T.P. Mukerjee, J. - (1.) THE question submitted by the Appellate Tribunal for the opinion of this court under Section 66(1) of the Indian Income-tax Act, 1922, hereinafter referred to as "the Act", is as follows : "Whether, on the facts and in the circumstances of the case, in the appeal under Section 30 to the Appellate Assistant Commissioner against the orders under Section 26A and Section 23(3) the point of the jurisdiction of the Income-tax Officer could be validly raised ?"
(2.) THE statement of the case relates to the assessment year 1956-57 and the material facts are as follows: THE assessee, M/s. Roop Narain Ram Chandra, Kanpur, was constituted as a firm under a deed of partnership dated the 17th of November, 1952. It was accorded registration under Section 26A of the Act for the two immediately preceding years 1955-56 and 1954-55. For the assessment year under reference, 1956-57, the assessee filed an application for renewal of registration before the Income-tax Officer, District III(ii), Kanpur. THE application was filed on June 16, 1956. When the application was pending before the Income-tax Officer, District III(ii), Kanpur, the Commissioner of Income-tax, U.P., Lucknow, made an order under Section 5(7A) of the Act on November 16, 1960, transferring the case of the assessee to the Income-tax Officer, District I(v), Kanpur. THE order of the Commissioner is a short one and is reproduced below: "ORDER Dated 16-11-1960. For the reasons stated hereunder, the Commissioner of Income-tax, Uttar Pradesh, Lucknow, hereby transfers under Sub-section (7A) of Section 5 of the Indian Income-tax Act, 1922 (XI of 1922), the case particulars of which are mentioned in column 3 of the schedule hereto annexed, to the Income-tax Officer mentioned in column 6 thereof. Reasons: THE case is transferred for facility of investigation and proper assessment. THE assessee did not file any objection against the proposed transfer; as such it is presumed that he has no objection to the transfer of his case. This order shall take effect from 25-11-1960. JUDGEMENT_171_ITR78_1970Html1.htm Sd./- F. H. Vallibhoy, Commissioner of Income-tax, Uttar Pradesh, Lucknow." It would be noticed from the entry in column 4 of the schedule appended to the order of the Commissioner of Income-tax that the status of the assessee has been mentioned as a registered firm. Evidently, this has reference to the status in which the assessee was assessed in the two preceding years of assessment, 1955-56 and 1954-55, as mentioned above, When the case went to the Income-tax Officer, District I(v), Kanpur, on transfer, he considered the application of the assessee for renewal of registration, but rejected it for reasons with which we are not concerned here. He made an assessment of the income of the assessee under Section 23(3) of the Act in the status of an "association of persons". The assessee appealed to the Appellate Assistant Commissioner against the orders of the Income-tax Officer, refusing to renew the registration under Section 26A of the Act and making the assessment for the assessment year 1956-57 in the status of an "association of persons". The Appellate Assistant Commissioner noticed that the Commissioner of Income-tax had transferred the case of M/s. Roop Narain Ram Chandra under Section 5(7A) of the Act from District III(ii) to Income-tax Officer, District I(v), and in the order of transfer the status of the assessee was described as a registered firm. The Income-tax Officer, District I(v), observed the Appellate Assistant Commissioner, continued the assessment proceedings initiated by the Income-tax Officer, District III(ii), and completed the assessment on M/s. Roop Narain Ram Chandra in the status of an "association of persons." According to the Appellate Assistant Commissioner the firm of M/s. Roop Narain Ram Chandra was an entity different from that/of Roop Narain Ram Chandra as a registered firm. The Appellate Assistant Commissioner held that in the terms of the order of transfer the Income-tax Officer, District I(v), could only make an assessment on the firm, Roop Narain Ram Chandra, and he had no jurisdiction to make an assessment on M/s. Roop Narain Ram Chandra as an "association of persons". Holding as above, the Appellate Assistant Commissioner set aside the assessment made by the Income-tax Officer, District I(v), under Section 23(3) of the Act, and directed that consequential effect of the order be given in the assessment of the members concerned. As regards the appeal preferred by the assessee against the order of the Income-tax Officer, District I(v), refusing to allow registration under Section 26A of the Act, the Appellate Assistant Commissioner held that for the same reasons the order of the Income-tax Officer was without jurisdiction. The Appellate Assistant Commissioner, therefore, cancelled the order of the Income-tax Officer, District I(v), under Section 26A of the Act and directed him to pass such orders as he thought proper on the application for renewal of registration made by the firm, M/s. Roop Narain Ram Chandra.
(3.) THE Income-tax Officer, District I(v), Kanpur, being dissatisfied with the orders passed by the Ap.pellate Assistant Commissioner, filed appeals to the Appellate Tribunal. THE Appellate Tribunal, relying on the decision of the Supreme Court in the case of R. B. Seth Teomal v. Commissioner of Income-tax, [1959] 36 I.T.R. 9; [1959] Supp. 2 S.C.R. 301 (S.C.), held that an objection as to the jurisdiction of the Income-tax Officer on the basis of the place of assessment is not justiciable and, therefore, the Appellate Assistant Commissioner was in error in holding that the Income-tax Officer, District I(v), had no jurisdiction to make an assessment of the assessee as an "association of persons" for the assessment year 1956-57. In the result, the Tribunal quashed the orders of the Appellate Assistant Commissioner and directed him to dispose of the case in accordance with law on the other grounds raised before him. At the instance of the assessee the Appellate Tribunal has submitted a statement of the case on the question of law set out hereinabove.;