1962 (8) TMI 84 - HC - Income Tax

Summary

Issues Involved:
1. Jurisdiction of the Civil Court.
2. Validity of the Transfer Orders.
3. Legality of the Proceedings under Section 34 of the Income-tax Act.
4. Service of Notices under Section 34.
5. Waiver and Consent regarding the Place of Assessment.
6. Applicability of Section 67 of the Income-tax Act.
7. Conditions Precedent for Action under Section 34.
8. Relief by Injunction.

Detailed Analysis:

1. Jurisdiction of the Civil Court:
The primary issue was whether the civil court had jurisdiction to entertain the suits filed by the plaintiff. The court held that the civil court had no jurisdiction to entertain the suits due to the comprehensive scheme of the Income-tax Act and the second part of section 67 of the Act, which bars suits against government officers for actions done in good faith under the Act.

2. Validity of the Transfer Orders:
The plaintiff challenged the validity of the transfer orders of his assessment cases from Hazaribagh to Patna, then to Ranchi, and finally to Calcutta. The court found that the transfer orders were valid and made under sub-section (5) of section 5 of the Income-tax Act. The court also noted that the plaintiff had consented to the transfer of his cases to Ranchi, and therefore, he could not challenge the validity of the transfer orders.

3. Legality of the Proceedings under Section 34 of the Income-tax Act:
The plaintiff contended that no assessment could be legally made under section 34 for the years in question due to the decision of the Supreme Court and the bar of limitation. The court held that the conditions precedent for taking action under section 34 were in existence, and therefore, the proceedings taken by the Income-tax Officer under section 34 were not without jurisdiction.

4. Service of Notices under Section 34:
The plaintiff asserted that the notices under section 34 were not properly served. The court found that the notices were properly issued by the Income-tax Officer of Ranchi after obtaining the approval of the Commissioner of Income-tax and were properly served on the plaintiff through his servant.

5. Waiver and Consent regarding the Place of Assessment:
The court noted that the plaintiff had waived his right to object to the place of assessment by not raising any objection before the institution of the suits. The court held that the absence of any objection at any time before the institution of the suits amounted to a waiver as to the place of assessment, which was Ranchi in this case.

6. Applicability of Section 67 of the Income-tax Act:
The second part of section 67, which bars suits against government officers for actions done in good faith under the Act, was discussed. The court held that the words "intended to be done" in section 67 refer to any act which may be done by an officer of the Government under the Act in future, including assessment proceedings to be completed under section 34. Therefore, the suits were barred by section 67.

7. Conditions Precedent for Action under Section 34:
The court examined whether the conditions precedent for action under section 34 were met. It was found that the Income-tax Officer had reason to believe that the plaintiff's income had escaped assessment due to non-disclosure of full and true material facts. The court held that the Ranchi officer had sufficient material to act under section 34, and therefore, the proceedings were not without jurisdiction.

8. Relief by Injunction:
The plaintiff sought a permanent injunction against the defendants. The court held that the prayer for injunction was barred by clauses (d) and (i) of section 56 of the Specific Relief Act, as the action of the Ranchi officer under section 34 was not without jurisdiction. The court also noted that the relief provided by the Income-tax Act's tribunals was equally efficacious.

Conclusion:
The appeals were dismissed with costs, and the court upheld the validity of the transfer orders, the legality of the proceedings under section 34, and the proper service of notices. The court also confirmed that the civil court had no jurisdiction to entertain the suits due to the comprehensive scheme of the Income-tax Act and section 67 of the Act.