1959 (3) TMI 3 - SC - Income Tax

Whether the Income-tax Officer, Calcutta, could make the assessment in the appellant s case? Held that - In the view of the matter the question as to the place of assessment does not arise out of the order of the Income-tax Appellate Tribunal and, therefore, no question of law could be referred nor could the High Court make such order under section 66(2). In our opinion, the High Court rightly dismissed the appellant s application for directing the case to be stated under section 66(2) of the Act. Appeal dismissed.

Issues Involved:
1. Jurisdiction of the Income-tax Officer (Calcutta) to make the assessment.
2. Competence of the Income-tax Appellate Tribunal to determine the jurisdiction of the Income-tax Officer.
3. Applicability of Section 5(2) and Section 5(7A) of the Income-tax Act.
4. Determination of the place of assessment under Section 64 of the Income-tax Act.
5. Validity of the High Court's dismissal of the application under Section 66(2) of the Income-tax Act.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Income-tax Officer (Calcutta) to make the assessment:
The appellant contended that his place of business was Lalmonirhat, and under Section 64(1) and (2) of the Income-tax Act, he was entitled to be assessed by the Income-tax Officer of that area. The assessment by the Income-tax Officer of Calcutta was challenged as an illegal assumption of jurisdiction. However, the court found that the Central Board of Revenue assigned the appellant's case to the Commissioner of Income-tax (Central), Calcutta, under Section 5(2) of the Act, which was within its powers. Therefore, the assessment by the Income-tax Officer, Calcutta, was held to be valid.

2. Competence of the Income-tax Appellate Tribunal to determine the jurisdiction of the Income-tax Officer:
The Tribunal held that it was not competent to adjudicate on the place of assessment. The court supported this view, stating that the scheme of the Act does not contemplate an appeal on the question of the place of assessment. The determination of the place of assessment under Section 64(3) is an administrative matter to be decided by the Commissioner of Income-tax or the Central Board of Revenue and is not subject to appeal.

3. Applicability of Section 5(2) and Section 5(7A) of the Income-tax Act:
The appellant argued that the Central Board of Revenue should have exercised its jurisdiction under Section 5(7A) and not under Section 5(2). The court clarified that Section 5(2) and Section 5(7A) operate in different spheres. Section 5(2) allows the Central Board of Revenue to assign cases to different Commissioners, while Section 5(7A) permits the transfer of cases between Income-tax Officers. The court found that the Central Board of Revenue lawfully exercised its power under Section 5(2) in assigning the appellant's case to the Commissioner of Income-tax (Central), Calcutta.

4. Determination of the place of assessment under Section 64 of the Income-tax Act:
The court noted that under Section 64(1) and (2), the appellant should be assessed by the Income-tax Officer of the area where he carries on his business. However, Section 64(3) provides that the place of assessment can be determined by the Commissioner of Income-tax or the Central Board of Revenue if a question arises. The court found that no objection to the place of assessment was raised at the appropriate stage before the Income-tax Officer, Calcutta. Consequently, the determination by the Central Board of Revenue under Section 5(2) was valid, and the provisions of Section 64(1) and (2) were rendered inapplicable by Section 64(5)(a).

5. Validity of the High Court's dismissal of the application under Section 66(2) of the Income-tax Act:
The appellant's application under Section 66(2) was dismissed by the High Court, and no appeal was filed against that order. The court held that the High Court rightly dismissed the application, as the question of the place of assessment does not arise out of the order of the Income-tax Appellate Tribunal. The court emphasized that the scheme of the Act does not allow for an appeal on the place of assessment, which is an administrative matter.

Conclusion:
The appeals were dismissed with costs, as the court found no merit in the appellant's contentions. The jurisdiction of the Income-tax Officer (Calcutta) was validly established under Section 5(2) of the Income-tax Act, and the determination of the place of assessment is an administrative matter not subject to appeal. The High Court's dismissal of the application under Section 66(2) was upheld.

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