SADHAN KUMAR ROY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) In this reference under Section 256(2) of the Income-tax Act, 1961, the following question has been referred to this court;

(2.) This is a case of reopening of certain orders passed by the Commissioner of Income-tax under Section 33B of the Indian Income-tax Act, 1922. In view of the fact that only one contention was urged before us, we need not set out the other facts leading up to the making of the impugned order in detail in this reference. The material facts so far as this question is concerned appear to be that the impugned assessment orders were passed on the 2nd September, 1963. There was a notice dated the 8th August, 1963, issued by the Commissioner of Income-tax under Section 33B of the Indian Income-tax Act, 1922, in respect of the assessment years 1958-59 to 1961-62. The said notice was issued by one Shri F. H. Vallibhoy who was then the Commissioner having jurisdiction over the assessee. On the 29th August, 1963, the assessee wrote a letter addressed to the Commissioner of Income-tax in response to the said notice in which he raised various contentions disputing the jurisdiction and the rights of the Commissioner to reopen the assessment under Section 33B of the Indian Income-tax Act, 1922. Towards the end of the said letter it was stated by the assessee as follows:

(3.) It appears that the jurisdiction of the Commissioner was changed and one Shri M. B. Palekar assumed charge as Commissioner on the 2nd September, 1963. The order under Section 33B of the Indian Income-tax Act, 1922, was passed on the 2nd September, 1963. The assessee raised various contentions before the Tribunal about the legality and validity of the impugned order and one of the contentions raised before the Tribunal was that Shri Palekar should have himself called for the records, examined the position himself and given a fresh notice if necessary. This contention appears in paragraph 10 at page 42 of the order of the Tribunal. The Tribunal was unable to accept the said contention. It was, further, contended that in view of the provisions of Section 5(7C) of the Indian Income-tax Act, 1922, as it stood at the relevant time, there had been no compliance With the said provisions and requirements enjoined by the said section and as such the impugned order was not legal. Section 5(7C) is as follows; "(7C), Whenever in respect of any proceeding under this Act an income-tax authority ceases to exercise jurisdiction and is succeeded by another who has and exercises jurisdiction, the income-tax authority so succeeding may continue the proceeding from the stage at which the proceeding was left by his predecessor : Provided that the assessee concerned may demand that before the proceeding is so continued the previous proceeding or any part thereof be reopened or that before any order for assessment is passed against him he be re-heard: Provided further that in computing the period of limitation for the purposes of Sub-section (3) of Section 34, the time taken in reopening the whole or any part of the proceeding or in giving an opportunity to the assessee to be reheard under the preceding proviso shall be excluded." The Tribunal, as mentioned hereinbefore, was unable to accept this contention for the reasons mentioned in, its order. In the aforesaid circumstances the question mentioned hereinbefore has been referred to this court under Section 256(2) of the Income-tax Act, 1961, as directed by this court.