Territorial jurisdiction for tax reference applications depends on ordinary nexus principles when statute is silent.

Where the Income-tax Act did not expressly fix the High Court with territorial jurisdiction for a section 66(2) reference application, the Court applied ordinary territorial principles instead. It treated section 66(8) as neutral and held that Tribunal rules could not by themselves confer jurisdiction. Using the assessee's place of business or residence, and the nexus that penalty proceedings are a continuation of the assessment proceedings, jurisdiction was found to lie with the Kerala High Court. The Madras High Court therefore lacked jurisdiction to entertain the reference petitions, and they failed on that ground.

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Issues: Whether the High Court had jurisdiction under section 66(2) to entertain the reference applications in the facts of the case.

Analysis: The petitions arose from penalty proceedings connected with assessments made in Kerala, while the applications were brought before the Madras High Court because the relevant income-tax charge and transfer notifications had placed the officer within the Madras administrative set-up. The Court held that no direct statutory provision in the Income-tax Act governed the territorial jurisdiction of the High Court for a section 66(2) application. Section 66(8) was treated as neutral, and the Tribunal Rules were held insufficient to determine High Court jurisdiction. In the absence of an express provision, the Court applied the principle underlying section 64, namely the place where the assessee carried on business or resided, and also regarded the penalty proceedings as a continuation of the assessment proceedings originating in Kerala. On both approaches, jurisdiction was found to lie with the Kerala High Court.

Conclusion: The Madras High Court had no jurisdiction to entertain the petitions under section 66(2), and the applications failed on that ground.

Ratio Decidendi: Where a taxing statute does not expressly determine the High Court having jurisdiction for a reference application, jurisdiction is to be identified by applying ordinary territorial principles, with primary regard to the assessee's place of business or residence and the real nexus of the proceedings.

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