The judgment of the court was delivered by
HEGDE J.---This is an original petitioner's appeal by
certificate. It arises from a decision of a Division Bench of the Allahabad High
Court in a writ petition under article 226 of the Constitution.
The Income-tax Officer, Rampur, directed the appellant
under section 18(3B) read with section 18(7) of the Income-tax Act, 1922 (to be
hereinafer referred to as " the Act ") to pay Rs. 1,39,739-5-0 as tax
on a sum of Rs. 2,00,000 remitted by it as selling commission to Messrs.
Nathirmal and Sons, Djakarta (Indonesia), during the year ending on December 31,
1951. The Income-tax Officer rejected the contention of the appellant that
Messrs. Nathirmal and Sons is not a non-resident firm. The Income-tax Officer
came to the conclusion that the firm in question is a non-resident one and
consequently the appellant was statutorily liable to deduct the income-tax
payable by that firm and pay the same to the Government.
Aggrieved by that order the appellant went up in appeal to
the Appellate Assistant Commissioner. The Appellate Assistant Commissioner
rejected the appeal on the ground that the same was not maintainable. He took
the view that an appeal lay only under section 30(1A). But, before such an
appeal can be entertained the appellant must satisfy two conditions, namely, (1)
he had deducted the tax due from the non-resident in accordance with the
provisions of sub-section (3B) ; and (2) that he had paid the sum deducted to
the Government. The appellant having not complied with those two conditions, the
Appellate Assistant Commissioner held that the appeal was incompetent. The order
of the Appellate Assistant Commissioner was confirmed by the Tribunal.
Thereafter, the appellant moved the High Court under article 226 of the
Constitution. That application came up before a single judge. The single judge
after going into the matter in detail came to the conclusion that Messrs.
Nathirmal and Sons is not a non-resident firm and that being so the appellant
was not required to act under section 18(3B). He accordingly set aside the order
impugned. The revenue went up in appeal against the order of the learned single
judge to the Appellate Bench. That Bench allowed the appeal with the
observations, " in the present case the question before the Income-tax
Officer, Rampur, was whether the firm Nathirmal and Sons was non-resident or
not. There was material before him on this question. He had jurisdiction to
decide the question either way. It cannot be said that the officer assumed
jurisdiction by a wrong decision on this question of residence ". The
Appellate Bench appears to have been under the impression that the Income-tax
Officer was the sole judge of the fact whether the firm in question was resident
or non-resident. This conclusion, in our opinion, is wholly wrong. No authority,
much less a quasi-judicial authority, can confer jurisdiction on itself by
deciding a jurisdictional fact wrongly. The question whether the jurisdictional
fact has been rightly decided or not is a question that is open for examination
by the High Court in an application for a writ of certiorari. If the High Court
comes to the conclusion, as the learned single judge has done in this case, that
the Income-tax Officer had clutched at the jurisdiction by deciding a
jurisdictional fact erroneously, then the assessee was entitled for the writ of
certiorari prayed for by him. It is incomprehensible to think that a
quasi-judicial authority like the Income-tax Officer can erroneously decide a
jurisdictional fact and thereafter proceed to impose a levy on a citizen. In our
opinion, the Appellate Bench is wholly wrong in opining that the Income-tax
Officer can " decide either way ".
It was contended by Mr. Manchanda, the learned counsel for
the revenue, that the appellant had a right of appeal to the Appellate Assistant
Commissioner under section 30(1A). He argued that if only he had deposited the
amount computed by the Income-tax Officer, then he would have had a right of
appeal to the Appellate Assistant Commissioner. Assuming that section 30(1A)
applied to facts of the case, then before having recourse to that provision a
person seeking to file an appeal under that provision must comply with two
requirements, namely, that he must have first deducted the tax due from the
non-resident assessee and must have paid the same to the Government. This
provision cannot apply to the case of a person who contends that the firm to
whom he made the payment is not a non-resident firm. If he is right in his
contention, then he could not have deducted the tax due from the firm to whom he
made the payment.
For the reasons mentioned above, we allow this appeal, set
aside the order of the Appellate Bench of the Allahabad High Court and remand
the case back to that court for deciding the appeal afresh. It is open to the
assessee to urge all the points that he has taken in the case.
The costs of this appeal will be the costs in the cause.
Appeal allowed. Matter remanded
