceeding would be executive or ministerial in character.

<CITATION> of state', AIR 1937 PC 31 (G), their Lordships who were called upon to construe the provisions of S.240 of the Government of India Act expressed the view that this section merely contained a statutory and solemn assurance that the tenure of office though at pleasure will not be subject to capricious or arbitrary action but will be regulated by rule and that the remedy of the person aggrieved did not lie by a suit in <ORG> but by way of appeal of official kind.

In 'R. v. Metropolitan Police Commrs; ex parte <NAME>', (1953) 2 All ER 717 (H), it was held that where a person whether he is a military officer, a police officer, or any other person, whose duty it is to act in matters of discipline is exercising disciplinary powers, it is most undesirable that he should be fettered by threats of orders of certiorari and so fourth, because that interferes with the free and proper exercise of the disciplinary powers which he has.

In 'Ex Parte Fry', 1954-2 All ER 118 (I), a fireman was charged under the Fire Services Discipline Regulations, 1948, with disobedience to orders inasmuch as he had failed to carry out a lawful order given to him to clear the fire uniform of an officer attached to the station. The fireman appeared before the Enquiry Officer but the hearing was conducted in such a way that he was denied a fair trial. The fireman accordingly applied to the Court for the issue of a writ of certiorari. Lord <NAME>, dismissed this application with the following observations:--

"It seems to me impossible to say, whether a chief officer of a force which is governed by discipline as <ORG> is exercising disciplinary authority over a member of the force that he is acting either judicially or quasi judicially. It seems to me that he is no more acting judicially or quasi-judicially than a schoolmaster who is exercising disciplinary powers over his pupils.'' <ORG> upheld this order on the ground that as the remedy by way of certiorari which was sought was discretionary in the <ORG> and as the <ORG> had exercised its discretion against the fireman there was no occasion for the appellate <ORG> to interfere. It refrained from expressing an opinion as to whether the chief officer of a force who is exercising disciplinary authority is acting in a judicial or a quasi-judicial capacity.

I find myself in respectful agreement with the view expressed by the learned Chief Justice of England. As the petitioners have not been able to show that the officers who have had occassion to deal with their cases in the removal proceedings were acting in a judicial or quasi-judicial capacity, it is obvious that they cannot invoke the aid of the writ of certiorari. The rules by which their conditions of service are regulated clearly provide a method for reviewing adverse decisions by administrative appeals.

16. Even if a writ of certiorari were to lie in a case of this kind, I would be extremely reluctant jto issue one, for I am of the opinion that interference with interlocutory orders passed in the course of removal proceedings would be productive of nothing but mischief.

17. This case can, I think, be decided on another ground. Let us assume for the sake of argument that the Enquiry Officer in the present case has failed to comply with the statutory rules and has in substance denied a hearing to which the petitioners were entitled. A notice has now been issued to them to show cause why their services should not be dispensed with.

Surely it is open to them, in response to the said notice, to inform <ORG> that they have been denied an opportunity of having their say and that a decision given without affording them an 6pportunity of being heard would be wholly ineffectual. One is entitled to presume that if there is substance in the protest the appropriate authority will set aside the proceedings and order a fresh enquiry.

It has been held repeatedly that if a reasonable opportunity is not afforded to a public officer at the first stage a reasonable opportunity may be afforded him at the second stage. Indeed it was pointed out by their Lordships of the privy <ORG> in <NAME> case that no action is proposed Within the meaning of Sub-section (3) of Section 240' of the Government of India Act (which corresponds to Article 311 ) until a definite conclusion has been come to on the charges and the actual punishment to follow is provisionally determined on.

It is on that stage being reached that the statute gives the civil servant the opportunity for which Sub-section (3) makes provision -- 'High Commr. for <CITATION> '. AIR 1948 PC 121 (J); --' <CITATION> ) AIR 1955 SC 160 (K).

18. A subsidiary point has also been raised namely that two of the petitioners have been reduced in rank without having been afforded an opportunity of showing cause against the action which was proposed to be taken against them. It is common ground that these two petitioners were working as Assistant Garrison Engineers in an officiating, capacity and reverted to their substantive rank of Superintendent.

In <NAME> v. <ORG>', LPA No. 28 of 1955: (AIR 1956 Pimj 207) (L), I gave detailed reasons for holding that a Government servant who is holding a post in an officiating capacity is not within the protection of the law which declares that no person shall be reduced in rank unless he has been afforded a reasonable opportunity of being heard. A similar view has been taken in -- '<NAME> v. <ORG>', AIR 1956 Nag 113 (M).

19. For these reasons I am of the opinion that an officer conducting a removal proceeding under Article 311 of the Constitution is not acting in a judicial or quasi-judicial capacity, that the orders passed by him cannot be reviewed on certiorari, that there has been no breach of Article 311 so far as it is still open to Government to afford the petitioners a reasonable opportunity of defending themselves and that the Enquiring Officer did not act illegally or improperly in ordering the reduction of two of the petitioners without affording them a reasonable opportunity of being heard. I would accordingly allow the appeal but, having regard to the peculiar circumstances of the case, leave the parties to bear their own costs.

<NAME>, J.

20. I have had the advantage of reading the judgment of my Lord the Chief Justice and I agree that these appeals should be allowed and the respondents' petitions under Article 226 of the Constitution should be dismissed. I however prefer to base my judgment on the ground that in these cases there has been no contravention of the provisions of Article 311 of the Constitution for the reasons given by Hon'able the Chief Justice in his Judgment.

I further agree that the orders reverting two of the petitions to their substantive ranks were neither illegal nor improper. (Vide LPA No. 28 of 1955: (AIR 1956 Punj 207) (L). These grounds are sufficient to dispose of these appeals and it appears unnecessary to express any final opinion on the other questions raised before us.

I am however in entire agreement with Hon'ble the Chief Justice that the orders in the present cases were made in the exercise of administrative powers but I feel doubtful if the exercise of administrative powers of this nature necessarily precludes an aggrieved person from seeking redress from this court in a fit and proper case by invoking Article 226 of the Constitution. In any case, as I have already stated this question need not be decided in these appeals. I would therefore also accept these appeals, leaving the parties to bear their own costs.


JUDGMENT <NAME>, J.

1. At the instance of the <ORG>, <ORG> has referred to this court under Section 256(1) of the Income-tax Act, 1961 (for short "the Act"), the following four questions of law as arising out of the order dated March 28, 1981, passed by the <ORG> in ITA No. 483/ Coch/1977-78 :

"1. Whether, on the facts and in the circumstances of the case and in view of the decision of <ORG> in <CITATION>  33 ITR 245, the order under Section 201 of the Income-tax Act is invalid and without jurisdiction ?

2. Whether, on the facts and in the circumstances of the case, the employee (Mr. <NAME>) is entitled to exemption under Section 10(6)(i)(a) of the Income-tax Act ?

3. Whether, on the facts and in the circumstances of the case, the order passed under Section 201 of the Income-tax Act is barred by limitation ?

4. Whether, on the facts and in the circumstances of the case, and also considering the scope and purport of the judgment of <ORG> in the earlier reference, <CITATION>  161 ITR 489 (Ker) (ITR No. 239 of 1979), the <ORG> (Bench) was right, justified and with jurisdiction in going into and deciding the questions of 'exemption' and 'limitation' contrary to the view of the earlier <ORG> (Bench) ?"

2. The assessee-company (which will be referred to in this judgment as "the company") owning tea estates had employed <NAME> (hereinafter referred to as "the employee") as manager of one of the estates. The employee was paid Rs. 8, 112 during the accounting year 1970-71 relevant to the assessment year 1971-72, being passage money for the journey of his two children from the U.K. to India and back. The employee filed his return on July 7, 1971, disclosing his net salary income but without including the sum of Rs. 8, 112. However, he mentioned the receipt of this amount in the statement appended to the return. The Income-tax Officer completed the assessment on the employee on December 22, 1971, accepting the return and treating the aforesaid amount as not includible in the assessee's income for the purpose of taxation under the Act by virtue of Section 10(6)(i)(a) of the Act. The company had been deducting tax at source and remitting the same to the <ORG>. But in doing so, the company had not included the sum of Rs. 8,112 in the total income for the purpose of computation of tax and had not deducted tax on this amount at source. On February 16, 1976, the Income-tax Officer issued a notice to the company intimating that he proposed to treat the company as a person in default under Section 201 of the Act for not deducting at source tax payable on the aforesaid amount. The company denied its responsibility to pay the tax and liability to be treated as assessee in default. The company further contended that the proceedings were barred by limitation. The Income-tax Officer overruled the contentions and passed an order on December 21, 1976, treating the company as a person in default under Section 201 of the Act and requiring it to pay tax and surchage due on the amount of Rs. 8,112.

3. Aggrieved by this order, the company filed an appeal before the Appellate Assistant Commisioner who allowed the appeal, holding that the journey of the children of the employee from the U. K. to India and back having been performed within 12 months after or before the employee's journey from the U.K. to India and back, the amount of passage money so paid was exempt from tax and the company was justified in not deducting tax at source. The <ORG> filed an appeal before <ORG> which set aside the order of the Appellate Assistant Commissioner and restored the order of the Income-tax Officer on March 22, 1979. The Tribunal held that the journey of the children of the employee from the U.K. to India and back had no connection with the employee proceeding on home leave out of India as contemplated in Section 10(6)(i)(a) of the Act, that the decision in ITR No. 13 of 1973[ <CITATION>  161 ITR 486 (Ker)] was not applicable to the facts, that the notification dated February 10, 1977, issued by the <ORG> also did not apply to the facts and the proceedings of the Income-tax Officer were not barred by limitation.

4. Thereupon, at the instance of the company, two questions of law were referred to this court under Section 256(1) of the Act. The reference was disposed of in ITR No. 239 of 1979 [ <CITATION>  161 ITR 489 (Ker)]. The questions were whether the company should have deducted tax on the amount in dispute at source and whether the order passed by the Income-tax Officer was barred by limitation. Pointing out that the statutory authorities failed to decide the jurisdictional, question, viz., whether in law, the <ORG> was entitled to proceed against the employer under Section 201 of the Act by going behind the order of assessment and treating the sum of Rs. 8,112 paid to the employee as not exempt from taxation despite the fact that in the assessment order made against the employee the said amount was treated as not includible in the taxable income of the assessee, this court remitted the case to the <ORG> for fresh disposal in accordance with law and in the light of the observations in the judgment.

5. Thereupon, the <ORG> considered the matter once again and by the judgment dated March 28, 1981, held that the Income-tax Officer had no jurisdiction to invoke Section 201 of the Act against the company since the assessment against the employee was completed and the same had become final and could not have been reopened, that the non-taxability of the disputed amount is supported by a circular of 1958 and the decision in ITR No. 13 of 1973-- <CITATION>  161 ITR 486 (<NAME>). The <ORG> further held that the proceedings against the company were barred by limitation under Section 231 of the Act. At the instance of the <ORG>, the four questions referred to earlier have been referred to this court under Section 256(1) of the Act.

6. The first question referred to this court is whether, on the facts and circumstances of the case and in view of the decision of <ORG> in <CITATION>  33 ITR 245, the order under Section 201 of the Act is invalid and without jurisdiction. Learned counsel representing the <ORG> contended that the liability of the employer under Section 192(1) of the Act is independent of the liability of the employee to pay tax, that the company is deemed to be a defaulter when it fails to make a valid deduction at source or pay over the amount deducted to the <ORG>, though the default is to be followed by passing a specific order which may be appealable under Section 246 of the Act and that the Income-tax Officer is entitled to proceed under Section 201 of the Act irrespective of the assessment being completed on the employee. Therefore, according to learned counsel, the action of the Income-tax Officer in this case treating the company as an assessee in default and passing an order for recovery was within his jurisdiction and did not suffer from any illegality. These contentions are rebutted by learned counsel for the company.

7. Section 15 of the Act deals with "salaries" and Section 16 with "deductions from salaries". Section 17 defines the expressions "salary", "perquisite" and "profits in lieu of salary". Section 10 categorises incomes not included in the total income. Sub-section (6) of Section 10 excludes from the total income certain sums received in the case of an individual who is not a citizen of India. The provision with which we are concerned as it existed at the relevant time is Sub-section (6)(i)(a) which reads :

"(6) in the case of an individual who is not a citizen of India,--

(i) subject to such conditions as the Central Government may prescribe, passage moneys or the value of any free or concessional passage received by or due to such individual,--

(a) from his employer, for himself, his spouse and children, in connection with his proceeding on home leave out of India. "

8. Evidently, both the employee and the company proceeded on the basis that the passage money of Rs. 8,112 was paid to the employee towards passage of the employee's children from the U.K. to India and back as part of passage money received by the employee in connection with his proceeding on home leave out of India, Therefore, the employer, while deducting tax at source at the time of paying salary and perquisites to the employee, did not include this amount in the taxable income and did not deduct tax thereon.

9. Chapter II of the Act deals with "basis of charge". Section 4 explains charge of income-tax. Sub-section (2) of this section states that in respect of income chargeable under Sub-section (1), income-tax shall be deducted at the source or paid in advance, where it is so deductible or payable under any provision of the Act. Chapter XIV of the Act deals with "procedure for assessment". Section 139 requires, among other things, every person whose total income in respect of which he is assessable under the Act during the previous year, exceeded the maximum amount which is not chargeable to income-tax, to furnish a return of his income in the prescribed manner and setting forth such other particulars as may be prescribed. In the case of a person drawing salary, he has to do so before the 30th of June of the assessment year. Provisional assessment is dealt with in Section 141A of the Act. Sub-section (1) of this section contemplates refund of excess paid, which is to be dealt with by regular assessment as laid down in Sub-section (4). Assessment, as such, is dealt with in Section 143 .

10. Chapter XVII of the Act deals with collection and recovery of tax. Sections 190 and 191 in Part A deal with deduction at source, advance payment and direct payment, respectively. Provisions governing deduction of tax at source are dealt with in Part B while Part C deals with advance payment of tax. Part D deals with collection and recovery. Subsection (1) of Section 192 states that "any person responsible for paying any income chargeable under the head 'Salaries' shall, at the time of payment, deduct income-tax on the amount payable at the average rate of income-tax computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year". The expression "person responsible for paying" is explained in Section 204 . In the case of a salaried employee, "the person responsible for paying" means the employer himself, or if the employer is a company, the company itself, including the principal officer thereof. Tax so deducted at source is required to be paid by the employer to the <ORG> within the prescribed time under Section 200 . Section 199 lays down in what manner credit is to be given for the tax so deducted. The section states, inter alia, that any deduction made in accordance with Section 192 and paid to <ORG> "shall be treated as payment of tax on behalf of the Person from whose income the deduction was made" and credit shall be given to him for the amount so deducted on the production of the certificate furnished under Section 203 in the assessment (including a provisional assessment under Section 141A ), if any, made for the immediately following assessment year under the Act.

11. Section 201 deals with the consequences of failure to deduct or pay. Sub-section (1) states, inter alia, that if any such person does not deduct or after deducting fails to pay the tax as required by or under the Act, he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of the tax. The sub-section has a proviso which is not very material for the purpose of this case. Under Sub-section (1A), the person who is deemed to be an assessee in default in respect of the tax, by virtue of Sub-section (1), shall be liable to pay simple interest at fifteen per cent. per annum on the amount of such tax from the date on which such tax was deductible to the date on which such tax is actually paid. Section 203 requires the person so deducting and paying to issue a certificate containing necessary particulars to the person on whose account such credit is given. Section 206 requires the person paying salary to furnish the prescribed return. We may, in this connection, notice Section 276B which states, inter alia, that if a person, without reasonable cause or excuse, fails to deduct or after deducting, fails to pay the tax as required by or under the provisions of Chapter XVII-B, he shall be punishable in the manner provided in Clauses (i) and (ii).

12. Section 220 deals with "when tax payable and when assessee deemed in default". Sub-section (1) states, inter alia, that any amount, otherwise than by way of advance tax, specified as payable in a notice of demand under Section 156 shall be paid within 35 days of the service of the notice at the place and to the person mentioned in the notice. Section 156 states that when any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under the Act, the Income-tax Officer shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable. Sub-section (2) of Section 220 states that if the amount specified in any notice of demand under Section 156 is not paid within the period limited under Sub-section (1), the assessee shall be liable to pay simple interest at fifteen per cent. per annum from the day commencing after the end of the period mentioned in Sub-section (1). Section 221 deals with liability on the part of the assessee in default or deemed to be in default in making payment of tax. Sections 222 to 230 deal with modes of recovery. Section 231 prescribes the period for commencing recovery proceedings against assessees and assessees deemed to be in default. Section 234 states that tax paid or deemed to have been paid under the provisions of Chapter XVII-B or Chapter XVII-C in respect of any income provisionally assessed under Section 141A shall be deemed to have been paid towards the provisional assessment.

13. Chapter XIX deals with refunds. Section 237 states that if any person satisfies <ORG> that the amount of tax paid by him or on his behalf for any assessment year exceeds the amount with which he is properly chargeable under the Act for that year, he shall be entitled to a refund of the excess.

14. The scheme and the provisions of the Act clearly indicate that the person who receives income by way of salary is primarily liable to pay the tax, though, generally speaking, the employer, that is, the person responsible for paying the salary, has a duty to collect the tax on the estimated income and pay over the same to the <ORG>. Where the employer fails to do so, he is deemed to be an assessee in default with certain consequences. The amount of tax so in default is to be recovered from him. The scheme contained in Sections 192 , 201 and the connected sections is only a mode of recovery of tax on the estimated income at the time of payment of salary to the employee. The obvious purpose of the scheme is to facilitate recovery of tax under the Act.

15. Nevertheless, income-tax is a tax on the income derived by the employee. It is a charge on the income. The liability of the person who derives income subsists in spite of the liability cast on the employer to deduct tax at source and pay over the same to the <ORG>. What is to be deducted at source and paid over to the <ORG> is tax computed on the estimated income. Income estimated may or may not, ultimately, in the assessment to be made in regard to the employee, be found to be correct. It is for the employee to submit an annual return showing his total income for the purpose of taxation and the <ORG> has a duty to complete the assessment, with statutory rights provided in the Act to the employee. The regular assessment may be preceded by a provisional assessment. In either event, the tax deducted at the source and paid over to the <ORG> is to be given credit to in the tax liability fixed on the employee for the assessment year. If the tax deducted at source and paid over to the <ORG> is found to be in excess, that has to be refunded to the person on whose behalf it was deducted, viz., the employee. If any excess is found due, the liability is on the employee to pay the same.

16. At the same time, we notice that the failure to make deduction or pay over the same to the <ORG> is also visited with certain consequences.

17. As we have pointed out, the provisions regarding deduction of tax at source and payment of tax so deducted to the <ORG> lay down only a mode of recovering tax due from the employee. In other words, the duty on the employer is not an end in itself. It is only a means to an end, viz., recovery of tax payable by the employee. Tax paid over to the <ORG> after deduction by the employer is for and on behalf of the employee. This is subject to the ultimate assessment to be made on the employee and the tax so deducted and paid is to go in adjustment of the employee's liability. In other words, the liability of the employer to make deduction at source and pay over the tax to the <ORG> is not independent of the liability of the employee to pay tax. It is dependent entirely on the liability of the employee to pay tax. If, on the estimated income of the employee, no tax is due, the employer has no liability to deduct tax at the source. The liability of the employer and the employee is interconnected and not independent of each other. Where the assessment in relation to an employee has been completed and has become final and no further tax is found due from the employee, that puts an end to the liability of the employer. Thereafter, it cannot be said that the liability of the employer survives. We are here dealing with a case where the assessment on the employee has become final. It is admitted that it cannot be reopened under any of the provisions of the Act. The present discussion is confined to such cases.

18. Any other view would lead to absurdity. If the view is taken that irrespective of the finality (followed by non-reopenability) attached to the assessment completed with reference to the employee, the employer can be deemed to be an assessee in default, it would follow that the employer is liable to pay the deficit to the <ORG> and that too with simple interest at 15 per cent. per annum from the date on which tax was deductible. Had the liability of the employee to pay the alleged deficit been alive, he would be liable to pay the deficit with simple interest at 15 per cent. per annum not from the date on which the tax was deductible but only from the day commencing after the end of the period mentioned in Sub-section (1)of Section 220 , that is, the expiry of 35 days of the service of demand notice under Section 156 , which notice could be served only after completing the assessment. This would lead to absurd results.

19. If the view is taken that the employer is deemed to be an assessee in default even though the assessment on the employee has become final, it would naturally follow that the employer would be under a duty to pay over the deficit to the <ORG>, failing which the <ORG> would be entitled to recover the same in the manner provided in the Act. Assuming that the deficit tax is so collected from the employer by the <ORG>, the amount so collected would go to the credit of the employee. But the assessment made on the employee showing that no further tax was due from him having become final, the employee has no liability in regard to any further amount. Naturally, the alleged deficit amount collected from the employer must be refunded to the employee. We do not think that the provisions of the Act could be interpreted in such a manner as to lead to such patently absurd consequences.

20. We, therefore, hold that the employer cannot be deemed to be an assessee in default once the assessment on the employee is complete and cannot be reopened in accordance with any of the provisions of the Act. Therefore, the act of the Income-tax Officer in the instant case treating the employer as an assessee in default is invalid and without jurisdiction.

21. Learned counsel for the <ORG> placed reliance on the decision of <ORG> in <CITATION>  33 ITR 245. We do not think that either the ratio of, or the observations in, the judgment have any impact on the question we have considered in this case. We answer question No. 1 in the affimative, in favour of the company and against the <ORG>.

22. In this view, it is a futile exercise and, therefore, unnecessary to answer questions Nos. 2 to 4. We decline to answer those questions.

23. The company will have its costs from the <ORG> including counsel's fee.

24. A copy of this judgment under the seal of <ORG> and the signature of the Registrar will be sent to <ORG> as required by Sub-section (1) of Section 260 of the Income-tax Act, 1961.