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TMI Blog1959 (3) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... pril, 1943, a notice was served on him under section 22(2) of the Income-tax Act (hereinafter called the Act). He filed the return on February 28, 1944. The Income-tax Officer, Rangpur, served notices on him under sections 24(4) and 23(2) for production of books etc. It appears that assessment proceedings continued before the Income-tax Officer, Rangpur, but no final assessment was made. According to an affidavit which has now been filed in this court the Central Board of Revenue by an order passed under sub-section (2) of section 5 of the Act assigned the appellant's case along with some other assessment cases to the Commissioner of Income-tax (Central) Calcutta. The order contains the following endorsements which give an indication of the reason for the case being assigned to the Commissioner of Income-tax (Central) : " Copy forwarded to :-- (1) ........................ (2) Commissioner of Income-tax, Central Calcutta. These cases are reported to have E.P.T. liabilities. " Thus the appellant's case which was before an Income-tax Officer within the area in charge of the Commissioner of Income-tax, Bengal (Mofussil), was withdrawn from him and was assigned to the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer. " In the excess profits tax appeal also this time an objection was taken as to jurisdiction : " For that the assessment is bad in law having been made without jurisdiction. " The Appellate Tribunal held against the appellant in a short paragraph : " So far as the first objection is concerned, in our opinion, it is not within our jurisdiction to go into this matter. The objection relates to the place of assessment. As held in Wallace Brothers & Co. Ltd. v. Commissioner of Income-tax the question as to the proper place of assessment is not one for adjudication by a court or by any appellate authority. Consequently we overrule the first contention of the assessee. " The Tribunal thus held that as the objection related to the place of assessment the Tribunal was not competent to go into that question. Upon this the appellant applied for a reference to be made under section 66(1) of the Act and prayed for five questions to be referred. The two questions relating to jurisdiction were : " (1) Had the Income-tax Officer (Non-Companies Income-tax-cum-Excess Profits Tax District, Calcutta) jurisdiction to make the assessment ? (2) Was the Income-tax Appellate Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Act. But seeing that in this case the appellant had moved the High Court and a decision has been pronounced adverse to him and this has become final, obviously it would not be open to him to question the correctness of the decision of the Tribunal on grounds which might have been taken in an appeal against the judgment of the High Court. All the points urged before us were taken in the reference under section 66(2) of the Indian Income-tax Act. It would therefore follow that these grounds are not open to the appellant. " But counsel for the appellant relied on Dhakeswari Cotton Mills Ltd. v. Commissioner of Income-tax, where the scope of appeals under article 136 were set out by the learned Chief Justice. In this case, however, it is not necessary to go into this question because in our opinion there is little substance in the appeal itself. Counsel for the appellant has urged two grounds in support of his appeal : that his place of business was Lalmonirhat and under section 64(1) and (2) of the Act he was entitled to be assessed by the Income-tax Officer of that area and (2) that assessment by the Income-tax Officer of Calcutta was an illegal assumption of jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r this sub-section before the assessment is made. " Thus under section 64(3) the question of determination as to the place of assessment only arises if an objection is taken by the assessee and the Income-tax Officer has any doubts as to the matter. But the determination is to be by the Commissioner of Income-tax or the Central Board of Revenue. The Act does not contemplate any other authority. It was contended on behalf of the assessee that he produced his accounts before the Income-tax Officer at Calcutta under protest. There is no mention of this protest in the assessment file and that is what was stated by the Commissioner of Income-tax in his reply which he gave on March 3, 1953, before the Income-tax Appellate Tribunal and which has been set out above. If such an objection had been raised the question would have been referred by the Income-tax Officer to the Commissioner as required under section 64(3). That stage never arose because the objection does not seem to have been taken at the stage when it should have been taken, i.e., before the Income-tax Officer, Calcutta. But it is contended by counsel for the appellant that in the present case there is an illegal assumpt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant to the Commissioner of Income-tax (Central) at Calcutta for the exercise of his functions as Commissioner. Now this is a power which the Central Board of Revenue did possess under sub-section (2) of section 5. As to which Income-tax Officer was to deal with that case was for the Commissioner of Income-tax to designate. Sub-section (7A) of section 5 confers on the Central Board of Revenue the power to transfer any case from one Income-tax Officer to the other which can be done at any stage of the proceedings. This sub-section is not a provision which in any way modifies or cuts down the power given to the Central Board of Revenue under section 5(2). The two sub-sections are complementary and operate in two separate spheres. Sub-section (2) is for the purpose of specifying as to which of the Commissioners would perform functions in respect of different areas, persons, incomes or cases or classes thereof. It was argued that sub-section (7A) is a special provision and it necessarily excludes the operation of sub-section (2) but as we have said above the two sections are not mutually exclusive. They operate in two different spheres, their areas of operation are different and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n whom an assessment or re-assessment for purposes of this Act has been, is being or is to be made in the course of any case in respect of which a Commissioner of Income-tax appointed without reference to area under sub-section (2) of section 5 is exercising the functions of a Commissioner of Income-tax. " In view of this provision, i.e., section 5(2), no objection can be taken on the ground of sub-sections (1) and (2) of section 64. Counsel for the appellant relied on a judgment of the Bombay High Court in Dayaldas Kushiram v. Commissioner of Income-tax where it was held that section 64 was intended to ensure that as far as practicable the assessee should be assessed locally, i.e., by the Income-tax Officer of the area in which the assessee carries on business, and there must, so far as the exigencies of the case allow, be some reasonable relation to the place where the assessee carries on business or resides. In that case the assessee was carrying on business in C Ward and the proper Officer under section 64 to assess him was the Income-tax Officer of that Ward. As a result of the coming into force of section 5(2) the Commissioner of Income-tax (Central) was created without r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e place of assessment, but only against the order of assessment of the Income-tax Officer. Counsel for the appellant also relied on the judgment of the Allahabad High Court in Dina Nath Hem Raj v. Commissioner of Income-tax. In that case the assessee was carrying on business at Calcutta and he was sought to be assessed at Kanpur and an objection was taken to the Income-tax Officer, Kanpur, making the assessment. The Income-tax Officer did not proceed in accordance with section 64(3) and therefore it was held that assessment made by him was without jurisdiction. In the present case no question has been raised as to the jurisdiction of the Income-tax Officer who made the assessment and apart from that the order was made by the Central Board of Revenue under section 5(2) of the Act and section 64(5) becomes operative and sub-sections (1) and (2) of section 64 are inoperative. See also Seth Kanhaiyalal v. Commissioner of Income-tax. The question then arises whether the objection as to the place of assessment, i.e., by the Income-tax Officer of Calcutta, could be challenged in appeal to the Appellate Assistant Commissioner and then before the Appellate Tribunal. In our opinion it co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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