RAY, J. - (1.) THE question referred to us is as follows : "Had the ITO (Non-companies Income-tax-cum- Excess Profit Tax, District Calcutta) jurisdiction to make an assessment of the assessee in respect of the years in question ? "THE assessee was at the relevant time a resident of Rangpur. THE assessee was a partner in four firms. THEse four firms had different sets of partners and there were separate deeds of partnership. THE assessee was assessed at Rangpur up to the asst. yr. 1942-43.
(2.) THE present reference relates to the asst. yrs. 1944-45, 1945-46, 1946-47 corresponding to the accounting years, 1943-44, 1944-45 and 1945-46. Since the ITO, Rangpur, had no jurisdiction for the assessment under the EPT Act, the records were forwarded to the ITO, Central, Calcutta, on 4th Jan., 1947. On 9th March, 1948, the assessee's pleader was served with notices under s. 23(2) of the Indian IT Act by the ITO for the production of accounts and other relevant evidence by 20th March, 1948, for the asst. yr. 1944-45. THE assessment was made under s. 23(4) on 24th March, 1948, for the year 1944-45. In respect of the other two years 1945-46 and 1946-47 the assessments were completed under s. 23(4) for default under s. 22(2). THE ITO rejected the assessee's applications under s. 27 of the IT Act. The assessee preferred appeals to the AAC against the assessment and also filed appeals against the order under s. 27 for reopening the assessments. The AAC gave relief in the quantum but dismissed the appeals that were filed against the order under s. 27. In the appeals the assessee raised contentions in regard to the jurisdiction of the ITO. The assessee lost in its contention and, thereafter, went up to the Tribunal. The Tribunal dismissed the appeals relating to the orders passed under s. 27 and remanded the appeals relating to the quantum of income. On remand the AAC directed the ITO to examine the assessee's books in the light of the observations made by the Tribunal. The AAC after hearing the assessee confirmed the assessment on the basis of the report of the ITO. The assessee challenged the jurisdiction of the ITO on the ground that the assessee was not aware of the transfer of his file from Rangpur to Calcutta. The AAC rejected the contention of the assessee. The assessee, thereafter, went up to the Tribunal. The Tribunal held that the assessee's objection to the jurisdiction of the ITO related to the place of assessment and, therefore, did not entertain the objection to jurisdiction. It should be stated here that before the Tribunal the assessee contended that as to the asst. yr. 1943-44 the assessee had taken similar objection to the jurisdiction of the ItO but the Tribunal held that it was an objection which related to the place of assessment. After the Tribunal passed the order on 4th Aug., 1955, the assessee preferred an application under s. 35 where the assessee contended that the objection did not relate to the place of assessment but to the taxable territories. The Tribunal passed an order on 9th Jan., 1956, on the application under s. 35 and held that, in the absence of facts required to decide whether the assessee was a resident in the taxable territories or not, the Tribunal could not determine the assessee's contentions.
(3.) COUNSEL for the assessee contended that on 15th Aug., 1947, as a result of the Indian Independence Act, British India ceased to exist and from the appointed day, 15t Aug., 1947, the ITOs of the Dominion of India as also the Indian IT Act had jurisdiction only in respect of the area of the Dominion of India. It was, therefore, contended that the ITO within the Dominion of India could deal with either the person of the resident or property of the resident or of a non-resident within the Dominion of India. It was also contended that if a non-resident, that is a person who became a non-resident from 15th Aug., 1947, had no income within the taxable territories he would not be within the jurisdiction of the ITO or authorities. COUNSEL for the assessee thus contended that before the ITO in India could continue proceedings he would have to be satisfied either that the assessee was a resident in India or that his income was in India. Counsel for the assessee referred to the Indian Independence (Income-tax Proceedings) Order, 1947. In the Income-tax Proceedings Order it is stated under s. 3 that where before the appointed day the jurisdiction of a tax officer under the relevant tax Act (meaning thereby the Indian IT Act or the EPT Act) has been altered in connection with the setting up of the Dominions of India and Pakistan, or where after the appointed day the case of an assessee is transferred from one Dominion to the other by agreement between the Central Boards of Revenue of the two Dominions, and by reason of such alteration of jurisdiction or transfer the case of an assessee falls to be dealt with on or after the appointed day by the tax authorities of India or as the case may be of Pakistan, all proceedings relating to the case pending before any tax authority of Pakistan, or as the case may be of India, shall be transferred to the corresponding tax authority of India, or as the case may be of Pakistan, and shall be disposed of by the last mentioned tax authority in accordance with law.;