Full Judgment Text
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PETITIONER:
RAI BAHADUR SETH TEOMAL
Vs.
RESPONDENT:
THE COMMISSIONER OF INCOME TAX ANDTHE COMMISSIONER OF EXCES
DATE OF JUDGMENT:
02/03/1959
BENCH:
KAPUR, J.L.
BENCH:
KAPUR, J.L.
SINHA, BHUVNESHWAR P.
HIDAYATULLAH, M.
CITATION:
1959 AIR 742 1959 SCR Supl. (2) 301
ACT:
Income Tax-Place of Assessment-Transfer of assessee’s case
to a different Commissioner of Income-tax-Assessment by
Income-tax Officer-jurisdiction-Indian Income-tax Act, 1922
(XI Of 1922), ss. 5, 64.
HEADNOTE:
The appellant was carrying on the business of a railway
contractor in a place in the district of R. In April 1943,
the Income-tax Officer of R which was under the charge of
the Commissioner of Income-tax, Bengal (Mufassil), served a
notice under S. 22(2) of the Indian Income-tax Act, 1922, on
the appellant who in pursuance of the notice filed the
return on February 28, 1944. The Income-tax Officer then
served notices on him under SS. 22(4) and 23(2) Of the Act
for the production of books, etc., but before the final
assessment was made, the Central Board of Revenue by an
order passed under S. 5(2) of the Act, transferred the
appellant’s case along with some other assessment cases, to
the Commissioner of Income-tax (Central), Calcutta. On
February 11, 1948, the Income-tax Officer, Calcutta, to whom
the appellant’s case was assigned, issued notices again
under SS. 22(4) and 23(2) of the Act and after making the
usual enquiries made the assessment order on March 15, 1948.
The appellant’s appeals to the Appellate Assistant
Commissioner and then to the Appellate Tribunal raising
objections to the legality of the transfer of his case to
Calcutta and to the jurisdiction of the Income-tax Officer,
Calcutta, were dismissed. The Appellate Tribunal held that
as the objection related to the place of assessment it was
not competent for the Tribunal to go into that question.
The appellant then made an application to the Commissioner
of Income-tax for reference under S. 66(1) of the Act, but
this was dismissed on the ground that the assessee never
raised any objection before the Income-tax Officer to his
jurisdiction and that, in any case, the question of
jurisdiction could not arise out of the order of the
Tribunal. An application filed by the appellant to the High
Court under S. 66(2) of the Act was dismissed and though the
order of dismissal was not taken up on appeal, the appellant
filed an appeal to the Supreme Court against the order of
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the Appellate Tribunal. It was contended for the appellant
that under S. 64(1) and (2) of the Act he was entitled to be
assessed by the Income-tax Officer of the area within which
the place of his business was situate, that the
302
assessment by the Income-tax Officer of Calcutta was illegal
assumption of jurisdiction and that, in any case, the order
of transfer by the Central Board of Revenue under S. 5(2) of
the Act was not valid because, if it wanted to transfer the
assessment proceedings from the file of one Income-tax
Officer to another it could be done only under S. 5(7A) and
not under S. 5(2).
Held : (1) Sub-section (7A) of S. 5 which confers on the
Central Board of Revenue the power to transfer any case from
one Income-tax Officer to another is not a provision which
in any way modifies or cuts down the power given to the
Central Board of Revenue under sub-S. 2 of S. 5 which
enables it to specify as to which of the Commissioners would
perform functions in respect of different areas, persons,
incomes or cases or classes thereof. The two sub-sections
are complementary and operate in two separate spheres.
Pannalal Binjraj v. Union of India, [1957] S.C.R. 233 and
Bidi Supply Co. v. Union of India, [1956] S.C.R. 267,
distinguished.
In the present case, the Central Board of Revenue directed
the Commissioner of Income-tax (Central), Calcutta, to
exercise his functions in respect of certain cases including
the case of the appellant and that fell under S. 5(2) and
not under S. 5(7A). The order of transfer was, therefore,
valid.
(2)The jurisdiction of the Income-tax Officer, Calcutta,
to make the assessment on the appellant cannot be
challenged, in view of sub-s. 5(a) of S. 64 of the Act,
under which sub-ss. (1) and (2) of S. 64 have no application
to an assessee in respect of whom anorder has been made
by the Central Board of Revenue under S.5(2) of the Act.
(3) Objections as to the place of assessment cannot be
raised in appeal either before the Appellate Assistant
Commissioner or before the Appellate Tribunal.
Wallace Brothers & Co. Ltd. v. Commissioner of Income-tax,
Bombay, Sind and Baluchistan, [1945] F. C. R. 65 and Seth
Kanhaiyalal v. Commissioner of Income-tax, [1936] 5 I.T.R.
739, relied on.
Dayaldas Kushiram v. Commissioner of Income-tax (Central),
[1939] 8 I.T.R. 139 and Dina Nath Hem Raj v. Commissioner of
Income-tax, (1927) I.L.R. 49 All. 616, distinguished.
Consequently, as the question as to the place of assessment
could not arise out of the order of the Appellate Tribunal
no such question of law could be referred to the High Court.
JUDGMENT:
CIVIl APPELLATE JURISDICTION: Civil Appeals Nos. 384 and 385
of 1957.
Appeal by special leave from the Order dated November 28,
1952, of the Income-tax Appellate
303
Tribunal (Calcutta Bench) in I.T.A. No. 4067 and E.P.T.
Appeal No. 391 of 1951-52.
N. C. Chatterjee, B. Sen Gupta and B. P. Maheshwari, for
the appellant.
K. N. Rajagopala Sastri, R. H. Dhebar and D. Gupta, for
the respondents.
1959. March 2. The Judgment of the Court was delivered by
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KAPUR, J.-These two appeals pursuant to special leave are
brought against two orders of the Incometax Appellate
Tribunal (Calcutta Bench) dated November 28, 1952, passed in
appeal No. 1. T. A. 4067 of 1951-52 in respect of income-tax
assessment for the assessment year ending 31st March, 1944,
and in appeal No. E. P. T. A. 391 of 1951-52 in respect of
Excess Profits tax assessment of the appellant for the
chargeable accounting period ending March 31, 1943. The
original assessee was R. B. Seth Teomal who was the manager
of a Hindu undivided family. On Seth Teomal’s death on May
30, 1944, Seth Ottanmal became the manager. He is now the
appellant representing the Hindu undivided family. He will
be termed as the appellant in these appeals. Seth Teomal
was carrying on the businesss of a railway contractor at
Lalmonirhat in the district of Rangpur which is now in
Pakistan. In April 1943 a notice was served on him under s.
22(2) of the Income-tax Act (hereinafter called the Act).
He filed the return on February 28, 1944. The Income-tax
Officer,Rangpur, served notices on him under ss. 22(4) and
23(2) for production of books, etc. It appears that
assessment proceedings continued before the Income-tax
Officer Rangpur, but no final assessment was made.
According to an affidavit which has now been filed in this
Court the Central Board of Revenue by an order passed under
sub-s. (2) of s. 5 of the Act assigned the appellant’s case
along with some other assessment cases to the Commissioner
of Income-tax (Central), Calcutta. The order contains the
following endorsements which give an indication of the
reason for the case being assigned to the Commissioner of
Income. tax (Central):
304
" Copy forwarded to
(1).........................................................
(2) Commissioner of Income-tax (Central), Calcutta. These
cases are reported to have E. P. T. liabilities ".
Thus the appellant’s case which was before an incometax
Officer within the area in charge of the Commissioner of
Income-tax, Bengal (Mofissil) was withdrawn from him and was
assigned to the Commissioner of Income-tax (Central),
Calcutta. On February 11, 1948, the Income-tax Officer
District N-C (I. T. cum E.P.T.) to whom it appears the
appellant’s assessment case was assigned issued notice again
under ss. 22(4) and 23(2) of the Act. That officer after
making the usual enquiries made the assessment order on
March 15, 1948. The order for Excess Profits Tax assessment
was made on March 30,1948.
Against these orders two appeals were taken to the Appellate
Assistant Commissioner on April 30, 1948. In the appeal
against income-tax assessment the appellant inter alia
raised the following two grounds in regard to the
jurisdiction of the Income-tax Officer, Calcutta:
" 5. For that the petitioner is not aware of any order
passed for the transfer of the case from Rangpur to Calcutta
and it is submitted that without such an order and
communication of such order the assessment is challengeable
for want of jurisdiction ".
" 32. For that the appellants challenge the jurisdiction as
there was no proper order of transfer and the business was
carried on outside Calcutta and assessments had never before
been made in Calcutta". But no such ground was taken in the
appeal against Excess Profits Tax assessment. The Appellate
Assistant Commissioner dismissed both these appeals. In
regard to jurisdiction he held:-
" It however appears from records on band that the principal
place of business of the concern was at Rangpur and as the
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income attracted E. P. T. liability the case was transferred
to Calcutta under Orders of C. B. R. Hence there is no
substance in the contention of the learned Advocate which
fails
305
The appellant then took two appeals to the Incometax
Appellate Tribunal. In the appeal against incometax
assessment he took two objections in regard to jurisdiction
:
" For that the objection taken before the learned A. A. C.
on jurisdiction should not have been summarily disposed of
by passing reference to an order of transfer of the case
from Rangpur to Calcutta without at the same time discussing
when the question of jurisdiction was seriously raised and
how and under what circumstances and to, whom was the case
transferred and for what purpose
" 2. For that the appellant begs leave to repeat that
transfer was not legal or proper and was not made by any
proper authority to legalise such transfer ".
In the Excess Profits Tax appeal also this time an objection
was taken as to jurisdiction :
" For that the assessment is bad in law having been made
without jurisdiction ".
The Appellate Tribunal held against the appellant in a short
paragraph:
" So far as the first objection is concerned, in our
opinion, it is not within our jurisdiction to go into this
matter. The objection relates to the place of assessment.
As held in 1945 T. T. R. 39 (Wallace Brothers, & Co. Ltd v.
Commissioner of Income-tax, Bombay, Sind and Baluchistan,
Federal Court) the question as to the proper place of
assessment is not one for adjudication by a Court or by any
Appellate Authority. Consequently we overrule the first
contention of the Assessee."
The Tribunal thus held that as the objection related to the
place of assessment the Tribunal was not competent to go
into that question. Upon this the appellant applied for a
reference to be made under s. 66(1) of the Act and prayed
for five questions to be referred. The two questions
relating to jurisdiction were:-
(1)" Had the Income-tax Officer (Non-Companies Income-tax
cum Excess Profits Tax’ District, Calcutta, jurisdiction to
make the assessment ?
39
306
(2)Was the Income-tax Appellate Tribunal correct in the
circumstances in holding that it has no jurisdiction to
determine the competence of the Income-tax Officer in making
the assessment ?"
In the " facts of the case " attached to the grounds of
Appeal it was stated that the accounts were produced before
the Income-tax Officer, Calcutta, under protest because the
jurisdiction of that officer was being challenged. In reply
to this the Commissioner after referring to Wallace
Brothers’ case (1) stated that it did not appear from the
assessment record that the assessee ever raised any
objection to the jurisdiction of the Income-tax Officer and
if it had been taken the matter would have been referred by
the Income-tax Officer to the Commissioner as required by
law. This- application under s. 66(1) was dismissed on the
ground that the question of jurisdiction could not arise out
of the order of Tribunal and reliance was placed on Wallace
Brothers’ case (1) and Seth Kanhaiyalal v. Commissioner of
Income-tax (2 ). The appellant applied to the High Court
under s. 66 (2) of the Act and prayed for the following two
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questions and some others to be referred :-
(i)" Had the Income-tax Officer (N. C. 1. T. Cum E. P. T.
District Calcutta) jurisdiction to make the assessment ?
(ii)Was the Income-tax Appellate Tribunal correct in the
circumstances in holding that it had no jurisdiction to
determine the competence of the Income-tax Officer in making
the assessment?"
The High Court dismissed this application on July 23, 1954.
No appeal has been filed in this Court against the order of
the High Court but an appeal has been filed against the
order passed by the Income-tax Appellate Tribunal.
On behalf of the Revenue a preliminary objection was taken
that as no appeal had been filed against the order of the
High Court that order had become final and this Court,
therefore, should not entertain the appeal against the order
of the Tribunal and reliance was placed on the observations
of Venkatarama
(1) [1945] F.C.R. 65; 13 I.T.R. 39.
(2) [1936] 5 I.T.R. 739.
307
Aiyar, J., in Govinda Rajulu Mudaliar v. Commissioner of
Income-tax (1). At p. 810 it was observed:
" The present appeal is against the decision of the Tribunal
itself It is no doubt true that this Court has decided in
Dhakeswari Cotton Mills Ltd. v. Commissioner of Income-tax,
West Bengal (2) that an appeal lies under article 136 of the
Constitution of India to this court against a decision of
the Appellate Tribunal under the Indian Income-tax Act. But
seeing that in this case the appellant had moved the High
Court and a decision has been pronounced adverse to him and
this has become final, obviously it would not be open to him
to question the correctness of the decision of the Tribunal
on grounds which might have been taken in an appeal against
the judgment of the High Court. All the points urged before
us were taken in the reference under s. 66 (2) of the Indian
Income-tax Act. It would therefore follow that these
grounds are not open to the appellant".
But counsel for the appellant relied on Dhakeswari Cotton
Mills Ltd. v. Commissioner of Income-tax (2) where the scope
of appeals under Art. 136 were set out by the learned Chief
Justice. In this case however it is not necessary to go
into this question because in our opinion there is little
substance in the appeal itself.
Counsel for the appellant has urged two grounds in support
of his appeal: (1) that his place of business was
Lalmonirhat and under s. 64 (1) and (2) of the Act he was
entitled to be assessed by the Income-tax Officer of that
area and (2) that assessment by the Income-tax Officer of
Calcutta was an illegal assumption of jurisdiction and
therefore he was entitled to have the order of assessment
quashed. In order to decide these questions reference has
to be made to the scheme. of the Act. The provisions
relevant to the issue of jurisdiction are ss. 5 and 64. The
former is headed " Income-tax authorities " and the latter "
Place of assessment ". Assessment is made by the Income-tax
Officer under s. 23 (3). Against an order of assessment or
the liability to be assessed an appeal
(1) [1958] 34 I.T.R. 807, 810.
(2) [1955] 1 S.C.R. 941, 949.
308
lies under s. 30 to the Appellate Assistant Commissioner and
a further appeal to Income-tax Appellate Tribunal under s.
33 of the Act. And then a reference can be made by the
Tribunal to the High Court under s. 66 (1) of the Act and if
the Tribunal does not make such reference the High Court can
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under s. 66 (2) be moved and it can then direct that such
reference be made.
The heading of s. 64 is " Place of assessment ". Sub-section
(1) of s. 64 provides that the assessee shall be assessed by
the Income-tax Officer of the area in which he carries on
his business. Sub-section (2) lays down that in all other
cases an assessee shall be assessed by the Income-tax
Officer of the area in which he resides. Under these two
sub-sections therefore the appellant, because he was
carrying on business at Lalmonirhat, had to be assessed by
the Income-tax Officer of that area, i.e., by the Income-tax
Officer of Rangpur. Sub-section (3) of that section
provides that if a question as to the place of assessment
arises, it is to be determined by the Commissioner of
Income-tax or by Central Board of Revenue according as the
case may be. Under the first proviso to this sub-section
before the question as to the place of assessment is
determined the assessee has to have an opportunity of
representing his views and under the second proviso the
place of assessment cannot be called into question by the
assessee if he has made a return in response to the notice
under sub-s. (1) of s. 22 and has stated therein the
principal place where he carries on his business or if he
has not made such a return, the time specified in the notice
has expired. The third proviso to this subsection is:
" Provided further that if the place of assessment -is
called in question by an assessee the Income Tax Officer
shall, if Dot satisfied with the correctness of the claim,
refer the matter for determination under this sub-section
before assessment is made ".
Thus under s. 64(3) the question of determination as to the
place of assessment only arises if an objection is taken by
the assessee and the Income Tax Officer has any doubts as to
the matter. But the determination
309
is to be by the Commissioner of Income Tax or the Central
Board of Revenue. The Act does not ’contemplate any other
authority.
It was contended on behalf of the assessee that he produced
his accounts before the Income Tax Officer at Calcutta under
protest. There is no mention of this protest in the
assessment file and that is what was stated by the
Commissioner of Income Tax in his reply which he gave on
March 3, 1953, before the Income-tax Appellate Tribunal and
which has been set out above. If such an objection had been
raised the question would have been referred by the Income-
tax Officer to the Commissioner as required under s. 64(3).
That stage never arose because the objection does not seem
to have been taken at the stage when it should have been
taken, i.e., before the Income-tax Officer, Calcutta.
But it is contended by counsel for the appellant that in the
present case there is an illegal assumption of jurisdiction
as the officer who made the assessment had no jurisdiction
at all to make the assessment. It was also contended that
if the Central Board of Revenue wanted to transfer the
assessment proceedings from the Income-tax Officer, Rangpur,
to the Income-tax Officer at Calcutta, it could only
exercise that jurisdiction by making an order under s. 5(7A)
and not under s. 5(2) of the Act. He relied on Taylor v.
Taylor (1) where it was held that if a mode of exercise of
power is laid down in the statute it has to be exercised in
that way and no other. He also relied on Nazir Ahmad v. The
King Emperor (2). He further contended that this was not a
case which fell under s. 5(2) of the Act. Section 5(7A)
gives to the Central Board of Revenue the power to transfer
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any case from one Income-tax Officer to another which can be
mad6 at any stage of the proceedings and does not
necessitate the reissuing of a notice under s. 22(2) if it
had already been issued by the Income-tax Officer from whom
the case is transferred and in the explanation- the word ’
case’ in relation to any person whose name is specified in
the order of transfer means
(1) (1875) 1 Ch. D. 426, 431
(2) (1936) L.R. 63 I.A. 372.
310
all proceedings under the Act which may be pending on the
date of the transfer and includes all proceedings which may
be commenced after the date of the transfer.
Section 5 although headed I Income-tax authorities’ also
gives to the Central Board of Revenue and the Commissioners
of Income-tax certain powers in regard to withdrawing of
cases from one area into other and from one Income-tax
Officer to another. Sub-section (2) of this section gives
power to the Central Government to appoint as many Commis-
sioner’s of Income-tax as it thinks fit and they have to
perform their functions in respect of different areas,
persons and bases or classes thereof. The relevant portion
of the sub-section is as follows:-
S.5(2) " The Central Government may appoint as many
Commissioners of Income-tax as it thinks fit and they shall
perform their functions in respect of such areas or of such
persons or classes of persons or of such incomes or classes
of incomes or of such cases or classes of cases as the
Central Board of Revenue may direct................."
In the present case there are more than one Commissioner of
Income-tax in Bengal and the Central Board of Revenue
assigned certain cases including the case of the appellant
to the Commissioner of Income-tax (Central) at Calcutta for
the exercise of his functions as Commissioner. Now this is
a power which the Central Board of Revenue did possess under
sub-s. (2) of s. 5. As to which Income-tax Officer was to
deal with that case was for the Commissioner of Incometax to
designate.
Sub-section 7A of s. 5 confers on the Central Board of
Revenue the power to transfer any case from one Income-tax
Officer to the other which can be done at any state of the
proceedings. This sub-section is not a provision which in
any way modifies or cuts down the power given to the Central
Board of Revenue under s. 5(2). The two sub-sections are
complementary and operate in two separate spheres. Sub-
section (2) is for the purpose of specifying as to which of
the Commissioners would perform functions in respect of
311
different areas, persons, incomes or cases or classes
thereof.
It was argued that s. 7A is a special provision and it
necessarily excludes the operation of sub-s. (2) but as we
have said above the two sections are not mutually exclusive.
They operate in two different spheres, their areas of
operation are different and therefore the power which the
Central Board of Revenue exercised in the present case
cannot be said to be illegal . It was not transferring the
appellant’s case from the Income-tax Officer, Rangpur, to
the Income-tax Officer, Calcutta. It directed the
Commissioner of Incometax (Central), Calcutta, to exercise
his functions in respect of certain cases including the case
of the appellant and that falls under s. 5(2) and not under
s. 5(7A).
Reference was made to Pannalal Binjraj v. Union of India
(1). But that was a case in which the question raised was
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of constitutional validity of sub-s. 7A of s. 5 and it was
held that it was a measure of administrative convenience and
was valid and neither infringed the fundamental rights under
Art. 14 nor under Art. 19(1)(g). There are no observations
in that case which militate against the view that sub ss.
(2) & (7A) operate in different areas nor did that question
arise in that case. The contention there raised was that
sub-s. 7A conferred arbitrary and uncontrolled powers of
transfer and was discriminatory and violative of the
provisions of Art. 14 and imposed an unreasonable
restriction on the right to carry on trade or business in
contravention of Art. 19 (1)(g). Counsel referred to Bidi
Supply Co. v. Union of India (2) But that case also does not
deal, with the matter now before us. The simple question to
be decided is whether the Income-tax Officer, Calcutta,
could make the assessment in the appellant’s case. The
submission that there was illegal assumption of jurisdiction
by the Income-tax Officer of Calcutta is not well-founded.
If the Central Board of Revenue had the power to direct the
Commissioner of Incometax (Central), Calcutta, to exercise
his functions in
(1) [1957] S.C.R. 233, 266.
(2) [1956] S.C.R. 267.
312
respect of several cases including the appellant’s mentioned
in the order dated November 29, 1946, as indeed it had under
s. 5(2), then neither that order could be challenged nor the
power of the Income-tax Officer, Calcutta, to make the
assessment. After an order by the Central Board of Revenue
under s. 5(2) of the Act the provisions of sub-ss. (1) and
(2) of s. 64 have no application because of sub-s. (5a) of
s. 64 which is as follows :
Sub-s. 5 " The provisions of sub-section (1) and subsection
(2) shall not apply and shall be deemed never at any time to
have applied to any assessee-
(a)on whom an assessment or reassessment for the purposes
of this Act has been, is being or is to be made in the
course of any case in respect of which a Commissioner of
Income-tax appointed without reference to area under sub-
section (2) of section 5 is exercising the functions of a
Commissioner of Income-tax".
In view of this provision no objection can be taken on the
ground of sub-sections (1) and (2) of s. 64.
Counsel for the appellant relied on a judgment of the Bombay
High Court in Dayaldas Kushiram v. Commissioner of Income-
tax (Central) (1), where it was held that s. 64 was intended
to ensure that as far as practicable the assessee should be
assessed locally, i. e., by the Income-tax Officer of the
area in which the assessee carries on business and there
must, so far as the exigencies of the case allow, be some
reasonable relation to the place where the assessee carries
on business or resides. In that case the assessee was
carrying on business in C Ward and the proper officer -under
s. 64 to assess him was the Income-tax Officer of that Ward.
As a result of the coming into force of s. 5(2) the
Commissioner of Income-tax (Central) was created without
reference to the area. The case of the assessee on whom the
notice had been served but had not been assessed in due
course assigned to the Commissioner of Income-tax (Central)
who designated an Income-tax Officer for assessment of the
assessee. The assessee thereupon made an application under
s. 45 of
(1)[1939] 8 I.T.R. 139.
313
the Specific Relief Act and prayed for direction to the
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Commissioner of Income-tax (Central) and the Incometax
Officer to whom his case had been assigned to forbear from
continuing the proceedings on the grounds that the Income-
tax Officer had no jurisdiction having regard to s. 64 of
the Act. It was held that the Income-tax Officer was not
the Income-tax Officer of the area in which the assessee was
carrying on business. It was also held that in spite of the
insertion of s. 5(2) of the Act such assessment was without
jurisdiction because there was no amendment of s. 64. As a
result of this judgment Ordinance IX of 1939 was promulgated
which subsequently was enacted as subs. 5 of s. 64. After
the Ordinance the assessee Dayaldas Kushiram was assessed by
the same Officer and after unsuccessful appeals to the
Commissioner of Income-tax and the Appellate Tribunal he
made an application under s. 66(1) on three questions: (1)
Whether the order passed by the Commissioner of Incometax
deciding the place of assessment of the assessee could be
the subject matter of appeal to the Incometax Appellate
Tribunal; (2) Whether the Tribunal had the power to
entertain an appeal on the question as to the place of
assessment of an assessee even in the absence of the order
of Commissioner of Income-tax and (3) whether the question
,as to the place of assessment is a question of law arising
out of the order of the Appellate Tribunal. It was held
that the order of the Commissioner was made under s. 5(2)
and not under s. 64(3) and as the Ordinance had
retrospective effect these questions did not arise and that
the assessment of the assessee was validly made by the
Income-tax Officer and the Ordinance removed the invalidity
of the orders made prior to the passing of the Ordinance so
far as they related to the assessee. Beaumont, C. J., held
that the Income-tax Act did not determine the place of
assessment but the officer who had to assess and that there
could be no appeal under the Act against the order of the
Commissioner as to the place of assessment, but only against
the order of assessment of the Income-tax Officer.
40
314
Counsel for the appellant also relied ’on the judgment of
the Allahabad High Court in Dina Nath Hem Raj v.
Commissioner of Income-tax (1). In that case the assessee
was carrying on business at Calcutta and he was sought to be
assessed at Kanpur and an objection was taken to the Income-
tax Officer, Kanpur, making the assessment. The Income-tax
Officer did not proceed in accordance with s. 64(3) and
therefore it was held that assessment made by him was
without jurisdiction. In the present case no question has
been raised as to the jurisdiction of the Income-tax Officer
who made the assessment and apart from that the order was
made by the Central Board of Revenue under s. 5(2) of the
Act and s. 64(5) becomes operative and sub-ss. (1) and (2)
of s. 64 are inoperative. See also Seth Kanhaiyalal v.
Commissioner of Incometax (2).
The question then-arises whether the objection as to the
place of assessment, i. e., by the Income-tax Officer of
Calcutta could be challenged in appeal to the Appellate
Assistant Commissioner and then before the Appellate
Tribunal. In our opinion it could not be. The scheme of
the Act shows that no appeal in regard to the objection to
the place of assessment is contemplated under the Act.
Under s. 64(3) of the Act a question as to the place of
assessment, when it arises, is determined by the
Commissioner. Any such order cannot be made a ground of
appeal to the Appellate Assistant Commissioner under s. 30
of the Act which provides for appeals against orders of
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assessment and other orders enumerated in s. 30 but no
appeals is there provided against orders made under s.
64(3). Similarly appeals to the Appellate Tribunal which
lie under s. 33 of the Act also do not provide for any
appeal on the question of the place of assessment. In
Wallace Brothers’ case (3) at p. 79 Spens, C. J., after
referring to s. 64(3) and the proviso thereto said:
" These provisions clearly indicate that the matter is more
one of administrative convenience than of
(1) (1927) I.L.R. 49 All. 616. (2) [1936] 5 I.T.R. 739.
(.3) [1945] F.C.R. 65: 13 I.T.R. 39.
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jurisdiction and in any event it is not one for adjudication
by the Court............... This confirms us in the view
that the scheme of the Act does not contemplate an objection
as to the place of assessment being raised on an appeal
against the assessment after the assessment has been made.
As we have already pointed out, the objection was not raised
in the present case even before the Appellate Income-tax
Officer but only before the Appellate Tribunal ".
There is nothing in the Bidi Supply case (1) which in any
way detracts from the efficacy of the decision of the
Federal Court in Wallace Brothers’ case (2). We have
already said that Bidi Supply case (1) deals with the vires
of s. 5(7A).
In this view of the matter the question as to the place of
assessment does not arise out of the order of the Income-tax
Appellate Tribunal and therefore no question of law could be
referred nor could the High Court make such order under s.
66(2). In our opinion, the High Court rightly dismissed the
appellant’s application for directing the case to be stated
under s. 66(2) of the Act.
The appeals therefore fail and are dismissed with costs. In
the circumstances of the case there will be only one set of
costs.
Appeals dismissed.
(1) [1956] S.C.R. 267. (2) [1945] F.C.R. 65; 13 I.T.R. 39.
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