1974 (8) TMI 29 - HC - Income Tax

Summary

Issues Involved:
1. Legal transfer of files to the Income-tax Officer, Special Circle, Ranchi for assessment years 1960-61 and 1961-62.
2. Jurisdiction of the Income-tax Officer, Special Circle, Ranchi to pass assessment orders for the said years.
3. Whether an objection regarding the place of assessment could be raised at the appellate stage if not raised before the Income-tax Officer.

Detailed Analysis:

1. Legal Transfer of Files:
The primary issue was whether the files for the assessment years 1960-61 and 1961-62 were legally transferred to the Income-tax Officer, Special Circle, Ranchi. The court noted that the Commissioner of Income-tax had passed an order on July 17, 1964, under section 127 of the Income-tax Act, 1961, transferring the cases from the Income-tax Officer, Ward A, Hazaribagh, to the Income-tax Officer, Special Circle, Ranchi. The Tribunal upheld this transfer, stating that even if section 127 of the 1961 Act was not applicable, the Commissioner had jurisdiction under section 5(7A) of the Indian Income-tax Act, 1922. The court agreed with the Tribunal, deeming the order a composite one under both section 5(7A) of the 1922 Act and section 127 of the 1961 Act. The court emphasized that the omission of the specific section was a mere irregularity and did not affect the substance of the transfer.

2. Jurisdiction to Pass Assessment Orders:
The court addressed whether the Income-tax Officer, Special Circle, Ranchi, had jurisdiction to pass assessment orders for the years 1960-61 and 1961-62. It was established that the returns for these years were filed before the commencement of the 1961 Act, thus governed by the provisions of the 1922 Act as per section 297(2)(a) of the 1961 Act. The court held that the transfer order, read in light of the Explanation to section 127 of the 1961 Act and section 5(7A) of the 1922 Act, meant that both pending and future cases were transferred. Consequently, the Income-tax Officer, Special Circle, Ranchi, had the jurisdiction to pass the assessment orders.

3. Objection Regarding Place of Assessment:
The court examined whether an objection regarding the place of assessment could be raised at the appellate stage if not raised before the Income-tax Officer. The court referenced the Supreme Court's decision in Seth Teomal v. Commissioner of Income-tax, which established that objections to the place of assessment must be determined by the Commissioner and could not be grounds for appeal. The court concluded that the assessee's objection was essentially about the place of assessment and not the inherent jurisdiction of the assessing officer. Therefore, since the objection was not raised before the Income-tax Officer, it could not be entertained at the appellate stage.

Conclusion:
The court reframed the questions and answered them accordingly:
1. The files for the assessment years 1960-61 and 1961-62 were legally transferred to the Income-tax Officer, Special Circle, Ranchi, who had the jurisdiction to pass assessment orders.
2. An objection regarding the place of assessment could not be raised at the appellate stage if it was not raised before the Income-tax Officer.

Both questions were answered in favor of the department and against the assessee. The assessee was ordered to pay the costs of the references, with a consolidated hearing fee assessed at Rs. 200.