Appeal granted, transfer order quashed, assessments allowed despite limitations. Court's jurisdiction upheld for justice.

The court allowed the appeal, quashing the invalid transfer order dated December 23, 1972, and directing the Income-tax Officer to make assessments for specified years despite limitations. The court held that it had jurisdiction to issue directions under section 153(3) of the Income-tax Act in the interest of justice and national interest, ensuring taxes were recoverable. The impugned order was set aside, and no costs were awarded in the appeal.

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Issues Involved:
1. Validity of the transfer order by the Central Board of Direct Taxes (CBDT) u/s 127 of the Income-tax Act, 1961.
2. Jurisdiction of the court to issue directions for assessments barred by limitation u/s 153 of the Income-tax Act, 1961.

Summary:

1. Validity of the Transfer Order:
The petitioner-appellant, an assessee under the Income-tax Act, 1961, challenged the CBDT's order dated December 23, 1972, which transferred its case from the Income-tax Officer, "A" Ward, Karimganj, to the Income-tax Officer, Central Circle XXXIII, Calcutta. The appellant contended that the order did not contain any reasons for the transfer as required by law. The rule was contested and subsequently discharged by the impugned order under appeal. However, the learned Advocate-General conceded that, in light of the Supreme Court's decision in Ajantha Industries v. Central Board of Direct Taxes [1976] 102 ITR 281 (SC), which mandated the recording and communication of reasons for such transfers, the impugned order was invalid. Consequently, the appeal was allowed, and the transfer order dated December 23, 1972, was quashed.

2. Jurisdiction to Issue Directions for Assessments Barred by Limitation:
The learned Advocate-General argued that the court should issue directions u/s 153(3) of the Act to enable the original Income-tax Officer to make assessments for the years 1970-71, 1972-73, 1973-74, and 1974-75, which would otherwise be barred by limitation. The court examined the relevant provisions of section 153, noting that sub-sections (1) and (2) provide time limits for assessments, while sub-section (3) allows for assessments to be completed at any time in consequence of or to give effect to any finding or direction contained in an order of any court in a proceeding otherwise than by way of appeal or reference under the Act. The court held that it had the jurisdiction to pass appropriate directions in the interest of justice and national interest, as otherwise, taxes payable for those years would be irrecoverable for no fault of the revenue.

The court rejected the contention that sub-section (3) of section 153 is a mere proviso to sub-sections (1) and (2), stating that it confers plenary powers on the appropriate authority to pass directions for assessments, reassessments, or recomputations at any time. The court also dismissed the argument that the intended assessments had become barred by limitation, noting that sub-section (3) expressly excludes the operation of the earlier sub-sections in such cases.

Conclusion:
The appeal was allowed, and the impugned transfer order dated December 23, 1972, was set aside. The court directed the Income-tax Officer, "A" Ward, Karimganj, to make assessments for the years 1970-71, 1972-73, 1973-74, and 1974-75. There was no order for costs in the appeal.

G. N. RAY J.: I agree.

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