Jurisdictional fact and tax deduction liability: a wrongly decided residence finding cannot confer jurisdiction, and the appeal remedy may still be available.

A quasi-judicial authority cannot finally determine its own jurisdiction by wrongly deciding a jurisdictional fact such as the recipient's residence; where liability to deduct tax depends on the payee being a non-resident, that foundational issue remains open to challenge, including in writ proceedings. The appellate remedy under section 30(1A) of the Income-tax Act, 1922 was held inapplicable where the assessee disputed the very basis of liability and contended that no deduction was required because the payee was not a non-resident firm. The appeal therefore succeeded, the High Court Appellate Bench order was set aside, and the matter was remitted for fresh decision with all contentions left open.

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Issues: (i) Whether the Income-tax Officer could finally determine the jurisdictional fact of residence and thereby fasten liability under section 18(3B) of the Income-tax Act, 1922; (ii) whether an appeal under section 30(1A) was maintainable in a case where the assessee disputed that the payee was a non-resident firm.

Issue (i): Whether the Income-tax Officer could finally determine the jurisdictional fact of residence and thereby fasten liability under section 18(3B) of the Income-tax Act, 1922.

Analysis: The liability to deduct tax under section 18(3B) depended on the foundational fact that the recipient was a non-resident. A quasi-judicial authority cannot confer jurisdiction on itself by incorrectly deciding such a jurisdictional fact. That question was open to examination in writ jurisdiction, and if the High Court found that the officer had assumed jurisdiction on an erroneous finding as to residence, certiorari would lie.

Conclusion: The jurisdictional fact was not conclusively within the officer's own determination, and the assessee was entitled to challenge the erroneous assumption of jurisdiction.

Issue (ii): Whether an appeal under section 30(1A) was maintainable in a case where the assessee disputed that the payee was a non-resident firm.

Analysis: The appellate remedy under section 30(1A) presupposed compliance with the statutory requirements of deduction and payment over of tax. Those requirements could not govern a case where the assessee's basic contention was that no deduction was called for because the payee was not a non-resident. The provision was therefore inapplicable to such a dispute.

Conclusion: The appeal was not barred on the ground taken by the revenue, and the assessee could pursue his challenge.

Final Conclusion: The appeal succeeded, the order of the High Court's Appellate Bench was set aside, and the matter was sent back for fresh decision on the appeal, with all contentions left open.

Ratio Decidendi: A quasi-judicial authority cannot determine its own jurisdiction by wrongly deciding a jurisdictional fact, and a statutory appellate remedy conditioned on prior compliance does not apply where the assessee disputes the very basis on which the liability arises.

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