DALMIA R Vs. UNION OF INDIA

JUDGEMENT

(1.) : This order will dispose of C Ws 316-D of 1965 and 318-D of 1965. In these petitions, under Arts. 226 and 227 of the Constitution, the petitioner, R. Dalmia, has prayed that notices dated March 20, 1965, issued by the ITO, Special Investigation Circle 'B', New Delhi, under s. 148 of the IT Act, 1961 (hereafter called "the Act"), to him personally and also to him and J. Dalmia and S. P. Jain as members of an AOP be quashed.

(2.) THE petitioner was assessed by the ITO, Special Circle, Charge IV, Patna, by assessment order dated March 27, 1950, in respect of his individual income for the year ending September 30, 1947, relevant to the year 1948-49. Notices under s. 34(1)(a) of the Indian IT Act, 1922, for the asst. yrs. 1940-41 to 1949-50 were also issued to him as also to J. Dalmia, HUF, and S. P. Jain (in his individual capacity). In the course of proceedings in pursuance of these notices, the petitioner, along with J. Dalmia and S. P. Jain, submitted proposals for settlement under s. 34(1B) of that Act which were accepted by the Central Board of Revenue with the previous approval of the Central Government. The petitioner claims that the impugned notices issued in spite of the previous assessments and the settlement are illegal, invalid and without jurisdiction. Both the petitioners are contested by the respondents.

(3.) IT was next contended that the previous assessment of the petitioner, as an individual, had been made by the ITO, Special Circle, Charge IV, Patna, and the ITO, Special Investigation Circle, New Delhi, who issued the impugned notice had, therefore, no jurisdiction to issue the same. In answer to this objection, Shri Sharma pointed out that the question of jurisdiction had already been determined by the CIT by his order dated May 25, 1964, on an objection taken by the petitioner on this score. There is no rebuttal to this. According to s. 124(1) of the Act, ITOs have to perform their functions in respect of such areas or of such persons or classes of persons or of such incomes or classes of incomes or of such cases or classes of cases as the CIT may direct. Under sub-s. (4) of s. 124, the question as to whether an ITO has jurisdiction to assess any person has to be determined by the CIT. IT is stated at the bar that the petitioner himself raised objection to the jurisdiction. IT is in the counter-affidavit of the respondents that this matter was determined by the CIT by order dated May 24, 1964. Nothing has been said as to why this order of the CIT does not operate to settle the controversy between the parties. IT is not, therefore, correct to say that the ITO who issued the notice did not have jurisdiction to do so. The last contention raised on behalf of the petitioner was that according to cl. (c) of sub-s. (2) of s. 282 of the Act, the impugned notice issued to the AOP had to be addressed to the principal officer of the association, but as it was addressed to the AOP through the petitioner, the same was illegal and bad. There appears to be no substance in this submission. The notice to an individual or BOI, according to this clause, could also be addressed to any member of the association. The petitioner is stated to be member of this association by he ITO. There is, therefore, no infirmity in the notice.