TMI Blog1979 (12) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... 73, the interim order was varied by P.K. Banerjee J. at the instance of the revenue as follows : "The interim order is varied to the extent that the proceedings may continue and the final order be passed but it will not be given effect to or communicated pending the disposal of the Rules. The final order or any assessment order will be subject to the result of the Rules. " At the final hearing of the Rules, it was conceded by the learned advocate appearing on behalf of the revenue that in view of the observations of the Supreme Court in Ajantha Industries v. CBDT [1976] 102 ITR 281, the impugned order of transfer under s. 127 of the I.T. Act, 1961, could not be sustained as the same did not state any reasons for the transfer of the cases of the appellants from the ITO, A-Ward, Karimgunj, to the ITO, Central Circle XXXIII, Calcutta. It was, however, prayed on behalf of the revenue that the court should give a direction for assessment in consequence of and in order to give effect to the finding that the order of transfer was invalid. The said prayer was opposed on behalf of the appellants. The learned judge, however, overruled the objection made on behalf of the appellants. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment shall be made under s. 143 or s. 144 at any time after two years from the end of the assessment year in which the income was assessable, where such assessment year is an assessment year commencing on or after the 1st day of April, 1969. Clause (ii) of sub-s. (3) of s. 153 provides as follows : " (3) The provisions of sub-sections (1) and (2) shall not apply to the following classes of assessments, reassessments and the recomputations which may, subject to the provisions of sub-section (2A), be completed at any time-... (ii) where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order, under section 250, 254, 260, 262, 263 or 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act. " While, therefore, sub-ss. (1) and (2) of s. 153 provide for the time-limit for completion of assessment and reassessment, sub-s. (3) makes such provision inapplicable under certain circumstances, one of which is that such assessment or reassessment can be made in consequence of or to give effect to any finding or direction co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt, it has been laid down, inter alia, that the finding and direction must be necessary for the disposal of the particular case, and that s. 153(3)(ii) is not a provision enlarging the jurisdiction of the authority or court. An authority or court, therefore, cannot simply for the purpose of lifting the bar of limitation give a finding or direction. Unless such a finding or direction is necessary for the disposal of the proceeding before such authority or court the provision of s. 153(3)(ii) will not be attracted. When making any finding or direction the authority or court will not take into consideration the provision of s. 153(3). It makes the finding or gives the direction, if required under the facts and circumstances of the case, for the proper disposal of the case. It may be that the assessment or reassessment has become barred by limitation during the pendency of a case before the authority or court, but that will be no consideration for making a finding or a direction, unless it is necessary for the disposal of the case. Now, it has to be considered whether the direction that has been given by the learned judge was necessary to be given in order to effectively dispose of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t petitions. The sum and substance of the prayers is that the impugned order of transfer should be quashed and that respondent No. 2, the ITO, Central Circle XXXIII, Calcutta, should be prohibited from making the assessments pursuant to the impugned order. The appellants had not made any prayer to the effect that respondent No. 1, the ITO, A-Ward, Karimgunj, should be directed to make the assessments. Even if that prayer was made, that would have been redundant, for, as soon as the impugned order of transfer was quashed, the ITO, A-Ward, Karimgunj, would again have jurisdiction to make the assessments. We do not also think that after the quashing of the impugned order, it was necessary to restrain respondent No. 2 from making the assessments. Respondent No. 2 derived his authority to assess the appellants from the impugned order, and after the same was struck down as illegal and invalid, the assessments, if made by respondent No. 2, would consequently fall to the ground as having been made without jurisdiction. The only question that was involved in the writ petitions was whether the impugned order should be quashed or not. Therefore, the only finding that was germane to the questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Supreme Court in the case of the Director of Inspection of Income-tax (Investigation), New Delhi v. Pooran Mail Sons [1974] 96 ITR 390 (SC). In that case, the question was whether the time limit fixed by s. 132(5) of the I.T. Act, 1961, was, also applicable to any direction under s. 132(12) or by a court in writ proceedings. While holding that the period of time fixed under s. 132(5) applied when the first order under that section was made and not to any direction given under s. 132(12) or by a court in writ proceedings, the Supreme Court made the following observations (p. 394): " Even if the period of time fixed under section 132(5) is held to be mandatory that was satisfied when the first order was made. Thereafter if any direction is given under section 132(12) or by a court in writ proceedings, as in this case, we do not think an order made in pursuance of such a direction would be subject to the limitations prescribed under section 132(5). Once the order has been made within ninety days the aggrieved person has got the right to approach the notified authority under section 132(11) within thirty days and that authority can direct the Income-tax Officer to pass a fres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch order has been made by the authority concerned without complying with the principles of natural justice, it will not be proper for the court to only quash the order to the advantage of the party. The court should in such a case not only quash the order, but also direct the authority to dispose of the matter afresh after giving the aggrieved party a reasonable opportunity to put forward its case. When, however, the authority concerned has no jurisdiction, such authority cannot obviously be asked to deal with the matter, and if the court takes the view that another authority has the jurisdiction to deal with the matter, such authority may be directed to deal with it. The impugned order of transfer has been found to be vitiated as no reason has been given in justification of the same. It is indisputable that the CBDT has the jurisdiction to make an order of transfer under s. 127 of the I.T. Act. If the effect of the quashing of the impugned order is that the CBDT is precluded from passing a fresh order of transfer after recording its reasons in the order, there can be no doubt that the court would grant liberty to the Board to make a fresh order of transfer in accordance with la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd, Karimgunj, to make the assessment. In upholding the said direction the Division Bench took the view that when the court was in seisin of the proceeding, the time-limit of assessment as provided in sub-ss. (1) and (2) of s. 153 would have no application to the assessment which might be made at any time in consequence of or to give effect to any finding or direction contained in an order of court in the said proceeding. Further, it was observed that such directions should be made in national interest. The observations in Pooran Mall's case [1974] 96 ITR 390 (SC), quoted above, were also relied on. It was, however, not considered whether the direction was necessary to be given for the disposal of the proceeding. It seems to have proceeded on the view that s. 153(3)(ii) is a substantive provision empowering the authority or court to lift the bar of limitation. The above Bench decision is, accordingly, contrary to the decision of the Supreme Court in Rajinder Nath's case [1979] 120 ITR 14 (SC), which was, however, not in existence on the date of the Bench decision. In our opinion, the question of national interest does not come in for the interpretation of a provision of a statute. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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