TMI Blog1970 (12) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... s served on him in after 1p.m. on the 22nd it was not possible for him to comply therewith. Thereafter, on the 31st December, 1966, a notice under section 22 of the Income-tax Act, 1961, was issued by the respondent-Income-tax Officer on the petitioner to show cause why penalty should not be imposel on him for not paying the tax assessed, On the 11th January, 1967, another notice under section 154/155 of the1961 Act was issued by respondent-Income-tax Officer for rectification of the purported assessment and under section 144 of that Act. On the 21st January, 1967, two applications were presented by the petitioner to the respondent-Income-tax Officer. In the first application he petitioner contended that the assessment was ultra vires as it was made under the 1961 Act and not under the 1922 Act, and therefore no question of penalty could arise. In the second, objection was taken to the competency of the notice of rectification of the order of assessment already made. On the 16th February, 1967, a notice of demand and a corresponding challan and the assessment order under section 144 of the 1961 Act for the assessment year 1961-62 were served on the assessee and on the same date the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, proceedings for the assessment of that person for that year may be taken and continued as if this Act had not been passed ; " (b) Where a return of income is filed after the commencement of this Act .... the assessment of that person for that year shall be made in accordance with the procedure srecified in this Act. The Income-tax Act, 1961, was brought into operation from the 1st April, 1962. Mr. Pal contends that as in this case the petitioner's return for 1961-62 was filed before the Ist April, 1962, the assessment for that year should have been made under the provisions of the 1922 Act, the respondent-Income-tax Officer had no jurisdiction to make the assessment under the 1961 Act. As such the order of assessment and all subsequent proceedings were ultra vires and invalid and the order passed in appeal therefrom was also invalid and void. Mr. Pal further submitted that) though the words used in section 297(2)(a) are " may be taken and continued ", the rule is mandatory and the Income-tax Officer has no option but to make the assessment under the provision of the repealed Act. In this connection an observation made by the Supreme Court in Jain Brothers v. Union of India i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner in respect of the assessment year 1960-61. He had such jurisdiction under the relevant provisions of the Income-tax Act and such jurisdiction could not be taken away by his applying the wrong provisions of law in making that assessment. The provisions of the Income-tax Act for the assessment and recovery of tax from an assessee are in the nature of procedural law and jurisdiction of the Income-tax Officer which would invalidate any orders passed by him ab initio. Such an order would merely be an erraneous order which could be rectified or corrected by appropriate procedure in appeal or otherwise as provided in the Act itself. In Hazari Mal Kuthiala v. Income-tax Officer, Special Circle, Ambala Cantt., the Supreme Court had to consider a case where the Commissioner of Income-tax, purporting to act under section 5(7A) of the Indian Income-tax Act, made an order that the assessment of the petitioner-firm would be done by a particular Income-tax Officer, Ambala, and not by the Income-tax Officer, Patiala. It was contended by the petitioner that the officer at Ambala had no jurisdiction as the order of the Commissioner was ultra vires since it was not issued under the Patial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oes not necessarily lead to the conclusion that the order of rectification made by the respondent was without jurisdiction. It is now well-settled that a wrong reference to the power under which an order is made does not per se vitiate the order, if there is some other power under which the order could lawfully be made. The validity of the order has to be tested by reference to the question whether the Income-tax Officer had any power at all to make the order. If the power is otherwise established, the fact that the source of the power has been incorrectly described would not make the order invalid: the order cannot fail merely because it purports to be made under a wrong provision if it can be shown to be within the power of the Income-tax Officer under some other provisions of law. Now, though the order of rectification could not be made by the respondent under section 154 of the new Act, it cannot be said that the respondent had no power at all to make it. The respondent had power to make an order of rectification under section 35 of the old Act and the order of rectification could not, therefore, be regarded as an order made by the respondent without jurisdiction..... The order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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