Basheshar Vs I.T Commissioner


Basheshar Vs I.T Commissioner

Basheshar Vs I.T Commissioner



The Commission received the complaint on 22nd July 1948, alleging substantial evasion of taxation on income by the assessee. It was alleged the assessee supplied tents, executed contract works, acted as a commission agent for textile mills on a fairly extensive scale, and did business on an individual basis as well as in partnership with his brother.

On 19th May 1954, the Tax Commission stated that the income, profits, and gains that had escaped assessment in the hands of the assessee for the period beginning on 1st April 1939, On 31st March 1947, the assessee paid Rs. 4,47,915, that the Commission also held that the assessee should accept the finding that was granted for the benefit of a settlement on the concessional basis of 75% and should pay a small penalty of Rs. 14,064. The assessee had no option but to make the best of the bad situation by requesting a settlement under section 8A, offering to pay Rs. 3,50,000 in tax and penalty as a settlement. In a report made to the Central Government under section 8A (1) dated 24 May 1954, the Commission stated that the terms of settlement in the application might be approved. The proposal was accepted by the Central Government. The assessee was also allowed to pay in monthly installments of Rs. 5,000.

Beginning with the case of Suraj Mall Mohta and Co. v. A.V. In Visvanatha Sastri , the Court stated that section 34 and section 5 (4) of the Investigation Act both dealt with persons who had not disclosed their income and had avoided paying tax on that income, but as the procedure prescribed by Investigation Act was reasonably more unjust than the procedure under Indian Income Tax Act, 1922. While Section 5(4) of the Investigation Act affects those who are dealt with under that sub-section, it is a piece of unfair legislation that violates Article 14 of the Constitution and is therefore void and unenforceable. As a result, many applications were made under Article 32 of the Constitution, and the Court, in Shree Meenakshi Mills Ltd. v. Sri A.V. Visvanatha Sastri 2, held that section 34 of the Income Tax Act, as amended by the Indian Income Tax Amendment Act, 1954, regulated on the similar fields, and hence, section 5(1) had become void and unenforceable as the procedure applied to persons dealt with there under became unfair.

Accordingly, in CT. Muthiah v. The Commissioner of Income Tax, Madras the court held that section 5(1) of the Act was ultra vires the Constitution, as it is unfair and violates the fundamental rights guaranteed by Article 14 of the Constitution While that person, who fell under the same category of substantial avoiders of taxes, was subjected to different procedures, and the normal procedure afforded the assesses rights which were withheld from those who were treated specifically under the Investigation Act, therefore, the appraisals made under section 8(2) were void and unenforceable.


Under Section 5(1) of the Act, the Central Government forwarded the appellant’s case to the Investigation Commission on July 22, 1948, for review and report. Under Section 6 of the Act, the Commission gave the designated official instructions to examine the appellant’s financial documents. Under Section 5(1) of the Act, the Central Government forwarded the appellant’s case to the Investigation Commission on July 22, 1948, for review and report. Under Section 6 of the Act, the Commission gave the designated official instructions to examine the appellant’s financial documents.

After that, the appellant applied to the Commission on May 20, 1954, under Section 8A of the Act, for a settlement of his case, promising to pay Rs. 3,50,000 in reduced-rate tax and penalties. The Commission recorded the settlement after notifying the Central Government that it had been approved and accepted by them.

In a response to the appellant dated January 29, 1958, the Commissioner of Income Tax stated that the settlement was authentic and that the appellant was obliged to pay the outstanding amounts. The Commissioner further requested that the appellant make these payments going forward. The appellant petitioned the Supreme Court by special leave in order to contest this Commissioner of Income Tax decision.


1. Whether the decision made under section 8A of the Taxation on Income (Investigation Commission) Act, 1947is valid?

2. Can a constitutionally guaranteed fundamental right be waived?



  • The 24 May 1954 Investigation Commission report has been quashed.
  • Upon reviewing the report and directives provided by the Central Government, the settlement was made in compliance, and the proceedings for the recovery of tax liabilities shall be quashed, and the tax amounts already recovered should be refunded.
  • In light of section 5(1) of the Investigation Act, which has already been declared unconstitutional, the settlement under section 8A cannot be enforced, for the foundation of the proceedings under section 8A was the reference under section 5(1) and the very foundation for the investigation commission’s report has been removed, so the settlement cannot be considered valid or enforced.


  • None of the decisions held in section 5(1) are wholly void and inoperable.
  • The Investigation Act is a pre-Constitutional Act and before the Constitution, when there was no such thing as a fundamental right, its provisions could not be questioned no matter how discriminatory the procedure was. With the Constitution, the government can lay down a coercive procedure for the assessee through the Investigation Act, which was proposed voluntarily and accepted by the central government on the recommendation of the commission. 
  • If a fundamental right had been violated by subjecting him to a discriminatory investigation process as outlined in the Investigation Act, then the assessee could voluntarily enter into the settlement agreement.


According to Justice Sudhi Ranjan Das, the language of Article 14 is a directive from the Constitution to the State to carry out its purpose by maintaining equality, as any welfare state, like India, is obliged to accomplish. No one can stop the State from fulfilling its commitment. A person or citizen may or may not waive their fundamental rights, and they are not permitted to waive a violation of those rights that the State tacitly recognizes as its constitutionally mandated obligation. The Indian Constitution’s Article 13 offers a special process for declaring laws unconstitutional.

Justice SK Das dissented with Justice Subba Rao’s ruling, maintaining that fundamental rights could be suspended until a test to ascertain if the decision is being made for the public good or the individual’s advantage. Along with other judges, Justice Subba Rao concurred that fundamental rights cannot be compromised.

It is thought that the fundamental rights guaranteed by our Constitution do not fall under the category of waiver for the reasons listed above. November 19, 1958: Basheshar Nath filed a lawsuit. The Commissioner in question. The appellation is acknowledged. The order of the Income Tax Commissioner, Delhi, dated January 29, 1958, is annulled, and all ongoing measures for carrying out the instruction of the Union Government dated July 5, 1954 are reversed. The costs of this appeal will go to  the proceedings. 

Whether an application is denied for admission or for any other reason, the court’s decision is final and the only way it can be reopened is in accordance with the law. In a cage like this, the doctrine of waiver has no room to be applied.


The doctrine of waiver is based primarily on the principle that a right or statutory provision that is for the welfare of a person can be waived. For whose benefit has this right been primarily granted-for the general public or for individuals?

In Part III of the Constitution, certain rights are granted for the benefit of the general public. As an example, Article 23 prohibits traffic in human beings, etc.; and Article 24 states that no child under the age of 14 shall work as a hazardous occupation. As a result, many of these rights are not primarily for the benefit of an individual, but rather for the benefit of the general public

No fundamental right can ever be forgiven. A person who has deferred that insurance in any circumstance may not a short time later raise the issue that the specific constitutional rights have been encroached in that circumstance as well as anything injury he might endure is because of his own demonstration. As per the Constitution, the State is forbidden from making any regulation which removes the privileges as stated in Part III of the Constitution. Thus, the State isn’t relied upon to force any right which is going against to the constitutional prohibition on the explanation that the party waived his fundamental right.

majority individuals of India are monetarily poor, instructively in reverse and politically because of which they are unaware of their rights. In such a circumstance, it is the obligation of the court to protect their privileges. Thus, it was held that the fundamental rights set up by the Constitution are otherworldly in nature and established public interest, and consequently can’t be waived. In the current case, Justice Das and Kapur were of the assessment that Article 14 can’t be waived while Justice Subba Rao and Bhagwati had another view that no fundamental right can be waived and the minority contradicting perspective on S.K. Das expressed that main the right which was for the singular advantage of an individual can.


After these decisions, the position was evident that a fundamental right can’t be waived. This judgment has been cited and maintained incalculable times by different courts in the Country. As indicated by the case of Justice KS Puttaswamy V. Association of India, Right to Privacy was held to be a fundamental right, while on account of Basheshar Nath and Behram Singh it was seen that the Right to Privacy incorporates that there can be a waiver in understanding to the Right to Privacy. Fundamental rights actually can’t be waived except if the entire judgment by the Apex Court is overruled.


The Indian Supreme Court has always maintained admirable opinions regarding the defense of citizens’ rights.Particularly in a society like India where widespread discrimination has been practiced on the basis of caste, creed, religion, color, and other factors, it is imperative that the Supreme Court uphold and defend the constitutionally granted rights of citizens. Similar to that, the Supreme Court in this instance dutifully carried out its honorable duty by denying the disputed waiver of fundamental rights. Permitting the waiver of these rights will undermine the fundamental goals that the Indian Constitution is based upon.

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