Chair­man, Inspecting Asst. Commr. of Income Tax Vs. Khan Saheb Ata Md Khan

Chair­man, Inspecting Asst. Commr. of Income Tax


Khan Saheb Ata Md Khan,

Supreme Court

Appellate Division



Kemahiddin Hossain CJ

Fazle Manim J

Ruhul Islam J

E Rahman, Chair­man, Inspecting Asst. Commr. of Income Tax Ctg. & ors …….Appellants


Khan Saheb Ata Mohammad Khan…………..Respondent


February 14, 1978.

Lawyers Involved:

A K.M. Mozammel Huq Bhuiya, Advo­cate, instructed by S.S. Hoda, Advocate-on-record—For the Appellants.

Ex parte—the Respondent.

Civil appeal No. 54D of S967

(From the Judgment and Order dated 24-3-65, passed by the Dacca High Court in Writ Petition No. 404 of 1964).


  K. Hossain, CJ — The short question as to the true construction of Martial Law Re­gulation No. 48(iii) of 1958 is involved. Facts giving rise to this appeal may be set out as follows:

2. The Respondent migrated from India to Pakistan in 1948 and purchased a Tea Estate, known as “Khan Tea Estate” in Sylhet. He was assessed to income-tax in Pakistan. After Martial Law Regulation 43 had been promulgated, the Respondent wrote a letter on the 29th of December, 1958, to the Income Tax Officer, Sylhet, wherein he said that in the assessment order of the In­come Tax Officer, Sylhet, of the 1st April, 1952, his capital, which he had brought from Shillong, India to Sylhet was shown as Rs. 5,00, 000/-only. He explained that he had been giving money from time to time to his wives and children who were in West Pakistan and East Pakistan and the sums with them grew over years from 1931, when he was married in West Pakistan, to a considerable sum of money. This was not included in his capital in East Pakistan. In a statement of assets and liabilities submitted by him on the 7th January, 1958, he had mentioned the same figure as his capital in East Pakistan as the one shown by the Income Tax Officer, Sylhet. Again, on the 19th August, 1958, he submit­ted another statement of assets and liabilities for the year ending 31st March, 1958, in which the position was the same. The amo­unt shown as reserve with his wives and chil­dren was not included therein, which amoun­ted to Rs. 1,30,000/-. The last paragraph of this letter may be produced:

Now under the Martial Law Regulation, I submit sincerely and honestly that if the amount with my wives and chil­dren grown as reserve which I give below is declarable and taxable, it may be tre­ated as deemed proper. The amount is Rs. 1,30,000/- (Rupees one lac thirty thousand) only.

3.  In continuation of this letter, the Res­pondent wrote another letter, on 12th January, 1959, to the Income Tax Officer. He explained that the amount of Rs. 1,30,000/- in the possession of his wives and children, represented his earnings and savings in  Shil­long (India) since 1931 and was outside the business capital shown by Income Tax Officer, in his assessment order, income-tax had been paid on it already. He had no business in Pakistan before or after the Parti­tion, except for the Tea Estate. The last sen­tence in this letter reads: “Under the circumstances noted above, my request is to read my declaration in the light shown above.”

4.  The Income Tax authority treated this as a consolidated return of income, within the meaning of the Martial Law Regulations and made a provisional demand by an order dated 27-6-64 under section 23(b) of the Income Tax Act and Martial Law Regulations 43 and 48. The Respondent protested to this demand, but he was made to pay Rs. 21,542/- in part payment of the provisional demand, which amounted to Rs. 34,572/-. Having failed to obtain redress from the Income Tax authorities, he moved the Dacca High Court in writ jurisdiction. The High Court took the view, that the Respondent had never made a “return” of his income, within the meaning of the Martial Law Regulations and the Income Tax authorities had, therefore no juris­diction to assess him as they did. They declared the assessment order as without law­ful authority and of no legal effect.

Leave was granted to consider the ques­tion set out above.

5. To turn to the relevant regulation viz. Regulation 48(iii) it may be set out as follows:

“Notwithstanding anything to the contrary contained in sub-paragraph (i) and (ii) above, any person may file a return of income or a consolidated statement for any year or years, prior to the assessment year 1954-55”.

6.    The question is, what is the true mean­ing of the expression “a consolidated state­ment for any year or years”. The regulation has not said anything beyond the few words cited above. It appears that the Central Board of Revenue issued circulars under Mar­tial Law Regulations but nothing has been said with regard to expression under consi­deration. In this view of the matter we are to give the expression, the plain meaning it bears upon the language used in the said re­gulation. The ‘consolidated statement’ there­ fore means any aggregate amount given by the assessee for the year or years he  desires to disclose his income to the Income Tax autho­rities. No form has been prescribed, and so it can be expressed in whatever way the assessee desires. All that is necessary, is that what­ ever be the form, the assessee must disclose in the consolidated statement that his disclo­sure relates to the income of certain year or years. Looked at from this stand-point, the last paragraph of the letter of the assessee, which has been set out earlier, shows that the Respondent has clearly stated that under Martial Law Regulation he has submitted sincerely and honestly an amount of Rs.1,30,000/-, that was with his wife and children and may be treated as declarable and taxable, if the  taxing authority deemed it proper. The respondent has clearly expres­sed his mind and given the consolidated amount. He has unequivocally surrendered the amount before the Income Tax authori­ties for the treatment they think proper. Record shows that the Respondent was given all the opportunities to defend his case but he either failed to avail of it or to satisfy the Income Tax authorities that they were the savings of his wife and children and not his undisclosed income earned in the High Court as well. The High Court was there­fore not justified in taking a technical view that there must be a formal presentation of a return of income, and the informal disclo­sure of consolidated statement of income will not be treated as return giving power to the Income Tax authority to assess the Respon­dent under the Martial Law Regulation. The Regulation clearly says that” the assessee can file proper return or a consolidated state­ment and the respondent has done the latter, and we find nothing in this Regulation which takes it beyond the purview of the Income Tax authorities to act upon such statement. We, therefore, allow this appeal, set aside the order of the High Court and restore that of the Income Tax authority. As there is no appearance on the other side we make no order as to costs.


Source: 1979, (AD)