COMMISSIONER OF INCOME TAX Vs. GOVINDRAM SEKSARIA

JUDGEMENT

(1.) THE assessee was assessed to income -tax for the assessment year 1950 -51 and earlier years by the Additional Income -tax Officer, Section VI (Central) Bombay. The jurisdiction of this Officer to assess the assessee is not in the question. The head officer of the assessee was at Indore and the Income -tax Act did not apply to Indore which was prior to 1950 an Indian State. Section 3 of the Finance Act of 1950 made the Income -tax Act applicable to the whole of India excepting Kashmir which included Madhya Bharat and Indore. The assessee was assessed by the same officer for the assessment year 1951 -52, and the contention put forward by the assessee was that by reason of the application of the Indian Income -tax Act to Indore the jurisdiction which was rightly vested in the Income -tax Officer became divested. This contention of the assessee has been accepted by the Tribunal and we have now to examine whether the Tribunal was correct in the view that it took.

(2.) NOW , on the 18th April, 1939, under sub -section (2) of section 5 the Central Broad of Revenue appointed the Commissioner of Income -tax certain specific cases and one of the cases assigned to this Commissioner of the assessee. Under section 5 (2) the Central Government may appoint a Commissioner of Income -tax for a specified area or it may appoint a Commissioner to discharge, without reference to area, the functions of a Commissioner in respect of any class or classes of cases assigned to him by the Central Board of Revenue, and in this case the Central Board of Revenue has directed the Commissioner of Income -tax (Central) to discharge the functions in respect of certain specific cases without reference to area. On the 27th April, 1939, the Commissioner of Income -tax (Central), by reason of the powers vested in him under section 5 (5) of the Act allotted the case of the assessee to Section I (Central), and on the 4th May, 1945, by reason of the powers vested in him under sub -section (7A) of section 5 he transferred the case of the assessee from the Income -tax Officer, Section I (Central), to the Income -tax Officer, Section VI (Central), and it is this officer who has assessed the assessee.

(3.) THE contention is that inasmuch as the assessee has his principal business in Indore, by reason of sub -section (1) of the section 64 he is entitled to be assessed by the Income -tax Officer of that area. It is said that before the Income -tax Act was made applicable to Indore the assessee could not claim his right under section 64 (1), but as soon as this section applied, whatever the jurisdiction of the Income -tax Officer, Bombay, was that jurisdiction ceased and the only officer who had jurisdiction was the Income -tax Officer of the area in question, viz., Indore. In putting forward this argument Mr. Kolah completely ignores and overlooks the provisions of sub -section (5) of section 64 and the provisions of that sub -section are : 'The provisions of sub -section (1) sub -section (2) shall not apply and shall be deemed never at any time to have applied to any assessee - (a) on whom an assessment or re -assessment for the purposes of this Act has been, is being or is to be made in the course of any case in respect of which a Commissioner of Income -tax appointed without reference to area under sub -section (2) of section 5 is exercising the functions of a Commissioner of Income -tax..'