Patna High Court
Talchar Sabai Grass Trading Company ... vs Commissioner Of Income-Tax, Bihar And ... on 10 September, 1947
Equivalent citations: [1947]15ITR455(PATNA)
JUDGMENT
AGARWALA, AG. C.J. - This is a reference under Section 66 (2) of the Income-tax Act at the instance of the assessee. Notice under Section 22 having been served on the assessee by the Income-tax Officer, Salaries Circle, Ranchi, and no return having been in response to the notice, the assessee was summarily assessed under Section 23 (4) of the Act. On appeal to the Assistant Commissioner, however, this assessment was cancelled. A fresh notice under Section 22 was then served upon the assessee calling upon him to take a return of his income. He then made a return showing that he had suffered a loss of Rs. 22,500 and odd during the previous year. As a result of his failure to appear in support of the return, however, he was again summarily assessed. The assessment shows the world income of the assessee of Rs. 30,000, and his income derived from sources within British India as Rs. 17,000. An appeal against this assessment was dismissed, but the Assistant Commissioner held that the assessment has been made by an officer who had no power to make it, manly, the Income-tax Officer, Salaries Circle, Ranchi. An appeal to the Appellate Tribunal was dismissed and also an application to have the case stated under Section 66 of the Act.
The ground on which the assessee now challenges the validity of this assessment is that on the 1st of April, 1939, the Central Board of Revenue has issued a notification appointing the Income-tax Officer, Poona, as the taxing authority for non-residents whose income arose in more than one province, and on the 30th of March, 1940, by another notification of the Central Board of Revenue, the Income-tax Officer of the circle in which the greater part of the assessees income was derived was designated as the authority to make the assessment. The Income-tax Officer of the Salaries Circle, Ranchi, was not an officer who had been empowered to make the assessment on the assessee. The assessees difficulty, however, is that he did not object to that officer making the assessment. In the first place, he made no return at all, and, when again called upon to make a return he did not raise any objection to being assessed by the Income-tax Officer, Salaries Circle, Ranchi. The second proviso to Section 64 (3), which was added by Section 81 of Act VII of 1939, declares that the place of assessment shall not be called in question by an assessee if he has made a return in response to the notice under sub-section (1) of Section 22 and has stated there in the principal place wherein he carries on his business, profession or vocation, or, if he has not made such a return and has not called in question the authority of the taxing officer before the expiry of the tome allowed by the notice under sub-section (2) of Section 22, or, in the case on an assessment under Section 34, within the time allowed by the notice issued under that section. It was pointed out by the Federal Court in Wallace Brothers v. Commissioner of Income-tax, Bombay, Sind and Baluchistan, that the provisions of Section 64 indicate that the question as to who shall make a particular assessment is one of administrative convenience and not of jurisdiction, and that it is not one for adjudication by the Court. It was observed that the scheme if the Act did not contemplate an a objection as to the place of assessment being raised on appeal against the assessment after the assessment had been made. As in the present case, no objection to the place of assessment or the assessing officer was raised before the Income-tax Officer, and the Court overruled and attempt of the assessee to raise it at a latter stage after the assessment has been made. The decision in that case is conclusive as to the correct interpretation of the Act, with the result that this reference must be discharged, but, in the circumstances without costs.
The questions specifically referred to this Court do not, in the circumstances, arise. Those questions are stated at page 7 of the paper book.
MANOHAR LALL, J. - I agree. The second proviso introduced to Section 64 (3) by the Act of 1939 makes it clear that the assessee is that entitled to raise the question as to the place of assessment if he has not raised in it the return filed by him in response to the notice under Section 22 (1) or if he has not made any return. The object of this enactment is obvious, namely that the question as to the place of assessment shall be determined before the assessment is allowed to go on. This is one of those instances where the litigant must be taken to have submitted to jurisdiction if he does not raise the question of want of jurisdiction immediately, and the legislature has debarred this question from being raised at a later stage. This view also commended itself to the Federal Court in Wallace Brothers case.
Reference discharged.