Law:

Section:

Section 127 of the Income-tax Act, 1961 [Corresponding to section 5(7A) of the Indian Income-tax Act, 1922] - Income-tax authorities - Power to transfer cases - Whether provision of section 5(7A) empowering Commissioner to set up a special circle is not inconsistent with provisions of Article 14 of the Constitution of India - Held, yes Section 142 of the Income-tax Act, 1961 [Corresponding to section 22(4) of the Indian Income-tax Act, 1922] - Assessment - Enquiry before assessment - Before requiring assessee to file a return of his world income, ITO obtained approval of Commissioner - Whether it should be presumed that before according his approval Commissioner had satisfied himself in regard to necessity of calling for world income of assessee - Held, yes - Whether provisions of section 22(4) cannot be held to be ultra vires constitution - Held, yes FACTS The petitioner was carrying on the business in timber. The ITO Simla issued a notice under section 22(4) and section 38 requiring him to file a return of his total income. Thereafter the Commissioner made an order under section 5(5) and (7A) withdrawing the petitioner's case from the ITO, Simla, and transferring it to the ITO, Special Circle at Ambala. The ITO of the special circle sent a notice to the petitioner under section 22(4) requiring him to furnish a statement of his assets and liabilities not included in the accounts. The petitioner protested against this requisition and raised a number of objections in regard to the validity of the demand and in regard to the validity of the statutory provisions under which the demand was made. The Commissioner rejected the representation and directed the ITO, Special Circle, to proceed with the case. On writ : HELD The provisions of section 5(7A) are not violative of Article 14 of the Constitution because the powers exercised by an ITO of a special circle are not different in any way from those exercised by an ITO of another circle, and, secondly, because an assessee who is aggrieved by his order has the same rights of appeal, revision and review as are available to other assessees. The setting up of a special circle is not inconsistent with the provisions of…

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