PROVINCE OF PUNJAB VS HANIFAN
1993 P T D 508
[Lahore]
Before Muhammad Akram and Muhammad Afzal Cheema, JJ
COMMISSIONER OF INCOME-TAX, RAWALPINDI ZONE, RAWALPINDI
versus
Malik ABDUL KARIM TRANSPORT CO. LTD., GUJRAT
P.T.R. No.118 of 1972, decided on 26/01/1973.
(a) Income-tax Act (XI of 1922)---
----S.64(3)---Jurisdiction---Place of assessment ---Assessee, a limited company having its registered office at Lahore riled its return of income at Lahore---. Record did not show that case of assessee was ever transferred from the jurisdiction of the Income Tax Officer, Lahore to the Income Tax Officer, Rawalpindi ---Jurisdiction and the place of assessment of the case was repeatedly disputed by the assessee---Held, it was incumbent upon the Income Tax Officer to have referred the objection of jurisdiction to the Commissioner for his decision in the matter---Assessment made by Income Tax Officer, Rawalpindi was not sustainable in circumstances.
(b) Income-tax Act (XI of 1922)---
----Ss.66 & 33---Reference---Income Tax Appellate Tribunal, in an appeal, had permitted the assessee (respondent) to raise objection as to the jurisdiction of Income Tax Officer for the first time by way of an additional plea, and exercised its discretion in the matter in favour of assessee---High Court, cannot sit in appeal against discretion so exercised by the Tribunal.
M.A. Lone for the Applicant.
ORDER
MUHAMMAD AKRAM, J.---This is a reference application under section 66(1) of the Income-tax made to this Court by the Commissioner of Income -tax, Rawalpindi Zone, Rawalpindi arising out of an order, dated the 24th of September, 1971 passed by the Income-tax Appellate Tribunal, Peshawar Bench, Camp Rawalpindi, accepting the Income-tax Appeal No.2167 of 1970-71 filed by the respondent.
2. The respondent-assessee, M/s. Malik Abdul Karim Transport Company Limited, is a private company incorporated under the Companies Act on the 16th of January 1962. Its registered office is situated at 76-Anarkali, Lahore. It commenced its business on the 3rd of April, 1962, and is alleged to have closed it afterwards. In respect of the assessment year 1963-64 the respondent filed its income-tax return with the Income-tax Officer, Companies, Circle-III, Lahore on the 14th of September, 1963. In this the address of the assessee was shown as . "Railway Road, Gujrat". It appears that in December ;1965 "North Zone" was bifurcated by the Central Board of Revenue into two separate Zones, namely, the Lahore Zone and the Rawalpindi Zone, and District Gujrat fell within the territorial jurisdiction of the Rawalpindi Zone. As it appears the return of the assessee was at first forwarded to the Rawalpindi Zone and assigned to the Income-tax Officer, Companies-I, Rawalpindi for disposal. But afterwards on an adjustment of jurisdiction within that zone, under the order of Commissioner of Income-tax, Rawalpindi Zone, Rawalpindi, this case was entrusted to the Income-tax Officer, Companies-IV, Gujranwala who eventually completed the assessment against the respondent on the 26th of March, 1968. Its appeal against the order was partly allowed by the Appellate Assistant Commissioner of Income-tax, A-Range, Rawalpindi on the 22nd March, 1971. Not fully satisfied with the order, the respondent filed the further Appeal No.2167 of 1970-71. On the 24th of September, 1971 the Income-tax Appellate Tribunal, Peshawar Bench, Camp Rawalpindi accepted the appeal of the respondent and completely annulled the assessment made by the Income-tax Officer, Companies -Circle-IV, -- Gujranwala as without jurisdiction.
3. In these circumstances the petitioner has made the above reference application to this Court for the opinion on the following question of law said to arise out of the Tribunal's order:
"Whether on facts and in the circumstances the Tribunal was legally justified in annulling the assessment on -the point of jurisdiction especially when the assessee has shown its principal place of business in the return and was barred to question it under the 2nd proviso to subsection (3) of section 64 of the Income-tax Act?"
4. We have heard the learned counsel for the petitioner in limine. It is not denied before us that registered office of this company is situated at Lahore. The return in question was competently filed by the assessee with the Income-tax Officer, Companies Circle-III, Lahore. But afterwards in December 1965 the North Zone was bifurcated by the Central Board of Revenue into two separate Zones, namely, Lahore Zone and Rawalpindi Zone. It is now clear that there is no order for the transfer of this case from Lahore to Rawalpindi Zone after the bifurcation of the North Zone in the manner stated above. In fact from the impugned order passed by the Tribunal it transpires that on the 6th of March, 1966 the assessee wrote to the Income-tax Officer, Company Ward, Rawalpindi complaining that his case was wrongly transferred to him and should be returned for disposal at Lahore. But the learned Income-tax Officer, on the 19th of March, 1966, declined to accede to this request on the erroneous assumption that the principal place of business of the company was situated at Gujrat within his territorial jurisdiction. Thereafter on the 28th of March, 1966 the petitioner again wrote to him in this connection. But once again he refused to send back the record. It was in these circumstances and in spite of the repeated objections raised by the respondent in advance, at the earliest, that the Income-tax Officer, Companies-IV, Gujranwala proceeded to finalise the assessment against the respondent on the 26th of March, 1968. But this was ultimately annulled by the Tribunal in its impugned order with the following observations:---
"The assesee's registered office unquestionably lay at Lahore and that should have been taken as the principal place of business as has been insisted upon in its various correspondences with the Income-tax Officer, Companies Circle-I, Rawalpindi as earlier referred to. The records do not show that the case was ever transferred from the jurisdiction of the Income-tax Officer, Companies Ward-III, Lahore to the Income-tax Officer, Companies Circle-I, Rawalpindi. The Departmental Representative could not refer us to any order of the transfer of the case. The jurisdiction and the place of assessment of the case was repeatedly disputed and this being so, it was the duty of the Income-tax Officer to refer the case to the Commissioner of Income-tax for a decision in this behalf in terms of subsection (3) of section 64 of the Act...:"
5. This view of the matter is unexceptionable. The respondent had raised the dispute as to the jurisdiction of the Income-tax Officer, Companies Circle, Rawalpindi. In the circumstances under subsection (3) of section 64 of the Act it was incumbent upon the Income-tax Officer to have referred this objection as to his jurisdiction to the Commissioner of Income-tax for his decision in the matter.
6. The Tribunal permitted the respondent to raise this objection before it as to the jurisdiction of the Income-tax Officer for the first time by way of an additional plea, and exercised its discretion in the matter in favour of the respondent. The Court cannot sit in appeal against the discretion thus exercised by it.
7. For the foregoing reasons we find that the order passed by the Tribunal is unexceptionable. This position of law under section 64(3) of the Act does not admit of any doubt and there can be no two opinions on it. In the circumstances we find that on the facts found by the Tribunal the above question of law does not even arise. This petition is accordingly rejected in limine.
M.BA./C-15/LPetition rejected.