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1963 Supreme(Cal) 19
HIGH COURT OF CALCUTTA
H.K. BOSE, D.MOOKERJEE, JJ.
Commissioner Of Income Tax - Appellant
Versus
Bidhu Bhusan Sarcar – Respondent
Appeal No : IT Ref. No. 22 of 1960
Decided On : Feb 07, 1963
S.Chowdhury, S.K.Banerjee, E.R.Meyer, B.L.Pal
The provisions of Art. 135 of the Constitution, s. 66A(2) of the Indian IT Act, and the Income-tax (Removal of Difficulties) Order, 1962, cls. 4(1) and 4(2) are applicable to the present case and the petitioner has a right of appeal to the Supreme Court.
Headnote:
INCOME TAX - Appeal to Supreme Court - Certificate under s. 66A(2) of the Indian IT Act r/w Art. 135 of the Constitution - Maintainability - Repeal of the Indian IT Act, 1922 - Effect - Income-tax (Removal of Difficulties) Order, 1962, cls. 4(1) and 4(2) - Applicability - Limitation - Art. 179 of the Limitation Act - Applicability.
Fact of the Case:
The assessee filed a voluntary return for the asst. yr. 1947-48 declaring a loss. Subsequently, the ITO issued a notice under s. 34 of the Indian IT Act. The assessee filed another voluntary return declaring a loss. The ITO issued a notice under s. 23(2) of the Act. The Eighth Addl. ITO issued a notice under s. 34 and passed an order filing the case. The ITO cancelled the proceeding and issued a fresh notice under s. 34. The assessee filed an appeal before the AAC, who set aside the assessment and directed that the assessment be completed according to law by an officer having proper jurisdiction. The Tribunal cancelled the assessment. The CIT transferred the case to the ITO, District I(2), who issued a fresh notice under s. 34 and made an assessment. The assessee appealed to the AAC, who held that the notice was void ab initio and the assessment should have been completed by 31st March, 1956, and it had become barred when the assessment was completed on 2nd May, 1956. The Tribunal restored the order of the ITO District I (2). The assessee applied to the Tribunal for a reference, and the Tribunal referred certain questions of law to the High Court. The High Court answered the questions in favor of the assessee. The assessee intended to prefer an appeal to the Supreme Court.
Finding of the Court:
1. The provisions of Art. 135 of the Constitution are attracted and the petitioner has a right of appeal in respect of the judgment which was delivered by the Division Bench on a reference under s. 66 of the Indian IT Act. 2. The provisions of s. 66A(2) of the Indian IT Act can be invoked in the present case and the petitioner has a right of appeal to the Supreme Court. 3. The Income-tax (Removal of Difficulties) Order, 1962, cls. 4(1) and 4(2) are applicable and the proceedings by way of appeal, reference or revision in respect of any order made under the repealed IT Act, 1922, have to be instituted and disposed of as if the repealing Act had not been passed. 4. The application for a certificate is within the period of limitation allowed by the law.
Issues: 1. Whether Art. 135 of the Constitution can be invoked in the facts and circumstances of the case. 2. Whether the provisions of s. 66A(2) of the Indian IT Act can be invoked in the present case. 3. Whether the Income-tax (Removal of Difficulties) Order, 1962, cls. 4(1) and 4(2) are applicable. 4. Whether the application for a certificate is within the period of limitation allowed by the law.
Ratio Decidendi: 1. Art. 135 of the Constitution is attracted and the petitioner has a right of appeal in respect of the judgment which was delivered by the Division Bench on a reference under s. 66 of the Indian IT Act. 2. The provisions of s. 66A(2) of the Indian IT Act can be invoked in the present case and the petitioner has a right of appeal to the Supreme Court. 3. The Income-tax (Removal of Difficulties) Order, 1962, cls. 4(1) and 4(2) are applicable and the proceedings by way of appeal, reference or revision in respect of any order made under the repealed IT Act, 1922, have to be instituted and disposed of as if the repealing Act had not been passed. 4. The application for a certificate is within the period of limitation allowed by the law.
Final Decision: The application for a certificate under s. 66A(2) of the Indian IT Act r/w Art. 135 of the Constitution is allowed. A certificate is to be drawn up and issued.
H.K. BOSE, C.J.
1. This is an application for a certificate under s. 66A(2) of the Indian IT Act r/w Art. 135 of the Constitution in respect of a decision of a Division Bench of this Court dt. 10th Jan., 1962, by which certain questions of law were answered in favour of the assessee in a reference under s. 66(1) of the Indian IT Act.
2. Bidhu Bhusan Sarcar, since deceased, used to be assessed in respect of his income in the district of 24-Parganas. On 22nd Dec., 1947, he filed a voluntary return before the ITO, District 24- Parganas, in respect of the asst. yr. 1947-48 declaring a net loss of Rs. 330. Subsequently, on account of the change in the territorial jurisdiction, the assessee's place of business fell within the jurisdiction of the ITO, District I(2), Calcutta, with the result that the file of the assessee was transferred to the ITO, District I(2), and it came within the jurisdiction of the Eighth Addl. ITO, District I(2). On 16th Jan., 1949, the Eighth Addl. ITO, District I(2), took action under s. 34 of the Indian IT Act presumably because he considered that the voluntary return filed on 22nd Dec., 1947, was invalid and could not be acted upon. The notice under s. 34 was issued on 23rd Feb., 1950, but as no return was filed in response to the notice even upto 15th Jan., 1952, the Eighth Addl. ITO, issued a notice under s. 22(4) of the Indian IT Act. It appears that prior to this on 31st March, 1949, the assessee filed another voluntary return for the asst. yr. 1947-48 to the ITO, District I(2), declaring a loss of Rs. 11,33,940. In August, 1950, the ITO, District I(2), acting on this voluntary return dt. 31st March, 1949, issued a notice under s. 23(2) of the Act. On 4th Feb., 1952, the Eighth Addl. ITO, District I(2), passed an order filing the case as there was already another file of the assessee in the same district. On 12th Feb., 1952, the ITO District I(2), cancelled the proceeding in respect of voluntary return dt. the 31st March, 1949, on the view that a voluntary return of loss was not valid and he, thereafter, took action under s. 34 and issued a notice under that section on 12/14th Feb., 1952. This proceeding resulted in an assessment under s. 23(4)/34 on 31st Jan., 1953. Against this order of assessment the assessee filed an appeal before the AAC. In appeal it was pointed out by the ITO that he had no jurisdiction over the assessee as there was already a file with the Eighth Addl. ITO. The AAC by an order dt. the 27th Dec., 1955, set aside the assessment made on 31st Jan., 1953, with a direction that the assessment should be completed according to law by an officer having proper jurisdiction over the case. Against the decision of the AAC, the assessee went up on appeal before the Tribunal. The grievance of the assessee before the Tribunal was that the AAC should have annulled the assessment without giving a direction for making a fresh assessment. The Tribunal, accepted this contention and by its order dt. the 23rd April, 1957, cancelled the assessment. In the meantime, on 30th Dec., 1955, the CIT passed an order under s. 5(7A) of the IT Act transferring the case of the assessee from the Eighth Addl. ITO to the ITO District I(2), and thereafter the ITO District I(2), issued a fresh notice under s. 34 of the IT Act dt. 11th Feb., 1956, and on 2nd May, 1956, he made an assessment under s. 23(4)/34 of the IT Act. The assessee took an appeal against this assessment order to the AAC. The contention raised before him was that the Eighth Addl. ITO had jurisdiction when he issued notice on 23rd Feb., 1950, and unless and until the assessment was completed in pursuance of that notice which was a valid notice it could not be said that any income had escaped assessment. The further contention raised was that the assessment in pursuance of the notice dt. the 23rd Feb., 1950, should have been completed on or before 31st March, 1952, or 31st March, 1956, as the case fell within the purview of s. 34(1)(a) or s.
