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Issues:
1. Interpretation of section 170(2) of the Income-tax Act, 1961 regarding jurisdiction to raise an assessment. 2. Validity of assessment on the Indian company as successor to the non-resident company. Analysis: 1. The case involved a question of law referred to the Calcutta High Court by the Tribunal under section 256(2) of the Income-tax Act, 1961. The issue was whether the Income-tax Officer had jurisdiction to raise an assessment in the hands of Tecalemit (India) Ltd. for the income earned during a specific period. The assessment year in question was 1964-65, corresponding to the period ending on 31-3-1964. 2. The facts of the case indicated that Tecalemit (India) Ltd., a non-resident company, had its business taken over by Tecalemit (Hind) Ltd. with effect from 1-4-1964. The non-resident company filed a return for the assessment year 1964-65, covering the period from 1-8-1963 to 31-3-1964. Subsequently, a revised return was filed for the previous year ending on 31-7-1964. The Income-tax Officer made a provisional assessment initially, followed by a fresh assessment under section 143(3) for the period in question. 3. The Assessing Officer described the assessee as Tecalemit (India) Ltd. [through Successor-Tecalemit (Hind) Ltd.], raising a jurisdictional issue. The Appellate Authority held that the assessment on the Indian company was without jurisdiction, as it was argued that the Indian company was not the successor to the non-resident company, rendering the assessment a nullity with no legal effect. 4. The Department appealed to the Tribunal, relying on section 170(2) of the Act, which deals with succession to business. However, the Tribunal found that the predecessor (non-resident company) was found, and a provisional assessment was already made on it. The Tribunal emphasized that section 170(2) can only be invoked when the predecessor cannot be found, which was not the case here. 5. The Tribunal further noted that the non-resident company had filed its return, and no further assessment action was taken. The Department's argument that the Indian company had filed a return did not change the legal position. The income belonged to the non-resident company, and if an assessment was to be made on the successor, it had to be done in accordance with the law. Since the predecessor was available for assessment, no proceeding could be taken against the successor under section 170(2). 6. Consequently, the Tribunal answered the question in the affirmative and in favor of the assessee, concluding that the Income-tax Officer had no jurisdiction to raise an assessment on Tecalemit (India) Ltd. The judgment did not award costs to either party.
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