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Issues: (i) whether the Commissioner's order under section 33A(2) of the Income-tax Act, 1922 was amenable to certiorari under article 226 of the Constitution of India; (ii) whether the revision under section 33A(2) was maintainable where no appeal lay to the Appellate Assistant Commissioner; (iii) whether the Income-tax Officer was bound to issue a notice of demand under section 29 of the Income-tax Act, 1922 after computing the assessee's capital gains.
Issue (i): whether the Commissioner's order under section 33A(2) of the Income-tax Act, 1922 was amenable to certiorari under article 226 of the Constitution of India.
Analysis: The revisional power exercised under section 33A(2) affected the assessee's rights and required the Commissioner to call for records, make inquiry, and pass an order on the application. The nature of the jurisdiction and the rights involved imposed a duty to act judicially. An administrative authority can perform quasi-judicial functions when the statute requires decision-making on evidence and the rights of the parties. The Court held that the Commissioner's refusal to interfere was not a mere administrative act beyond writ control.
Conclusion: The order was amenable to certiorari and the preliminary objection failed.
Issue (ii): whether the revision under section 33A(2) was maintainable where no appeal lay to the Appellate Assistant Commissioner.
Analysis: Section 33A(2) bars revision only where an appeal lies and the time for appeal has not expired, or where an appeal is pending, or where the order has been appealed to the Tribunal. Since the Income-tax Officer had merely computed capital gains and had not passed an appealable order under section 23(3), no appeal lay to the Appellate Assistant Commissioner. The Commissioner therefore had jurisdiction to entertain the revision.
Conclusion: The revision was maintainable.
Issue (iii): whether the Income-tax Officer was bound to issue a notice of demand under section 29 of the Income-tax Act, 1922 after computing the assessee's capital gains.
Analysis: Section 29 required the Income-tax Officer to serve a notice of demand when tax became due in consequence of an order passed under the Act. Once the taxable capital gains were determined, the officer had a statutory duty to issue the demand notice. Failure to do so constituted non-performance of a mandatory statutory obligation and justified mandamus.
Conclusion: The Income-tax Officer was bound to issue the notice of demand.
Final Conclusion: The writ petition ought not to have been dismissed in limine; the impugned revisional order was quashed and the Income-tax Officer was directed to proceed in accordance with law.
Ratio Decidendi: Where a statutory revisional authority is required to decide affecting civil rights on inquiry and record, its order is quasi-judicial and subject to certiorari, and a statutory duty to issue a demand notice after tax is determined may be enforced by mandamus.
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