Reassessment jurisdiction and pending proceedings under the repeal clause controlled validity of fresh income-tax notices.

Jurisdiction to initiate reassessment under the 1922 Income-tax Act was treated as distinct from venue: the absence of a transfer order under section 5(7A) did not by itself defeat the Jodhpur Income-tax Officer's authority to issue section 34 notices. For notices under the 1961 Act, section 297 preserved pending proceedings under the repealed Act and barred fresh section 148 notices for years where section 34 proceedings were already pending at the commencement of the new Act. Fresh section 148 notice was permissible only for a year with no pending section 34 proceeding.

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Issues: (i) Whether the Income-tax Officer at Jodhpur had jurisdiction to issue notices under section 34 of the Indian Income-tax Act, 1922 for escaped income despite the absence of a transfer order under section 5(7A) of that Act; (ii) Whether notices under section 148 of the Income-tax Act, 1961 could validly be issued for assessment years 1946-47 to 1949-50 when proceedings under section 34 of the repealed Act were already pending at the commencement of the 1961 Act.

Issue (i): Whether the Income-tax Officer at Jodhpur had jurisdiction to issue notices under section 34 of the Indian Income-tax Act, 1922 for escaped income despite the absence of a transfer order under section 5(7A) of that Act.

Analysis: The legal distinction between jurisdiction and venue was applied. The relevant provisions governing assessment and reassessment vested power in the Income-tax Officer as such, while the place of assessment and allocation of work under sections 64 and 5(5) of the 1922 Act were treated as matters of venue or administrative convenience, not inherent jurisdiction. The absence of a transfer order under section 5(7A) did not divest the Jodhpur officer of authority to initiate reassessment proceedings, and the objection to place was also not available after the return was not filed within the prescribed time.

Conclusion: The Jodhpur Income-tax Officer had jurisdiction to issue the section 34 notices under the 1922 Act.

Issue (ii): Whether notices under section 148 of the Income-tax Act, 1961 could validly be issued for assessment years 1946-47 to 1949-50 when proceedings under section 34 of the repealed Act were already pending at the commencement of the 1961 Act.

Analysis: Section 297(2)(d)(i) preserved pending proceedings under section 34 of the repealed Act and directed that they continue as if the 1961 Act had not been passed. Section 297(2)(d)(ii) permitted fresh notices under section 148 only where no section 34 proceedings were pending at the commencement of the new Act. Since section 34 notices had already been issued and proceedings were factually pending for assessment years 1946-47 to 1949-50, the later notices under section 148 for those years were barred. For assessment year 1950-51, however, no section 34 notice had been issued before the new Act commenced, so a fresh section 148 notice was permissible.

Conclusion: The notices under section 148 for assessment years 1946-47 to 1949-50 were invalid, while the notice for assessment year 1950-51 was valid.

Final Conclusion: The challenge succeeded only in part: the reassessment notices for four assessment years were quashed for want of jurisdiction, but the notice for the fifth year was sustained.

Ratio Decidendi: Where reassessment proceedings under the repealed Income-tax Act, 1922 were already factually pending at the commencement of the Income-tax Act, 1961, section 297 barred the issue of fresh notices under section 148 for those very years; and absence of a transfer order under section 5(7A) did not necessarily extinguish the jurisdiction of an otherwise duly appointed Income-tax Officer to initiate proceedings under section 34.

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