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Documents citing Suraj Mall Mohta And Co vs A. V. Visvanatha Sastri And Another on 28 May, 1954

Senairam Doongarmal Agency (P.) Ltd. ... vs K.E. Johnson And Others. on 15 March, 1963

For the first proposition that both sub-sections (1) and (2) of section 37 operate on the same field and the provisions of section 37(2) being more onerous, should be struck down, reliance has been placed on two decisions of the Supreme Court in Suraj Mall Mohta & Co. v. A. V. Visvanatha Sastri and Shree Meenakshi Mills Ltd., Madurai v. A. V. Visvanatha Sastri and a decision of the Calcutta High Court in S. M. Nawab Ariff v. Corporation of Calcutta. In the first case before the Supreme Court, the validity of section 5(4) of the Taxation on Income (Investigation Commission) Act was called into question. During the proceedings before the Income-tax Investigation Commission, it was found that the petitioner also evaded payment of tax. His case was sought to be referred under section 5(4) of Act XXX of 1947. It was urged that on a plain reading, section 5(4) is not limited only to persons who made extraordinary profits and to a substantial extent evaded payment of taxation on income, but applies to all persons who may have evaded payment of taxation on income, irrespective of whether the evaded profits are substantial or insubstantial. That being the true scope of section 5(4), it deals with the same class of persons who fall within the ambit of section 34 of the Indian Income-tax Act and are dealt with in sub-section (1) of section 34. The income of such persons could also be taxed under proceedings under that section. Inasmuch as proceedings under the Act XXX of 1947 were more onerous, and persons belonging to the same class could on the sweet will of the Investigation Commission be treated under section 5(4), although they could also be proceeded against under the provisions of section 34 of the Income-tax Act, this was a clear case of discrimination. The validity of section 5(1) of the Act XXX of 1947 was not decided in this case.
Gauhati High Court Cites 141 - Cited by 16 - Full Document

Sh. Ram Kishan vs The State (Delhi Administration) on 25 September, 2017

1. Vide this common judgment, I dispose off two  cases i.e. case titled as "Ram Kishan Vs. State & Ors", New  PC   No.   42187/16   (Old   PC   No.   133/05)   instituted   on  11.05.2005 and case titled as "Suraj Mal Vs. State & Anr",  New   PC   No.   42171/16   (Old   PC   No.   119/08)   instituted   on  19.07.2007.
Delhi District Court Cites 3 - Cited by 0 - Full Document

S.C. Prashar vs Vasantsen Dwarkadas on 5 October, 1955

49. On the other hand are to my mind formidable difficulties with which respondents Nos. 1 and 2 are faced in their attempt to meet the challenge against the constitutionality of that part of the second proviso to sub-section (3) of section 34, which renders the bar of time limit applicable to the case of any person alleged to have escaped assessment and who is sought to be assessed or reassessed in consequence of or to give effect to any finding or direction contained in any order in the various proceedings enumerated in that proviso. The person sought to be affected is not the assessee who was a party to the proceedings but any person who was not a party to those proceedings, and the expression "any person" would include even a person who was not in any way concerned in those proceedings. The main ground on which the second category mentioned by me above is sustainable as a reasonable and just classification is obviously lacking in the case of this third category. Separate considerations do affect this category. In support of his contention that the second proviso so far as it embraced "any person" was intra vires the Legislature Mr. Seervai had not much to urge. It was said that the classification was inherent in the scheme of taxation and must be held to be reasonable having regard to the subject-matter. Learned counsel also relied on the observations of Mahajan, C.J., in the case of Suraj Mall Mohta v. Visvanatha Sastri which I have already set out. He argued that there was nothing uncommon in characteristics between persons who were assessees who had participated in any of the proceedings enumerated in the second proviso and other persons against whom finding was recorded or direction given in any such proceedings. Both these kinds of persons, so it was urged, had common characteristics and, therefore, required equal treatment. It was said that the fact that they had escaped assessment was the real characteristic to be considered. I am unable to acquiesce in this argument. Nor am I able to read anything in the observations of the learned Chief Justice which lends any support to this argument. The observations were made in a totally different context to emphasize the principle that classification which is permissible means segregation in classes based on some real and substantial distinction bearing a just and reasonable relation to the objects sought to be attained and not segregation made arbitrarily and without any substantial basis. To my mind the arguments urged by learned counsel are not sufficient to prop up a classification which on the face of it seems unreasonable. A finding, if it is to be binding on a party, should, as a general rule, be in proceedings inter partes. It cannot bind strangers. As to strangers the maxim must apply res inter alios acta alteri nocere non debet. There are some limitations to the application of the fundamental principle which underlies this maxim, but they have no bearino on the present point. It would not only be highly inconvenient but also grossly unjust to deprive a person of the benefit of an express provision of law prescribing limitation simply because in some income-tax proceedings to which he was not a party-and of which he may possibly be unaware-some finding was recorded or direction given affecting his position or his rights. No substantial reason has been suggested why a stranger to proceedings mentioned in the proviso should have to answer the notice under section 34 after the expiry of the period of limitation prescribed by the section. Nor has any satisfactory reason been suggested why after inordinate lapse of time he should have to face proceedings which may be fraught with serious consequences. He may have for years ceased to carry on the business in respect of which he is sought to be assessed or reassessed and may not even be in a position to produce his books of account. It was faintly urged that there was no possibility of the difficulties of such person being overlooked or ignored by the Income-tax Officer, and in any event by the appellate authorities. There is to my mind no scope here for any such argument. Moreover I am concerned here not with any particular case but with the challenge to the constitutionality of the proviso in so far as it can and does affect strangers. Of course, the burden is on the one attacking the legislative arrangement to negative every conceivable basis which might support it. Therefore, it is for the petitioners who impeach the proviso to show that the classification does not rest upon any reasonable basis. There is always strong presumption that the Legislature understands and correctly appreciates the needs of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds. It is well understood that the Court need not be ingenious in searching for grounds of distinction to sustain a classification that may be subjected to criticism. It is well established that with reference to taxing statutes, the Legislature has considerable latitude in making classifications. It can select persons or things as it chooses for purpose of taxation. But after giving full consideration to all these well established general principles it is extremely difficult for me to see how persons who may well have been total strangers to the various proceedings enumerated in the second proviso to section 34(3) can be regarded as a category resting on a rational basis. Such a classification, in my judgment, is without a rational distinction and obnoxious to the constitutional guarantee which applies to all matters great or small. Very readily I feel bound to extend to such persons the benefit of the time-limit expressly prescribed by the section and to hold that legislation segregating such persons in a class which has no systematic relation to a class or persons benefiting by the time-limit is a classification arbitrary and unjustifiable. The proviso, so far as it affects persons other than assessee not parties to the proceedings enumerated in it must, therefore, be held to be ultra vires the Legislature.
Bombay High Court Cites 43 - Cited by 40 - M Hidayatullah - Full Document

Rustomji vs Income-Tax Officer, Special ... on 25 November, 1963

On the arguments addressed before us, the first questions that arises for consideration is of the nature of sub-section (1A). As is plain from the language of that provision, it enabled the Income-tax Officer to bring to tax escaped income for only for such provision years as fell wholly or partly within the period beginning on 1st september, 1939, and ending on 31st March, 1946, if the escaped income of such year or years amounted to or was likely to amount to Rs. 1 lakh or more. When sub-section (1A) was introduced with effect from 17th July, 1954, the period of limitation for reopening assessments under clause (a) or clause (b) of section 34(1) for any year falling within the aforesaid period had already expired. Sub-section (1A) made no distinction as to whether the escaped assessment was due to an omission or failure on the part of the assessee to make a return of his income under section 22 for any year or to disclose fully or truly all material facts necessary for his assessment for that year, or whether even if there was no such omission or failure, the Income-tax Officer had reason to believe that income had escaped assessment or full assessment. It enabled the Income-tax Officer to serve a notice, no matter whether the assessees case fell under clause (a) or clause (b) of sub-section (1) of section 34, and notwithstanding that the period of eight years or, as the case may be, four years specified in sub-section (1) had expired. A notice under sub-section (1A) could be issued only with the previous sanction of the Central Board of Revenue on or before 31st March 1956. Sub-section (1A) thus expressly referred to the assessments which could be duly opened by specific reference to particular previous years. There can, therefore, be no doubt that it embodied a special provision with regard to the reopening of assessment of particular previous years which could not be reopened either under clause (a) or clause (b) of section 34(1) because of the bar of limitation. That sub-section was no doubt introduced soon after the decision of the Supreme Court in Suraj Mall Mohta and Co. v. Visvanatha Sastri. But its applicability was not confined to only èthose cases which were being dealt with under the Taxation on Income (Investigation Commission) Act, 1947, or were before the Investigation Commission. It was a provision inserted for the "assessment or reassessment" of all persons "who have to a substantial extent evaded payment of taxes" during the period specified in the sub-section. Learned Advocate-General did not dispute that sub-section (1A) was special provision. What he urged was that it was a special provision till 1st April, 1956, only and thereafter it ceased to be operative, and that, though it was retained on the statute book after 1st April, 1956, it must be taken to have been impliedly repealed when the time limit of eight years for a notice under section 34(1)(a) was removed by section 18 of the finance Act, 1956.
Madhya Pradesh High Court Cites 14 - Cited by 3 - Full Document

The State Of Bombay vs Bhanji Munji And Another.October 12, ... on 21 October, 1954

The result of this decision was that the Commission was restrained from dealing with Mohta's case. The provisions of section 5(1) 792 of the Act were also attacked in that case as contravening article 14 of the Constitution, but the Court refrained from expressing any opinion about their constitutionality as that question had no relevancy then. The consequence of that decision was that a certain provision of Act XXX of 1947 was declared void and unenforceable to the extent of its repugnancy to the provisions of Part III of the Constitution under article 13(1) thereof Its validity however during the pre-Constitution period was beyond question.
Supreme Court of India Cites 22 - Cited by 116 - V Bose - Full Document

Bmm Ispat Limited, Hospet vs Dcit, Bangalore on 10 April, 2018

In view of the above law laid down by the jurisdictional High Court in the case of Canara Housing, though the material found in the possession of the other person, the Assessing Officer was justified in considering the same in the proceedings under section 153A of the Act. Further the Act does not contemplate parallel proceedings under section 153A and 153C of the Act. The acceptance of the contention of the assessee would be contrary to the scheme of the chapter dealing with search assessments.
Income Tax Appellate Tribunal - Bangalore Cites 39 - Cited by 1 - Full Document

Northern India Caterers Private Ltd., & ... vs State Of Punjab And Another on 4 April, 1967

We have struck down harsh, oppressive and unjust laws giving the government an arbitrary power of directing a summary trial ,of offences by a special criminal court instead of trial by the ordinary courts or of subjecting assessee to the inquisitorial procedure of the Taxation of Income (Investigation Commission) Act, 1947. It is because those laws were harsh, despotic and tyrannical that they were struck down. It is remarkable that in Suraj Mall Mohta and Co. v. A. V. Visvanatha Sastri and another(8), the Court said that if there was a provision for reviewing the con-
Supreme Court of India Cites 40 - Cited by 1938 - J M Shelat - Full Document

Viani Papers vs Fast Track Team on 12 January, 2009

7. As far as the question whether Section 17D is constitutionally valid, it is necessary to notice the facts of the case reported in Suraj Mall-Mohta and Co. v. A.V. Visvanatha Sastri and another (AIR 1954 SC 545). That was a case where resort was made to Section 5(4) of the Taxation On Income (Investigation Commission) Act, 1947. Therein, the Court taking note of the provisions contained in Section 5(4) found that Sub-section (4) of Section 5 of the procedure prescribed by the impugned Act in so far as it affects the persons proceeded WPC. 15659/08 L 13 against, deprives of the right of appeal, second appeal and revision petition and it is a discriminatory legislation under Article 14 of the Constitution of India and is void and unsustainable. In that case, no doubt, the Commission was headed by a Judge of the High Court. The Court held as follows:
Kerala High Court Cites 38 - Cited by 8 - K Joseph - Full Document

Ramzan Mian And Ors. vs Executive Engineer, P.W.D. And Ors. on 1 April, 1969

In course of his argument, the learned Advocate General referred to the cases of Suraj Mall Mohta & Co. v. A.V. Vishvanath Sastri and Anr. , Purshotlam Govindji Halm v. Shri B.M. Dassi and Ors. , Collector of Malabar and Anr. v. Erimmal Ebrahim Hajee , Manna Lal and Anr. v. Collector of Jhalawar and Ors. , Nav Rattanmal and Ors. v. State of Rajasthan and Lachhman Dass v. State of Punjab . All the aforesaid cases have been noticed in the minority judgment of the Supreme Court. It was held in the cases other than the ease reported in5 that the Revenue Recovery Acts and other Acts creating special tribunals and procedure for the expeditious recovery of revenue and State sues are in the public interest and they do not violate Article 14 of the Constitution.
Patna High Court Cites 31 - Cited by 6 - Full Document

Maganlal Chhagganlal (P) Ltd vs Municipal Corporation Of Greater ... on 11 April, 1974

In fact in Suraj Mull Mohta's case (supra) and Shree Meenakshi Mills case (supra) the special procedure under the Income Tax Investigation Commission Act could be initiated by the Central Government while the ordinary 47 procedure under the Income Tax Act could be initiated by an altogether different authority, namely, the income Tax Officer, and yet it was held that section 5, sub-section (4) in one case and section 5, sub-.section (1) in the other were violative of article 14 since the two procedures, one substantially more drastic and judicial than the other. operated in the same field without any guideline being provided by the legislature as to when one or the other shall be adopted. Moresoever, it is not correct to say that it is the Municipal Commissioner who would initiate the special procedure set out in Chapter VA. The Municipal Commissioner would be moved by the Estate Officer of the Municipal Corporation to issue a notice under section 105B, sub-section just as a civil court would be moved by the Municipal Corporation to issue process against the occupant. Alternatively, the matter can also be viewed from a slightly different standpoint. When a Municipal Commissioner issues notice under section 105B, sub-section (2) initiating the special procedure against an occupant, he really acts on behalf and for the benefit of the Municipal Corporation-he seeks to enforce the right of the Municipal Corporation. Therefore, it is really the Municipal Corporation which avails of the special procedure set out in Chapter VA. The scope and content of the aforementioned rule against discrimination in matters of procedure cannot, therefore, be narrowed down or its applicability in the present case obviated on the ground suggested by the respondents. It was then contended on behalf of the respondents that even where two procedures are available against a person, one substantially more drastic and prejudicial than the other, and there is no guiding principle or policy laid down by the legislature as to when one or the other shall be adopted, there would be no violation of the equality clause, if both procedures are fair.
Supreme Court of India Cites 77 - Cited by 199 - A Alagiriswami - Full Document
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