K.C.Agrawal, C.J. - (1.) THIS writ petition, under Article 226 of the Constitution, has been filed by Birla Cotton Spinning and Weaving Mills Ltd. for a direction commanding the respondents to withdraw, cancel and/or rescind the order dated March 2, 1965, passed under Section 23A of the Indian Income-tax Act, 1922, for the assessment year 1960-61 against Messrs. Merchandise and Stores Ltd. and to refund the sum of Rs. 40,135 paid by the petitioner.
(2.) BY an order dated April 22, 1960, the Rajasthan High Court sanctioned a scheme of arrangement, for the amalgamation of Messrs. Rajputana General Dealers Ltd. and Messrs. Merchandise and Stores Ltd. incorporated under the Companies Act, 1956. On May 20, 1960, the High Court of Punjab at Delhi also passed an order under the provisions of the Companies Act, 1956, for amalgamation of the said Rajputana General Dealers Ltd. and the Merchandise and Stores Ltd. with the petitioner-Birla Cotton Spinning and Weaving Mills Ltd. having its registered office at P.O. Birla Lines, Delhi. After amalgamation, Messrs. Rajputana General Dealers Ltd. and Messrs. Merchandise and Stores Ltd. stood dissolved as from May 20, 1960, when the certified copy of the order of the Punjab High Court was duly filed with the Registrar of Companies, Rajasthan at Jaipur. As a result of amalgamation, the undertakings of the said two companies including all debts, liabilities and obligations stood transferred to and vested in the petitioner-company and the petitioner was to pay, satisfy, discharge, perform and fulfil all the debts, liabilities, contracts, arrangements and obligations of the said two companies. Notices under Section 23A of the Indian Income-tax Act, 1922, were issued by the Income-tax Officer, Company Circle, Jaipur, against Messrs. Merchandise and Stores Ltd. and Messrs. Rajputana General Dealers Ltd. These notices were delivered at the office of the petitioner-company at Delhi. The petitioner's representative appeared before the Income-tax Officer and objected to the validity of these notices, but orders were passed assessing additional super-tax of Rs. 40,135 on Messrs. Merchandise and Stores Ltd. and Rs. 31,465 on Messrs. Rajputana General Dealers Ltd. The taxes imposed were realized from the petitioner-company. Against the judgment of the Income-tax Officer, two appeals were preferred before the Appellate Assistant Commissioner, but both of them were dismissed by the Appellate Assistant Commissioner finding that the notices issued in the names of the companies had been duly responded to and that no objections, had been taken before the Income-tax Officer to the initiation of the proceedings. Moreover, the companies had been in existence throughout the previous year relevant to the assessment year 1960-61. On the merits, the Appellate Assistant Commissioner confirmed the levy of additional super-tax and dismissed the two appeals.
(3.) AGAINST the order of the Appellate Assistant Commissioner, appeals were preferred by the petitioner-company before the Income-tax Appellate Tribunal. The Tribunal repelled the contention of the petitioner-company that as the petitioner was not an assessee, no tax could be imposed on it under Section 23A of the Income-tax Act. The Tribunal held that in fact the proceedings had been initiated and continued against the Birla company and, therefore, the proceedings were valid in view of Clause 6 of the scheme of amalgamation. The Tribunal disposed of this contention by observing that action under Section 23A had not been taken on the basis that the Birla company was a successor to the transferor companies within the meaning of Section 26(2). The Birla company was the legal representative of the transferor companies and the orders passed by the Income-tax Officer were valid. A reference to the High Court of Delhi (see [1980] 123 ITR 354) was sought under Section 66(1) of the Indian Income-tax Act, 1922. The reference applications were filed by the Birla company. By two separate judgments, the two learned judges before whom reference applications were laid held that the same were not maintainable in Delhi. The relevant portion of the judgment of Hon'ble Mr. Justice S. Ranganathan is quoted below (see [1980] 123 ITR 354, 362, 363) : "We agree with Shri Verma that this decision fully covers the present case. In this case the assessment orders were passed by the Income-tax Officer at Jaipur and the appeals were also disposed of by the Appellate Assistant Commissioner at Jaipur. The mere accident that when the matters came before the Tribunal the appeals had to be heard by the Delhi Bench of the Income-tax Appellate Tribunal because at that time there was no Bench of the Tribunal at Jaipur, cannot vest this court with jurisdiction to hear references in the matters coming from the State of Rajasthan." ;