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The firm carried on business as forest lessees and timber merchants at Dhilwan in the former Kapurthala State. In that State, an Income-tax law was in force, and prior to the integration of the State, on April 10, 1947, the income of the firm for the account year 1945-1946 (Samvat. 2002) was duly assessed, and the tax was also paid. Subsequently, political changes took place, Kapurthala integrated into what was known as Pepsu, and the Rajpramukh issued two Ordinances in Samvat. 2005, by which all laws in force in Kapurthala including the Income-tax law ceased to be operative from August 20, 1948. The two Ordinances instead applied laws in force in the Patiala State to the area of the new State which included Kapurthala, and the Patiala Income-tax Act, 2001, came into force. Later still, the Indian Finance Act, 1950 (26 of 1950), applied the Indian Income-tax Act to the Part B States, which had emerged as a result of political changes. Section 13 of the Indian Finance Act, 1950, repealed the Income-tax laws obtaining in the area of the Part B States except for the purposes of levy, assessment and collection of income-tax and super- tax in respect of the period defined therein. On March 12, 1955, the Income-tax Officer, Special Circle, Ambala, issued a notice purporting to be under s. 34 of the Patiala Income-tax Act of Samvat. 2001 to the appellant firm calling upon it to file a return of its income and total world income, because he had reason to believe that the income had been underassessed. Previous to this, on November 4, 1953, the Commissioner of Income-tax, Punjab (1), Himachal Pradesh, Bilaspur and Simla, purporting to act under s. 5, sub-ss. (5) and (7A) of the Indian Income-tax Act, ordered that the assessment of the appellant firm would be done by the Income-tax Officer, Special Circle, Ambala and not by the Income-tax Officer, B-Ward, Patiala, who ordinarily would be the competent authority under s. 64 of the Indian Income-tax Act to assess the appellant firm. The appellant firm raised objections, but failed, and then filed the petition under Art. 226 of the Constitution, out of which the present appeal arises.

Numerous objections were taken in respect of the competency of the proceedings before the taxing authorities, but some of them are no longer pressed. An argument under Art. 14 of the Constitution has now been abandoned, though it figured at earlier stages of the present case. A second point that the reassessment cannot be made under the Patiala In. come- tax Act is not in dispute, because the respondents before us stated that the reassessment, if any, would have to be done in accordance with the Kapurthala law, as it existed in the assessment year (Samvat. 2002). A third argument, namely, that the words of s. 13 of the Indian Finance Act, 1950, did not include reassessment, has also been abandoned, in view of the decisions of this Court in Lakshmana Shenoy v. The Income,-tax Officer, Ernakulam (1) and The Income-tax officer, Bangalore v. K. N. Guruswamy (2). Only one point has been pressed before us, and it is that the Income-Tax Officer, Special Circle, Ambala, had no jurisdiction to issue a notice under s. 34, and (1) [1959] S.C.R. 751.

The Patiala Income-tax Act contained provisions almost similar to ss. 5(5) and 5(7A) of the Indian Income-tax Act. Sub-section (5) differed in this that the Commissioner of Income-tax was required to consult the Minister-in-charge before taking action under that sub-section. The only substantial difference in the latter sub-section was that the Explanation which was added to s. 5(7A) of the Indian Income-tax Act as a result of the decision of this Court in Bidi Supply Co. v. Union of India (1) did not find place in the Patiala Act. The Commissioner, when he transferred this case, referred not to the Patiala Income-tax Act, but to the Indian Income-tax Act, and it is contended that if the Patiala Income-tax Act was in force for purposes of reassessment, action should have been taken under that Act and not the Indian Income-tax Act. This argument, however, loses point, because the exercise of a power will be referable to a jurisdiction which confers validity upon it and not to a jurisdiction under which it will be nugatory. This principle is wellsettled. See Pitamber Vajirshet v. Dhandu Navlapa(2).

(7A) The Commissioner of Income-tax may transfer any case from one Income-tax Officer subordinate to him to another, and the Minister Incharge may transfer any case from any one Income-tax Officer to another. Such transfer may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Income-tax Officer from whom the case is transferred." There can be no doubt that sub-s. (7A) authorises ,the Commissioner to transfer individual cases. The words " any case from one Income-tax Officer subordinate to him to another ", " such transfer may be made at any stage of the proceedings " etc., clearly indicate this. Sub-section (7A) is, however, not applicable here, because in respect of the cognate sub-section of the Indian Income-tax Act it was ruled by this Court that it could apply to a pending case only. It was to overcome this lacuna that the Explanation was added by the Indian Parliament. This amendment came in 1956, and the Patiala Act did not include a similar Explanation, because prior to 1956 the question had not arisen. There is one other difference between the Patiala Act and the Indian Act. Whereas sub-s. (7A) was introduced in the Indian Act by an amendment, the corresponding sub-section was enacted at the same time as the rest of the Patiala Act.