1951 (10) TMI 25 - HC - Income Tax

Summary

Issues Involved:
1. Jurisdiction of the Income-tax Appellate Tribunal, Delhi Bench, to hear the appeal arising out of the order of the Income-tax Officer, 'E' Ward, Lahore.
2. Legality of showing the Income-tax Officers, Private Salary Circle, Delhi, and Companies Circle, New Delhi, as respondents despite the assessment being made by the Income-tax Officer, 'E' Ward, Lahore.
3. Justification of showing two Income-tax Officers as respondents when the assessment under appeal was framed by only one.

Detailed Analysis:

1. Jurisdiction of the Income-tax Appellate Tribunal, Delhi Bench:
The primary contention was whether the Delhi Bench of the Income-tax Appellate Tribunal had the jurisdiction to hear appeals originating from orders passed by the Income-tax Officer, 'E' Ward, Lahore. The respondent Bank had shifted its head office from Lahore to Delhi due to the partition of Punjab. The records related to the Bank's income-tax affairs were transferred to Delhi. The appeals were initially sent to the President's Bench at Bombay, which then referred them to the Pakistan Tribunal. However, the Pakistan Tribunal declined to hear them, leading to their eventual hearing by the Delhi Bench. The Tribunal's decision was contested on jurisdictional grounds post-decision by the Commissioner of Income-tax, Delhi. The Tribunal dismissed the applications, stating that the jurisdictional issue was not raised during the appeals and that the Department had accepted notice and representation in the appeals, thereby agreeing to abide by the Tribunal's decision.

2. Legality of Showing Income-tax Officers as Respondents:
The second issue revolved around whether it was legally correct for the Tribunal to show the Income-tax Officers of the Private Salary Circle, Delhi, and Companies Circle, New Delhi, as respondents when the assessment under appeal was made by the Income-tax Officer, 'E' Ward, Lahore. The Tribunal opined that the confusion regarding the substitution of different respondents was immaterial since the Department had accepted notice and had been properly represented in the appeals. The substantial points raised in the questions did not arise out of the Tribunal's orders in the appeals as these points were never raised or argued during the appeals.

3. Justification of Showing Two Income-tax Officers as Respondents:
For the assessment year 1944-45, an additional question was whether the Tribunal was justified in showing two Income-tax Officers as respondents when the assessment was framed by only one. The Tribunal dismissed this application as well, maintaining that the Department's acceptance of notice and representation in the appeals rendered the confusion over respondent substitution immaterial.

Conclusion:
The High Court concluded that the questions of law regarding jurisdiction and respondent substitution did not necessarily need to be discussed in the Tribunal's order to be considered arising out of the order. However, it was noted that the Department's failure to raise these issues at the earliest opportunity, despite having accepted their substitution and representation in the appeals, rendered these questions inappropriate for consideration at this stage. The applications were dismissed with costs, emphasizing that the Department's conduct indicated an acceptance of the Tribunal's jurisdiction and decision.