TMI Blog1978 (3) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... law to this court as arising out of the orders of the Tribunal, dated 2nd March, 1968, in the aforesaid Income-tax Appeals Nos. 1978 and 1979 of 1963-64. The said reference has been numbered in this court as ITR No. 68 of 1969. When the reference came up for hearing before us, Shri B. N. Kirpal, learned counsel for the Commissioner of Income-tax, Delhi (Central), New Delhi, raised a preliminary objection that this court has no jurisdiction to entertain the reference under section 66(1) of the Act in view of the facts of the case. For a proper appreciation of the objection, a few relevant facts have to be stated. The assessee is a Hindu undivided family consisting of Seth Banarsi Dass, the karta, his wife, Shrimati Rammurti Devi, and his four sons, Seth Mohan Lal, Seth Brij Bhushan Lal, Seth Jatinder Lal and Seth Satinder Lal. The assessee filed its returns for the assessment years 1956-57 and 1957-58. The Income-tax Officer, Meerut, passed the assessment orders, dated 27th March, 1961, and 30th March, 1962, in respect of the aforesaid two assessment years. Aggrieved by the said assessment orders, the assessee preferred Appeal No. 26 of 1962-63, in respect of the assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l has jurisdiction over more States than one, and it has to make a choice, it must be guided by the principles of section 64, and make the reference to the High Court which has jurisdiction over the place where the assessee carries on business, profession or vocation or resides." The correctness of the objection has to be considered in the light of the relevant provisions of the Act regarding the jurisdiction of Income-tax Officers, Appellate Assistant Commissioners of Income-tax and the Income-tax Appellate Tribunal. Under section 5(3) of the Act, the Central Government may appoint as many Appellate Assistant Commissioners of Income-tax as it thinks fit, and the Commissioner of Income-tax may appoint as many Income-tax Officers as may, from time to time, be sanctioned by the Central Government. Section 5(5) provides that the Income-tax Officers shall perform their functions in respect of such persons or classes of persons or of such incomes or classes of income or in respect of such areas as the Commissioner of Income-tax may direct. Section 5(4) provides that the Appellate Assistant Commissioners of Income-tax shall perform their functions in respect of such persons o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellate Tribunal refuses to state a case on an application under section 66(1) on the ground that no question of law arises, the assessee or the Commissioner, as the case may be, may, within the time mentioned in the sub-section, apply to the High Court, and the High Court, if it is not satisfied with the correctness of the decision of the Appellate Tribunal, require the Appellate Tribunal to state the case and refer it. Section 66(8) provides that, for the purposes of section 66, "the High Court" means- (a) in relation to any State, the High Court for that State, and (b) in relation to the Union Territories of Delhi and Himachal Pradesh, the High Court of Punjab. After the establishment of the Delhi High Court with effect from 1st November, 1966, the clause (b) above was amended as in "relation to the Union Territories of Delhi and Himachal Pradesh, the Delhi High Court". The reference to Himachal Pradesh was omitted after the State of Himachal Pradesh was constituted, as the same would be covered by clause (a). The Appellate Tribunal Rules, 1946, were made in pursuance of section 5A(8) of the Act. Rule 3 thereof provides that a Bench (i.e., a Bench of the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bench from which the jurisdiction is transferred by the standing order shall be heard and decided by the Bench to whom the jurisdiction is now transferred. There is an explanation after clause 3 stating that by this standing order, the ordinary jurisdiction of a Bench will be determined not by the place of residence or business of the assessee, but by the location of the office of the assessing officer. After the Income-tax Act of 1961 was enacted on 13th January, 1961, the Income-tax Appellate Tribunal Rules, 1963, were made by the Appellate Tribunal under section 255(5) of the said new Act with effect from 17th April, 1963. Rules 3 and 4 in the said Rules of 1963 are substantially the same as rules 3 and 4 in the 1946 Rules. The provisions in rules 40 and 47 of the 1963 Rules provide in the same manner as the rules 39 and 46 of the 1946 Rules. By rule 51, the Appellate Tribunal Rules, 1946, were repealed except as to proceedings to which the Act (Indian Income-tax Act, 1922) applied. In pursuance of rule 4 of the Appellate Tribunal Rules, 1946, and rule 4 of the Appellate Tribunal Rules, 1963, the President of the Appellate Tribunal issued Standing Order No. 1 of 1967 with e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 1946, the Standing Order No. 1 of 1954, and the Standing Order No.1 of 1967, as it was made applicable to proceedings to which the Act applies. So far as the jurisdiction of an Income-tax Officer to assess an assessee is concerned, sub-sections (3) and (5) of section 5 merely provide for the appointment of Income-tax Officers and state that the former are to perform their functions in respect of such persons or classes of persons or of such incomes or classes of income or in respect of such areas as the Commissioner of Income-tax may direct. Sub-sections (1), (2) and (3) of section 64, however, prescribe the place of assessment of an assessee and lay down that where an assessee carries on a business or profession or vocation at any place, he shall be assessed by the Income-tax Officer of the area in which such place is situate or, where the business, profession or vocation is carried on in more places than one, by the Income-tax Officer of the area in which the principal place of his business, profession or vocation is situate, and that in all other cases, an assessee shall be assessed by the Income-tax Officer of the area in which he resides. Thus, the jurisdiction of an Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are concerned with the Allahabad Bench and the Delhi Benches. We have earlier set out the States mentioned in column 2 against each of the said Benches. According to it, the Allahabad Bench had to hear appeals and applications under the Act from the State of Uttar Pradesh and Vindhya Pradesh, while the Delhi Benches have to hear appeals and applications from Delhi, Jammu and Kashmir and certain other Districts and States. The Explanation after clause 3 of the aforesaid standing order makes it clear that, by this order, the ordinary jurisdiction of a Bench will be determined not by the place of the residence or business of the assessee, but by the location of the office of the assessing officer. The "assessing officer", though not defined anywhere, obviously means, in the context, the Income-tax Officer making the assessment. Thus, the jurisdiction of the Bench to hear an appeal or an application under the Act is to be determined by the location of the office of the assessing Income-tax Officer in the particular case, and not by the criterion mentioned in section 64, viz., the place of business or residence of the assessee. The above was the position under the Appellate Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch, 1967, it was the Delhi Benches that had to hear and determine all appeals and applications under the Acts of 1922 and 1961, from Meerut. It has also to be noted that clause 2 of the said Standing Order No. 1 of 1967, provided that: " All pending appeals and applications except those in which orders have been reserved after hearing, will be governed by the above order. Appeals and applications already fixed for hearing will be heard by the Bench before which they are so fixed." Therefore, in the present case, the fact apparent from the record that the Appeals Nos. 1978 and 1979 of 1963-64 were heard and determined by the Delhi Bench suggests that the appeals must have been originally preferred to the Allahabad Bench according to the provisions in the Standing Order No. 1 of 1954, and subsequently transferred to and heard and determined by one of the Delhi Benches in compliance with the provisions in the Standing Order No. 1 of 1967. The same has also to be presumed according to the principle that official acts have to be presumed to have been performed in accordance with the requirements of law and nothing to the contrary has been shown to us to rebut that presumption. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved as follows: " All that appears from them (Appellate Tribunal Rules) is that by standing order made under rule 4 of these Rules, the Madras Bench of the Tribunal has jurisdiction over Madras and Kerala States. There is an Explanation to the standing order which is to the effect that by that order the ordinary jurisdiction of a Bench would be determined not by the place of business or residence of the assessee but by the location of the office of the assessing officer. We do not find it possible to apply this principle in deciding the jurisdiction of the High Court for purposes of section 66(2). Section 64 deals with place of assessment and this is determined by the place where an assessee carries on a business or profession or vocation and, in other cases, the assessee shall be assessed by the Income-tax Officer of the area in which he resides. We are inclined to think that, since there is no direct statutory provision governing the matter, the notions which apply to a determination of the jurisdiction of a court should be called in aid. On that view, we think that, where a Tribunal has jurisdiction over more States than one, and it has got to make a choice, in the absence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es mentioned as against the Bench in column 2 of the tabular form in clause 1 of the standing order. In other words, the Bench hears appeals and applications in the cases coming from the States over which it has been given jurisdiction. Therefore, when it hears and determines an appeal as an appeal from a particular State, it would be quite appropriate for the Bench to refer a question of law arising out of its order in that appeal to the High Court of the State from which the appeal had come. Thirdly, this view, in our opinion, would also be in accord with and give a meaning and effect to the words "in relation to any State, the High Court of that State" in section 66(8) of the Act. Fourthly, section 33(6) of the Act provides that "save as provided in section 66, orders passed by the Appellate Tribunal on appeal shall be final", and section 66(5) provides that " the High Court upon the hearing of any such case shall decide the questions of law raised thereby and shall deliver its judgment thereon containing the grounds on which such decision is founded and shall send a copy of such judgment under the seal of the court and the signature of the Registrar to the Appellate Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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