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TMI Blog1992 (12) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Officer, D-II Ward, Bombay. The assessee appealed. The appeal was considered by the Commissioner of Income-tax (Appeals)-II, Bangalore ; the statement of the case sent by the Appellate Tribunal states that "the appeal preferred to the first appellate authority had been transferred to Bangalore and the same was disposed of by the Commissioner of Income-tax (Appeals-II ), Bangalore, by order dated September 2, 1985". The assessee thereafter filed the further appeal before the Appellate Tribunal at Bangalore. The Appellate Tribunal upheld the assessee's claim for weighted deduction under section 35B, following a decision of the Bombay High Court reported in CIT v. Eldee Wire Ropes Ltd. [1978] 114 ITR 485. The decision of this High Court in Ullalnarayan Mallya's case [1976] 1 KLJ 487 was distinguished. Hence, this reference at the instance of the Revenue. Mr. K. R. Prasad, learned counsel for the assessee, raised a preliminary objection to the maintainability of the reference to this court. Learned counsel contended that the assessment order being of the Income-tax Officer at Bombay, reference could have been made only to the Bombay High Court, though the appellate decision is of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Officer. The Supreme Court nowhere held that on transfer of the case, all further proceedings including appellate and reference proceedings also get transferred. The proceedings which could be initiated by an Income-tax Officer in respect of the particular assessee, thereafter, has to be initiated by the transferee-officer" In CIT v. Bidhu Bhusan Sarkar [1967] 63 ITR 278, the Supreme Court was considering the scope of section 5(7A), of the Indian Income-tax Act, 1922. The Additional Income-tax Officer who had initiated proceedings under section 34 made an order that the case be "filed". Thereafter, an order came to be passed under section 5(7A) transferring the case to the principal Income-tax Officer, who issued a fresh notice under section 34. The question was whether any case was pending before the Additional Income-tax Officer which could be transferred. The Supreme Court held (at page 287): "The Explanation to section 5(7A) makes it clear that the word case', in relation to any person whose name is specified in the order of transfer means all proceedings under the Act in respect of any year which may be pending on the date of the transfer, and also includes all proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of sections 121, 123, 124 and 125 ; it did not govern the provisions of section 122. The jurisdiction of the Appellate Assistant Commissioner is determined under section 122 by the directions of the Board. Therefore, the legislative intention seems to be that a specific direction is necessary conferring jurisdiction on the Appellate Assistant Commissioner to deal with the case of an assessee whose case was transferred to another Income-tax Officer (when the latter is not judicially subordinate to the Appellate Assistant Commissioner.) In fact, in the instant case, there was a specific order conferring appellate power on the Commissioner of Income-tax (Appeals), Bangalore, to consider the assessee's appeal, as is clear from para 3 of the statement of case sent by the Appellate Tribunal. The Rajasthan High Court in Uma Kant and Co. (P.) Ltd. v. CIT [1977] Tax LR 476, held that the jurisdiction of the High Court to entertain reference under section 256 of the Act is determined from the fact as to whether the case has arisen and whether the Assessing Officer was located within the jurisdiction of the High Court or not. It was a case where an appeal was pending befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovide a basis for the determination of the jurisdiction of the High Court to which a case has to be stated by way of reference. Since the appeal to the Tribunal arose out of the assessment order of the Income-tax Officer, at Meerut in the State of Uttar Pradesh, it was held that the reference has to be made to the Allahabad High Court. At pages 827 and 828, the High Court held : " It seems to us that, when there is no direct statutory provision governing the matter, the proper course would be to apply the same basis that has been adopted already with regard to the jurisdiction of a Bench of the Appellate Tribunal for the following reasons : Firstly, as already noticed, the jurisdiction of an Income-tax Officer, i.e., the place of, assessment, has been required under section 64 of the Indian Income-tax Act, 1922, to be determined on the basis of the place where the assessee carries on a business or profession or vocation and, in other cases, the area in which the assessee resides. This basis, however, has not been adopted in providing the basis for the determination of the jurisdiction of a Bench of the Appellate Tribunal. Under the Explanation to Standing Order No. 1 of 1954, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the reference. So, instead of adopting a different basis for that intermediate stage, it would be quite appropriate to adopt the same basis as the one adopted for determining the jurisdiction of the Bench." The lis or the cause for further proceedings arises out of the order of the Income-tax Officer. It is this order that is sought to be reversed or modified. Therefore, it is reasonable to infer that the said order should be judicially considered only by the High Court having jurisdiction over the particular Income-tax Officer. An assessee may shift his place of business or residence and it will not be practical to locate such place of residence or business always, to determine the High Court's jurisdiction. Law should be clear, certain and simple. The location of the assessing authority is easily identifiable. We are in respectful agreement with the test formulated by the Delhi High Court to determine the jurisdiction of the High Court to entertain a reference under section 256 of the Act. Birla Cotton, Spinning and Weaving Mills Ltd. v. CIT [1980] 123 ITR 354 is also a decision of the Delhi High Court, wherein its earlier decision in Seth Banarsi Dass Gupta's case [1978] 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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