Mala fides and declaratory writ relief in pending tax assessment require clear proof and cannot control ongoing enquiry

Allegations of mala fides and personal bias against income-tax authorities must be proved by clear material; mere suspicion, surrounding circumstances, or some unreasonable steps in the enquiry are insufficient, and the bias claim failed. A writ court will not ordinarily issue a declaratory mandamus directing an assessing officer to confine an ongoing assessment to the Income-tax Act where the assessment is still pending and statutory remedies remain available. Although a notice calling for eight years' accounts exceeded the stated statutory limit and was unreasonable, the Court declined to supervise the assessment through Article 226 and refused the requested relief.

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Issues: (i) whether the allegations of mala fides and personal bias against the income-tax authorities were proved so as to justify interference in writ jurisdiction; (ii) whether, in proceedings under Article 226, the Court could grant a mandamus or declaration directing the assessing officer to confine the enquiry and assessment strictly within the limits of the Income-tax Act at the stage of pending assessment.

Issue (i): Whether the allegations of mala fides and personal bias against the income-tax authorities were proved so as to justify interference in writ jurisdiction.

Analysis: The petitioner relied on surrounding circumstances and alleged that the enquiry was being used for collateral purposes. The Court held that such allegations required clear proof and that the material placed was insufficient to establish personal bias or mala fides. The denials filed by the concerned officers were accepted, and the incidental acts complained of were not shown to be unsupported by the assessment process. Although some of the steps taken by the officer were found to be unreasonable, that by itself did not prove malicious intent.

Conclusion: The allegation of mala fides and personal bias was not proved.

Issue (ii): Whether, in proceedings under Article 226, the Court could grant a mandamus or declaration directing the assessing officer to confine the enquiry and assessment strictly within the limits of the Income-tax Act at the stage of pending assessment.

Analysis: The Court noted that section 22(4) of the Income-tax Act limited the power to call for accounts to three years prior to the previous year, and the impugned notice requiring eight years' accounts was outside that limit and unreasonable. Even so, the relief sought was in substance a declaratory direction that the officer should act according to law during the continuing assessment proceedings. The Court held that writ jurisdiction was not the proper vehicle for such merely declaratory relief, particularly when the assessment was incomplete and the statute provided a hierarchy of remedies for grievances on the merits.

Conclusion: The Court declined to grant the requested writ relief and held that no such declaratory mandamus could be issued in the petition.

Final Conclusion: The writ petition failed, as the complained-of bias was not established and the Court would not use Article 226 to supervise the ongoing assessment by way of a merely declaratory order.

Ratio Decidendi: Writ jurisdiction will not ordinarily be used to grant a merely declaratory direction controlling an ongoing assessment, and allegations of mala fides in administrative action must be proved by clear and convincing material.

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