P L D 1967 Dacca 493 (PLP)

SALAHUDDIN AHMED, J.‑Both these petitions have been beard together as similar questions of fact and law were Involved in both the cases and they are being disposed of by this one judgment, On these two petitions, one Rule nisi was issued on the 30th of May 1966 and two Rules nisi on the 20th of June 1966 separately. These Rules nisi are directed against certain notices, namely, notices dated the 30th of April 1966, 3rd of June (two notices), 11 th of June and 16th of June, 1966, directing the petitioner in each case to appear before the Income‑tax Officer (Investigation) Circle III, Dacca, in respect of the assessment year 1961‑

62. Both the petitioners are Directors of Nishat Jute Mills Ltd., Dacca. It is their case that their case in respect of assessment of income‑tax has been suddenly transferred to the respondents without affording them any prior opportunity for representing their case in violation of section 64 of the Income‑tax Act. It may be mentioned here that respondent No. 2 'n each one of the two petitions was added subsequently as a party by an order of this Court dated the 20th of June 1966. The petitioners have stated that they asked for information as to the particulars, which led to the transfer of their cases from the Income‑tax Officer of the local area, which normally dealt with the cases of the petitioners in respect of assessment of income‑tax but received no response to the query. The petitioners have submitted that the impugned notices served on them asking them to appear before the Income‑tax Officer (Investigation) Circle III, Dacca are illegal and they cannot therefore be compelled to appear before him for the purpose of the said assessment. On behalf of the respondents, the Income‑tax Officer (Investigation) Circle III, Dacca has himself sworn two affidavits, one dated 23rd of June 1966 and the supplementary affidavit dated the 29th of July 1966. The respondents have denied the allegations made against them and have asserted that the notices are legal and they have been duly issued. On behalf of the petitioners, Mr. Asrarul Hossain, counsel, has appeared and he has challenged the validity of the impugned notices on two grounds. He has contended in the first place that Annexures 'A' and 'D' to the affidavit of the respondents dated the 23rd of June 1966 which are the main bases of the impugned notices are illegal. He however concedes that Annexure 'C' to the said affidavit is a good order. The said Annexures 'A', 'C' and 'D' are quoted below. ANNEXURE `A' ' No. Jud‑15 (a) 1965‑66/11116. Office of the Commissioner of Income‑tax (Investigation) Karachi, 26th May 1966. Subject:‑Transfer of cases under section 5 (7A) of I. T. Act. In pursuance of subsection (7A) of section 5 of the Income -tax Act, 1 922 (XI of 1922), the Commissioner of Income‑tax (Investigation), Karachi, is pleased to transfer the cases in respect of the assessee specified in column 2 from the Income‑tax Officer (Investigation) referred to in column 3 to the Income‑tax officer (Investigation) referred to in column 4 of the Schedule below :‑ S. Name of the No. assessee. Name of the I.T. O. from whom the case is transferred. Name of the I.‑T. O. to whom the case is transferred. Directors of Nishat Group of Companies :‑

1. Mian Abdul Aziz. I. T. O. (Investigation) Circle 1, Karachi. I.‑T. O. (Investigation) Circle III, Dacca. Sd/‑ (K. A. MAJEED) PTS. Commissioner of Income‑tax (investigation) Karachi. Copy forwarded for necessary action to: - (1) I. T. O. (Investigation), Circle I, Karachi with reference to his letter No. AF‑12/Inv‑I/1166/66 dawn 23‑5‑66. (2) I. A. C. (Investigation) Karachi. (3) I. T. O. (Investigation), Circle III, Dacca for necessary action. The assessee may be informed accordingly. (4) I. A. C. (Investigation), Dacca. Sd/‑ (K. A. MAJEED) PTS. Commissioner of Income‑tax (Investigation) Karachi." C. No. 54 (18)‑ITP/6l GOVERNMENT OF PAKISTAN CENTRAL BOARD OF REVENUE Karachi, The 23rd May 1963. In pursuance of subsection (2) of section 5 of the Income‑tax Act, 1922 (XI of 1922) and in supersession of all previous orders, the Central Board of Revenue is pleased to assign to the Commis sioner of Income‑tax (Investigation), Karachi, the cases relating to the assessment, penalty and other proceedings under the Income- tax Act, 1922, for the assessment years beginning on and after the first day of April, 1948, and ending on or before the thirtieth day of June, 196 3, in respect of the following assessees, namely:‑ S. No Name of the assessee.

227. Mian Abdul Aziz Sd/‑ (A. H. A. Kazi), Secretary Central Board of Revenue, ANNEXURE `D' C. No. 55 (18)‑ITP/61 GOVERNMENT OF PAKISTAN CENTRAL BOARD of REVENUE Karachi, the 23rd May, 1963. In pursuance of subsection (7A) of section 5 of the Income -tax Act, 1922 (XI of 1922) and in supersession of all previous orders the Central Board of Revenue is pleased to transfer the cases in respect of the assessee specified in Column 2 from the Income‑tax Officer referred to in Column 3 to the Income‑tax Officer referred to in Column 4 of the Schedule below: ‑ S. No Name of the assessee. Name of the Income‑tax Officer from whom the case is transferred. Name of the Income‑tax Officer to whom the case is transferred. 1 2 3 4 227 Mian Abdul Aziz Income‑tax Officer Central Circle IV, Karachi. Income‑tax Officer Investiga tion Circle V, Karachi. Sd/‑ (A. H. A. Kazi), Secretary, Central Board of Revenue. It has been contended that the said Annexure `D' which is an order of the Central Board of Revenue under subsection (7A) of section 5 of the Income‑tax Act, transferring the cases of the petitioners from the income‑tax Officer, Central Circle IV, Karachi to the Income‑tax Officer (Investigation), Circle V, Karachi seeks to transfer the cases of these two petitioners person wise which is not authorised by the subsection. In support of this contention, he t as relied on a decision of this Court reported in Sheikh Naseem Anwar v. The Income‑tax Dicer, Investigation Area and others (P L D 1964 Dacca 304). In the case under report, the Court considered sec tion 5(7A) and the attached explanation as it stood before the amendment of the explanation on the 30th of June 1963 and in that context the Court held that subsection (7A) of section 5 did not contemplate transfer of a case person wise. Sip cc the amendment of the 30th of June 1963 (vide Act XVI of 1963), subsection (7A) of section 5 together with the explanation stands as follows "5. . . . . . . . . . . (5A) . . . . . . . . . . (6) . . . . . . . . . . (7) . . . . . . . . . . (7A) The Central Board of Revenue may transfer any case from any one Income‑tax Officer to another, the Commissioner of Income‑tax may transfer any case from one Income‑tax Officer subordinate to him to another, and an Income‑tax Officer may, if authorised by the Commissioner of Income‑tax to whom he is subordinate to do so and, subject to such conditions as the said Commissioner may think fit to impose, transfer any case falling within his jurisdiction to another Income‑tax Officer. Such transfer ma; be made at any stage of the proceedings, and shall not render necessary to issue of any notice already issued by any Income‑tax Officer. Explanation.‑In this section, the word "case", in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year ; In our opinion, the amended Explanation gives clear indica tion of the fact that subsection (7A) contemplates transfer of all the proceedings in respect of the specified person, past, present and future. Case under subsection (7A) is not a "case" under the other subsections of section 5 but it has a special meaning assigned to it by the Explanation. In this special sense "case" in relation to "any specified person" means all proceedings under the Income‑tax Act in respect of any year, which may be pending on the date of the order or which may have been completed on or before such date and it also includes all proceedings under the Act which may be commenced after the date of such order in respect of any year. The history of the legislation on this point also shows that the Legislature intended to remedy the defect that was disclosed by the decisions of cases, namely, that sub section (7A) does not contemplate a transfer of a case personwise. Besides, having regard to the facts of the case, there was only one case pending against the petitioners on the date of the impugned order contained in Annexure `D', namely, assessment for the year 1961‑

62. The result of Annexure 'D', therefore, was a transfer of this case from the Income‑tax Officer, Central Circle 1V, Karachi to the Income‑tax Officer (Investigation), Circle V, Karachi. It is relevant to note at this stage that on the same date, namely the 23rd of May 1963, the Central Board of Revenue passed another order under section 5 (2) of the Income‑tax Act assigning to tile Commissioner of Income‑tax (Investigation), Karachi cases of the petitioners relating to penalty and other proceedings under the Income‑tax Act for the assessment years beginning on and after the 1st day of April, 1948 and ending on or before 30th day of June 1963 (vide Annexure `C' to the affidavit of the respondent dated the 23rd of June 1966). This order appears to have been made to authorise the Commissioner of Income‑tax (Investigation), Karachi to be in seisin of the cases so as to enable him to pass any order of transfer of these cases in future if it is required to do so, and to obviate any criticism of the nature contained in paragraph 10 of the petitions. The said paragraph runs as follows: `That it is stated that there being no assignment of the case to a Commissioner such assignment is illegal inasmuch as there is no revising authority under the Act. The order contained in the said Annexure 'C' is a perfectly legal order even under section 5(2) of the Income‑tax Act as it stood before its amendment on the 30th of June, 1963. This amendment authorised person wise transfer of cases under this subsection. Objection has been taken to the aforesaid Annexure 'A' to the affidavit of the respondents date the 23rd of June, 1966 on the ground that there is a conflict of jurisdiction inasmuch as the Central Board of Revenue having by its order dated the 23rd of May, 1963 transferred the cases of the petitioners to the Income -tax Officer (Investigation), Circle V, Karachi (vide the said Annexure 'D'), the Commissioner of Income‑tax (Investigation) Karachi could not revise the aforesaid order of the Central Board of Revenue and order transfer of the cases of the petitioners from the Income‑tax Officer (Investigation), Circle I, Karachi to the Income‑tax Officer (Investigation), Circle III, Dacca (vide Annexure 'A' to the affidavit of the respondents dated 23‑6‑66). It has further been contended that there is nothing to show how the cases of the petitioners came to be transferred from the Income‑tax Officer (Investigation), Circle V, Karachi to the Income‑tax Officer (Investigation), Circle I, Karachi. This contention is no longer of substance having regard to the fact that the respondents have, by their affidavit dated the 29th of July 1966, supplied the missing links, namely, Annexures 'A' and 'B' to the affidavit of the respondents dated the 29th of July, 1966. This affidavit has been put in with our permission and the petitioners have not asked for any permission to reply to it. Annexure 'A' is an order dated the 15th of October, 1963 passed by the Commissioner of Income‑tax (Investigation), Karachi under section 5(7A) of the Income‑tax Act transferring the cases of the petitioners from the Income‑tax Officer (Investigation), Circle V, Karachi to the Income‑tax Officer (Investigation), Circle II, Karachi. Annexure 'B' is another order of the Commissioner of Income‑tax (Investigation), Karachi dated the 15th of October, 1964 passed under the said subsection transferring the cases of the petitioners from the Income‑tax Officer (Investigation), Circle II, Karachi to the Income‑tax Officer (Investigation), Circle I, Karachi. These two annexures explain as to how the Commissioner of Income‑tax (Investigation), Karachi directed that the cases of the petitioners be transferred from the Income -tax Officer (Investigation), Circle I, Karachi to the Income‑tax Officer (Investigation), Circle III, Dacca. We do not think that there is any conflict of jurisdiction brought about by Annexures 'D' and 'A' annexed to the affidavit of the respondents dated the 23rd of June, 1966. Under subsection (7A) of section 5, the Central Board of Revenue has been empowered to transfer any case from any one income‑tax Officer to another while the Commissioner of Income‑tax has been empowered to transfer any case from one income‑tax Officer subordinate to him to another. In the present cases, the Central Board of Revenue having transferred the cases of the petitioners to the Commis sioner of Income‑tax (Investigation), Karachi, the latter had authority to transfer the cases from the Income‑tax Officer (Investigation), Circle V to any other Income‑tax Officer sub ordinate to the Commissioner. The contention that the petitioners were entitled to claim that they should be assessed by the Income‑tax Officer of the area in which they had their business or they resided is not available having regard to subsection (5) of section 64 of the Act. The subsection clearly says that the provisions of subsection (1) and subsection (2) shall not apply and shall be deemed never at any time to have applied to any assessee. "(a) on whom an assessment or re‑assessment for the purposes of this Act has been, is being or is to be made in the course of any case in respect of which a Commissioner of Income‑tax appointed without reference to area under sub section (2) of section 5 is exercising the functions of a Commis sioner of Income‑tax, or (b) where by any direction given or any distribution or allocation of work made by the Commissioner of Income‑tax under subsection (5) or section 5, or in consequence of any transfer made under subsection (7A) of section 5, a particular Income‑tax Officer has been charged with the function of assessing that assessee, or (c) . . . . . . . . . . but assessment of such person, whether the proceedings for such assessment began before or after the 1st day of April, 1939, shall be made by the Income‑tax Officer for the time being charged with the function of making such assessment by the Central Board of Revenue or by the Commissioner of Income- tax to whom he is subordinate, as the case may be." It has also been contended that there has been a contravention of the rule of natural justice inasmuch as the petitioners were not given any opportunity to make any representation before the impugned transfers were made. It appears from the facts contained in the affidavits before us that the cases of the petitioners had been taken away from the Income‑tax Officer of the local area as mentioned in section 64(1) and (2) as far back as the year 1962, and the petitioners never felt aggrieved because of the contravention of this rule of natural justice. The case reported in P L D 1964 Dacca 304 does not support the petitioners on this point inasmuch as following the recommendation made in the case of Pannalal Binjraj v. The Union of India (31 I T R 565) the High Court too similarly recommended to the Income‑tax Authority to follow the rule of natural justice, namely, to give hearing before any decision is taken which adversely effects the assessee with regard to the forum where his Income‑tax is assessed. The facts of the present cases disclose that, although transfers of their cases were made and continued to be made since 1963. It is only in May 1966 that the petitioners have come for the first time to challenge the legality of the various orders transferring the cases of the petitioners for assessment under the Income‑tax Act from one Income‑tax Officer to another. Therefore, on the ground of delay also these petitions are liable to be dismissed in limine. Even on the ground of inconvenience, the petitioners have no case inasmuch as both of them are residing in Dacca and Dacca is the principal place of their business. We, therefore, do not find any substance in any one of the contentions advanced before us. The Rules nisi are accordingly discharged in each one of the two petitions but having regard to the facts of the cases we make no order as to costs. A. M. SAYEM, J.‑I agree. S. Q. Rules discharged.