1. These are petitions Hied by the Commissioner of Income-tax, Madras (Central) Madras, under Section 66 (2) of the Income-tax Act 1922. The respondent was an assessee on the file of the Income-tax Officer, Trivandrum. He was assessed to income-tax for the years 1951-52 to 1956-57 by orders made by that officer in February 1955, for the first three years, in April of that year, for the fourth year in February 1956, for the fifth year and in November of that year for the last year. The assessment orders were reopened by the income-tax officer which resulted in an order dated 31-12-1962. Proceedings for levy of penalty were also started by that officer which were referred to by him to the Inspecting Assistant Commissioner, Central Range, Madras, under Section 274(2) of the Income-tax Act 1961.
On 1-10-1964, the Inspecting Assistant Commissioner levied a penalty for each of the years, but his orders on appeal filed by the assessee were set aside by the Tribunal. The Tribunal declined at the instance of the Commissioner to make a reference to this court on the view that the questions involved were factual and they were concluded by the findings of the Tribunal.
(In paragraph 2 of the judgment, the view of the Tribunal that it is a pure question of fact was held to be incorrect. It was held to be a mixed question of fact and law. The judgment then proceeds.)
3. But on behalf of the assessee, a point of jurisdiction is raised, which, in our opinion, appears to be one of substance. On 4-5-1964, there was a notification of the Central Board of Direct Taxes which created the charge of the Commis-sioner of Income-tax (Central), Madras. (Board's Notification No. 2. F. No. 55/67/ 64--IT). On 15-5-1964, the charge of the Commissioner of Income-tax (Central), Madras was actually created. There was another notification by the Central Board of Direct Taxes dated 28-9-1964, which attached the Income-tax Officer, Central Circle Tiruchur to the Commissioner of Income-tax (Central), Madras (Board's Notification No. 69 F. No. 55/172/64-IT). This notification was given effect to on and from 1-10-1964. It meant that the Inspecting Assistant Commissioner, Central Range, Madras assumed jurisdiction over the Income-tax Officer, Central Circle, Tiruchur. It is in that capacity the Inspecting Assistant Commissioner made the order we referred to, which is dated 19-12-1964. The present petitions were filed on 5-1-1967. Subsequently, it appears the Central Board has, on 17-7-1967 retransferred the jurisdiction over the case to the Income-tax Officer, Companies Circle, Trivandrum. What Is argued before us is that in the light of these facts it is the Kerala High Court that will have jurisdiction under Section 66(2) and not this court.
4. We have heard argument on this question on both sides. We have been referred to certain provisions of the Income-tax Act, which, we may say, are of no assistance in deciding the question before us. They deal with the jurisdiction of the assessing officer, the powers of transfer vested in the Commissioner in relation to particular cases under his jurisdiction and the set up and powers of the Tribunal including its jurisdiction. But no provision from the Income-tax Act has been brought to our notice which directly bears upon the point now at issue. Section 66(2) entitles the assessee or the Commissioner, as the case may be, to apply to the High Court in case the Tribunal has refused to refer a matter to that court, for a direction requiring the Tribunal to make a reference, Sub-section (8) of Section 66 says that for the purpose of the section, the High Court means in relation to anv State the High Court for that State. The words 'in relation to any State' appear to be neutral and do not, to our minds, by themselves fix the State the High Court in which will have jurisdiction under Section 66(2).
The Appellate Tribunal rules do not also throw much light. All that it appears from them is that by the standing orders made under rule 4 of these rules, the Madras Bench of the Tribunal has jurisdiction over Madras and Kerala States. There is an explanation 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 assessee 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).
5. Section 64 deals with place of assessment and this is determined by the place where an assessee carries on a business or profession or vocation and in other cases, the assessee 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, the 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 principles of Section 64, that is to say, the place where the assessee carries on his business, profession or vocation or resides. On that test, it is the High Court of Kerala which will have jurisdiction.
There is also another approach to the question, namely, the subject-matter test As we mentioned, the penalty proceedings were originally initiated by the Income-tax Officer at Trichur and it was because of a directive by Section 274(2) he made a reference to the Inspecting Assistant Commissioner. But in effect, as we think, the penalty proceedings are but a continuation of the original assessment orders and the subsequent proceedings started by the Income-tax Officer at Trichur for levy of penalty. On that basis too, we are inclined to think that this court will have no jurisdiction under Section 66(2).
6. The petitions are dismissed, but in the circumstances with no costs.