RAJA BAHADUR KAMAKSHYA NARAIN SINGH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under Section 66(1) of the Income-tax Act. The following questions have been referred for the decision of this Court :- (1) In the circumstances of the case is the assessment valid by virtue of Government of Bihar Notification No. 216-F.R., dated the 26th May, 1940, and/or Bihar Regulation I of 1941 read with Bihar Regulation IV of 1942 ? and (2) Whether in the circumstances of the case after the distribution and allocation of the applicants case to the Income-tax Officer, Special Circle, Patna, under Section 5(5) of the Income-tax Act that Officer was entitled to proceed from the stage at which he received the case from his predecessor, so a not to render the assessment subsequently made by him invalid. The first question having already been authoritatively answered by the Federal Court has not been pressed.

(2.) THE facts relating to the second question are these. A notice was issued to the assessee in respect of the assessment for the year 1940-41 on the 20th April, 1940. Subsequently the proceeding was transferred to the Special Income-tax Circle, under Section 5(5) by a notification dated the 14th of September, 1940. THE record of the case was received by the Income-tax Officer of the Special Circle at Patna on the 27th of November, 1940. THE assessment was completed on the 21st of January, 1941. THE assessee is a resident of Hazaribagh. No fresh notice under Section 22(2) was issued by the Officer in charge of the Special Circle at Patna. THE assessment proceeded from the stage it had reached before the transfer to that officer. It is contended by the assessee that the officer in charge of the Special Circle had no jurisdiction to make the assessment until he had served on the assessee a notice under Section 22(2) of the Act. THEre is no substance whatsoever in that contention. THE first sub-section of Section 22 requires the Income-tax Officer to give notice by publication in the press in the prescribed manner before the first day of May each year requiring every person whose total income during the previous year exceeded the maximum amount which is not chargeable to income-tax to furnish within a certain period a return of his total income and total world income during that year. THE second sub-section provides that in the case of any person whose total income is, in the Income-tax Officers opinion, of such an amount as to render such person liable to income-tax, the Income-tax Officer may serve a notice upon him requiring him to furnish within a stated period a return in the prescribed form setting forth his total income and total world income during the previous year. This is not a mandatory provision, but confers upon the Income-tax Officer a discretion to serve the notice referred to in sub-section (2) on individual assesses. THE notice being an optional one, its non-issue or non-service cannot be regarded as the foundation of the assessing officers jurisdiction. THE answer to the second question referred for decision is, therefore, as follows : In the circumstances of the case after the distribution and allocation of the applicants case to the Income-tax Officer, Special Circle, Patna, under Section 5(5) of the Income Tax Act that officer was entitled to proceed from the stage at which he received the case from his predecessor, and the assessment made by him is not invalid.