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PETITIONER: Y. NARAYANA CHETTY & ANOTHER

       Vs.

RESPONDENT: THE INCOME-TAX OFFICER, NELLORE AND OTHERS

DATE OF JUDGMENT: 15/10/1958

BENCH: GAJENDRAGADKAR, P.B. BENCH: GAJENDRAGADKAR, P.B. AIYYAR, T.L. VENKATARAMA SARKAR, A.K.

CITATION:  1959 AIR  213            1959 SCR  Supl. (1) 189  CITATOR INFO :  F          1961 SC1026  (6)

ACT:        Income-tax-Rule  empowering  Income-tax  Officer  to  cancel        registration  of  firm  found not  be  genuine-Validity  of-        Registered  firm, if an assessee-Seryvice of notice on  firm        through Partner, if valid and proper-Writ Petition, if  lies        against  illegal assessment Indian Income-tax Act, 1922  (XI        Of 1922), SS. 23, 34-Income-tax Rules, r. 6B-Constitution of        India, Art. 226.

HEADNOTE: Two persons, B and C, formed a partnership firm on April 20, 1936, and the firm was dissolved on March 31, 1948.  I and C along  with R formed a second firm on July 30, 1941, and  it was  dissolved on March 31, 1949.  B and C along  with  five others  formed a third firm on December 1, 1941, and it  was dissolved  on  January 1, 1949.  All the  three  firms  were carrying on business in yarn and cloth and all of them  were registered  under  S. 26-A of the Income-tax Act.   For  the years  1943-44 and 1944-45 tile said firms were  treated  as separate entities and separate assessment orders were passed in  respect of the income of each one of them for  the  said years.  Subsequently, the Income-tax Officer served  notices under S. 34 Of the Act on C on behalf of the firms and after hearing  the parties he held that the firms were  fictitious and  so  cancelled  their registration under r.  6B  of  the Income-tax  Rules  and  passed fresh  orders  of  assessment against them on the basis that they were unregistered firms. One  Y who was a partner in the third firm and C filed  four writ  petitions  under Art. 226 of the Constitution  in  the High  Court challenging the validity of the  orders  passed. The   High  Court  dismissed  the  petitions   but   granted certificates of fitness to appeal 190 under  Art.  133.  The appellants contended that r.  6B  was inconsistent  with S. 23(4) of the Act and was ultra  vires, that  consequently the cancellation of registration  of  the firms  was  without jurisdiction and was void and  that  the proceedings taken under s. 34 Of the Act were invalid as the required  notice  was  not  issued  against  the  individual

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partners who were the assesses. Held,  that r. 6B of the Income-tax Rules was not  inconsis- tent with S. 23(4) Of the Act and was not ultra vires.  Rule 6B  dealt with cancellation of registration in  cases  where the  certificate  of registration had been  granted  without there  being  a genuine firm in existence,  while  S.  23(4) dealt  with  cancellation  of  registration  on  account  of failure  to comply with the requirements of law, though  the registered firm was genuine.  Rule 6B was obviously intended to carry out the purpose of the Act and was valid.  The fact that no appeal had been provided against an order made under r.  6B was no ground for challenging its validity.   It  was also  not open to the appellants to contend that the  orders passed under s. 6B were invalid on the ground that the  rule did  not  require the giving of any notice before  the  can- cellation of registration as in the present case notice  had actually been given and the appellants had been afforded  an opportunity of being heard. Held,  further, that in the cases of registered  firms,  the firms themselves were the assessees and as such the  notices issued under S. 34 against the firms and served upon C  were valid and proper notices, :and it was not necessary to serve notices  upon  the individual partners of  the  firms.   The notice  prescribed  by  s.  34 was  not  a  mere  procedural requirement.   If  no  notice was issued or  if  the  notice issued was shown to be invalid then the proceedings taken by the Income-tax Officer would be illegal and void. Commissioner of Income-tax, Bombay City v. Ramsukh  Motilal, [1955]  27 I.T.R. 54 and R. K. Das & Co. v. Commissioncy  of Income-tax, West Bengal, [1956] 30 I.T.R. 439, approved. The   contention  that  the  assessments   were   completely illogical  and  therefore illegal could not be  urged  in  a petition under Art. 226 of the Constitution since it did not raise any question of jurisdiction.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeals nos. 317 to  320 of 1957. Appeal  from the judgment and order dated March 5, 1954,  of the Madras High Court, in Writ Petitions Nos. 613 and 629 of 1952 and 201 and 202 of 1953. A.   V.  Viswanatha  Sastri  and B.  K. B.  Naidu,  for  the appellants. 191 A.   N.  Kripal, R. H. Dhebar and D. Gupta,  for  respondent No. 1. 1958.  October 15.  The Judgment of the Court was  delivered by GAJENDRAGADKAR,  J.-These  four  appeals  arise  from   four petitions  filed  against the Income-tax  Officer-,  Nellore Circle, Nellore, respondent 1, in respect of the proceedings taken  by him against three firms under s. 34 of the  Indian Income-tax Act (hereinafter called the Act).  The firm  M/s. Bellapu Audeyya and Chilla Pitchayya was formed on April 20, 1936, and it was dissolved on March 31, 1948.  It  consisted of  two  partners,  Chilla Pitchayya  and  Bellapu  Audeyya. Chilla  Pitchayya had started another firm in the  name  and style  of G. Pitchayya & Co. with another partner  R.  Subba Rao.   This  firm was formed on July 30, 1941,  and  it  was dissolved  on March 31, 1949.  Bellapu Audeyya and.   Chilla Pitchayya had also formed another firm along with five other partners which carried on its business in the name and style of  Prabbat Textiles.  This firm was formed on  December  1,

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1941,  and it "-as dissolved by a decree of the civil  court Passed  oil December 22, 1949, the dissolution having  taken effect  from  January  1, 1949.  All the  three  firms  were carrying on business in yarn and cloth and all of them  were registered under s. 26A of the Act.  It appears that for the purpose of assessing the income of these firms for the years 1943-44  and 1944-45, respondent 1 was satisfied  on  making enquiries that each of the three firms was a separate entity and so separate assessment orders were passed in respect  of the income of each one of them for the said two years. Subsequently on August 14, 1951, respondent I issued  notice against the firm of Prabliat Textiles under s.34 of the Act. In  the proceedings thus commenced, respondent I  hold  that the firm of Prabhat Textiles was a fictitious tirm and  that the  real partners ",ere C. Pitchayya and B. Audeyya.  As  a result   of  this  finding,  respondent  I   cancelled   the registration of the said firm under r. 6B of the  Income-tax Rules and passed fresh orders of assessment against the said firm on the 192 basis  that it was an unregistered firm for  the  assessment years  1943-44 and 1944-45 on August 14, 1952, and  February 25,  1953,  respectively.   Similar  action  was  taken   by respondent  I in respect of the two other firms on the  same dates. Thereupon  Y.  Narayana Chetty, one of the partners  of  the Prabhat Textiles filed a writ petition in the High Court  of Madras, No. 613 of 1952, against respondent I under Art. 226 of  the Constitution and prayed that the High Court,  should issue  a writ of prohibition or any other appropriate  writ, order  or  direction prohibiting the first  respondent  from continuing  the proceedings as per his notice of August  14, 1951,  and  from  enforcing the order  of  fresh  assessment passed  in  the  said proceedings oil August  14,  1952,  in regard to the assessment year 1943-1944.  In respect of  the same  firm Chilla Pitchayya sought for a similar  relief  by Writ  Petition No. 201 of 1953 in regard to the  proceedings and  assessment order for the assessment year 1944-45.   The same Chilla Pitchayya also filed Writ Petitions Nos. 629  of 1952 and 202 of 1953 in respect of the proceedings taken and fresh  assessment  orders passed against the  two  remaining firms   for  the  assessment  years  1943-44   and   1944-45 respectively.  The four petitions were heard together by the High  Court  and  were  dismissed on  March  5,  1954.   The petitioners  then  applied for and obtained  from  the  High Court  a certificate under Art. 133 read with 0. XLV, r.  1, 2, 3 and 8 that the value of the subject-matter in the peti- tions before the High Court as well as of the appeals before this  Court  was  more than Rs. 20,000.   It  is  with  this certificate  that  the four appeals have  come  before  this Court.  Y. Narayana Chetty is the appellant in Civil  Appeal No. 317 of 1957 whereas Chilia Pitchayya is the appellant in Civil Appeals Nos. 318, 319 and 320 of 1957. In  the High Court it was urged by the appellants  that  the proceedings taken under s. 34 against each of the said firms were  without jurisdiction and void.  It was also  contended that  the  cancellation of the registration of each  of  the firms  was similarly void and without jurisdiction  inasmuch as r. 6B under which the  said order of cancellation was passed was  ultra  vires the  Central  Board of Revenue which promulgated  the  rules under  the -powers conferred on it by the Act.  Besides  the appellants  attacked  the  validity  of  the  orders  passed against  them under s. 31 on the ground that it was  illegal to  assess escaped income under s. 34 on the basis that  the

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firms were unregistered firms while maintaining the original assessment  for  the said firms on the basis that  they  had been  duty  registered under s. 26A of the  Act.   The  High Court  has held against the appellants on all these  points. Besides  the high Court has stated in its judgment  that  it was  admitted by the appellants before it that  appeals  had been filed against each one of the orders challenged in  the writ proceedings and the High Court thought that that itself would  suffice  to  justify  its  refusal  to  exercise  its jurisdiction  under Art. 226 of the Constitution.   However, since  the  primary relief asked for by  the  appellants  in their  respective  petitions  was  the  issue  of  writ   of prohibition the If High Court felt that it may as well  deal with the merits of the contentions raised by the appellants. That  is why the High Court examined the merits of the  said contentions.   On behalf of the appellants,  Mr.  Viswanatha Sastri has raised the same three points before us. The first point raised by Mr. Sastri is that the proceedings taken  by  respondent I under s. 34 of the Act  are  invalid because  the  notice required to be issued  under  the  said section   has   not  been  issued  against   the   assessees contemplated  therein.  In the, present case the  Income-tax Officer  has purported to act under s. 34(I)(a) against  the three firms.  The said sub-section provides inter alia  that "  if the Income-tax Officer has reason to believe  that  by reason  of  the  omission  or failure on  the  part  of  the assessee to make a return of his income under s. 22 for  any year  or  to  disclose fully and truly  all  material  facts necessary for his assessment for that year, income,  profits or gains chargeable to income-tax has been under-.assessed", he may, within the nine prescribed, " serve on the  assessee a notice containing all or any of the requirements which may 194 be included in the notice under sub-s. (2) of s..22 and  may proceed  to  reassess such income, -profits or  gains."  The argument is that the service of the requisite notice on  the assessee  is  a condition precedent to the validity  Of  any reassessment made under s. 34; and if a valid notice is  not issued  as  required, proceedings taken  by  the  Income-tax Officer  in  pursuance of an invalid notice  and  consequent orders  of  reassessment passed ’by him would  be  void  and inoperative.   In  our  opinion, this  contention  is  well- founded.  The notice prescribed by s. 34 cannot be  regarded as  a  more procedural requirement; it is only if  the  said notice  is  served  on the assessee  as  required  that  the lncome-tax Officer would be justified in taking  proceedings against him.  If no notice is issued or if the notice issued is shown to be invalid then the validity of the  proceedings taken  by  the  Income-tax Officer without a  notice  or  in pursuance  of an invalid notice would be illegal  and  void. That  is  the  view taken by the Bombay  and  Calcutta  High Courts  in-the  Commissioner of Incometax,  Bombay  City  v. Ramsukh  Motilal (1) and B. K. Das & Co. v. Commissioner  of Income-tax,  West Bengal (2) and we think that that view  is right. Let us then consider the nature of the notice issued by  the Income-tax  Officer  in  the  present  proceedings.   It  is conceded by Mr. Sastri that the notice issued by the Income- tax  Officer  was served on the appellant  C.  Pitchayya  on behalf  of the firms in question and that in each  case  the notice specifically averred that the Income-tax Officer  had reason  to believe that the income of the assessee had  been under-assersed  in  the relevant years of  assessment.   The notice  further  required  the assessee to  deliver  to  the officer within thirty-five days of the receipt of the notice

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a return in the attached form of the total income and  total world  income  of the assessee assessable for  the  relevant period.  In pursuance of this notice the appellant Pitchayya in fact appeared before the officer during the course of the proceedings  commenced under s.34. Mr. Sastri contends  that this  notice is defective be cause it purports to be  issued Against the firm and no (1) [1955]’27 I.T.R. 54. (2) [1956] 30 I.T.R. 439. 195 notice  has been issued against the respective  partners  of the  firm.   According  to Mr. Sastri the  assessee  who  is entitled  to a notice under s. 34(1)(a) is not the firm  but each individual partner of the firm.  He also suggests  that each individual partner should have been called upon to make a  return  of his total income assessable for  the  relevant year; inasmuch as the notice is issued against the firm  and not  against individual partners it is invalid.  In  support of  this  argument  Mr.  Sastri  has  referred  us  to   the definition of the word " assessee" under s. 2, cl. (2) as it stood  prior  to  the amendment of  1953.   Under  the  said clause,  assessee  meant  " person  by  whom  income-tax  is clearly payable".  In the case of a registered firm  income- tax  is  clearly payable by the individual partners  of  the firm under s. 23(5) of the Act, savs Mr. Sastri; and so,  if the  Income-tax Officer intended to take action under s.  34 it  was  his  duty to issue  the  requisite  notice  against individual  partners in respect of their respective  incomes for  which they were liable to pay the tax.   This  argument purports  to derive support from the provisions of s.  23(5) as they stood before the amendment introduced in 1956.   The effect  of the said provisions was that "the sum payable  by the firm itself shall not be determined but the total income of  each partner of the firm including therein his share  of its income, profits and gains in the previous year shall  be assessed  and  the sum payable by him on the basis  of  such assessment  shall be determined "; so that what the  Income- tax  Officer had to do in assessment proceedings  against  a registered  firm was to determine the total income  of  each partner of the firm and not to determine the sum payable  by the firm itself.  The argument is that this provision  shows that  the person liable to pay the tax was  each  individual partner of the firm and so it is the individual partners  of the  firm who are entitled to the statutory notice under  s. 34(1)(a).   In  our  opinion, this  argument  is  not  well- founded.  Section 3 of the Act which is the charging section provides inter alia that "where any Central Act enacts  that income-tax can be charged for any year at any rate or rates, tax at that rate or those rates shall be 196 charged for that year in accordance with and subject to  the provisions of this Act in respect of the total income of the previous  year of every firm ; " in other words, a  firm  is specifically  treated as an assessee by s. 3.  Besides,  the word  "person"  used by s. 2, sub S. (2) of  the  Act  while defining the assessee, would obviously include a firm  under s. 3(42) of the General Clauses Act since it provides that a person  includes  "any  company or association  or  body  of individuals  whether incorporated. or not ".  Therefore,  it would  not  be correct to say that an assessee under  s.  2, sub-s.  (2)  of  the Act  necessarily  means  an  individual partner-  and does not include a firm.  The  argument  based upon  the relevant provisions of s. 23(5) is also not  valid be. cause it is obvious that for the purposes of  assessment at  all relevant and material stages under ss. 22 and 23  it

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is  the firm that is treated as an assessee.  When a  return of the income is made for the relevant year, it is a  return with  regard to the total income of the firm that has to  be submitted  under s. 22; and when assessment is levied  under s.  23, the Income-tax Officer determines and can  determine the  total  income of each partner of the  firm  only  after ascertaining the total income of the firm itself It is  true that  s.  23(5)  as it then stood  required  the  Income-tax Officer to determine the total income of each partner of the firm including his share of the firm’s income and to  assess each  partner in respect of such income, and in  that  sense individual partners of the firm undoubtedly became liable to pay  income-tax  ; but it is clear that in  determining  the total income of each partner his share in the firm’s  income has  to be included and so the firm does not cease to be  an assessee for the purpose of s. 23(5).  This position is  now clarified  by the provisions of s. 23(5)(a)(i) and  (ii)  as amended  in  1956.   The present  s.  23(5)(a)(i)  and  (ii) provides: S.   23(5)(a)(i) and (ii): (5)  Notwithstanding  anything  contained in  the  foregoing sub-sections,  when  the assessee is a firm  and  the  total income  of the firm has been assessed under subsection  (1), sub-section (3) or sub-section (4), as the case may be                             197 (a)  in the case of a registered firm- (1)  the income-tax payable by the firm itself shall be determined; and (ii) the  total,  income  of  each.  partner  of  the  firm, including therein his share of its income, profits and gains of the previous year, shall be assessed and the sum  payable by him on the basis of such assessment shall be determined: and so it is clear that the registered firm does not at  all cease to be an assessee under this provision. In  this  connection  it would be relevant to  refer  to  S. 23(4).  This subsection provides: "  If  any person fails to make the return required  by  any notice given under subsection (2) of section 22 and has  not made a. return or a revised return under sub-section (3)  of the same section or fails to comply with all the terms of  a notice issued under sub-section (4) of the same section  or, having made a return, fails to comply with all the terms  of a  notice issued under subsection (2) of this  section,  the Income-tax Officer shall make the assessment to the best  of his  judgment and determine the sum payable by the  assessee on the basis of such assessment and, in the case of a  firm, may refuse to register it or may cancel its registration  if it is already registered: Provided  that  the  registration of a  firm  shall  not  be cancelled until fourteen days have elapsed from the issue of a, notice by the Income-tax Officer.to the firm  intimatiiig his intention to cancel its registration" This  provision  clearly shows that the person to  whom  the first  part of the provision refers includes a firm  and  it lays down that if a firm commits a default as indicated  the Income-tax  Officer may refuse to register it or may  cancel its  registration if it is already registered.   Thus  there can  be  no  doubt that s. 23(4) treats  the  fit-in  as  an assessee and provides for the imposition of penalty  against the  firm  in  case the firm commits  any  of  the  defaults indicated  in the sub-section.  The effect of  the  relevant provisions of s. 23 therefore is that for the assessment  of the  total taxable income it is the affairs of the  assessee firm that are investigated and 198

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examined   and  when  the  total  income  of  the  firm   is ascertained,  it is allocated to its individual partners  in proportion  to their respective shares.  The result of  such allocation undoubtedly is to make the partners liable to pay tax in respect of their taxable income thus allocated ;  but that  cannot justify the inference that the firm is  not  an assessee in the relevant proceedings. Even when the notice is issued under s. 34(1)(a) the Income- tax  Officer proceeds to act on the ground that the  income, profits  and  gains of the firm which are chargeable  to  an income-tax have been under-assessed; it is the income of the firm  which  is  initially  ascertained  in  the  assessment proceedings  under  s. 23 and it is in respect of  the  said income of the firm that the Income-tax Officer finds that  a part  of it has escaped assessment.  We do  not,  therefore, think  that the appellant’s argument that the notice  issued against  the  firm and served on the appellant  was  invalid under s. 34(1)(a) can be accepted. It  is then urged that the Income-tax Officer was  bound  to issue notices to individual partners of the firms because at the  material  time all the firms had been  dissolved.   Mr. Sastri concedes that under s. 63 (2) a notice or requisition under the Act may in the case of a firm be addressed to  any member  of the firm but his contention is that this  applies to a firm in existence and not to a firm dissolved.  If the, appellants’  case is that as a result of dissolution of  the firms the firms had discontinued their business as from  the respective  dates  of dissolution they ought to  have  given notices  of such discontinuance of their business  under  s. 25(2)  of the Act.  Besides, in the present case,  the  main appellant  has in fact been served personally and the  other partners who may not have been served have made no grievance in the matter.  We are, therefore, satisfied that it is  not open to the appellants to contend that the proceedings taken by  the Income-tax Officer under s. 34(1)(a) are invalid  in that  notices of these proceedings have not been  served  on the  other alleged partners of the firms.   Incidentally  it may be pointed out that the finding of 199 the Income-tax Officer in respect of all the three firms  is that  the  only  persons who had interest  in  the  business carried  on  by  the  said firms  were  B.  Audeyya  and  C. Pitchayya.   It is remarkable that B. Audeyya has not  cared to challenge the proceedings or to question the validity  of the fresh assessment orders passed by the Income-tax Officer in the present proceedings. Mr. Sastri then challenges the validity of the  cancellation of the registration of the three firms on the ground that r. 6B  under which the Income-tax Officer purported to  act  is ultra  vires.   Rule 6B provides that in the  event  of  the Income-tax  Officer  being satisfied  that  the  certificate granted under r. 4 or under r. 6A has been obtained  without there  being a genuine firm in existence he may  cancel  the certificate  so granted.  The material rules of which r.  6B is  a part have been framed by the Central Board of  Revenue under  the  authority conferred by s. 59 of the  Act.   This section  empowers the Central Board of Revenue,  subject  to the  control of the Central Government, to make rules  inter alia  for carrying out the purposes of the Act.  Section  59 (2)(e) lays down that such rules may provide for any  matter which  by  this  Act  is to  be  prescribed  and  the  rules preceding r. 6B deal with the procedure to be followed,  and prescribe  the application to be made, for the  registration of  firms under s. 26A of the Act.  Section  59(5)  provides that  the  rules  made  under  the  said  section  shall  be

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published  in the official gazette and shall thereupon  have effect  as if enacted in this Act.  Thus there is  no  doubt that  the  rules  are  statutory rules  and  once  they  are published  in the official gazette they are operative as  if they  were  a  part of the Act.  Mr.  Sastri  concedes  this position; but he argues that r. 6B is inconsistent with  the material provisions in the Act and is therefore ultra  vires the  Central  Board  of Revenue.   This  argument  is  based substantially  on  the  provisions of  s.  23(4).   We  have already referred to the provisions of this subsection.   Mr. Sastri contends that it is only where the requirements of s. 23(4)  are satisfied that the registration of a firm can  be cancelled.  The procedure for registration of firms is  laid down in s. 26A of 200 the  Act.   An application has to be made to  the  Incometax Officer  on  behalf  of  any  firm  constituted  Linder  the instrument  of partnership specifying the individual  shares of the partners for registration for the purposes of the Act and  of any other enactment for the time being in force  and relating,  to  income-tax  and  supertax.   Sub-section  (2) requires  that the said application ,,hall be made  by  such person or persons and, at such times and shall contain  such particulars  and  shall be in such form and be  verified  in such manner as may be prescribed and it shall be dealt  with by   the  Incometax  Officer  in  such  manner  as  may   be prescribed.   It is in pursuance of the requirements  of  s. 26(2)  that the relevant rules for the registration  of  the firms  have  been made.  The question which arises  for  our decision  in  this  connection  is:  if  a  firm  has   been registered  Linder  s. 26A, when can  such  registration  be cancelled  ? The appellant suggests that the only  cases  in which   such  registration  can  be  cancelled   are   those prescribed in s. 23(4).  We have no doubt that this argument is  fallacious.  The cancellation of registration  under  s. 23(4)  is in the nature of a penalty and the penalty can  be imposed  against  a  firm  if it is guilty  of  any  of  the defaults  mentioned  in the said subsection.   It  would  be noticed that where registration is cancelled under s. 23(4), there is no doubt that the application for registration  had been properly granted.  The basis of an order under s. 23(4) is  not  that  the  firm which had  been  registered  was  a fictitious  one,  but that, though the registered  firm  was geniuine, by its failure to comply with the requirements  of law  it had incurred the penalty of having its  registration cancelled.   That  is  the effect of the  provisions  of  s. 23(4).  On the other hand, r. 6B deals with cases where  the Income-tax  Officer  is  satisfied  that  a  certificate  of registration  has  been granted under r. 4 or  under  r.  6A without there being a genuine firm in existence ; that is to gay  an  application for registration had been made  in  the name  of  a  firm which really did not exist;  and  on  that ground  the  Income-tax Officer proposes to  set  right  the matter by cancelling the certificate which should never have been granted to the 201 alleged  firm.   That being the effect of r. 6B  it  is  im- possible  to accede to the argument that the  provisions  of this  rule are inconsistent with the provisions of s.  23(4) of the Act.  If the Income-tax Officer is empowered under s. 26A  read  with the relevant rules to grant  or  refuse  the request  of the firm for registration, it would normally  be open to him to cancel such registration if he discovers that registration  had been erroneously granted to a  firm  which did  not  exist.   Rule 6B has been  made  to  clarify  this

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position and to confer on the Income-tax Officer in  express and specific terms such authority to review his own decision in  the matter of the registration of the firm when he  dis- covers  that  his  earlier decision  proceeded  on  a  wrong assumption about the existence of the firm.  In our opinion, there  is no difficulty in holding that r. 6B  is  obviously intended to carry out the purpose of the Act and since it is not  inconsistent with any of the provisions of the Act  its validity is not open to doubt. It is, however, urged that whereas the firm aggrieved by the order  passed by the Income-tax Officer under s.  23(4)  can challenge  the correctness or propriety of the order  in  an appeal  against the final assessment order passed  under  s. 23,   no  such  remedy  is  available  to  the  firm   whose registration is cancelled under r. 6B.  We are not impressed by  this argument.  The validity of the rule cannot, in  our opinion,  be challenged merely on the ground that no  appeal has  been  provided  against  the  order  passed  under  the impugned  rule.  It is also true that whereas before  taking action under s. 23(4) the Income-tax Officer is required  to issue a notice to the firm, no such provision is made  under r. 6B. Mr. Sastri has, however, conceded that the  appellant before us had notice and was given an opportunity to satisfy the  Income-tax  Officer  that  the  respective  firms  were genuine  and not fictitious.  Thai being so we do not  think that  it would be open to the appellant to contend that  the order  passed  against  him under r. 6B is  invalid  on  the purely  academic ground that r. 6 B does not require  notice to be issued before the registration of a firm is cancelled. If the power 26 202 under r. 6B is exercised by the Income-tax Officer against a firm  without giving it a notice in that behalf and  without affording  it an opportunity to satisfy the officer that  it is  a genuine firm, it may be open to the firm  to  question the validity of the order on that ground.  We are,  however, not  called  upon to deal with such a case  in  the  present appeals.   In this connection we may incidentally  refer  to the   decision  of  this  Court  in  Ravula  Subba  Rao   v. Commissioner of 1. T., Madras (1) where this Court has  held that  rules (2) and (6) of the rules framed under s.  59  of the  Indian  Income-tax Act are not ultra  vires  the  rule- making authority. The last argument which Mr. Sastri sought to raise before us was that the revised assessment is completely illogical, and therefore  illegal,  in each case inasmuch as  the  original assessment for the two assessment years still remains as  on the basis that the firms in question are registered and  the fresh  assessment in respect of the escaped income  for  the same years is made on the basis that the said firms are  not registered.   Mr.  Sastri says that it is not  open  to  the Income-tax Officer to adopt such a course.  If  registration has  been  cancelled the whole of the assessment  should  be made  on that footing; the department cannot treat the  firm as  registered for part of the income, and unregistered  for the  balance, during the same assessment years; that is  Mr. Sastri’s  grievance.   We do not propose to  deal  with  the merits  of this contention.  There can be no doubt  that  it would be open to the appellants to raise this contention  in the  appeals which they have filed against the fresh  orders of  assessment.  We understand that applications  have  been made  by  the appellants in respect of the  said  orders  of assessment  under  s.  27 of the Act.  If that  be  so,  the appellants  may, if it is open to them to do  so,  ventilate

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their grievance in the said proceedings also.  We hold  that this  contention cannot be urged in petitions for  writs  of prohibition  under Art. 226 of the Constitution, since  they do  not  raise any question of jurisdiction.  All  that  the appellants would be able to argue on this ground (1)  [1956] S.C.R. 577. 203 would  be that the course adopted by the Income-tax  Officer in  making  orders  of fresh  assessment  is  irregular  and illogical  and  should  be  corrected.   That  is  a  matter concerning the merits of the orders of assessment and by  no stretch of imagination can it be said to raise any  question of  jurisdiction under Art. 226.  That is why we express  no opinion’ on this point. Before we part with this case we would like to, observe that Mr.  Kripal  for  the  respondent  sought  to  raise   three preliminary  objections.  He urged that the issue of a  writ is  a  discretionary  matter and since the  High  Court  has refused  to  exercise  its  discretion  in  favour  of   the appellants  the  appeals  would  be  virtually   incompetent inasmuch  as this Court would be slow to interfere with  the exercise  of discretion by the High Court.  He  also  argued that   the  original  petitions  to  the  High   Court   are incompetent   under  Art.  226  since  under  the  Act   the appellants had an alternative effective remedy available  to them in the form of appeals against the impugned orders  and in  fact  they  had filed such appeals  and  had  also  made applications  under  s.  27 of the  Act.   Mr.  Kripal  also contended that the High Court would have no jurisdiction  to issue a writ of prohibition against the tax authorities.  We do  not propose to consider these objections because, as  we have already indicated, we are satisfied that the view taken by  the High Court on the points raised before it is  right. These  objections may have to be considered in future  on  a suitable occasion. The  result is the appeals fail and must be  dismissed  with costs. Appeals dismissed. 204