Case ID: 1326

Judgment:
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 Section 13 of the Indian Finance Act	 1950	 repealed the Income tax laws obtaining in the area of the Part B States except for the purposes 895 of levy	 assessment and collection of income tax and super tax in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] S.C.R. 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 64(1) 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 5(5) and 5(7A) 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 5(7A) 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 Navlapa(2). The difficulty	 however	 does not end there. The Commissioner	 in acting under section 5(5) 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] S.C.R. 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 3)(c) 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] S.C. 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 64(1) 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] S.C.R. 751. It was further contended that the Commissioner in acting under section 5(5) 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 U.P. vs Manbodhan Lal Srivastava	 [1958] S.C.R. 553	 K. section Srinivasan vs Union of India	 ; 	 Montreal Street Railway Company vs Normandin	 L.R. 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	 I.L.R. 	 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.