Jurisdiction after transfer revival and section 27 relief require proof of sufficient cause for each default in assessment proceedings.

A transferred income-tax case reverts to its earlier position when a later transfer order is quashed, and the earlier valid transfer revives without a fresh order; on that basis, the Ranchi Income-tax Officer had jurisdiction. The Tribunal could also accept the correct copy of the order and condone the filing defect, so the appeal was treated as properly instituted within time. Relief under section 27 was refused because the assessee, on its own showing, had received the statutory notice and a mistaken belief about jurisdiction did not amount to sufficient cause for failure to comply with notices under section 22(2) and section 22(4).

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Issues: (i) Whether the appeal before the Tribunal was competent and within time. (ii) Whether the assessment made by the Income-tax Officer, Special Circle, Ranchi, was legal and valid, including the questions of jurisdiction and whether the assessee had sufficient cause under section 27 to avoid the consequences of non-compliance with notices under section 22(2) and section 22(4).

Issue (i): Whether the appeal before the Tribunal was competent and within time.

Analysis: The memorandum of appeal initially contained a defect, but the Tribunal had the power to accept the correct copy of the order and to condone the delay in filing it. Once the defect was cured and the proper order was brought on record, the appeal had to be treated as properly instituted within time.

Conclusion: The issue was decided in favour of the assessee.

Issue (ii): Whether the assessment made by the Income-tax Officer, Special Circle, Ranchi, was legal and valid, including the questions of jurisdiction and whether the assessee had sufficient cause under section 27 to avoid the consequences of non-compliance with notices under section 22(2) and section 22(4).

Analysis: The quashing of the Central Board of Revenue's later transfer order revived the earlier transfer to Ranchi, and no fresh transfer order was necessary. The Ranchi Income-tax Officer therefore had jurisdiction. On the assessee's own showing, the notice under section 22(2) read with section 34 had been served, and a mistaken belief about jurisdiction did not amount to sufficient cause for failure to file the return. The assessee had two defaults, and relief under section 27 could not be granted unless sufficient cause was shown for both.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Final Conclusion: The reference was answered in part for the assessee on the question of limitation and competency of the appeal, but the validity of the Ranchi assessment and the refusal to reopen the assessment were upheld.

Ratio Decidendi: Where a transferred income-tax case reverts to its earlier position after quashing of a later transfer order, the earlier valid transfer revives without a fresh order; and for relief under section 27, the assessee must establish sufficient cause for each default that enabled the best judgment assessment.

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