Basheshar Nath v. Commissioner of Income Tax, 1959 AIR 149

Author: Icchanshi Srivastava, Law Student at Mahatma Gandhi Kashi Vidhyapith, Varanasi.

Edited by: Peuli Chakraborty, Final Year Law Student, University of Burdwan, West Bengal.

ABSTRACT / HEADNOTE

Part 3 of the Constitution provides Fundamental Rights to citizens. The Indian Constitution does not provide any provisions for waiving fundamental rights because it guarantees and protects the rights of individuals. These rights were given for the enjoyment of or to safeguard the individual. The U.S. Constitution has this doctrine of waiver.

In this case, the appellant approached the Supreme Court by way of a special leave petition under Article 13 of the constitution because the settlement under Section 8A of the Taxation of Income [Commission and Investigation] Act, 1947, between the Commissioner of Income-Tax [the respondent] and Basheshar Nath [the appellant] was invalid. After all, the Supreme Court in the case of Muthiah v. Commission of Income Tax, 1955, held that Section 5(1) of the Taxation of Income was an infringement of Article14 The Commissioner of Income Tax contended that Basheshar has already waived off his fundamental rights; now he has no right to sue us.

The Supreme Court held in the Basheshar Nath case that fundamental rights are mandatory rights and no citizen can relinquish his rights even through settlement. The Constitution doesn’t provide any provision for waivers of fundamental rights. Article 13 of the Constitution has judicial review power. This Article declares any law or provision void that is an infringement of fundamental rights, and the doctrine of waiver is also declared void under Article 13.

Keywords: Fundamental Rights, Supreme Court, Doctrine Of waiver, Article 14, Commissioner Of Income Tax.

CASE DETAILS

INTRODUCTION AND BACKGROUND OF JUDGEMENT

The doctrine of waiver means voluntary relinquishment of rights. These rights can be granted by the constitution or by any statute; the rights provided by the statute can be relinquished, but the rights provided by the Constitution of India cannot be relinquished in any circumstances because these fundamental rights are not merely for an individual benefit but as a matter of public policy. Rights that are part of public policy cannot be waived.

However, the U.S.A. supports this doctrine of waiver, but the Constitution of India doesn’t support this doctrine, even though the Indian Constitution borrowed the concept of fundamental rights from the U.S.A.

In the recent case of BashesherNath v. C.I.T., the petitioner escaped the income tax.

The Central Government ordered the Commissioner of Income Tax Authorities to examine the account of the petitioner under Section 5(1) of the Income Tax Act. After examining the account of the petitioner, the petitioner was found guilty of tax evasion the Commissioner of Income Tax made a settlement under Section 8A with the petitioner, and in the settlement agreement, the Commissioner of Income Tax authority made the petitioner write that he would not sue the Government of India and the Commission of Income Tax.

The question arose as to whether the petitioner waived his right and whether Section 5(1) violated Article 14.

The Supreme Court in this case held that no individual can waive his right.

FACTS OF THE CASE

The fact of the case was that the appellant (Basheshar) had escaped from income tax liability. When the Commission of Income Tax Authorities got to know about his evasion of tax, the central government ordered the income tax authorities under Section 5 of the Taxation of Income Act to establish a commission for examining or investigating the accounts of Besheshar (the appellant).

After examining the accounts of the appellant, they submitted the report to the Central Government, and the income tax authorities found that Bashesher concealed his income from paying tax. At the direction of the Central Government of India, the Commission of Income Tax made a settlement agreement under 8A of the Act. Then Basheshar agreed to make the settlement with the commission of income tax on May 19, 1954, and the appellant agreed to pay his income tax by way of penalties in an instalment of Rs. 5,000. The authorities also attached the B properties. They also made a settlement that, in the future, he would not sue the Government of India or the Commission of Income Tax.

Bashesher agreed to settle these conditions with the Commission of Income Tax.

Later in 1955, the Supreme Court, in the case of Muthiah v. Commission of Income Tax, declared Section 5(1) of the Act, which is an ultraviolet of Article 14 of the Constitution. On this basis, the appellant challenged the validity of the settlement made under Section 8A of the Income Tax Act and claimed they should release his property from attachment and refund his money. The Commission of Income Tax denied the appellant’s claim and held that the settlement was valid.

After the decision of the Commissioner of Income Tax, the appellant approached the Supreme Court by special leave under Article 136 of the Constitution and challenged the decision of the Commissioner of Income Tax.The respondent [the Commission of Income Tax] contended that the appellant has waived his right to sue against the Central Government and the Commissioner of Income Tax in the settlement agreement.

 LEGAL ISSUES RAISED

• Can an individual waive his fundamental rights?
• Whether a settlement made under Section 8 is valid or not?
• Whether Section 5 of the Act on Ultraviolent Article 14?

PETITIONER/ APPELLANT’S ARGUMENTS

1. The Commissioner of Income Tax has violated the appellant’s rights by attaching his property and making payment of taxes in instalments through settlement under Section 8 because Section 5(1) was declared void in the case of Muthiah V Commissioner of Income Tax.
2. The appellant claimed that his attached property must be released and the payment he made must be refunded to him.
3. Seizing the rights of someone through settlement is not valid, even though it was made by the order of the Indian government.

RESPONDENT’S ARGUMENTS

1. The income tax officer is allowed under sec 5 of the Act to review the records and accounts of the assessee, and it is not a violation of Art. 14 of the appellant.
2. Attaching the property and the instalment payment of taxes are not invalid because Section 8A renders authority for the settlement.
3. During the settlement agreement, the appellant himself waived his right.

RELATED LEGAL PROVISIONS

1. 1. “Section 5(1) and Section 8A of the Taxation of Income [Investigation and Commission] Act, 1947”.
   2. “Article 14 and Article 136 of the Constitution”.

JUDGEMENT

The court held that Article 14 cannot be waived off because rights are a matter of public policy to ensure equality and a large majority of people in India are economically poor and educationally backward. They are not aware of their rights; it is the duty of the judiciary to protect their rights against themselves. Although Article 13 of the Constitution declares a law void if it is an infringement of fundamental rights, Other honourable judges stated fundamental rights can be waived if it is for his benefit.

Now that it is an established law that an individual cannot waive off any of his fundamental rights, the court has applied this law in many other cases. such as, in the case of Yousuf Ali v. M.S. Kasbekar, AIR 1982, along with in Nar Singh Pal v. Union of India AIR 2000.

CONCLUSION & COMMENTS

Fundamental rights cannot be waived off in any condition unless and until individuals waive their rights if it is in their interest, and we should also appreciate that our constitution has no such provision for the waiver of fundamental mental rights.

REFERENCES

• https://indiankanoon.org/doc/761967/
• https://www.drishtijudiciary.com/landmark-judgement/constitution-of-india/basheshar-nath-v-cit-air-1959-sc-149
• https://indiankanoon.org/doc/1058205/
• https://indiankanoon.org/doc/1916825/