1. These two petitions are filed by the Commissioner of income-tax, madras, praying that this court may be pleased to direct the Incometax Appellate Tribunal, Madras Bench, to state a case to this Honorable court and refer the question of law, viz.
'Whether the Appellate Tribunal was correct in holding that the value of the perquisite as fixed in previous assessments together with Rs. 600/- added represented the fair rental value of quarters occupied by the assesses and as such the valued of the perquisite as contemplated in Rule 24-A of the Income-tax Rules?
The assesses was employed as Assistant Manager in the Nadupally Estate, Kerala State. During the account year ended 31-3-1959 and 31-3-1960, the assessee received from his employer salary and allowances amounting to Rs. 20902 and Rs. 27280 respectively. Besides, the assessee was provided with rent-fee furnished quarters, hire-free furniture's, free electricity and two servants whose wages were borne by the employer.
(2) In his income-tax returns for the relevant years, 1959-60 and 1960-61 filed before the Income-tax Officer, Always, the assessee returned the value of his rent-free accommodation at Rs. 492, calculated at the rate of Rs. 41 per month, which was the figure accepted by the Department in a number of prior assessments. The Officer, however, refused to adopt the assessee's valuation on the score that under rule 24-A of the Income-tax Rules, 1922, the value of the rent-free furnished quarters was to be fixed at 121/2 percent on the salary. But, in view of the location of the assessee's quarters and the amenities provided therein, the officer determined the rental value at 9 per cent on the salary which amounted to Rs. 1440 and Rupees 1854 respectively for the two assessment years, 1959-60 and 1960-61.
(3) The assessee appealed against the officer's decision to the Appellate Assistant Commissioner of Income-tax, Trivandrum. The Appellate Assistant Commissioner rejected the assessee's contentions, and on the materials placed, he adopted Rs. 3400 as the fair rental value of the assessee's quarters.
(4) The assessee went on further appeal to the Income-tax Appellate Tribunal, Madras Bench. The Tribunal was of the view that the rental value adopted in the prior year's assessments on a basis agreed to between the department and the assessee, as well as Assistant managers of other estates concerned was fair and reasonable, and that the same value ought to have adopted for the present assessment years also, even after Rule 24-A came into force. The Tribunal further found that no basis was disclosed for the officer's valuation of the rent at 9 per cent on the salary. The Tribunal accepted that the accommodation provided to the assessee was substantial, but observed that it was offset by other factors such as the loneliness of the place, inaccessibility of the area and the like. In those circumstances, the Tribunal held that the rental value agreed to by the department in the prior assessment years should continue to be adopted for the present assessment years also. At the same time, the Tribunal was of the view that the value of the furniture, which was not taken into account in the prior assessment years, must also be reckoned in arriving at the value of the rent-free quarters for the assessment years, under appeal. The Tribunal determined the annual rental value of the assessee's rent-free quarters at Rs. 492 on the basis of the department's own estimate in the prior assessment years, and fixed the annual value of the furniture at Rs. 600, taking the rental value of the assessee's furnished quarters as a whole at Rs. 1092,. In the meantime, the assessee's file, at his own request, was transferred to the file of the Income-tax Officer, Coimbatore, who is subordinate to the Income-tax Commissioner, Madras. The Commissioner of Income-tax, Madras, therefore, filed reference applications under Section 66(1) before the Tribunal, requiring a case to be stated to this High Court on the question of law above referred to, The Tribunal rejected the applications, on the ground that no question of law arose out of its order in the appeals. The Commissioner of Income-tax, Madras has therefore, filed the present applications to direct the Tribunal to state a case referring the question of law set out above.
(5) Learned counsel for the assessee resisted the applications. He raised a preliminary objection that the Commissioner of Income-tax, Madras has no locus standi to file these applications in this court. Therefore, the preliminary point to be considered is whether this court has jurisdiction to deal with the petition filed by the Commissioner of Income-tax, Madras before we proceed to the question of law raised in these applications. If we come to the conclusion that this court has no jurisdiction to entertain these application, it will be unnecessary to consider the question of law raised therein.
(6) The assessee, as already observed, was employed as Assistant Manager in the Nadupally Estate, Kerala State. Under S. 64 of the Act, the assessee has to be assessed by the Income-tax Officer of the area in which he resides. In this case, the assessment has been made by there Income-tax Officer, Always, Kerala State, as the assessee was residing within the jurisdiction. The assessee aggrieved with the order of assessment filed an appeal before the Appellate Assistant Commissioner of Income-tax, Trivandrum, who had jurisdiction over the Income-tax, Officer of Always. Again aggrieved with the order of the appellate authority, the assessee preferred an appeal to the Appellate Tribunal, Madras Bench. Against that order, the Commissioner of Income-tax preferred the reference application under S. 66(1) of the Act.
(7) Now by virtue of Standing Order No. 3 of 1960 dated 1-8-1960, the Tribunal at Madras, acquired the jurisdiction to hear and determine the appeals from the States of Kerala, Madras and Mysore excluding the districts, of Bijapur, Dharwar, Belgaum and North Canara, In effect, the Tribunal, at Madras has jurisdiction to hear and determinate the matters arising out of assessment proceedings before the Income-tax Officers in Kerala State. In this case, there is no dispute that the original assessment was made by the Income-tax Officer, Always, and the appeal was decide by the Appellate Assistant Commissioner, Trivandrum, and the tribunal at Madras had, therefore, jurisdiction to hear and decide the appeal as well as the reference application
(8) Under Rule 14 of the Appellate Tribunal Rules, 1946, when an assessee filed an appeal under S. 33(1), the Income-tax, Officer is made a respondent to the appeal. Similarly, if, either the assessee or the Department prefers an application under S. 66(1), then the department is represented by the Commissioner of Income-tax, to whom the Income-tax Officer is subordinate. Now, if the Tribunal refuses to state a case, the assessee or the Commissioner of Income-tax as the cases may be, may apply to the High Court, and the High Court may, if it is not satisfied with the correctness of the decisions of the Tribunal, require the Tribunal to, state a case and refer the question of law. Under S. 66(8) of the Act, the High Court means the High Court for that State.
(9) In this case, we have to consider whether the Commissioner of Income-tax, Madras, has got locus standi to filled the applications under S. 66(2) of the Act it is strenuously contended by learned counsel for the assessee that the 'Commissioner' referred to in Rules 37 and, R. 38 of the Appellate Tribunal Rules, would mean only the Commissioner of income-tax, to whom the Income-tax Officer who made the assessment is subordinate. Therefore it is contended that only the Commissioner of Income-tax, Kerala State, could file the applications and not the Commissioner of Income-tax, Madras. In effect, the contention is that this court will have no jurisdiction to deal with the applications. But Mr. V. Balasubramaniam, for the department, contended before us that the assessee himself was transferred to Coimbatore and had the files transferred the files of the income-tax Officer, Coimbatore, within the jurisdiction of the Commissioner of Income-tax, Madras, and that therefore the Commissioner of Income-tax, Madras, would have locus standi to file the applications. But we are not impressed with this argument, for, at the relevant period, the assessee was within the jurisdiction of the Income-tax, Officer, Always, and he was assessed by that Income-tax Officer. The appeal was preferred to the Appellate Assistant Commissioner at Trivandrum. By virtue of the Standing Order already referred to, a further appeal lay to the Tribunal, at Madras. In the circumstances, we are inclined to agree with learned counsel for the assessee that the present applications are incompetent, as the Commissioner of Income-tax, Madras has no locus standi to file the applications, and as the assessments have been made in the Kerala State, no applications can lie to the High Court at Madras. In this view of the matter, it is unnecessary to go into the question of law referred to us.
(10) The applications are dismissed. These will be no order as to costs.
(11) Applications dismissed.