1971 (5) TMI 13 - HC - Income Tax

Powers Of Commissioner - notice issued by an Additional Commimioner of Income-tax to the petitioner revising an order made by the Income-tax Officer in purported exercise of the power of the Additional Commissioner under section 263

Summary

Issues Involved:
1. Jurisdiction of the Additional Commissioner of Income-tax under section 263 of the Income-tax Act, 1961.
2. Validity of the notice issued by the Additional Commissioner of Income-tax.
3. Whether the Additional Commissioner of Income-tax is a persona designata.
4. Concurrent jurisdiction of the Additional Commissioner and the Commissioner of Income-tax.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Additional Commissioner of Income-tax under section 263 of the Income-tax Act, 1961:
The petitioner contended that the power of revision under section 263 could only be exercised by the Commissioner of Income-tax and not by the Additional Commissioner. However, the amendments made by the Finance Act, 1970, to sections 116 and 117 of the Income-tax Act, 1961, included the Additional Commissioner of Income-tax in the same category as the Commissioner of Income-tax. Additionally, section 130 was amended to state that the term "Commissioner" includes the Additional Commissioner, thereby granting the latter concurrent jurisdiction with the Commissioner for the purposes of sections 263 and 264.

2. Validity of the notice issued by the Additional Commissioner of Income-tax:
The notice dated September 16, 1970, issued by the Additional Commissioner of Income-tax, Delhi-II, was challenged by the petitioner on the grounds of lack of jurisdiction. The court found that the amendments to the Income-tax Act and the notification by the Central Board of Direct Taxes (CBDT) conferred valid concurrent jurisdiction on the Additional Commissioner. Therefore, the notice issued by the Additional Commissioner was deemed valid and within the scope of his authority.

3. Whether the Additional Commissioner of Income-tax is a persona designata:
The petitioner argued that the Commissioner of Income-tax was a persona designata, meaning a specific individual designated by the statute to perform certain functions, and thus the Additional Commissioner could not exercise the powers under section 263. The court referred to the Supreme Court's decision in Ajaib Singh v. Gurbachas Singh, which discussed the concept of persona designata. However, the court distinguished this case by noting that the amendments to the Income-tax Act explicitly placed the Additional Commissioner on an equal footing with the Commissioner, thus negating the persona designata argument.

4. Concurrent jurisdiction of the Additional Commissioner and the Commissioner of Income-tax:
The court examined the amendments made by the Finance Act, 1970, and the subsequent notification by the CBDT, which provided that the Additional Commissioner of Income-tax would have concurrent jurisdiction with the Commissioner of Income-tax. The court concluded that the Additional Commissioner of Income-tax, Delhi-II, had the same powers as the Commissioner of Income-tax, Delhi-II, including the power to revise orders under section 263.

Conclusion:
The court dismissed the petition, holding that the amendments to the Income-tax Act and the notification issued by the CBDT validly conferred concurrent jurisdiction on the Additional Commissioner of Income-tax. The notice issued by the Additional Commissioner under section 263 was deemed valid, and the petitioner's arguments regarding persona designata were rejected. The court found no merit in the petition and dismissed it with costs.