Kerala High Court
Capricorn Shopping Complex vs Income-Tax Officer And Ors. on 24 January, 1996
Equivalent citations: [1996]218ITR721(KER)
Author: K.A. Abdul Gafoor
Bench: K.A. Abdul Gafoor
JUDGMENT K.A. Abdul Gafoor, J.
1. The petitioner challenges exhibits P-4, P-5 and P-6 orders passed by the first respondent-Income-tax Officer. His contention is that the assessing authority has valued the building constructed by him through the Executive Engineer (Valuation) of the Department and the yardstick for valuation adopted was based on the particulars in Instruction No. 1671. The petitioner has not been given a copy of the said instruction even though he had specifically asked for the same. He had not told the assessing authority in exhibit P-4 that he can get it directly from the Central Board of Direct Taxes. When the petitioner applied for a copy to the Board he had been informed by exhibit P-9 that it is not meant for public consumption. That means some instruction which has some bearing on valuation is withheld from the petitioner and at the same time, it is applied against the petitioner to impose higher rate of tax. It is in the above circumstances, the petitioner has incorporated prayer No. 2 to direct the third respondent to provide him with a copy of the Central Board of Direct Taxes Instruction No. 1671.
2. As regards prayer No. 1, the petitioner filed appeals against exhibits P-4, P-5 and P-6 and that appeal has been disposed of. Against that, the petitioner has filed further appeal before the Tribunal. The petitioner claims that in order to successfully prosecute his appeal before the Tribunal a copy of the said instruction is necessary.
3. Instructions are issued by the Board as empowered under Section 119 of the Income-tax Act, 1961. It cannot be said that such instructions are not meant for public consumption. It is also provided in Rule 111B of the Income-tax Rules, 1962, that circulars necessary in the public interest shall be published in the Gazette. That means such circulars are for public consumption. Anyhow, it is the admitted case that the circular was applied against the petitioner, but at the same time, the petitioner was not provided with a copy thereof. It has been held by this court in the decision in Karunakaran v. Tahsildar [1990] 1 KLT 869 as follows (at page 872) :
"Under the legal and constitutional system, any authority discharging powers under law is bound to project the reasons which weigh with him in coming to a particular conclusion. Denning Lord Justice declared :
'The giving of reasons is one of the fundamentals of good administration.' (See Breen v. Amalgamated Engg. Union [1971] 1 All ER 1148). The Supreme Court of India has declared the principle consistently. It is unnecessary to load the judgment with numerous citations containing the declaration application of the principle. The recent decision of the House of Lords Dr. G. v. General Medical Council [1989] 2 All ER 69 is a recent illustration of the application of the principle, and the extreme anxiety on the part of the courts to ensure that a citizen is not handicapped even by a misapprehension in relation to the allegations or assumptions made against him by a statutory functionary. The principle is attracted in all situations where there is an impact on a citizen's rights--whether it be an adjudication in relation to an industrial dispute, a determination of a service claim, or a pronouncement of any other legal right. The mere fact that certain exercises had been made in the files kept in the office would be no consolation for the affected person. On the one hand, a citizen is certainly bound to discharge his liability cast under a valid assessment order. However, he must know the details on which an assessment has been made and the liability imposed."
Thus, it is clear that if some document is relied on against an assessee to assess him to a high rate of tax, the document shall be disclosed to him. It cannot be withheld. The petitioner is perfectly justified in contending that the copy of the said document is necessary for successful prosecution of his appeal now pending before the Tribunal.
4. Though prayer No. 1 in the original petition has become infructuous, because of the appellate order by the Deputy Commissioner, he is entitled to the second prayer, namely, a direction to provide him with a copy of the Central Board of Direct Taxes Instruction No. 1617 of 1991 on which the assessments were made. Therefore, I direct the third respondent to provide the petitioner with a copy of the said instruction at the earliest, at any rate, within a period of six weeks from today.
5. The original petition is disposed of as above.