Local tax assessment jurisdiction, transfer of pending proceedings, and no bar to relief against illegal assessment.

Section 64 required assessment by the Income-tax Officer of the area where the assessee carried on business, so the Central Income-tax Officer lacked jurisdiction where a local officer for the relevant ward existed. The Court treated the local officer as the proper statutory authority and upheld the assessee's right to local assessment. Under Section 5, pending assessments and proceedings could be transferred because no vested substantive right had accrued, but completed assessments could not be displaced retrospectively once appellate and review rights had attached. The Court also held that neither Section 226 of the Government of India Act, 1935 nor Section 45 of the Specific Relief Act barred the petition, as it sought to prevent an illegal assessment by the proper officer.

---

---

Issues: (i) Whether the Income-tax Officer, Central, Section II, had jurisdiction to assess the assessee in view of Section 64 of the Income-tax Act. (ii) Whether pending assessments and proceedings could validly be transferred to the Commissioner, Central, under Section 5 of the Income-tax Act. (iii) Whether the petition was barred by Section 226 of the Government of India Act, 1935, or by Section 45 of the Specific Relief Act, 1877.

Issue (i): Whether the Income-tax Officer, Central, Section II, had jurisdiction to assess the assessee in view of Section 64 of the Income-tax Act.

Analysis: Section 64 required assessment by the Income-tax Officer of the area in which the assessee carried on business. The Court held that the statutory scheme contemplated local assessment and that the area assigned to the Central Officer, namely the Bombay Presidency, Sind and Baluchistan, was too wide and did not bear a reasonable relation to the place of business in Bombay. The existence of a local officer for the assessee's ward meant that the local officer alone answered the description in Section 64.

Conclusion: The Central Income-tax Officer lacked jurisdiction, and the assessee was entitled to be assessed by the local officer; this issue was decided in favour of the assessee.

Issue (ii): Whether pending assessments and proceedings could validly be transferred to the Commissioner, Central, under Section 5 of the Income-tax Act.

Analysis: The Court distinguished between completed assessments and pending matters. It held that the power to transfer cases covered pending assessments and proceedings, because no vested substantive right had accrued in such matters, but did not extend to assessments already completed, where appellate and review rights had attached.

Conclusion: Pending assessments and proceedings were capable of transfer, but completed assessments were not; this issue was decided partly against the assessee.

Issue (iii): Whether the petition was barred by Section 226 of the Government of India Act, 1935, or by Section 45 of the Specific Relief Act, 1877.

Analysis: The Court held that directing a revenue officer to perform or refrain from performing a statutory duty in a preliminary assessment matter did not amount to prohibited original jurisdiction in a revenue matter. It further held that the assessee had a personal right to be assessed by the proper officer and no equally efficacious alternative remedy existed to prevent an illegal assessment in advance.

Conclusion: Neither preliminary objection barred the petition; this issue was decided in favour of the assessee.

Final Conclusion: The application succeeded in substance, with the Court protecting the assessee's right to local assessment while recognising the transferability of pending matters but not completed assessments.

Ratio Decidendi: Where a statute mandates assessment by the Income-tax Officer of the area in which the assessee carries on business, an administrative transfer cannot displace that local jurisdiction unless the statutory description is still satisfied; pending assessment proceedings may be transferred, but completed assessments carry accrued rights that cannot be taken away retrospectively.

---