COLLISTER, J. - (1.) THIS is a reference under Sec. 66(2) of the Indian Income-tax Act. The assessee is a joint Hindu family living in Khurja in the Bulandshahr district, whose head and representative is one Seth Kanhaiya Lal. The assessment year is 1933-34. The assessee is a partner to the extent of a one third share in the firm of Messrs. Sadhoram Tularam at Calcutta. The Income-tax Officer of Calcutta found that this firm had paid Rs. 3,33,279 to its partners and he treated this as income of the firm; that is to say, no allowance was granted in respect to this sum. According to his calculations there was a profit of Rs. 1,33,039, but against this he set off a certain sum on account of depreciation and took into account certain other matters with which we are not concerned and ultimately he worked out a net loss to the firm of Rs. 5,434. He thereafter reported to the Income-tax Officer of Meerut that the assessees one third share amounted to Rs. 50,820, which sum was arrived at in the following way.
(2.) THE assessees income from property at Khurja amounted to Rs. 360 and the Income-tax Officer added this amount to the sum of Rs. 50,820 and levied income-tax upon the assessee in the amount of Rs. 51,180. He over-ruled the assessees objection that the assessees share in the Calcutta firm amounting to Rs. 50,820 was not liable to assessment. THE assessee applied to the Assistant Commissioner of Income-tax and in his grounds of appeal he also raised a plea of jurisdiction; but the appeal was dismissed. THEreafter the assessee applied to the Income-tax Commissioner for a reference to be made to this Court under Section 66(2) of the Act. THE Income-tax Commissioner has accordingly stated a case and has referred three questions of law to this Court. It may be mentioned here that the Income-tax Officer had omitted to take into account the assessees one third share in the net loss of the Calcutta firm, i.e., in the sum of Rs. 5,434, 1/3rd of that amount being Rs. 1,811. He has now corrected the error and finds that the assessees share in the firm works out at Rs. 49,009. The three questions of law which have been referred to this Court are as follows :- (a) whether the Income-tax Officer, Meerut, had jurisdiction to make the assessment in question; (b) whether the amount of Rs. 51,180 had been correctly treated as the assessees share in the Calcutta firm for the assessment year in dispute; (c) whether in view of the provisions of Sec. 14(2)(b) the amount was exempt from income-tax. Question :- (a) This plea has been argued before me on two grounds. The first ground is a pure technicality. In his assessment order the Income-tax Officer signed himself as the Income-tax Officer, Meerut, and it is contended that this was a wrong designation. A notification was issued under Sec. 5(4) of the Income-tax Act on the May 4, 1934, under which an Additional Income-tax Officer was appointed for the Meerut circle and was to have jurisdiction in the Meerut City and in the district of Bulandshahr. The appellate order of the Assistant Commissioner of Income-tax dated November 16, 1924, shows that it was conceded before him by the assessee that there was an Additional Income-tax Officer of Meerut at the date of the assessment order, i.e., on the June 28, 1934, and that it was that official who made the said assessment order. Obviously the mere fact that the official in question incorrectly or inadvertently designated himself as the Income-tax Officer of Meerut City and the Bulandshahr district cannot divest him of his jurisdiction.
(3.) THE second ground is that since the assessee was doing business at Calcutta as a partner in the firm of Sadhoram Tularam, the assessment should have been made at Calcutta and not at Khurja. Clause (1) of Sec. 64 of the Act reads as follows :-"Where an assessee carries on business at any place, he shall be assessed by the Income tax Officer of the area in which his principal place of business is situate." Clause (2) reads :- In all other cases an assessee shall be assessed by the Income-tax Officer of the area in which he resides". In the view which I take, however, upon this question of jurisdiction it will not be necessary to consider whether the assessee was "carrying on business" at Calcutta within the meaning of clause (1) of Sec. 64 Clause (3) of that section reads as follows - "Where any question arises under this section as to the place of assessment, such question shall be determined by the Commissioner or where the question is between places in more provinces than one by the Commissioners concerned, or if they are not in agreement, by the Central Board of Revenue; provided that before any such question is determined the assessee shall have had an opportunity of representing his views." The provisions of Sec. 64 are concerned with the assessment which an Income-tax Officer makes and clause (3) appears to me to contemplate a question of jurisdiction arising at the time of such assessment and not at any future stage. If the Income-tax Officer has an doubt as regards his jurisdiction or if is moved by the assessee the question of jurisdiction will "arise" and it will then be his duty to refer the matter to the Commissioner in order that the latter may proceed in the manner laid down by clause (3). In Messrs. Dina Natu Hem Raj v. Commissioner of Income-tax, United Provinces (2 I.T.C. 304) the Income-tax Officer of Cawnpore had assessed a certain firm to income-tax at Cawnpore in spite of the firms objection that the assessment ought to be made at Calcutta. The firm appealed by its appeal was dismissed, an application was then made to the Commissioner of Income-tax to state a case under Sec. 66 of the Act, but the application was refused. Thereafter an application was made to this Court for a rule directing the Commissioner to state a case, and this was allowed. It was held by a Bench of this Court that if the question as to the place of assessment had been decided in accordance with Sec. 64(3) of the Act, the High Court could not have interfered, but as in the circumstances of that case there had been a total failure of the Income-tax authorities to apply the provisions of Sec. 64(3) and an illegal assumption of authority by the Income-tax Officer of Cawnpore, the assessee had a right to have a case stated. At page 313 the following passage occurs in the judgment : "Where such a question as we have indicated arises as to the principal place of business and such question has been determined by the Commissioner or where the question is between places in more provinces than one, by the Commissioners concerned or by the Board of Inland Revenue, such decision is final. There is no right of appeal and no power in the High Court to interfere with it, nor do the provisions of Sec. 64, which give the assessee a right to require the Commissioner to refer to the High Court any question of law, or in the event of his refusal to apply to the High Court for a statement of the case, apply to a decision made under Sec. 64. No doubt under Sec. 66(1) the Commissioner may on his own motion refer a case to the High Court on any question of law arising in the determination of the question under Sec. 64 but this seems to be the only way in which the determination of such question can be brought before the High Court." It will be observed that in that case an objection as regards the place of assessment was made at the earliest moment, i.e., at the time of the assessment proceedings, in the present case, however, no question of jurisdiction arose at the time of assessment inasmuch as the assessee did not object to being assessed at Khurja and the Income-tax Officer himself had apparently no doubt in his own mind as regards his jurisdiction and he was therefore under no necessity to refer the matter to the Commissioner of Income-tax, in my opinion the provisions of clause (3) of Sec. 64 were not intended to apply to any stage after the making of the assessment order. If the assessee had no right to object in the matter of jurisdiction after the assessment order had been made, it has to be considered whether this is a "question of law arising out of" the appellate order within the meaning of clause (2) of Sec. 66. It cannot be denied that the question of jurisdiction was raised in appeal before the Assistant Commissioner inasmuch as one of the grounds of appeal was that the Additional Income-tax Officer had no jurisdiction to make the assessment : and thereafter the assessee moved Commissioner to state a case for the decision of the High Court on the ground that this point-among others-had been decided against him by the Assistant Commissioner. There is, of course, nothing to prevent an assessee from putting any plea he may choose into his memorandum of appeal and in that way it can be said that a decision of any such point will create a "question arising out of the appeal"; but what is to be seen is whether the question is one that property arises out of the appeal. In other words, was the assessee competent to raise this plea before the Assistant Commissioner ? Sec. 30 of the Act provides that "any assessee objecting to the amount or rate at which he is assessed under Sec. 23 or Sec. 27 or denying his liability to be assessed under this Act... may appeal to the Assistant Commissioner against the assessment..." I have omitted such portion of the section as is irrelevant. From the language of the section it is clear that an assessee has a right to appeal only as regards his liability to be assessed under the Act or as regards the amount or rate at which he has been assessed; he is not competent to object in appeal as regards the place of jurisdiction. It appears to be the policy of the Act that if there is to be any question of the Income-tax Officers jurisdiction, it must be done at the time of the assessment proceedings and not at any later stage. It is argued before us that in an ordinary civil litigation a question of jurisdiction can be raised at any time and that by analogy an assessee under the Income-tax Act should have the same right. But Section 21 of the Civil Procedure Code enacts that : "No objection as to the place of suing shall be allowed by any appellate or revisional Court unless such objection was taken in the court of first instance at the earliest possible opportunity and, in all cases where issues are settled, at or before such settlement and unless there has been a consequent failure of justice". Thus the analogy does not help the assessee. In my opinion the assessee was not competent to ask the Commissioner of Income-tax to state a case on the question of jurisdiction to the High Court. ;