1940 (9) TMI 27 - HC - Income Tax

High Court upholds jurisdiction limits under Section 66, affirms finality of assessments, emphasizes procedural compliance.

Seth Kanhaiya Lal Goenka Versus Re. on

Seth Kanhaiya Lal Goenka Versus Re. on - 1941 9 ITR 25 All Issues:Jurisdiction of Income-tax Officer, Refusal to state a case under Section 66(3) of the Indian Income-tax Act, Refusal to refer questions on jurisdiction to High Court under Section 66(2), Compliance with Section 64(3) in determining place of assessment, Opportunity for assessee to represent views in decision-making process.Jurisdiction of Income-tax Officer:The case involved an application by an assessee under Section 66(3) of the Indian Income-tax Act to require the Commissioner to state a case and refer it to the High Court. The assessee had questioned the jurisdiction of the Income-tax Officer of Meerut regarding the place of assessment. The Commissioner had obtained an affidavit from the assessee and, in consultation with the Commissioner of Bengal, decided that assessments for certain years should be made in the United Provinces and others in Calcutta. The Income-tax Officer of Meerut proceeded with the assessment despite objections from the assessee, which was completed in 1937.Refusal to State a Case under Section 66(3):The Commissioner refused to state a case on the point of jurisdiction, stating that as no appeal was provided under Section 30 against an order passed under Section 64, the questions on jurisdiction did not arise out of the appellate order of the Assistant Commissioner. The High Court held that under Section 66, only questions of law arising out of the Assistant Commissioner's order could be referred to them. The Assistant Commissioner's jurisdiction to decide an appeal was limited by Section 30 of the Act, and the High Court could not interfere with decisions made under Section 64.Compliance with Section 64(3) in Determining Place of Assessment:The High Court analyzed the decision-making process under Section 64(3) and concluded that the matter had been decided in strict conformity with the Act. The Court emphasized that the decision on the place of assessment was final once made by the Commissioner, and there was no right of appeal against such decisions. The Court highlighted that the Legislature's intent was clear in not allowing appeals under Section 64 due to the hierarchical structure of the Income-tax authorities.Opportunity for Assessee to Represent Views in Decision-making Process:The Court addressed the contention that the assessee was not given an opportunity to represent views in the decision-making process as required by the proviso to Section 64(3). The Court held that the assessee had an opportunity to represent views by providing an affidavit, and it was not necessary for the Commissioner to inform the assessee of the joint decision with the Commissioner of Bengal. The Court further rejected arguments challenging the decision-making process and upheld the legality of the order under Section 64(3).In conclusion, the High Court rejected the application, affirming the Commissioner's decision that questions on jurisdiction could not form the subject of a reference to the High Court under Section 66. The Court emphasized the limitations on appeals and interventions in decisions made under Section 64, highlighting the hierarchical structure and finality of assessments once determined by the relevant authorities. The Court also upheld the compliance with procedural requirements and dismissed arguments challenging the decision-making process.