RAI BAHADUR SETH TEOMAL versus THE COMMISSIONER OF INCOME TAX AND THE COMMISSIONER OF EXCESS PROFITS TAX

Citation: [1959] SUPP. 2 S.C.R. 301 · Decided: 02-03-1959 · Supreme Court of India · Bench: BHUVNESHWAR PRASAD SINHA · Disposal: Dismissed

Judgment (excerpt)

(2) S.C.R. SUPREME COURT REPORTS 
301 
RAI BAHADUR SETH TEOMAL 
v. 
THE COMMISSIONER OF INCOME TAX AND 
THE COMMISSIONER OF EXCESS PROFITS 
TAX 
(B. P. SINHA, J. L. KAPUR and 
M. HIDAYATULLAH, JJ.) 
Income Tax-Place of Assessment-Transfer of assessee's case 
to a different Commissioner of Income-tax-Assessment by Income-
tax Officer-Jurisdiction-Indian Income-tax Act, r922 (XI of 
I922), SS. 5, 64. 
The appellant was carrying on the business of a railway 
contractor in a place in the district of R. In April 1943, the 
Income-tax Officer of R which was under the charge of the Com-
missioner of Income-tax, Bengal (Mufassil), served a notice 
under s. 22(2) of the Indian Income-tax Act, 1922, on the appel-
lant who in pursuance of the notice filed the return on February 
28, 1944. The Income-tax Officer then served notices on him 
under ss. 22(4) and 23(2) of the Act for the production of books, 
etc., but before the final assessment was made, the Central Board 
of Revenue by an order passed under s. 5(2) of the Act, trans-
ferred the appellant's case along with some other assessment 
cases, to the Commissioner of Income-tax (Central), Calcutta. 
On February 11, 1948, the Income-tax Officer, Calcutta, to whom 
the appellant's case was assigned, issued notices again under 
ss. 22(4) and 23(2) of the Act and after making the usual enquiries 
made the assessment order on March 15, 1948. The appellant's 
appeals to the Appellate Assistant Commissioner and then to 
the Appellate Tribunal raising objections to the legality of the 
transfer of his case to Calcutta and to the jurisdiction of the 
Income-tax Officer, Calcutta, were dismissed. The Appellate 
Tribunal held that as the objection related to the place of assess-
ment it was not competent for the Tribunal to go into that 
question. The appellant then made an application to the Com-
missioner of Income-tax for reference under s. 66(1) of the Act, 
but this was dismissed on the ground that the assessee never 
raised any objection before the Income-tax Officer to his juris-
diction and that, in any case, the question of jurisdiction could 
not arise out of the order of the Tribunal. An application filed by 
the appellant to the High Court under s. 66(2) of the Act was 
dismissed and though the order of dismissal was not taken up 
on appeal, the appellant filed an appeal to the Supreme Court 
against the order of the Appellate Tribunal. It was contended 
for the appellant that under s. 64(1) and (2) of the Act he was 
entitled to be assessed by the Income-tax Officer of the area 
within which the place of his business was situate, that the 
r959 
March z. 
302 
SUPREME COURT REPORTS [1959] Supp._ 
'959 
assessment by the Income-tax Officer of Calcutta was illegal 
assumption of jurisdiction and that, in any case, the order of 
Seth Teomol 
transfer by the Central Board of Revenue under s. 5(2) of the 
v. 
Act was not valid because, if it wanted to transfer the assess-
Conunissioner of ment proceedings from the file of one Income-tax Officer to · 
Income-tax 
another it could be done only under s. 5(7A) and not under 
s. 5(2). 
Held: (1) Sub-section (7A) of s. 5 which confers on the Cen-
tral Board of Revenue the power to transfer any case from one 
Income-tax Officer to another is not a provision which in any 
way modifies or cuts down the power given to the Central Board 
of Revenne under sub-s. 2 of s. 5 which enables it to specify as 
to which of the Commissioners would perform functions in res-
pect of different areas, persons, incomes or cases or classes there-
of. The two sub-sections are complementary and operate in two 
separate spheres. 
Pannalal Binjraj v. Union of India, [1957] S.C.R. 233 and 
Bidi Supply Co. v. Union of India, [1956] S.C.R. 267, distin-
guished. 
In the present case, the Central Board of Revenue directed 
the Commissioner of Income-tax (Central), Calcutta, to exercise 
his functions in respect of certain cases including the case of the 
appellant and that fell under s. 5(2) and not under s. 5(7A). The 
order of transfer was, therefore, valid. 
(2) The jurisdiction of the Income-tax Officer, Calcutta, to 
make the assessment on the appellant cannot be challenged, in 
view of sub-s. 5(a) of s. 64 of the Act, under which sub-ss. (1) 
and (2) of s. 64 have no application to an assessee in respect of 
whom an order has been made by the Central Board of Revenue 
nnder s. 5(2) of the Act. 
(3) Objections as to the place of assessment cannot be raised

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