- (1.) THIS is a reference by the Income-tax Appellate Tribunal, Delhi Bench, purporting to be one under section 66(1) of the Indian Income-tax Act. We are concerned with the opposite party, who was assessed to income-tax under the Rampur State Income-tax Act, 1944 (to be referred to as the Rampur Act), for the assessment year 1946-47. She died after this reference was made and one of her sons has got himself impleaded as her legal representative. While the assessment proceedings were pending in the Rampur State against the opposite party the State merged in India and by section 3 of the Taxation Laws (Extension to Merged States and Amendment) Act, 1949 (to be henceforth referred to as the Merger Act), the Indian Income-tax Act, 1922, and all rules and orders made thereunder were extended to, and brought into force in, the State with effect from April 1,1949, and by section 7, the Rampur Act, which was in force, ceased to have effect except for the purposes of the levy, assessment and collection of income-tax and super-tax in respect of any period not included in the previous year for the purposes of assessment under the Indian Income-tax Act, 1922, as extended to that State by section 3....... and for any purposes connected with such levy, assessment or collectio : Provided that any reference in any such law to an officer, authority, tribunal or court shall be construed as a reference to the corresponding officer, authority, tribunal or court appointed or constituted by or under the Indian Income-tax Act, 1922........
(2.) PROVIDED further that if any question arises as to who such corresponding officer, authority, tribunal or court is, the decision of the Central Government thereon shall be final. Section 5 of the Rampur Act describes the classes of income-tax authorities for the purposes of it, they bein : (a) The Minister-in-charge of Income-tax; (b) Commissioner of Income-tax; (c) Assistant Commissioner of Income-tax; (d) Income-tax Officers. Under the Indian Income-tax Act, 1922 (which will henceforth be referred to as the Indian Act) classes of income-tax authorities for the purposes of the Act ar : (a) Central Board of Revenue; (b) Commissioner of Income-tax; (c) Appellate Assistant Commissioner of Income-tax; (d) Income-tax Officers; and (e) Inspectors of Income-tax. It is not in dispute that an Income-tax Officer under the Indian Act is an officer or authority corresponding to an Income-tax Officer under the Rampur Act; consequently the assessment proceedings against the opposite party were completed on March 12, 1961 (after the enforcement of the Indian Act), by an Income-tax Officer appointed under the Indian Act. He found concealment of particulars of income or deliberate furnishing of inaccurate particulars of income by the opposite party and on January 18, 1956, imposed a penalty upon her in exercise of the power conferred by section 28(1)(c) of the Rampur Act which is analogous to section 28(1)(c) of the Indian Act. The assessment order was completed and the penalty was imposed by the Income-tax Officer appointed under the Indian Act in view of the provision contained in section 7 of the Merger Act. It has been held in C.A. Abraham v. Income-tax Officer, Kottayam and Commissioner of Income-tax v. Bhikaji Dadabhai & Co., that imposition of a penalty under section 28(1)(c) is included in the phrase, the levy, assessment and collection of income-tax. Consequently the imposition of penalty was governed by the Rampur Act even though is was imposed after the Rampur Act was repealed and the Indian Act had come into force. There is no controversy on this point.
(3.) THE opposite party preferred an appeal from the order imposing the penalty as provided by section 31 of the Rampur Act to the Appellate Assistant Commissioner appointed under the Indian Act. THEre is no dispute about his corresponding to an Appellate Assistant Commissioner under the Rampur Act. THE Appellate Assistant Commissioner allowed the appeal and set aside the order of penalty on the ground that imposition of penalty is not included in the phrase, the levy, assessment and collection of income-tax. He was of the view that the imposition of penalty is in addition to the assessment of income-tax and not a part of it. We are not concerned with the merits of the view taken by him; what we want to point out is that he allowed the appeal solely on the ground that the penalty could not be imposed under the Rampur Act because its operation in respect of penalty had not been saved by section 7 of the Merger Act. Section 33 of the Rampur Act provides that the Commissioner of Income-tax may direct the Income-tax Officer to appeal to the High Court against an order passed under section 31 by an Appellate Assistant Commissioner. High Court in this provision obviously means the High Court of Rampur. The Commissioner of U.P., in exercise of this power, directed the Income-tax Officer to file an appeal from the order of the Appellate Assistant Commissioner to the Income-tax Appellate Tribunal and an appeal was accordingly filed. The Commissioner of U.P. could undoubtedly be an officer corresponding to the Commissioner of Income-tax of Rampur but it is questionable whether the Income-tax Appellate Tribunal, Delhi, could be said to be an authority corresponding to the High Court of Rampur. Under section 33(2) of the Rampur Act, second appeal could be filed only in the High Court of Rampur and by virtue of section 7 of the Merger Act it could be filed only in a tribunal or court corresponding to the High Court of Rampur. The Income-tax Appellate Tribunal entertained the second appeal and issued notice of it to the opposite party who appeared before it but did not questions its jurisdiction to entertain it (on the ground that it was not a tribunal or court corresponding to the High Court of Rampur). It dismissed the second appeal, taking the same view of section 7 of the Merger Act as was taken by the Appellate Assistant Commissioner.;