Nagarmal Bawri and Another vs Income Tax Appellate Tribunal, Gauhati Bench and Others

Goswami, C.J.—This order will govern both the Civil Rules as an identical question is raised in both the matters.

The Additional Commissioner of Income Tax, Assam, Nagaland, Meghalaya, Manipur and Tripura (briefly "the Addl. Commissioner") filed an application u/s 256(1) of the Income Tax Act, 1961 (briefly "the Act"), before the Income Tax Appellate Tribunal, Gauhati Bench (briefly "the Tribunal"), praying that certain questions raised in the application arising out of the order of the Tribunal dated 10th April, 1972, in two connected Income Tax appeals be referred to the High Court for decision. When the application came up for hearing a preliminary objection was raised by the assessee with regard to the competency of the Additional Commissioner of Income Tax to file the application u/s 256(1). The Tribunal heard both parties and overruled the preliminary objection. Hence this writ application.

Mr. T.P. Mukherjee, the learned counsel for the petitioners, raised the same objection before this court, as had been earlier raised before the Tribunal. We may at once observe that no provisions of the Act nor any notifications issued thereunder have been challenged as invalid in the present proceedings. Mr. Mukherjee submits that the Additional Commissioner of Income Tax is not competent to file an application u/s 256 in pursuance of the Notification No. S, 0, 3147 dated 19th June, 1971, which is relied upon by the department. As already stated, he does not challenge the validity of the notification but based his argument relying upon it. It is submitted that, although the Additional Commissioner of Income Tax has been directed in the above notification as per item 3 of the annexure to perform the functions in respect of,

"All work relating to second appeals before the Income Tax Appellate Tribunal, references and writ petitions before the High Courts and Supreme Court and any other proceedings before these authorities except prosecution proceedings and tax recovery proceedings."

An application for reference u/s 256(1) is not included therein. Hence, says the learned counsel, this application u/s 256(1) signed and lodged by the Additional Commissioner before the Tribunal should be rejected as incompetent.

"Commissioner" u/s 2(16) of the Act means a person appointed to be a Commissioner of Income Tax under Sub-section (1) of section 117, and includes a person appointed to be an Additional Commissioner of Income Tax under that sub-section. For the purposes of the Act, therefore, a Commissioner and an Additional Commissioner of Income Tax are at par subject to any directions of the Central Board of Direct Taxes u/s 121 of the Act. By Section 130(1)(b), in respect of any function to be performed by a Commissioner under any provision of the Act in relation to an assessee, the Commissioner referred to therein shall in a case where two or more Commissioners have concurrent jurisdiction over such assessee, be the Commissioner empowered to perform such function by the Board. By section 130(2), subject to the provisions of Subsection (1), for the purposes of sections 253, 254, 256, 262 and 264, the Commissioner referred to therein shall, in relation to an assessee, be the Commissioner having for the time being jurisdiction over the assessee. Section 256(1) provides that the assessee or the Commissioner may, within sixty days of the date upon which he is served with notice of an order u/s 254, by application in the prescribed form......require the Appellate Tribunal to refer to the High Court any question of law arising out of such order. There is a right conferred u/s 256(1) to the assessee as well as to the Commissioner, when either is aggrieved by an appellate order of the Tribunal, to make an application u/s 256(1) to the Tribunal for referring any question of law raised therein to the High Court. Section 256(1), so far as the application for reference is concerned puts the Commissioner and the assessee at par. They are both litigants before the Tribunal praying in each case for reference to the High Court. It is difficult to equate this right with the exercise of power or any jurisdiction under the Act, When Section 256(1), therefore, confers a right on the Commissioner to make an application, the word "Commissioner" must include u/s 2(16) "an Additional Commissioner of income tax". The Additional Commissioner of Income Tax, therefore, has a right under the statute to make an application u/s 256(1), apart from the position whether he is directed under any notification to exercise that right. When the statute itself has conferred upon the Additional Commissioner this right, there is no necessity for conferment of any such right by a notification u/s 121(1). The notification, if any, in that behalf only elucidates the right and reinforces the same. There is, therefore, no valid objection to the Additional Commissioner of Income Tax making the application u/s 256(1) before the Tribunal.

Mr. Mukherjee, however, drew our attention to item 3 in the notification, which we have quoted above, and submitted that "all work relating to references" must mean work relating to references when the same are pending before the High Court and cannot confer a right to the Additional Commissioner of Income Tax to take steps anterior to the pendency of the reference before the High Court for a reference to the Tribunal. Although, in the view we have taken, this point need not have been answered, we are unable to subscribe to such narrow interpretation of the word "references" in the context of the notification.

Mr. Mukherjee also submitted that the decision of the Delhi High Court in National Agricultural Co-Operative Marketing Federation Ltd. Vs. Central Board of Direct Taxes and Others, . relied upon by the Tribunal, was given without any reference to the aforesaid notification and, therefore, is not correct. Again, in the view we have taken, it is not necessary to refer to this decision, but since it has been relied upon before us also by Mr. Bhattacharjee for the department, we may only mention that this was a case where the power of revision of the Additional Commissioner of Income Tax under sections 263 and 264 of the Act was in issue. On the other hand, the question raised before us does not relate to the power or jurisdiction of the Additional Commissioner. As such, this decision is not of much relevance in the present proceedings in the way we have disposed of the controversy.

In the result, both the applications are rejected. The rules nisi are discharged. We will, however, make no order as to cost.

Baharul Islam, J.

I agree.