TaxTMI 
TaxTMI 
1967 (9) TMI 33
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..... The main relief sought by the petitioners in the two writ petitions is that the assessment orders made against them for the assessment year 1962-63 be quashed. The assessment orders have been passed by Shri K. P. Jain, Income-tax Officer, Central Circle I, Meerut. Normally the assessment proceedings giving rise to these petitions should have taken place at Agra, but the Central Board of Direct Taxes, New Delhi, transferred the cases to Meerut. Later on, at the request of the petitioners, Shri Jain aforesaid was directed to hold the assessment proceedings of the petitioners at New Delhi. A large number of grounds have been taken in the two writ petitions. Most of those grounds can be urged before the Appellate Assistant Commissioner before whom appeals are pending against the assessment orders passed by Sri K. P. Jain. Mr. Deoki Nandan has, however, contended that there are two questions which cannot be raised before the Appellate Assistant Commissioner and for the decision of those questions the proper forum is this court exercising its powers under article 226 of the Constitution of India. The two questions are : " 1. That the transfer order having been passed by one memb....
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....oards of Revenue for Direct Taxes and for Excise and Customs and to amend certain enactments for the purpose of conferring powers and imposing duties on the said Boards. " Section 4 of this Act provides: " 4. Procedure of the Board.-(1) The Central Government may make rules for the purpose of regulating the transaction of business by each Board and every order made or act done in accordance with such rules shall be deemed to be the order or act, as the case may be, of the Board. (2) Every rule made under this section shall be laid as soon as may be after it is made before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session or in two successive sessions, and if, before the expiry of the session in which it is so laid or the session immediately following, both houses agree in making any modification in the rule or both houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be, so however, that any modification or annulment shall be without prejudice to the validity of anything previously done under that rule. " Purporti....
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....n of law that the Central Board of Direct Taxes must act as a single unit and a transfer order made by a single member of the Central Board of Direct Taxes is void. 2. Inasmuch as the Central Boards of Revenue Act, 1963, only permits the framing of rules dealing with the procedure and not with the transaction of business or what would in common parlance be called the constitution of Benches, rule 4 is ultra vires. The two questions are interconnected. We are, therefore, proceeding to consider them together. It is true that section 127 of the Act read with section 2(12) of the Act provides that the power to transfer cases can also be exercised by the Central Board of Direct Taxes. We have already pointed out earlier that the Act does not deal with matters relating to the internal management of the Central Board of Direct Taxes nor does it deal with the manner in which the Central Board of Direct Taxes shall exercise its power. We have also pointed out that such a provision could not exist in the Act because the Act only deals with the questions relating to income-tax and not with the internal management or distribution of the business amongst the members of the Central Board of Di....
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.... would also comprehend the distribution of the business to various members finds support from J. K. Gas Plant Manufacturing Co. (Rampur) Ltd. v. Emperor. In that case an order made by a single member of the Governor-General in Council was challenged on the ground that it had not been made by the Governor-General in Council. Their Lordships, dealing with the submission, observed : " Some attempt was then made on behalf of the appellants to suggest that on some evidence tendered to the Tribunal by the Crown before the charges were framed, it might be deduced that the distribution order was made and approved by one Member of the Council only and not by the Governor-General in Council at all and might therefore be invalid. In this connection reference was made to the rules of business made under the powers conferred on the Governor-General by sub-section (2) of section 40 which purported to authorise such action by one Member of the Council, and it was suggested that any such delegation of authority to one member only was ultra vires. It was submitted that the only rules of business which were authorised by the sub-section were rules in respect of business actually transacted by Membe....
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....orising the Chairman to pass orders distributing the business of the Board among himself and other member or members of the Board. We now proceed to consider a connected submission of Mr. Deokinandan. He contends that section 127(1) of the Act requires that the reasons for the transfer shall be recorded. His complaint is that in the order of Shri Narain Rao, extracted earlier, no reasons have been given for the transfer. In the first place, we have not got the whole order of Shri Narain Rao before us but only an extract contained in a letter sent by the Secretary of the Central Board of Direct Taxes to the petitioner. Secondly, we would like to point out that in the notice issued to the petitioners to show cause why the cases be not transferred from Agra to any other place, it has been clearly stated : " That the Central Board of Direct Taxes propose to transfer your case for facility of investigation from Income-tax Officer, Special Circle, Agra, to the Income-tax Officer, Central Circle I, Meerut, under section 127 of the Income-tax Act, 1961. " The reason, therefore, given in the show cause notice is "facility of investigation ". It is not Mr. Deokinandan's contention that ....