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TMI Blog1963 (8) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, 1952, disclosing the following income alleged to have arisen to him in the State of Saurashtra from money-lending and speculation during the years mentioned against the respective figures : 2. The assessee also disclosed that he had a share in a firm called Messrs. Rameshchandra Manilal and Company, carrying on business at Kozhikode, from the assessment year 1950-51. On the basis of this disclosure the assessee was assessed to Income Tax on an income of ₹ 50,000 for the assessment year 1949-50 under the Saurashtra Income Tax Ordinance, 1949, which was applicable in respect of that assessment year and for the assessment year 1950-51 and 1951-52, the assessee was assessed to Income Tax on incomes of ₹ 40,062 and ₹ 14,098 respectively under the Indian Income Tax Act, 1922, which had by then been applied to the territories of the State of Saurashtra. 3. It appears that in 1958, the Income Tax Officer, Ward-A, Junagadh, who has territorial jurisdiction over Veraval being the place where the assessee was residing and carrying on business during the previous year, Samvat year 2004, received information from which he had reason to believe that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee's advocate below the note. Thereafter, the Income Tax Officer issued a notice on 8th December, 1958, under section 22(4) of the Indian Income Tax Act, 1922, calling for the production of the books of account and bank pass-books of the assessee relevant to the assessment year 1949-50 on 19th December, 1958. The assessee, however, addressed a letter dated 18th December, 1958, to the Income Tax Officer contending that in respect of the assessment year 1949-50 it was the Saurashtra Income Tax Ordinance, 1949, which was applicable and not the Indian Income Tax Act, 1922, and that no proceedings could, therefore, be instituted against the assessee under section 34(1)(a) of the Indian Income Tax Act, 1922, in respect of the assessment year 1949-50 and the notices issued under section 34(1)(a), 22(2) and 22(4) of the Indian Income Tax Act, 1922, were accordingly invalid. Since the assessee failed to make the return required by the notices under section 22(2) and did not comply with the terms of the notice issued under section 22(4), the Income Tax Officer proceeded to make a best judgment assessment under section 23(4) and determined the income accruing or arising in Bombay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the question of reference to the Commissioner under section 64(3) could arise only if the assessee claimed specifically that some Income Tax Officer other than the Income Tax Officer issuing the notice had jurisdiction over the case of the assessee and that since in the present case all that the assessee did was to go on repeating that the Income Tax Officer, Ward-A, Junagadh, had no jurisdiction over his case and did not claim specifically that any other Income Tax Officer had such jurisdiction, he could not be said to have raised an objection to the place of assessment which was required to be referred to the Commissioner for his decision under section 64(3). The Appellate Assistant Commissioner also held that the question of jurisdiction of a particular Income Tax Officer to assessee could not be raised in an appeal under section 30(1). Still, however, the Appellate Assistant Commissioner proceeded to consider whether the Income Tax Officer, Ward-A, Junagadh, had jurisdiction to assess the assessee and held that having regard to the circular of the Board of Revenue to which reference has already been made by us earlier, while referring to the order of the Income Tax Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing an objection as to the place of assessment, if the Income Tax Officer was not inclined to accept the validity of the objection, the Income Tax Officer was bound to refer the matter to the Commissioner under section 64(3), and it was not opened to the Income Tax Officer to determine the objections himself and to proceed to assessee to tax on the basis that he had jurisdiction to assess the assessee. Since the Income Tax Officer was not entitled, argued Mr. D. H. Dwarkadas, to proceed with the assessment of the assessee without getting the question as to the place of assessment determined by the Commissioner under section 64(3), the assessee had sufficient cause for not filing the return pursuant to the notice under section 22(2) and not complying with the terms of the notice under section 22(4) so long as the question was not determined by the Commissioner and it was not held by the Commissioner that the Income Tax Officer, Ward-A, Junagadh, had jurisdiction to assess the assessee. Mr. D. H. Dwarkadas thus invoked the aid of section 64(3) for making out sufficient cause for setting aside the assessment within the meaning of section 27. The contention based on section 64(3) is, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 22(1) and has stated therein the principal place where he carries on his business, profession or vocation, for in that event the assessee himself having stated the principal place where he carries on his business, profession or vocation, he cannot be permitted to raise an objection to the place of assessment determined on the basis of such statement. An assessee is also precluded by the second proviso to sub-section (3) from calling in question the place of assessment after the expiry of the time allowed by the notice under section 22(2) or section 34 for the making of a return. If he has not made a return in response to the notice under section 22(1) stating therein the principal place where he carries on his business, profession or vocation, by this provision in sub-section (3) the time for making an objection to the place of assessment is limited to the period allowed by the notice under section 22(2) or section 34 for the making of a return and, once such period has expired, the assessee cannot thereafter raise any objection to the place of assessment. Where, however, an assessee raises an objection to the place of assessment and contends that he is liable to be assessed not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the assessee contended that it was enough to bring sub-section (3) into play, that an assessee should raise an objection to the jurisdiction of the Income Tax Officer who claims to assess the assessee and that it was not necessary that the assessee should state as to who according to him was the Income Tax Officer entitled to assess the assessee. His contention was that there may be cases where it may be possible for an assessee to say that the Income Tax Officer who claims to assess him has no jurisdiction under section 64 but it may not be possible for him to state as to who is the Income Tax Officer who has jurisdiction to assess him. In such a case, to take the view that an assessee must in raising objection to the jurisdiction of the Income Tax Officer, who claims to assess the assessee, must also state who according to the assessee is the other Income Tax Officer entitled to assess him, would be to deny the benefit of the machinery provided by sub-section (3) to such assessee. Now, Mr. D. H. Dwarkadas is certainly right when he contends that, in order to attract the applicability of sub-section (3), it is not necessary for an assessee to point out specifically a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter it is clear that the assessee is not entitled to rely on the provisions of section 64(3) for the purpose of contending that he was prevented by sufficient cause from filing the return pursuant to the notice under section 22(2) and from complying with the terms of the notice under section 22(4). 10. We may point out that the first question as framed does not really bring out the point in controversy between the parties. It assumes that there was a question of jurisdiction raised before the Income Tax Officer which was required to be disposed of by the Commissioner under section 64(3) which premise itself is in dispute between the assessee and the Commissioner. We would, therefore, reframe the question as follows so as to bring out the real nature of the controversy between the parties : Whether, on the facts and in the circumstances of the case, a question as to the place of assessment was raised by the assessee as contemplated by section 64(3) which was required to be referred to the Commissioner for his decision under the provisions of that section ? 11. Our answer to this question will be in the negative. 12. That takes us to the second question, namely, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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