l Appeal No 135 of 1958
Appeal from the judgment and order dated 114 394 September 4 1956 of the Punjab High Court in Civil Writ Case No 325 of 1965
N A Palkhivala and J B Dadachanji for the appellant
C K Daphtary Solicitor General of India K N Rajagopal Sastri and D Gupta for the respondents
September 27
The Judgment of the Court was delivered by HIDAYATULLAH J
The appellant firm L Hazarimal Kuthiala of Kapurthala moved the High Court of Punjab under article 226 of the Constitution for writs of prohibition certiorari quo warranto etc against the Income tax Officer Special Circle Ambala and the Commissioner of Income tax Punjab 1 Himachal Pradesh Bilaspur and Simla in respect of reassessment of the income of the firm for the account year 1945 1946
The High Court dismissed the petition but granted a certificate under articles 132 and 133 of the Constitution and this appeal has been filed on that certificate
The firm carried on business as forest lessees and timber merchants at Dhilwan in the former Kapurthala State
In that State an Income tax law was in force and prior to the integration of the State on April 10 1947 the income of the firm for the account year 1945 1946 Samvat
2002 was duly assessed and the tax was also paid
Subsequently political changes took place Kapurthala integrated into what was known as Pepsu and the Rajpramukh issued two Ordinances in Samvat
2005 by which all laws in force in Kapurthala including the Income tax law ceased to be operative from August 20 1948
The two Ordinances instead applied laws in force in the Patiala State to the area of the new State which included Kapurthala and the Patiala Income tax Act 2001 came into force
Later still 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Section 13 of the Indian Finance Act 1950 repealed the Income tax laws obtaining in the area of the Part B States except for the purposes 895 of levy assessment and collection of income tax and super tax in respect of the period defined therein
On March 12 1955 the Income tax Officer Special Circle Ambala issued a notice purporting to be under section 34 of the Patiala Income tax Act of Samvat
2001 to the appellant firm calling upon it to file a return of its income and total world income because he had reason to believe that the income had been underassessed
Previous to this on November 4 1953 the Commissioner of Income tax Punjab 1 Himachal Pradesh Bilaspur and Simla purporting to act under section 5 sub sections
5 and 7A of the Indian Income tax Act ordered that the assessment of the appellant firm would be done by the Income tax Officer Special Circle Ambala and not by the Income tax Officer B Ward Patiala who ordinarily would be the competent authority under section 64 of the Indian Income tax Act to assess the appellant firm
The appellant firm raised objections but failed and then filed the petition under article 226 of the Constitution out of which the present appeal arises
Numerous objections were taken in respect of the competency of the proceedings before the taxing authorities but some of them are no longer pressed
An argument under article 14 of the Constitution has now been abandoned though it figured at earlier stages of the present case
A second point that the reassessment cannot be made under the Patiala In
come tax Act is not in dispute because the respondents before us stated that the reassessment if any would have to be done in accordance with the Kapurthala law as it existed in the assessment year Samvat 2002
A third argument namely that the words of section 13 of the Indian Finance Act 1950 did not include reassessment has also been abandoned in view of the decisions of this Court in Lakshmana Shenoy vs The Income tax Officer Ernakulam 1 and The Income tax officer Bangalore vs K N Guruswamy 2
Only one point has been pressed before us and it is that the Income Tax Officer Special Circle Ambala had no jurisdiction to issue a notice under section 34 and 1 1959 SCR 751
2  896 that only the Income tax Officer B Ward Patiala was the competent authority
Reliance is placed in this connection upon the provisions of section 641 of the Indian Income tax Act under which the locally situated Income tax Officer would have had jurisdiction in this case
The transfer of the case by the Commissioner of Income tax by his order dated November 4 1953 is characterised as ultra vires and incompetent and it is this argument alone to which we need address ourselves in this appeal
The Patiala Income tax Act contained provisions almost similar to sections 55 and 57A of the Indian Income tax Act
Sub section 5 differed in this that the Commissioner of Income tax was required to consult the Minister in charge before taking action under that sub section
The only substantial difference in the latter sub section was that the Explanation which was added to section 57A of the Indian Income tax Act as a result of the decision of this Court in Bidi Supply Co vs Union of India 1 did not find place in the Patiala Act
The Commissioner when he transferred this case referred not to the Patiala Income tax Act but to the Indian Income tax Act and it is contended that if the Patiala Income tax Act was in force for purposes of reassessment action should have been taken under that Act and not the Indian Income tax Act
This argument however loses point because the 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
This principle is wellsettled
See Pitamber Vajirshet vs Dhandu Navlapa2
The difficulty however does not end there
The Commissioner in acting under section 55 of the Patiala Income tax Act was required to consult the Minister in charge
It is contended that the Central Board of Revenue which under the Indian Finance Act 1950 takes the place of the Minister in charge was not consulted and proof against the presumption of regularity of official acts is said to be furnished by the fact that under the Indian law no such consultation was necessary and the Commissioner having purported 1 1056 SCR BOM
486 489 897 to act under the Indian law could not have felt the need of consultation with any higher authority
This perhaps is correct
If the Commissioner did not act under the Patiala law at all which enjoined consultation with the Minister in charge and purported to act only under the Indian law his mind would not be drawn to the need for Consultation with the Central Board of Revenue
Even so we do not think that the failure to consult the Central Board of Revenue renders the order of the Commissioner ineffective
The provision about consultation must be treated as directory on the principles accepted by this Court in State of U P vs Manbodhan Lal Srivastava 1 and K section Srinivasan vs Union of India 2
In the former case this Court dealt with the provisions of article 320 3c of the Constitution under which consultation with the Union Public Service Commission was necessary
This Court relied upon the decision of the Privy Council in Montreal Street Railway Company vs Normandin 3 where it was observed as follows  
The question whether provisions in a statute are directory or imperative has very frequently arisen in this country but it has been said that no general rule can be laid down and that in every case the object of the statute must be looked at
The cases on the subject will be found collected in Maxwell on Statutes 5th Ed p 596 and the following pages
When the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty and at the same time would not promote the main object of the Legislature it has been the practice to hold such provisions to be directory only the neglect of them though punishable not affecting the validity of the acts done
 The principle of the Privy Council case was also applied by the Federal Court in Biswanath Khemka vs The King Emperor 4 and there as pointed out by this 1 1058 SC R 533
3  2   1321
4 898 Court the words of the provision were even more emphatic and of a prohibitory character
The essence of the rule is that where consultation has to be made during the performance of a public duty and an omission to do so occurs the action cannot be regarded as altogether void and the direction for consultation may be treated as directory and its neglect as of no consequence to the result
In view of what has been said in these cases the failure to consult the Central Board of Revenue does not destroy the effectiveness of the order passed by the Commissioner however wrong it might be from the administrative point of view
The power which the Commissioner had was entrusted to him and there was only a duty to consult the Central Board of Revenue
The failure to conform to the duty did not rob the Commissioner of the power which he exercised and the exercise of the power cannot therefore be questioned by the assessee OD the ground of failure to consult the Central Board of Revenue provision regarding which must be regarded as laying down administrative control and as being directory
Learned counsel however contends that even if all this be decided against him he is still entitled to show that the transfer of the case can only take place under sub section
7A of section 5 and not under sub section
According to him the former subjection deals with the transfer of individual cases and that inasmuch as there was no pending case at the time then as was ruled by this Court in the Bidi Supply case 1 the transfer could not be valid
In the absence of an Explanation similar to the one added to the Indian Income tax Act he contends that a case which was not pending could not be transferred under sub section
He contends also that sub section
5 deals not with the transfer of individual cases but with the distribution of work
The two sub sections of section 5 of the Patiala Income tax Act read as follows  5 Income tax officers shall perform their functions in respect of such persons or classes of persons or of such incomes or classes of income or in respect of 1  899 such areas as the Commissioner of Income tax may in consultation with the Minister Incharge direct and where such directions have assigned to two or more Income tax Officers the same persons or classes of persons or the same incomes or classes of income or the same area in accordance with any orders which the Commissioner of Income tax may in consultation with the Minister Incharge make for the distribution and allocation of work to be performed
The Minister Incharge may with the previous approval of the ljlasi Khas by general or special order in writing direct that the powers conferred on the Income tax Officer by or under this Act shall in respect of any specified case or class of cases be exercised by the Commissioner and for the purposes of any case in respect of which such order applies references in this Act or in any rules made hereunder to the Income tax Officer shall be deemed to be references to the Commissioner
7A The Commissioner of Income tax may transfer any case from one Income tax Officer subordinate to him to another and the Minister Incharge may transfer any case from any one Income tax Officer to another
Such transfer may be made at any stage of the proceedings and shall not render necessary the re issue of any notice already issued by the Income tax Officer from whom the case is transferred
 There can be no doubt that sub section
7A authorises the Commissioner to transfer individual cases
The words  any case from one Income tax Officer subordinate to him to another   such transfer may be made at any stage of the proceedings  etc clearly indicate this
Sub section 7A is however not applicable here because in respect of the cognate sub section of the Indian Income tax Act it was ruled by this Court that it could apply to a pending case only
It was to overcome this lacuna that the Explanation was added by the Indian Parliament
This amendment came in 1956 and the Patiala Act did not include a similar Explanation because prior to 1956 the question had not arisen
There is one other difference between the Patiala Act and the Indian Act
Whereas sub section
7A was introduced in the Indian Act by an 900 amendment the corresponding sub section was enacted at the same time as the rest of the Patiala Act
Now it is quite clear that a case which was not pending at the time of transfer could not be transferred under sub section
7A of section 5 of the Patiala Act
The same reasoning must be applied to that subsection as it was applied to the Indian Act
Learned counsel referred us to an affidavit by the Under Secretary Central Board of Revenue reproduced in Pannalal Binjraj vs Union of India 1 which stated the reason for the introduction of sub section
It is a little difficult to accept the affidavit as an aid to find out the intention why a particular law or amendment was enacted more so where the affidavit concerns quite another Act of a different legislature
It is however pertinent to remember that sub section
7A expressly gave the power to transfer pending cases but said nothing about cases which were riot pending
The power to transfer such cases before they came into being must therefore be found in some other enactment
The Department contends that it would fall within sub section
5 of section 5 and points out that this Court was not required to consider that sub section because the transfer of the cases dealt with in the Bidi Supply case 2 was by an authority not named in sub section
5 and therefore the transfer in those instances could not be held to be under that sub section
The Department contends that the Commissioner of Income tax is mentioned both in sub section
5 and sub section
7A and could derive his power from one or the other or both
The short question thus is whether an individual case which was not a pending case could be transferred from one Income tax Officer to another under sub section
5 of section 5 of the Patiala Act which was kept alive for assessment and reassessments relating to previous assessment years
Mr Palkhivala argues that the words of the sub section  such persons or classes of persons or of such incomes or classes of income or in respect of such areas  denote by the plural employed a dealing with a group rather than 1  246
2  901 an individual case
He further contends that if individual cases were held to be included in sub section
5 then sub section
7A would be unnecessary and otiose
He argues that harmonious construction thus requires that the two sub sections must be taken to cover different situations
The last argument is hardly open after the decision of this Court adverted to already
If pending cases alone were within sub section
7A those cases which were not pending could not be said to have been provided for there
There is thus no overlapping at least in so far as cases not pending were concerned
An arrangement for their disposal would be a subject of distribution of work and nothing much turns upon the employment of the plural number because the plural includes the singular
Indeed a single case might well be in a class separate from others
Duplication of powers is sometimes noticeable in statutes and does not destroy the effectiveness of the powers conferred
Section 24 of the Civil Procedure Code dealing with transfers of cases and the provisions of the Letters Patent of the High Court are instances in point
If a particular action is valid under one section it cannot be rendered invalid because the identical action can also be taken under another section and it makes no difference if the two empowering provisions are in the same statute
In any event sub section
7A would cut down sub section
5 only to the extent the former provides and it has been held that it was confined to pending cases only
Sub section 5 was thus available for cases which were not pending and the case which was the subject matter of the Commissioner s order was not a pending case
Mr Palkhivala contends that sub section
5 merely enables distribution of work and does not deal with transfers
But where a case is not pending an order relating to it may take the form of transfer or an arrangement for its disposal
There is nothing to prevent the Commissioner acting under sub section
5 to arrange that the case of an assessee shall be disposed of by a particular Income tax Officer
The words of 115 902 sub section
5 that  Income tax Officers shall perform their functions in respect of such persons as the Commissioner may direct  only show that the Commissioner may direct that one Income tax Officer shall not and another Income tax Officer shall perform the functions in respect of such and such person or persons
The plural including the singular the order of the Commissioner was valid because he arranged and distributed work and did not seek to transfer any case
It is however contended that this renders sub section
7A otiose
In our opinion it does not
Special provision for transfer of pending cases is all that is provided there and if such a transfer takes place the provisions of sub section
7A will be invoked
Those provisions are to be read as not pre judicing the general powers granted by sub section
5 and vice versa
For these reasons the appeal fails and will be dismissed with costs
Appeal dismissed


Summary:
The appellant firm which carried on business as forest lessees and timber merchants in the former Kapurthala State was assessed to and paid income tax for the account year 1945 46 under the Income tax law which was then in force in the said State
Subsequently Kapurthala State integrated into what was known as Pepsu and the Patiala Income tax Act 2001 was made applicable and came into force in the integrated State
Later still the Indian Finance Act 1950 26 of 1930 applied the Indian Income tax Act to Part B States which had emerged as a result of political changes and section 13 Of the Indian Finance Act repealed the Income tax laws obtaining in Part B States except for the purposes of levy assessment and collection of income tax and Super tax relating to the period mentioned therein
On November 4 1953 the Commissioner of Income tax Punjab i etc
purporting to act under section 5 sub sections
5 and 7A of the Indian Income tax Act ordered the assessment of the appellant firm to be done by the Income tax Officer Special Circle Ambala and not by the Income tax Officer B Ward Patiala who would ordinarily be the competent assessing authority for the firm under section 64 Of the Indian Income tax Act
On March 12 1953 the Income tax Officer Special Circle Ambala issued a notice purporting to be under the Patiala Income tax Act of Samvat 2001 to the appellant firm for filing a return of its income and total world income as he believed that the income had been underassessed
The appellant then filed an application under article 226 of the Constitution in the High Court for writs of prohibition certiorari quo warranto etc
against the Income tax Officer Special Circle Ambala and the Commissioner of Income tax Punjab i etc
regarding the reassessment of the income of the firm for the account year 1945 46
The High Court dismissed the said petition and this appeal was filed on a certificate granted by the High Court
The contentions of the appellant inter alia were that the Income tax Officer Special Circle Ambala had no jurisdiction to issue a notice under section 34 893 of the Patiala Income tax Act of Samvat 2001 and that only the Income tax Officer B Ward Patiala was the competent authority as he was the locally situated Income tax Officer and would have jurisdiction under section 641 of the Income tax Act
The transfer of the case by the Commissioner of Income tax by his order of November 4 1954 was characterised as ultra vires and incompetent
The argument that the words of section 13 Of the Indian Finance Act 1950 did not include reassessment was abandoned in view of the decisions of this Court in Lakshmana Shenoy vs The Income tax Officer Ernakulam 1959 SCR 751
It was further contended that the Commissioner in acting under section 55 of the Patiala Income tax Act was required to consult the Minister in Charge whose place was taken by the Central Board of Revenue under the Indian Finance Act 1950
Held that although the Commissioner of Income tax was required to consult the Central Board of Revenue his failure to do so did not render his order ineffective however wrong it might be from the administrative point of view
The provision about consultation must be treated as directory and the Commissioner s power could not be questioned by the assessee on the ground of failure to consult the Central Board of Revenue
State of UP vs Manbodhan Lal Srivastava 1958 SCR 553 K section Srinivasan vs Union of India   Montreal Street Railway Company vs Normandin LR 1917 A C 170 and Biswanath Khemka vs The King Emperor  followed
The Commissioner while transferring the case may have referred to the Indian Income tax Act and not to the Patiala income tax Act but the exercise of the power would be referable to a jurisdiction which conferred validity upon it and not to a jurisdiction under which it would be nugatory
Pitamber Vajirshet vs Dhandu Navlapa ILR  followed
A case which was not pending at the time of transfer could not be transferred under sub section
7A of section 5 of the Patiala Act but it could be transferred from one Income tax Officer to another under sub section
5 Of section 5 of the Patiala Act which was kept alive for assessment and reassessment relating to previous years
Sub section
7A makes special provision for transfer of pending cases and is not prejudicial to the general powers granted by sub section
Bidi Supply Co vs Union of India   refer red to