The Judgment of the Court was delivered by
Sinha, J.:— This is a reference under Section 21 of the Excess Profits Tax Act read with Section 66(1) of the Income-tax Act.
2. The question referred to is in these terms:—
“Whether on the facts and in the circumstances of the case the Appellate Tribunal was right in holding that the Excess Profits Tax Officer, Central Circle IV, Calcutta, was competent to make the excess profits tax assessment under Section 14(1) of the Excess Profits Tax Act, 1940, for the chargeable accounting period ending 31st December, 1941, corresponding to the previous year relevant to the income-tax assessment for 1942–43 ?”
3. The reference arises out of an assessment for excess profits tax for the chargeable accounting period commencing on January 1, 1941, and ending on December 31, 1941, the corresponding assessment year, under the Income-tax Act being 1943–43. On February 24, 1943, the Income-tax Officer, Companies District No. II, made the income-tax assessment of the assessee for the assessment year 1942–43. He was the officer Who was exercising the functions of an Income-tax Officer under Section 5(5) of the’ Income-tax Act in regard to the case of the assessee during the period January 1, 1941, to September 1, 1944.
4. By a notification dated September 14, 1940, the Central Board of Revenue, in exercise of powers given to them by Section 3(3) of the Excess Profits Tax Act, appointed every Income-tax Officer to be an Excess Profits Tax Officer and assigned to every such Excess Profits Tax Officer all cases in respect of which he was, for the time being, exercising the functions of an Income-tax Officer.
5. The income-tax Officer, Companies District No. II, became by reason of the notification the Excess Profits Tax Officer to assess the excess profits tax of the assessee. He issued notice under Section 13(1) of the Excess Profits Tax Act requiring the assessee to submit a return of income with respect to the chargeable accounting period January 1, 1941, to December 31, 1941. On September 2, 1943, he made a provisional excess profits tax assessment under Section 14A of the Excess Profits Tax Ordinance (No. 16 of 1943).
6. By an notification dated September 1, 1944, the Central Board of Revenue, in exercise of their power under Section 5(2) of the Income-tax Act assigned the case of the assessee to the commissioner of Income-tax (Central), Calcutta. That section authorises the Central Government to appoint a Commissioner of Income-tax for any area specified in the order of appointment to discharge the functions of a Commissioner in respect of any cases or classes of cases assigned to him, to the exclusion of any Commissioner appointed for any area.
7. On September 8, 1944, the Commissioner of Income-tax (Central) Calcutta in exercise of his power under Section 5(5) of the Income-tax Act assigned the income-tax case of the assessee to the Income-tax Officer, Central Circle IV, Calcutta.
8. On such assignment the Excess Profits Tax Officer, Companies District No. II, who was also the Income-tax Officer, Companies District No. II, transferred the excess profits tax case of the assessee to the Excess. Profits Tax Officer, Central Circle IV Calcutta.
9. On December 11, 1945, the Excess Profits Tax Officer, Centra Circle IV, Calcutta, made the final assessment of excess profits tax under Section 14 of the Excess Profits Tax Act.
10. No objection was taken to the jurisdiction of the Excess Profits Tax Officer Who made the assessment during the assessment proceedings.
11. On appeal to the Appellate Assistant Commissioner objection was raised for the first time that the assessment had been made without jurisdiction. It was urged that as the Income-tax Officer, Companies District No. II, had already made the assessment, the assignment of the income-tax case to the Income-tax Officer, Central Circle IV, by the notification dated September 8, 1944, did not give him jurisdiction to make the assessment of excess profits tax. It was also argued that the assessment of excess profits tax was illegal because it was made by an Excess Profits Tax Officer who had not issued the notice under Section 13 of the Excess Profits Tax Act.
12. The Appellate Assistant Commissioner held that the Excess Porfits Tax Officer, Companies District No. II, could not be deprived of the jurisdiction which he had assumed by the assignment of the income-tax assessment case by the Commissioner of Income-tax, (Central), Calcutta, to the Income-tax Officer, Central Circle IV, Calcutta; and the latter had no jurisdiction to make the excess profits tax assessment. The assessment was accordingly cancelled.
13. Against that order an appeal was taken to the Income-tax Appellate Tribunal, who allowed the appeal and held that by the notification dated September 8, 1945, when the income-tax case of the assessee was assigned to the Income-tax Officer, Central Circle IV, Calcutta, that officer acquird jurisdiction to make the excess profits tax assessment.
14. At the instance of the assessee, the Tribunal has referred to us the question to which I have already made reference.
15. Dr. Pal appearing for the assessee first argued that as the Income-tax Officer, Companies District No. II, had already made the assessment the case of the assessee could not be assigned to any other Income-tax Officer.
16. That argument however assumes that once an assessment is made, there remains nothing further to be done in the case by the Income-tax Officer having seisin of the case and he becomes functus officio. That is however not the position. It is admitted that the Income-tax Act gives to the Income-tax Officer powers which he can exercise even after the assessment has been made. He can, as the Tribunal has pointed out, exercise the powers under Section 34 and Section 35 of the Income-tax Act if he considers that any portion of the income of the assessee has escaped assessment. The making of an assessment by itself is no bar to an order for transfer of the case to any other Income-tax Officer to enable him to exercise the powers necessary to be exercised in the circumstances of the particular case.
17. Dr. Pal next argued that the assignment of the case to the Income-tax Officer, Central Circle IV, Calcutta, did not confer jurisdiction on that officer to make the excess profits tax assessment.
18. The decision of the question turns on the construction of the notification of the Central Board of Revenue dated September 14, 1940. It will be remembered that by that notification, every Income-tax Officer was appointed an Excess Profits Tax Officer and to every such Excess Profits Tax Officer were assigned all cases in respect whereof he was, for the time being, exercising the functions of an Income-tax Officer. There cannot be any doubt as to the meaning of this notification. It seeks to combine in one officer the functions of an Income-tax Officer and of an Excess Profits Tax Officer in respect of a case or a class of cases. If at a particular point of time an Income-tax Officer is in charge of the case of a particular assessee for income-tax purposes, he is given the power to deal also with the excess profits tax assessment of that assessee. The moment the Income-tax Officer loses seisin of the case by a valid order of assignment or otherwise, he also loses jurisdiction to make excess profits tax assessment in that case. The Income-tax Officer who then acquires jurisdiction to deal with the case, whether by an order of assignment or otherwise, automatically derives power to deal with the excess profits tax assessment in that case. In my opinion, it was clearly intended by the notification to vest in one officer the power to make the assessment in a particular case under both the Acts. Dr. Pal's argument is that only the Income-tax Officer Who for the first time assumes jurisdiction in a particular case of income-tax assessment can discharge the functions of an Excess Profits Tax Officer in that case. In any other case, a special order would be necessary. The notification does not say anything about assumption of jurisdiction. It gives the power of excess profits tax assessment in a case to an officer when he is discharging the functions of an Income-tax Officer in regard to that case.
19. This construction seems to me to be in accord with sound good sense and any other construction would lead to inconvenient results and would introduce needless complications. The language of the notification does not seem to me to admit of any other construction.
20. Dr. Pal next argued that it was not competent for the Commissioner of Income-tax (Central), Calcutta, to transfer the case under Section 6(5) of the Income-tax Act. He refers us to Section 5(7A) of the Act and contends that an order for transfer can only be made under sub-section (7A). It however appears that Section 5(7A) deals only with the transfer of a particular case from one Income-tax Officer to another. Under Section 5(5) the Commissioner of Income-tax is given the power to transfer a class of cases from one Income-tax Officer to another. The notification dated September 8, 1944, did not direct the transfer of one specified case but of a class of cases. I therefore do not think that there is any substance in this objection.
21. It therefore appears that the assignment of the income-tax case of the assessee to the Income-tax Officer, Central Circle IV, Calcutta, was valid. After the assigument that officer was discharging the functions of an Income-tax Officer in regard to the case of the assessee. By reason of the notification dated September 14, 1940, therefore he automatically derived power to make the excess profits tax assessment in that case.
22. The question in my opinion referred to us should be answered in the affirmative.
23. The assessee will pay the costs of this reference. Certified for two counsel.
Harries, C.J:— I agree.
25. Reference answered accordingly.