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Issues: (i) Whether the press notifications issued by the Ministry of Finance had legal force so as to support a writ of mandamus directing the income-tax authorities to act in accordance with the concessional scheme; (ii) Whether the assessment and penalty orders were liable to be quashed in certiorari, including on the plea that the disclosed amount could be brought to tax only by proceedings under section 34 of the Income-tax Act, 1922.
Issue (i): Whether the press notifications issued by the Ministry of Finance had legal force so as to support a writ of mandamus directing the income-tax authorities to act in accordance with the concessional scheme.
Analysis: The notifications were only press notes and were not shown to have been issued under the Income-tax Act or any other law. They therefore did not create enforceable legal rights against the taxing authorities. A writ of mandamus cannot issue to compel observance of instructions that have no statutory force.
Conclusion: The claim for mandamus failed and was against the assessee.
Issue (ii): Whether the assessment and penalty orders were liable to be quashed in certiorari, including on the plea that the disclosed amount could be brought to tax only by proceedings under section 34 of the Income-tax Act, 1922.
Analysis: The disclosures were treated as income for the assessment years then pending, and the taxing authorities had discretion under the scheme to allow deductions for earlier intangible additions. The resulting assessments were not shown to be without jurisdiction. Section 34 was inapplicable because it operates only where a completed assessment is sought to be reopened, whereas the amounts in question were brought in during the current assessment process itself.
Conclusion: The assessment and penalty orders were not liable to be quashed and the challenge failed.
Final Conclusion: The writ appeal and the connected writ petitions were rejected, and the taxing authorities' actions were left undisturbed.
Ratio Decidendi: Executive press notifications without statutory authority do not confer enforceable rights by mandamus, and section 34 of the Income-tax Act, 1922 is confined to reopening completed assessments, not to amounts disclosed and assessed in the current proceedings.
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