1969 (3) TMI 12 - HC - Income Tax

Competency of latter ITO to amend the amount of tax demand - income-tax file of petitioner transferred to other officer - SC set aside the order of transfer - ITO started certificate proceeding for recovery of tax - case filed against transfer to ITO of another district - held that latter officer can amend the amount of tax demand

Summary

Issues Involved:
1. Jurisdiction of the Income-tax Officer, Ranchi, to issue the certificate.
2. Validity of the certificate amendment by the Income-tax Officer, Hazaribagh.
3. Bar of limitation under section 46(7) of the Income-tax Act, 1922.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Income-tax Officer, Ranchi, to Issue the Certificate:
The petitioner argued that the Income-tax Officer, Ranchi, had no jurisdiction to issue the certificate for the recovery of tax. The court noted that the petitioner's file was transferred multiple times: initially to the Special Circle, Ranchi, by an order of the Commissioner of Income-tax on April 21, 1951, and later to Calcutta by the Central Board of Revenue. The Supreme Court had set aside the transfer to Calcutta, resulting in the file being sent back to Ranchi. The court concluded that the Income-tax Officer, Ranchi, had jurisdiction when the certificate was issued on March 25, 1957, as the file was validly transferred back to Ranchi following the Supreme Court's decision. Therefore, the first point was rejected as being without substance.

2. Validity of the Certificate Amendment by the Income-tax Officer, Hazaribagh:
The petitioner contended that the amendment of the certificate by the Income-tax Officer, Hazaribagh, was invalid as he had no jurisdiction over a certificate proceeding pending before the Certificate Officer, Ranchi. The court observed that the Income-tax Officer, Hazaribagh, had jurisdiction to amend the certificate as the petitioner's file was pending before him at the time of the amendment. The court also noted that the amendment reduced the amount to the petitioner's advantage. Therefore, the second point was dismissed as it was not only without substance but also not raised before any revenue authorities.

3. Bar of Limitation under Section 46(7) of the Income-tax Act, 1922:
The petitioner argued that the certificate proceeding was barred by time under section 46(7) of the Act. The court examined the timeline of events: a fresh demand was made on October 16, 1954, following an appellate order, and the certificate proceeding was initiated on March 20, 1955, by the Income-tax Officer, Calcutta. The court held that the action taken by the Income-tax Officer, Calcutta, was valid and within the limitation period. The court emphasized that the Explanation to section 46(7) deems a proceeding to have commenced if some action is taken within the prescribed period. Therefore, the third point was also dismissed as being without any substance.

Conclusion:
The application was dismissed with costs, and the rule was discharged. The court found no merit in the petitioner's arguments regarding jurisdiction, validity of the certificate amendment, and the bar of limitation. The legal proceedings were deemed to have been conducted within the appropriate legal framework, and the impugned certificate proceeding was upheld.