Law:

Section:

Section 124 read with section 147 of the Income-tax Act, 1961 [Corresponding to section 5(5) read with section 34 of the Indian Income-Tax Act, 1922], read with sections 5(5) and 34 of the Patiala Income-tax Act - Assessing Officer - Jurisdiction of - Assessment year 1945-46 - Commissioner, purporting to act under section 5(5) of 1922 Act, ordered that assessment of assessee-firm would be done by ITO, Ambala and not by ITO, Patiala who ordinarily, would be competent authority under section 64 of 1922 Act to assess assessee - In 1955 ITO, Ambala issued reassessment notice under Patiala Act for assessment year 1945-46 - Assessee challenged said act of transfer by Commissioner and jurisdiction of ITO, Ambala to issue said notice contending that Commissioner, when he transferred case, referred not to Patiala Act, but to 1922 Act, and thus if Patiala Act was in force for purposes of reassessment, action should have been taken under that Act and not under 1922 Act - Whether exercise of a power will be referable to a jurisdiction which confers validity upon it and not to a jurisdiction under which it will be nugatory - Held, yes - Whether there is nothing to prevent Commissioner, acting under section 5(5) of 1922 Act, to arrange that case of an assessee shall be disposed of by a particular ITO and, therefore, order of Commissioner was valid as he merely arranged and distributed work, and did not seek to transfer any case - Held, yes - Whether failure to consult Central Board of Revenue did not render order of Commissioner in effective as provision about consultation was only directory - Held, yes - Whether, therefore, ITO, Ambala had jurisdiction to reassess assessee - Held, yes FACTS Assessee-firm had business in Part B States. The Indian Finance Act, 1950 (26 of 1950), applied the Indian Income-tax Act to the Part B States, which had emerged as a result of political changes. Section 13 of the Indian Finance Act, 1950, repealed the income-tax laws obtaining in the area of the Part B States except for the purposes of levy, assessment and collection of income-tax and super-tax in respect of the period defined therein. The Commissioner purporting to act under section 5,…

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