1950 (5) TMI 40 - HC - Income Tax

Summary

Issues:
Jurisdiction of Excess Profits Tax Officer to make assessment under Excess Profits Tax Act for a specific accounting period.

Analysis:
The judgment pertains to a Reference under Section 21, Excess Profits Tax Act read with Section 66(1), Income Tax Act. The main issue revolves around the competence of the Excess Profits Tax Officer to make the assessment under Section 14(1), Excess Profits Tax Act, for the chargeable accounting period ending 31-12-1941, corresponding to the previous year relevant to the Income Tax Assessment for 1942-43. The Reference arises from an assessment for Excess Profits Tax for the period from 1-1-1941 to 31-12-1941, with the corresponding Income Tax assessment year being 1942-43.

The case involves the assignment of the Income Tax case of the assessee to different Income Tax Officers over time. Initially, the Income Tax Officer, Companies District No. II, made the Income Tax assessment for the assessee for the relevant year. Subsequently, by notifications and assignments, the case was transferred to the Commissioner of Income Tax (Central) Calcutta and then to the Income Tax Officer, Central Circle IV, Calcutta.

The crux of the issue lies in the interpretation of the notification dated 14-9-1940, which appointed every Income Tax Officer as an Excess Profits Tax Officer and assigned all relevant cases to them. The judgment emphasizes that once an Income Tax Officer loses jurisdiction over a case, he also loses the authority to make Excess Profits Tax assessment in that case. The power to assess Excess Profits Tax is automatically transferred to the Income Tax Officer who acquires jurisdiction over the case.

The judgment dismisses arguments challenging the jurisdiction of the assigned Income Tax Officer to make the Excess Profits Tax assessment. It clarifies that the assignment of cases by the Commissioner of Income Tax is valid under Section 5(5), Income Tax Act, and the transfer of a class of cases is within the Commissioner's authority. The judgment concludes that the assignment of the case to the Income Tax Officer, Central Circle IV, Calcutta, was valid, and he had the jurisdiction to make the Excess Profits Tax assessment for the relevant period.

In summary, the judgment upholds the competence of the assigned Income Tax Officer to conduct the Excess Profits Tax assessment, emphasizing the legal provisions governing the transfer of cases and the powers vested in designated officers. The decision affirms the validity of the assessment made by the Excess Profits Tax Officer, Central Circle IV, Calcutta, for the specified accounting period.