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Banarsi Dass Gupta Vs. Commissioner of Income-tax, Delhi - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtDelhi High Court
Decided On
Case NumberIncome Tax Reference No. 68 of 1969
Judge
Reported in11(1978)DLT14
ActsIncome Tax Act, 1922 - Sections 66(1)
AppellantBanarsi Dass Gupta
RespondentCommissioner of Income-tax, Delhi
Advocates: C.S. Aggarwal,; M.S.P. Aggarwal,; Meera Jaggi,;
Cases ReferredMadars v. S. Sivaramakrishna Iyer
Excerpt:
direct taxation - jurisdiction of high court - sections 66 (1) and 66 (8) of income tax act, 1922 - to which high court the delhi bench could refer question of law proposed in application under section 66 (1) - section 66 (1) merely states that assessed require tribunal to refer to high court any question of law arising out of order under section 33 - appellate tribunal shall within time prescribed in draw up statement of case and refer question to high court - section 66 (2) provides that if appellate tribunal refuses to state case on application under section 66 (1) on ground that on question of law arises then assessed may within time prescribed apply to high court - if high court not satisfied with correctness of decision of tribunal then it can require tribunal to state case and.....t.v.r. tatachari, j.(1) this is a reference made by the income-tax appellate tribunal, delhi bench 'a' to this court under section 66(1) of the indian income-tax act, 1922 (hereinafter referred to as the act). (2) the assessed, a hindu undivided family of which the karta is seth banarsi dass gupta, meerut, filed two applications r. a. nos. 945 and 946 of 1968-69, before the appellate tribunal, delhi bench 'a', under section 66(1) of the act, arising out of the income-tax appeals nos. 1978 and 1979 of 1963-64, relating to the assessment years 1956-57 and 1957-58. similarly, the commissioner of income-tax, delhi (central), new delhi, filed two applications, r. a. nos. 12 and 13 of 1968-69, arising out of the same income-tax appeals nos. 1978 and 1979 of 1963-64, relating to the assessment.....
Judgment:

T.V.R. Tatachari, J.

(1) This is a reference made by the Income-tax Appellate Tribunal, Delhi Bench 'A' to this Court under Section 66(1) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act).

(2) The assessed, a Hindu undivided family of which the Karta is Seth Banarsi Dass Gupta, Meerut, filed two applications R. A. Nos. 945 and 946 of 1968-69, before the Appellate Tribunal, Delhi Bench 'A', under Section 66(1) of the Act, arising Out of the Income-tax Appeals Nos. 1978 and 1979 of 1963-64, relating to the assessment years 1956-57 and 1957-58. Similarly, the Commissioner of Income-tax, Delhi (Central), New Delhi, filed two applications, R. A. Nos. 12 and 13 of 1968-69, arising out of the same Income-tax Appeals Nos. 1978 and 1979 of 1963-64, relating to the assessment years 1956-57 and 195 7-5 8 under Section 66 (1) of the Act.

(3) By a common order, dated 28th March, 1969. the Appellate Tribunal referred seven questions of law to this Court as arising out of the orders of the Tribunal, dated 2nd March, 1968 in the aforesaid ' Income-tax Appeals Nos. 1978 and 1979 of 1963-64. The said reference has been numbered in this Court as I.T.R. No. 68 of 1969. When the reference came up for hearing before us, Shri B. N. Kirptl, learned counsel for the Commissioner of Income-tax, Delhi (Central), New Delhi, raised a preliminary objection that this Court has no juris- diction to entertain the reference under Section 66(1) of the Act in view of the facts of the case. For a proper appreciation of the objection, a few relevant facts have to be stated.

(4) The assessed is a Hindu undivided family consisting of Seth Banarsi Dass, the Karta, his wife, Shrimati Rammurti Devi, and his four sons, Seth Mohan Lal, Seth Brij Bhusan Lal, Seth Jatinder Lal and Seth Satinder Lal.

(5) The assessed filed its returns for the assessment years 1956-57 and 1957-58. The Income-tax Officer, Meerut, passed the assessment orders, dated 27th March, 1961, and 30th March, 1962, in respect of the aforesaid two assessment years.

(6) Aggrieved by the said assessment orders, the assessed preferred appeal No. 26 of 1962-63 in respect of the assessment year 1956-57 and appeal No. 55 of 1962-63 in respect of the assessment year 1957- 58, to the Appellate Assistant Commissioner of Income-tax, Meerut. By his orders, dated 13th March, 1963, and 12th March, 1963, respectively, the Appellate Assistant Commissioner, Meerut, allowed the appeals partly.

(7) In so far as the said appellate orders were against it, the asses- see preferred appeals Nos. 1978 and 1979 of 1963-64, to the Income- tax Appellate Tribunal. By two orders, both dated 2nd March, 1968. the Appellate Tribunal, Delhi Bench allowed the appeals partly.

(8) Thereupon, as already stated, the assessed filed the applications, R. A. Nos. 945 and 946 of 1968-69, and the Commissioner of Income-tax, Delhi, (Central), New Delhi filed applications, R. A. Nos. 12 and 13 of 1968-69, under Section 66(1) of the Act praying that the questions proposed by them respectively may be referred to this High Court. By its order, dated 28th March, 1969, the Appellate Tribunal, Delhi Bench, held that some of the questions proposed were questions of fact and declined to refer the said questions. It however, held that seven other questions were questions of law which arise of its impugned orders, and referred the same to this Court.

(9) The objection raised by Shri Kirpal is that all the members of the H.U.F. (assessed) reside and carry on their business at Meerut, that the assessment orders were passed by the Income-tax Officer at Meerut, that the appeals there from were disposed of by the Appellate Asstt. Commissioner at Meerut, and that consequently, Meerut being in the State of Uttar Pradesh, the High Court to which the reference could be made by the Appellate Tribunal, would be the High Court of Allahabad and not the High Court of Delhi, even though the Appellate Tribunal, Delhi Bench, is situated at Delhi. In support of the objection he relied upon' the decision of the High Court of Madras in Commissioner of Income-tax Madras v. S. Sivaramakrishna Iyer 70 I.T.R. 860. In that case, a Division Bench (Veeraswami and Ramaprasada Rao JJ.) held that -

'ASthere are no statutory provisions for determining the proper High Court to which reference under Section 66(2) should be made where the Tribunal has jurisdiction over more Shan one State, the principles which apply to a determination of the jurisdiction of a Court should be applied, and in this view, where a Tribunal has jurisdiction over more States than One, and it has to make a choice, it must be guided by the principles of Section 64, and make the reference to the High Court which has jurisdiction over the place where the assessed carries on business, profession, or vocation or resides'.

(Vide the head-note).

(10) The correctness of the objection has to be considered in the light of the relevant provisions of the Act regarding the jurisdiction of Income-tax Officers, Appellate Assistant Commissioners of Income- tax and the Income-tax Appellate Tribunal.

(11) Under Section 5(3) of the Act, the Central Government may appoint as many Appellate Assistant Commissioners of Income-tax as it thinks fit, and Commissioner of Income-tax may appoint as many Income-tax Officers as may, from time to time, be sanctioned by the Central Government.

(12) Section 5(5) provides that the Income-tax Officers shall perform their functions in respect of such persons or class of persons or such incomes or classes of income or in respect of such areas as Commissioner of Income-tax may direct.

(13) Section 5(4) provides that the Appellate Assistant Commissioners of Income-tax shall perform their functions in respect of such persons or classes of persons or such income or classes of incomes or in respect of such areas as the Central Board of Revenue may direct.

(14) Under Section 5A(1), the Central Government is required to appoint an Appellate Tribunal consisting of as many persons as it thinks fit to exercise the functions conferred on the Appellate Tribunal by the Act, Section 5A(2) requires that the said persons shall consist of judicial members and Accountant Members as defined in section 5A(3). Section 5A(4) requires the Central Government to appoint a judicial member of the Tribunal to be President thereof. Section 5A(5) provides that the powers and functions of the Appellate Tribunal may be exercised and discharged by Benches constituted from Members of the Tribunal by the President of the Tribunal.

(15) Section 64(1) deals with the place of assessment and provides that :-

'WHEREan assessed 'carries on a business, profession orvocation at any place, he shall be assessed by the Income-tax Officer of the area in which that place is situate or, where the business, profession or vocation is carried on in more places than one, by the Income-tax Officer of the area in which the principal place of his business, profession or vocation is .situate'.

(16) Section 64(2) provides that - 'in all other cases an assessed shall be assessed by the Income- tax Officer of the area in which he resides'.

(17) Section 64(3) provides-

'WHEREany question arises under this section as to the place of assessment, such question shall be determined by the Commissioner, or where the question is between places in more States than one, by the Commissioners concerned, or, if they are not in agreement, by the Central Board of Revenue'.

(18) Section 30 provides for an appeal to the Appellate Assistant Commissioner against an order of assessment by an Income-tax Officer.

(19) Section 33 provides for an appeal to the Appellate Tribunal against an appellate order of an Appellate Assistant Commissioner.

(20) Section 66(1) provides that within the time mentioned therein, the assessed or the Commissioner may 'require' the Appellate Tribunal to refer to the High Court any question of law arising out of such order under Section 33, and that the Appellate Tribunal shall within the time prescribed in the sub-section draw up a statement of case and refer the question to the High Court.

(21) Section 66(2) provides that if the Appellate Tribunal refuses to state a case on an application under Section 66(1) on the ground that no question of law arises, the assessed or the Commissioner, a9 the case may he. may within the time mentioned in the sub-section, apply to the High Court, and the High Court, if it is not satisfied with the correctness of the decision of the Appellate Tribunal, require the Appellate Tribunal to state the case and refer it.

(22) Section 66(8) provides that for the purposes of Section 66, 'the High Court' means--

(A)in relation to any State, the High Court of the State, and

(B)in relation to the Union Territories of Delhi and Himachal Pradesh, the High Court of Punjab. After the establishment of the Delhi High Court with effect from 1st November, 1966, the Clause (b) above was amended as 'in relation to the Union Territories of Delhi and Himachal Pradesh, the Delhi High Court'. The reference to Himachal Pradesh was omitted after the State of Himachal Pradesh was constituted, as the case would be covered by clause (a).

(23) The Appellate Tribunal Rules, 1946, were made in pursuance of Section 5A(8) of the Act, Rule 3 thereof provides that a Bench (i.e. a Bench of the Appellate Tribunal) shall hold its sittings at its headquarters or such other place as it may consider convenient. Rule 4(1) provides that a Bench shall hear and determine such appeals and applications made under the Act, as the President (i.e. of the Appellate Tribunal) may by General or Special Order direct.

(24) With reference to am application under Section 66(1) of the Act, Rule 39 of the Appellate Tribunal Rules provides that the Bench which heard the appeal giving rise to the application shall hear it unless the President (of the Appellate Tribunal) directs otherwise. Rule 46 provides that when a requisition is received from the High Court under Section 66(2), or where the case is referred back under Section 66(4), it shall be dealt with by the Bench referred to in Rule 39 unless otherwise directed by the President, Rule 47 provides that. when a copy of the judgment of a High Court is received by the Tribunal under Section 66(5), it shall be sent to the Bench referred to in Rule 39 for such orders as may be necessary unless the President directs otherwise.

(25) In pursuance of Rule 4 of the Appellate Tribunal Rules, 1946, the President of the Tribunal issued Standing Order No. 1 of 1954. In Clause I thereof, it was provided that all appeals and applications under the Act from the States specified in Column 2 therein shall be heard and determined by the Benches specified in Column 1 with effect from 11-6-1954. The relevant entries in Columns 1 and 2 are- 1 2 Allahabad Bench Uttar Pradesh and Vindhya Pradesh. Delhi Bench Punjab, Pepsu, Himachal Pradesh, Bilaspur, Delhi, Ajmer Rajasthan and Madhya Bharat. Delhi Bench Jammu and Kashmir.

(26) Clause 3 of the Standing Order provides that with reference to Rules 39 and 46 of the Appellate Tribunal Rules, reference applications under Section 66(1) and matters arising under Sections 66(2). 66(3), 66(4) and 66(5) of the Act arising out of orders passed by the Bench from which the jurisdiction is transferred by the Standing Order shall be heard and decided by the Bench to whom the jurisdiction is now transferred. There is an Explanationn after clause 3 slating that by this Standing Order, the ordinary jurisdiction of a Bench will be determined not by the place of residence or business of the assessed, but by the location of the office of the 'assessing officer.

(27) After the Incomes-tax Act of 1961 was enacted on 13th January, 1961, the Income-tax Appellate Tribunal Rules, 1963, were made by the Appellate Tribunal under Section 255(5) of the said new Act with effect from 17th April, 1963. Rules 3 and 4 in the said Rules of 1963 are substantially the same as Rules 3 and 4 in the 1946 Rules. The provisions in Rules 40 and 47 of the 1963 Rules provide in the same manner as the Rules 39 and 46 of the 1946 Rules. By Rule 51, the Appellate Tribunal Rules, 1946, were repealed except as to proceedings to which the Act (Indian Income-tax Act, 1922) applied. In pursuance of Rule 4 of the Appellate Tribunal Rules, 1946, and Rule 4 of the Appellate Tribunal Rules, 1963, the President of the Appellate Tribunal issued Standing Order No. 1 of 1967 with effect from 1st March, 1967. In clause 1 thereof, it is provided that all appeals and applications under the Indian Income-tax Act, 1922, and the Income-tax Act, 1961, from the Districts and States specified in Column 2 therein shall, with effect from 1st March, 1967, be heard and determined by the Benches specified in Column I therein. The relevant cn- tries in Columns 1 and 2 are - Allahabad Bench-Uttar Pradesh (excluding all Districts of Rohilkhand Division except Shahjahanpur District, Meerut and Kumaon Divisions, and Agra, Aligarh and Mathura Districts of Agra Division) and Rewa Division of Madbya Pradesh. Delhi Benches-Delhi, Punjab, Haryana, Himachal Pradesh, Rohilkhand Division except Shajahanpur District, Meerut and Kumaon Division and Agra, Aligarh and Mathura Districts of Agra Division of Uttar Pradesh, Gwalior Division of Madhya Pradesh, Rajasthan, Jammu and Kashmir, and the Union Territory of Chandigarh.

(28) Clause 3 of the Standing Order provides that with reference to Rules 39 and 46 of the Appellate Tribunal Rules, 1946, and Rules 40 and 47 of the Appellate Tribunal Rules, 1963, reference applications under section 66(1) and matters arising under Sections 66(2) 66(3), 66(4), 66(5) and 66A(4) of the Act, and reference applications and connected matters arising under the corresponding sections of the Income-tax Act, 1961, shall be heard and decided by the Bench to which the jurisdiction is now transferred. There is an Explanationn after clause 3 which states that by this Standing Order, the Ordinary jurisdiction of a Bench will be determined not by the place of business or residence of the assessed but by the location of the office of the assessing officer.

(29) The above are all the provisions that need to be noticed. As the present case relates to assessment years 1956-57 and 1957-58, we are concerned with the provisions in the Act, the Appellate Tribunal Rules Of 1946, the Standing Order I of 1954, and the Standing Order I of 1967 as it was made applicable to proceedings to which the Act applies.

(30) So far as the jurisdiction of an Income-tax Officer to assess an assessed is concerned, sub-sections (3) and (5) of section 5 merely provide for the appointment of Income-tax Officers and state that the former are to perform their functions in respect of such persons or class of persons or such incomes or classes of income or in respect of such areas as the Commissioner of Income Tax may direct. Sub-sections (1), (2) and (3) of section '64, however, prescribe the place of assessment: of an assessed and lay down that where an assessed carries on a business or .profession or vocation at anyplace, he shall be assessed by the Income Tax Officer of the area in which such place is situate or, where the business, profession or vocation is carried on in more places than one, by the Income-tax Officer of the area in which the principal place of his business, profession or vocation is situate, and that in all other cases, an assessed shall be assessed by the Income-tax Officer of the area in which he resides. Thus, the jurisdiction of ah Income-tax Officer to .assess an assessed is to be determined by the place of business, profession or vocation, or by the location of the residence of the assessed, as the case may be.

(31) As regards the jurisdiction of an Appellate Assistant Commissioner to hear an appeal against an assessment order of any Income-tax Officer, the only provision in the Act is section 5(4) according to which he performs his functions in respect of such persons or classes of persons or of such incomes or classes of income or in respect of such areas as the Central Board of Revenue may direct. Thus, the jurisdiction to hear an appeal against an assessment order of an Income-tax Officer would be with that Appellate Assistant Commissioner Who has been given such jurisdiction by the directions issued by the Central Board of Revenue in that regard, which may be class-wise or area-wise.

(32) We next come to the jurisdiction of the Appellate Tribunal. Section 5A of the Act shows that there is only one Appellate Tribunal constituted under the Act. Is powers and functions conferred by the E Act are to be exercised by Benches constituted from the Members of the Tribunal by the President of the Tribunal. One of the functions of the Appellate Tribunal is to hear an appeal preferred under section 33 of the Act against the appellate order of an Appellate Assistant Commissioner. As the Tribunal functions through its Benches, such an appeal has to be heard by one of the Benches. Rule 4(1) of the Appellate Tribunal Rules, 1946, lays down that a Bench shall hear and determine such appeals and applications made under the Act as the President of the Tribunal may by general or special order direct.

(33) Clause I of Standing Order No.-1 of 1954 issued by the President of :he Tribunal shows that only a limited number of Benches have been constituted, and no separate Bench has been constituted for each State or Union Territory. One or more of those Benches were located at Bombay, Allahabad, Madras, Calcutta, Delhi and Patna. They are set out in column I of the tabular form clause 1. Against each of them arc set out in column 2 of the tabular form, the States from which appeals or applications under the Act are to be heard and determined by the Bench. Thus, the Bench or Benches at some of the above places have to hear appeals or applications under the Act from more than one State.

(34) In the present case, we are concerned with the Allahabad Bench and the Delhi Benches. We have earlier set out the States mentioned in Column 2 against each of the said Benches. According to it, the Allahabad Bench had to hear appeals and applications under, the Act from the State of Uttar Pradesh and Vindbya Pradesh, while the Delhi Benches have to hear appeals and applications from Delhi, Jammu and Kashmir and certain other Districts and States. The Explanationn after clause 3 of the aforesaid Standing Order makes it clear that, by this order, the ordinary jurisdiction of a Bench will be determined not by the place of the residence or business of the assessed, but by the location of the office of the Assessing Officer. The 'assessing officer', though not defined anywhere, obviously means, in the context, the Income-tax Officer making the assessment. Thus, the jurisdiction of a Bench to hear an appeal or an application under the Act is to be determined by the location of the office of the assessing Income-tax Officer in the particular case, and not by the criterion mentioned in section 64 viz., the place of business or residence of the assessed.

(35) The above was the position under the Appellate Tribunal Rules, 1946, read with the Standing Order No. 1 of 1954. The Appellate Tribunal Rules of 1963, no doubt, by Rule 51 thereof, repealed the 1946 Rules, but expressly continued the applicability of the 1946 Rules to proceedings to which the Act (Indian Income-tax Act, 1922) applied. Thus the Standing Order No. 1 of 1954 continued to be in force till 1st March, 1967 when the Standing Order No. 1 of 1967 was made. thereforee, according to the position explained in the previous paragraph, in the present case, the location of the office of the assessing Income-tax Officer being Meerut in the State of Uttar Pradesh, the appeals from the appellate orders of the Appellate Assistant Commissioner, dated 12th and 13th March, 1963, lay at that time to the Allahabad Bench of the Appellate Tribunal. It is not clear from the record as to whether they were so preferred to the Allahabad Bench. What the record shows is that the said appeals were numbered as Income-tax Appeals Nos. 1978 and 1979 of 1963-64, and they were heard and disposed of by the Delhi Bench on 2nd March, 1968.

(36) It has to be recalled that Rule 4 of the Appellate Tribunal Rules of 1946 (like Rule 4 of the Appellate Tribunal Rules of 1963) provided that a Bench shall hear and determine such appeals and applications made under the Act (Indian Income-tax Act, 1922), as the President of the Appellate Tribunal may by general or special order direct. Accordingly, the President issued the Standing Order I of 1967, with effect from 1st March, 1967, in pursuance of both Rule 4 of the 1946 Rules and Rule 4 of the 1963 Rules. The said order expressly superseded all existing orders on the subject. It, thereforee, governed the appeals Nos. 1978 and 1979 of 1963-64 from and after 1st March, 1967. By clause I of the said Order, the President directed that all appeals and applications under the Act (Indian Income-tax Act, 1922), as well as Income-tax Act, 1961, from the Districts and States specified in Column 2 of the tabular form in that clause, shall, with effect from 1st March, 1967, be heard and determined by the Benches specified in column I of the said tabular form. We have earlier set out the relevant entries in that tabular form. They show that Meerut has been excluded from the jurisdiction of the Allahabad Bench and included in the jurisdiction of the Delhi Benches. In other words, from and after 1st March 1967, it was the Delhi Benches that had to hear and determine all appeals and applications under the Acts of 1922 and 1961 from Meerut. It has to also to be noted that clause 2 of the said Standing Order 1 of 1957 provided that :-

'ALLpending appeals and applications except those in which orders have been reserved after hearing, will be governed by the above order. Appeals and applications already fixed for hearing will be heard by the Bench before which they are so fixed'.

Therefore, in the present case, the fact is apparent from the record that the appeals 1978 and 1979 of 1963-64 were heard and determined by the Delhi Bench suggests that the appeals must have been originally preferred to the Allahabad Bench according to the provisions in the Standing Order I of 1954 and subsequently transferred to and heard and determined by one of the Delhi Benches in compliance with the provisions in the Standing Order I of 1967. The same has also to be presumed according to the principle, the official acts have to be presumed to have been performed in accordance with the requirements of law, and nothing to the contrary has been shown to us to rebut that presumption. We, thereforee, proceed an the basis that the Delhi Bench had the jurisdiction to hear and determine the appeals Nos. 1978 and 1979 of 1963-64, and consequently, as the Bench that heard the appeals, had the jurisdiction to hear and determine the applications under section 66(1) of the Act by virtue of the provisions in Rules 39 and 46 of the Appellate Tribunal Rules, 1946 read with clause (3) Of the Standing Order 1 of 1967 to which we have made reference earlier.

(37) The question then arises as to which High Court the Delhi Bench could refer the questions of law proposed in the applications under section 66(1) of the Act.

(38) The only relevant provisions in the Act are those in Section 66. Section 66(1) merely states that within the time mentioned therein, the assessed or the Commissioner may require the Appellate Tribunal to refer to 'the High Court' any question of law arising out of an order under Section 33, and that the Appellate Tribunal shall within the time prescribed in the sub-section draw up a statement of case and refer the question to 'the High Court' Section 66(2) provides that if the Appellate Tribunal refuses to state a case on an application under Section 66(1) on the ground that no question of law arises, the assessed or the Commissioner, as the case maybe, may, within the time mentioned in the sub-section, apply to 'the High Court', and 'the High Court' if it is not satisfied with the correctness of the decision of the Appellate Tribunal, require the Appellate Tribunal to state the case and refer it. Section 66(8) provides that for the purposes of Section ' 66, 'the High Court' means - (a) in relation to any State, the High Court of the State, and (b) in relations to the Union Territory of Delhi, the High Court of Delhi.

(39) The aforesaid provisions do not clearly indicate to which particular High Court the Appellate Tribunal has to make a reference under Section 66(1) or which High Court can call for a reference under Section 66(2), in a case where a Bench of the Appellate Tribunal has jurisdiction over more than one State. This has been noticed in the decision of the Madras High Court in Commissioner of Income-tax Madras v. S. Sivaramakrishna Iyer (Supra). The learned Judges, after pointing out that either Section 66(1) or Section 66(2) or Section 66(8) or the Appellate Tribunal Rules do not throw much light, observed as follows :-

'ALLthat appears from them (Appellate Tribunal Rules) is that by Standing Order made under Rule 4 of these Rules the Madras Bench of the Tribunal has jurisdiction over Madras and Kerala States. There is an Explanationn to the Standing Order which is to the effect that by that order the ordinary jurisdiction of a Bench would be determined not by the place of business or residence of the assessed but by the location of the office of the assessing officer. We do not find it possible to apply this principle in deciding the jurisdiction of the High Court for purposes of Section 66(2)'

'SECTION64 deals with place of assessment and this is determined by the place where the assessed carries on a business or profession or vocation and, in other cases, the assessed shall be assessed by the Income-tax Officer of the area in which he resides. We are inclined to think that since there is no direct statutory provision governing the matter, notions which apply to a determination of the jurisdiction of a Court should be called in aid. On that view, we think that, where a Tribunal has jurisdiction over more States than one, and it has got to make a choice, in the absence of a statutory provision relating to the matter it must be guided by the principal of Section 64, that is to say, the place where the assessed carries on his business, profession or vocation or resides'.

(40) The Standing Order referred to by the learned Judges is obviously Standing Order I of 1967 as it is that order that refers to the States of Madras and Kerala as being within the jurisdiction of the Madras Bench, and not the Standing Order No. 1 of 1954. The learned Judges, however, after referring .to the Explanationn to the Standing Order, merely stated that they do not find it possible to apply the principle in the Explanationn in deciding the jurisdiction of the High Court for purposes of Section 66(2), but did not give any reason as to why they did not find it possible to so apply.

(41) It seems to us that, when there is no direct statutory provision governing the matter, the proper course would be to apply the same basis that has been adopted already with regard to the jurisdiction of a Bench of the Appellate Tribunal for the following reasons. Firstly, as already noticed, the jurisdiction of an income-tax Officer, i.e., the place of assessment, has been required under Section 64 to be determined on the basis of the place where the assessed carries on a business or profession or vocation and, in other cases, the area in which the assessed resides. 'This basis, however, has not been adopted in providing the basis for the determination of the jurisdiction of a Bench of the Appellate Tribunal. Under the Explanationn to the Standing Order I of 1954 as well as to the Standing Order I of 1967, the aforesaid basis under Section 64 was expressly given a go by, and the basis of the location of the office of the Assessing Officer has been adopted. thereforee, in considering the question as to the High Court to which a Bench having jurisdiction over more than one State has to make a reference, the basis adopted for determining the jurisdiction of the Bench would be more appropriate than the basis adopted for determining the jurisdiction of an Income-tax Officer.

(42) Secondly, according to the said basis provided in the Explanationn to the Standing Order for determining the jurisdiction of a Bench, the Bench deals with appeals and applications arising out of the orders of the Assessing Income-tax Officers in the various States mentioned as against the Bench in Column 2 of the tabular form in clause 1 of the Standing Order. In other words, the Bench hears appeals and applications in the cases coming from the States over which it has been given jurisdiction. thereforee, when it hears and determines an appeal as an appeal from a particular State, it would be quite appropriate for the Bench to refer a question of law arising out of its order in that appeal to the High Court of the State from which the appeal had come.

(43) Thirdly, this view, in our opinion, would also be in accord with and give a meaning and effect to the words 'in relation to any State, the High Court of that State' in Section 66(8) of the Act.

(44) Fourthly, Section 33(6) of the Act provides that 'save as provided in Section 66, orders passed by the Appellate Tribunal on appeal shall be final', and Section 66(5) provides that 'the High Court upon the hearing of any such case shall decide the questions of law raised thereby and shall deliver its judgment thereon containing the grounds on which such decision is founded and shall send a copy of such judgment under the seal of the Court and the signature of the Registrar to the Appellate Tribunal which shall pass such orders as are necessary to dispose of the case conformably to such judgment'. The said provisions show that in a case where a reference is made to a High Court by a Bench of the Appellate Tribunal under section 66 of the Act the reference is just an intermediate stage, and the case (appeal before the Bench) would be finally disposed of by the Bench after receiving the judgment of the High Court in the reference. So, instead of adopting a different basis for that intermediate stage, if would be quite appropriate to adopt the same basis as the one adopted for determining the jurisdiction of the Bench.

(45) Thus, it would be appropriate and in consonance with the aforesaid provisions of the Act and the Standing Orders if the basis for the jurisdiction of the Bench is adopted, instead of adopting the basis mentioned in Section 64 of the Act, as suggested in the decision of the Madras High Court in the case. Commissioner of Income-tax, Madars v. S. Sivaramakrishna Iyer (Supra).

(46) A suggestion was made by the learned counsel for the assessed that the place of location of the Bench which hears and determines an appeal may be adopted as the basis for the determination of the jurisdiction of the High Court to which a question of law arising out to its order should be referred, and on that basis the reference to the Delhi High Court in the present case was in order as the Delhi Bench is situated within the territorial jurisdiction of the Delhi High Court. We are unable to accept the suggestion. It has to be noted that there is no statutory requirement that there should be a separate Bench of the Appellate Tribunal for each State or Union Territory. In fact, by the Standing Orders I of 1954 and I of 1967, only a limited number of Benches had been constituted by the President of the Tribunal and located at the places mentioned in Column I of the tabular form in clause 1 of the said Standing Orders. If the basis suggested by the learned counsel is adopted, it would result in only the aforesaid few High Courts, within whose territorial jurisdiction the aforesaid limited number of Benches were located, having the jurisdiction to deal with all the references under Section 66 to the exclusion of the various other High Courts, which obviously is to be avoided. The basis pointed out by us above would avoid such a situation.

(47) In the view taken by us, it would follow that in the present case, since the Income-tax appeals Nos. 1978 and 1979 of 1963-64 had arisen out of the assessment orders of the Income-tax Officer at Meerut which is in the State of Uttar Pradesh, it is the High Court of Allahabad to which the reference should have been made and not the Delhi High Court. As the Delhi High Court has no jurisdiction to entertain the reference, we decline to answer the reference and return the statement of case to the Delhi Bench for taking such appropriate action as it thinks fit in the light of his judgment. In the circumstances of the case, we direct the parties to bear their own costs in this reference.


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