TMI Blog1992 (7) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... 77, of the Tax Recovery Officer in respect of the said shares and/or dividend accruing thereon. The facts of the case are that the Birla Seva Trust was created under a deed of trust dated June 15, 1977. The office of the trust is situated at Calcutta. The trust is the owner of, inter alia, 2,01,875 ordinary shares of Pilani Investment Corporation Ltd. (in short the "said shares"). The shares were received by the trust from another public charitable trust called Birla Jankalyan Trust which in its turn had received the same from a private discretionary trust known as Raja Baldeodas Birla Santatikosh (in short the "private trust"). In respect of the said shares owned by the trust a declaration under section 153B(1) of the Companies Act, 1956, was duly filed with the public trustee on August 14, 1972. The income from the said shares has been received by the trust and utilised for public charitable purposes in accordance with the objects of the valid trust. The facts and circumstances giving rise to the alleged tax demand against the said private trust are, inter alia, as under : (a) The said private trust was created by a deed dated May 20, 1943, by the late Jugal Kishore Birla f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal, Jaipur Bench, the Central Board of Direct Taxes transferred the income-tax cases of the said private trust to Calcutta and the said appeals before the Tribunal, Jaipur Bench, were transferred to the Calcutta Bench. (e) The said appeals of the private trust for the assessment years 1971-72 to 1974-75 were heard by the Calcutta Bench of the Tribunal which differed from the view taken by the Jaipur Bench of the Tribunal in the appeal for the assessment year 1970-71 and held that the transfer of the said shares to the said Birla Jankalyan Trust by the said private trust was not void but was at best voidable and that the income in respect of the said shares was not the real income of the said private trust and could not be assessed in its hands. The appeals of the said private trust for the said assessment years 1971-72 to 1974-75 were accordingly allowed. At the instance of the Department, the Tribunal referred to this court questions of law arising out of its said order which, inter alia, were (i) whether the transfer of the said shares by the said private trust to Birla Jankalyan Trust was valid or void or voidable and (ii) whether the income in respect of the said sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was noticed. At page 602, it was held that the donation of the said shares by the said private trust must take its full legal effect and was not void ab initio and until it was lawfully avoided or set aside the donee-trust has a perfect legal title to the said shares and dividends, if any, thereon. It is submitted by Mr. Bajoria, learned advocate for the petitioner, that in view of the said decision of the Division Bench of this court in the case of the said private trust in Raja Baldeodas Birla Santatikosh [1991] 190 ITR 578, this writ application should be allowed and the notice of attachment dated February 15/17, 1977, the order of attachment dated June 7, 1977, the order dated June 22/27, 1977, of the Tax Recovery Officer rejecting the claim of the petitioners and his letter dated November 9, 1977, should be set aside. In my view, this contention has substance. The said decision of this court is binding on the income-tax authorities who were parties to it. As held by this court, the said shares are not the property of the said private trust and the income in respect thereof could not also be assessed in the hands of the said private trust. The Tax Recovery Officer rejecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ession on behalf of the judgment debtor. He has based his order rejecting the applicant's objection solely on the ground of want of title. The applicant then filed an application in revision under section 115 of the Code of Civil Procedure. There, the learned single judge, after considering the provisions of Order 31, rules 58 and 60, observed as follows : "From these two rules, it is perfectly clear that the court's duty in dealing with an objection under Order 21, rule 58, is to concentrate on the question of possession and to decide whether the judgment-debtor is in possession of the property on his own behalf or on account of or in trust for some other person. If the court finds that the property is in the actual possession of some person other than the judgment-debtor, then it has to decide whether that possession is in trust for or on behalf of the judgment-debtor. The court is not concerned with the question of title to the property and is in fact incompetent to consider and decide that question. The order of release or otherwise must be based entirely upon the finding on the question of possession." A similar view has been taken by a learned single judge of the Bombay H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted February 27, 1969, were void. In that case, the assessee held that the ambit of the power of the Tax Recovery Officer under rule 11 of the Second Schedule was not called in question in the earlier writ petition. The judgment in the earlier petition did not preclude the petitioners from contending that the Tax Recovery Officer had no power to declare the transfer of property void. There the Bombay High Court observed as follows: " The Tax Recovery Officer acting under rule 11 of the Second Schedule must direct his investigation to possession. It is not open to him to go into complicated questions of title. But, if in the course of such investigation as to who is in possession of the property attached, a question of some legal right, interest or title arises and if it affects the determination of the question is to who is the person really in possession, he can take such legal right, interest or title into account." It must be observed that the provisions of rule 11 of the Second Schedule are analogous to Order 21, rules 58-61 and 63 of the Code of Civil Procedure as they stood until rule 58 was amended in 1976. Having regard to the principle laid down in these decisions i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beyond the territorial jurisdiction of a particular High Court but is given effect to against the petitioner within the said High Court's jurisdiction gives rise to at least a part of the cause of action at the place where it is implemented. When an order becomes effective only when it is communicated or served, the service of the order or receipt of a notice thereof would form part of the cause of action for the filing of a writ petition by the person aggrieved thereby. Thus when the impugned act of the respondents takes effect within the territorial jurisdiction of this High Court, this court could entertain the writ petition by the person aggrieved notwithstanding that the respondents have their offices, residences outside its territorial jurisdiction. The cases of the said private trust against whose demands the attachment was made had been transferred to Calcutta. The orders vacating the said demands have been passed by the Income-tax Officer at Calcutta. Even if the writ petition is returned on the ground that all the authorities are outside the jurisdiction still a fresh writ petition can be filed now at Calcutta in view of the fact that the assessments of the said priv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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