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PETITIONER: PANNALAL BINJRAJ

       Vs.

RESPONDENT: UNION OF INDIA.

DATE OF JUDGMENT: 21/12/1956

BENCH: BHAGWATI, NATWARLAL H. BENCH: BHAGWATI, NATWARLAL H. JAGANNADHADAS, B. AIYYAR, T.L. VENKATARAMA SINHA, BHUVNESHWAR P. DAS, S.K.

CITATION:  1957 AIR  397            1957 SCR  233

ACT: Income-tax-Transfer  of cases-Discretion vested in the  Com- missioner  or the Board,if discriminatory and  violative  of fundamental  rights-Omnibus wholesale order of transfer,  if constitutionally valid-Indian Income-tax Act(XI of 1922), as amended by Amending Act XXVI of 1956, ss. 5(7A), 64(1), (2)- Constitution of India, Arts.I4, 19(1)(g).

HEADNOTE: These petitions on behalf of the assessees raised the common question  as  to the constitutionality of s. 5(7-A)  of  the Indian  Income-tax Act, which was raised but not decided  by this Court in Bidi Supply Co.  V. The Union of India, (1956) S.  C. R. 267.  Reliance was placed on the  observations  of Bose,  J. in his Minority judgment in that case and  it  was contended  that  the  section  read  with  the  explanation, subsequently   added   to   it   as   a   result   of   that decision,conferred  arbitrary  and  uncontrolled  powers  of transfer  on  the Income-tax Commissioner  and  the  Central Board  of Revenue, was discriminatory and violative  of  the provisions   of   Art.  14  and  imposed   an   unreasonable restriction  on the right to carry on trade or  business  in contravention of Art. 19(1)(g) of the Constitution.  It  was further  contended  that  the omnibus  wholesale  orders  of transfer  made without any reference to any particular  case or  without any limitation as to time were inconvenient  and discriminatory  and ran counter to the majority judgment  in that case.  The contention of the Central Board of  Revenue, supported  by affidavits filed on its behalf, was  that  the section    was   intended   to    minimize    administrative inconvenience,  there was no discrimination  after  transfer because  the same relevant provisions of the Act as  applied to  others  similarly  situated,  were  applied  after   the transfer and any resulting inconvenience to the assessee was sought  to be minimised by transferring his case  either  to the  nearest  area  or,  where that  was  not  feasible,  by examining his accounts or evidence, if required by him, at a place  suited  to  his convenience and  that  the  wholesale omnibus orders of transfer were covered by the explanation:

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Held,  that  s.  5(7A) of the Indian Income-tax  Act  was  a measure of administrative convenience, was  constitutionally valid  and  did not infringe any of the  fundamental  rights conferred  by Arts. 14 and (19)(g) of the  Constitution  and the  orders  of  transfer  in question  were  saved  by  the explanation:  to  that section  and.  were  constitutionally valid. 30 234 The  right conferred on the assessee by s. 64(1) and (2)  of the Act was not an absolute right and must be subject to the primary object of the Act itself, namely, the assessment and collection  of income-tax, and where the exigencies  of  tax collection  so required, the Commissioner of  Income-tax  or the Central Board of Revenue had the power under s. 5(7A) of the  Act to transfer his case to some other officer  outside the  area  where he resided or carried on business  and  any difference  in his position created thereby as  compared  to that  of others similarly situated would be no more  than  a minor  deviation  from the general standard  and  would  not amount to a denial of equality before the law. This  discretionary power vested in the Authorities  by  the section to override the statutory right of the assessee must be  distinguished  from  the  discretion  that  has  to   be exercised  in respect of a fundamental right  guaranteed  by the  Constitution and the two tests to judge whether it  was discriminatory  would  be, (I) whether it  admitted  of  the possibility  of any real and substantial discrimination  and (2) whether it impinged on a fundamental right guaranteed by the  Constitution and, so judged, the discretion  vested  in the  Authorities  by  s. 5(7-A) of the Act was  not  at  all discriminatory  nor did the section impose any  unreasonable restriction on the fundamental -right to carry on trade   or business. Bidi  Supply  Co. v. The Union of India, (1956)  S.C.R.  267 M.K.  Gopalan  v.  The State of  Madhya  Pradesh,  (1955)  I S.C.R.168  ; The State of West Bengal v. Anwar  Ali  Sarkay, (1952)  S.C.R.  284; Dayaldas Kushiram  v.  Commissioner  of Income-tax,  (Central),,  I.L.R.  1940  Bom.  650;  Dayaldas Kushiram  v. Commissioner of Income-tax, Central, (1943)  11 I.T.R. 67; and Wallace Brothers & Co., Ltd. v.  Commissioner of Income-tax, Bombay, Sind & Baluchistan, A.I.R. 1945  F.C. 9, discussed. The  explanation  added to the section by the  Amending  Act XXVI Of 1956, was intended to expand the connotation of the’ term  ’case’ used in the section and included  both  pending proceedings  as also other proceedings under the  Act  which might be commenced in respect of any year after the date  of transfer  and  as  such  the orders  in  question  were  not unconstitutional or void. The  Income-Tax Authorities, however, must be held bound  by the  statements  made  in  their  affidavits  and  where  an assessee could make out a prima facie case of a mala fide or discriminatory  exercise of the discretion’ vested in  them, the Court will scrutinise the circumstances in the light  of those  statements and where necessary quash an abuse of  the power under Arts. 226 and 32 Of the Constitution. Ratanlal Gupta v. The District Magistrate of Ganjam,  I.L.R. 1951 Cuttack 441 and Brundaban; Chandra Dhir Narendra v.                             235 The  State  of  Orissa  (Revenue  Department),  I.L.R.  1952 Cuttack 529, referred to. The  Income-tax  Authorities  should  follow  the  rules  of natural  justice  and, where feasible, give  notice  of  the intended  transfer to  the assessee concerned in order  that

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he  may  re_ resent his view of the matter  and  record  the reasons of the transfer, however briefly, to enable the Court to judge whether such  transfer was mala fide or discriminatory, if and when challenged.

JUDGMENT: ORIGINAL.   JURISDICTION: Petitions Nos. 97, 97A, 44, 86  to 88, 111, 112, 85, 158, 211 to 251 and 225 to 229 of 1956. Under  Article  32  of the Constitution  of  India  for  the enforcement of Fundamental Rights’ N.   C. Chatterji  A. K. Sen, B. P. Maheshwari and  Tarachan Brijmohan Lal, for the petitioners in Petitions Nos. 97  and 97A of 1956. N.  C. Chatterji and V. S. Sawhney, for the  petitioners  in Petitions Nos. 44., 86 to 88, Ill and 112 of 1956. N.   C. Chatterji and D. N. Mukherji, for the petitioners in Petition No. 85 of 1956.  Purshottam Tirukumdas and 0. P. Lal, for the petitioners in Petitions Nos. 211 to 215 of 1956. S.   C.  Isaacs and K. R. Chaudhuri. for the petitioners  in Petitions Nos. 225 to 229 of 1956. Bhagirth Das and M. L. Kapur, for the petitioner in petition No. 158 of 1956. C.   K. Daphtary, Solicitor-General of India, G. N. Joshi,    Porpus A.  Mehta and R. H. Dhebar, for the respondents  (Union,  of India,  the Central Board of Revenue and various  Income-tax Officers in all petitions.) B.  Sen  and  P.  K. Ghose, for the  State  of  West  Bengal (Respondents  Nos.  2 and 3 in Petitions Nos.211 to  215  of 1956). 1956.  December 21.  The Judgment of the Court was delivered by BHAGWATI   J.-These   petitions  under  Art.   32   of   the Constitution raise a common question of law whether s. 5 (7A) of the Indian Income-tax Act, hereinafter 236 called   the  Act,  is  ultra  vires  the  Constitution   as infringing  the fundamental rights enshrined in Art. 14  and Art. 19 (1) (g). The  facts which led to the filing of the petitions ’nay  be shortly stated. petitions Nos. 97 & 97-A of 1956: The  petitioners are M/s. pannalal Binjrai, Oilmill  owners, merchants  and  commission agents, carrying on  business  at Sahibganj  in the district of Santhal Pargans, having  their branch at 94 Lower Chitpur Road, Culcutta, petitioner No. 1, and  R. B. Jamuna Das Chowdhury, resident of the same  place and  erstwhile  karta of the Hindu undivided  family,  which carried on business in the name and style of M/S. Pannalal Binjr petetioner No. 2. Before September 28,  1954, they,   being  assessed by the Income-tax  officer,  Special Circle, Patna.  On September 28, 1954, the Central Board  of Revenue  made  an  order -transferring their  cases  to  the Income.tax Officer, Central Circle XI, Calcutta.  On January 22, 1955, the Central Board of Revenue transferred the cases of petitioner No. 2 to the Income-tax Officer Central Circle VI,Delhi, and on July 12, 1955, it similarly transferred the cases  of petitioner No. I to the same officer.   After  the dates  of such transfer to the Income-tax  Officer,  Central Circle  VI,  Delhi,  the  said  officer  instituted  several proceedings  against them and the petitioners challenged  in these petitions the validity of the said orders of  transfer and all the subsequent proceedings  including the assessment

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orders as well as the order levying penalty for  non-payment of the income-tax which had been assessed prior thereto,  on the  ground  that s. 5 (7A) of the Act was ultra  Vires  the Constitution and all the proceedings which were  entertained against  the petitioners by the Income-tax  Officer  Central circle  XI Calcutta, and by the Income-tax  Officer  Central Circle VI, Delhi, were without jurisdiction and void. petitions  Nos. 44 and 85 of 1956 The petitioner in Petition No.44/56 is Shrii A. L. sud,  the sole  proprietor of 14/B.  Amritlal Sud (Construction)’  who orginally belonged to Hoshiarpur district in the 237 State  of  Punjab  but  has since  1948  been  residing  and carrying  on business in Calcutta.  Prior to June 29,  1959, he  had  been  assessed  to  income-tax  by  the  Income-tax Officer,  Special Survey Circle VII, Calcutta.  On June  29, 1955,  the Central Board of Revenue transferred his case  to the  Income-tax  Officer, Special Circle, Ambala,,  and  the said  officer continued the proceedings in  the  transferred case  and  also instituted further proceedings  against  the petitioner  and assessed him under s. 23 (4) of the Act  for the assessment years 1946-47 and 1947-48.  Demands were made upon the petitioner for payment of the amount of  income-tax thus  assessed whereupon he filed this  petition  impeaching the  validity of the order of the Central Board ’of  Revenue dated June 29, 1955, and the proceedings entertained by  the Income-tax  Officer, Special’ Circle, Ambala,on  the  ground that s. 5 (7A) of the Act was ultra vires the Constitution. Petition  No.  85/56 was filed by M/s.  Bhagwan  Das  Sud  & Sons,  Merchants, Hoshiarpur, carrying on business in  rosin and  turpentine there.  Before October 20, 1953,  they  were being  assessed by the Income-tax Officer,, Hoshiarpur,  but on  that date their case was transferred under s. 5 (7A)  of the Act by the Commissioner of Income-tax to the  Income-tax Officer, Special Circle, Ambala.  The said officer continued the  said  case and reopened the assessment  for  the  years 1944-45  to  1050-51 and completed the  assessment  for  the assessment,  years  1947-48,  1950-51  and  1951-52.   These petitioners  also thereupon filed the  petition  challenging the   validity  of  the  order  of  transfer  made  by   the Commissioner  of  Income-tax on October 20,  1953,  and  the proceedings  entertained by the Income-tax Officer,  Special Circle, Ambala, thereafter, on the same ground -of the ultra vires character of s. 5 (7A) of the Act. Shri  A. L. Sud, the petitioner in Petition No. 44/56  is  a member of the Hindu undivided family carrying on business in the  name and style. of M/s bhagwan Das Sud & Sons  and  the cases  of  both  these petitionrs were  transferred  to  the Income-tax Officer, Special 238 Circle, Ambala, as above, by the said respective orders. Petitions Nos. 86, 87, 88, 111, 112 and 158 of 1956: These  petitions  may  be  compendiously  described  as  the Amritsar  group.   The petitioner in Petition No.  86/56  is Sardar   Gurdial  Singh,  son  of  S.  Narain  Singh.    The petitioner  in Petition No. 87/56 is Dr. Sarmukh Singh,  son of  S. Narain Singh.  The petitioner in Petition No.  112156 is  S. Ram Singh, soil of S. Narain Singh.  These three  are brothers  and  the petitioner in Petition No. 88/56  is  the father, S. Narain Singh, son of S. Basdev Singh.  The father and  the  three  sons were the directors  in  the  Hindustan Embroidery  Mills  (Private)  Ltd.,  petitioner  No.  1   in Petition  No.  111/56, which is located  at  Chheharta  near Amritsar.   All these petitioners were, prior to the  orders of transfer made by the Commissioner of Income-tax under  s.

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5(7A) of the Act, being assessed by the Income-tax  Officer, ’A’  Ward, Amritsar, but their cases were transferred on  or about June 29, 1953, from the Income-tax Officer, ’A’  Ward, Amritsar,   to  the  Income-tax  Officer,  Special   Circle, Amritsar.   These  cases  were -  continued  by  the  latter officer and notices under a. 34 of the Act were also  issued by  him  against them for the assessment years  1947-48  to’ 1951-52.   Each  one  of  them  filed  a  separate  petition challenging the said orders of transfer by the  Commissioner of Income-tax and the proceedings entertained by the Income- tax Office r, Special Circle, Amritsar, against them -on the score of the unconstitutionality of s. 5 (7A) of the Act. The petitioner in Petition No. 158/56 is one Shri Ram  Saran Das Kapur, the head and karta of the Hindu undivided  family carrying on business outside Ghee Mandi Gate, Amritsar.  His case  also whichprior to the order complained  against,  was being  entertained  by  the Income-tax  Officer,  ’F’  Ward, Amritsar,  was transferred on some date in 1954 by an  order of the Commissioner of Income-tax under s.   5(7A)  of   the Act  to  the Income-tax Officer, Special  Circle,  Amritsar. No objection wag taken by the                             239 petitioner to this order of transfer until after the assess. ment order was passed against him but he also challenged the validity  of the said order of transfer and the  proceedings entertained  by  the  Income-tax  Officer,  Special  Circle, Amritsar,  thereafter,  on  the same grounds  as  the  other petitioners. Petitions NOs. 211 to 215 of 1956: These  petitions may be described as the  Sriram  Jhabarmull group.  Though ’ separately filed, the petitioner in each of them  is the same individuals Nandram Agarwalla, who is  the sole proprietor Of a business which he carries on under  the name  and style of I Sriram Jhabarmull’.  It is a  business, inter  alia,  of  import  and  export  of  piece-goods’   as commission  agents,  and  dealers  in  raw  wool  and  other materials.  The principal place of business is at Kalimpong, in the district of Darjeeling, though there is also a branch at Calcutta.  These petitions concern the assessment of  the petitioner  to income-tax for the respective years  1944-45, 1945-46, 1946-47, 1947-48 and 1948-49.  Prior to the  orders of the Commissioner of Income-tax under s. 5(7A) of the  Act complained against, the petitioner was being assessed by the Income-tax  Officer,  Jalpaiguri, Darjeeling.  On  March  5, 1946, the cases of the petitioner were transferred from  the Income-tax  Officer, Jalpaiguri, Darjeeling, to the  Income- tax  Officer,  Central Circle 1, Calcutta, and a  couple  of months thereafter they were again transferred to the Income- tax Officer, Central Circle IV, Calcutta.  On June 8,  1946, there  was  a further transfer assigning the  cases  to  the Income-tax Officer, Central Circle 1, Calcutta, and on  July 27, 1946, orders were passed by the Commissioner of  Income- tax Central, Calcutta, under s. 5(7A) transferring the cases of the petitioner to the Income-tax Officer, Central  Circle IV,  Calcutta.   These are the orders which  are  complained against  as  unconstitutional  and  void  invalidating   the proceedings which were continued and subsequently instituted by  the  Income-tax Officer, Central  Circle  IV,  Calcutta, against    the    petitioner   on   the   score    of    the unconstitutionality  of  s.  5(7A) of the Act.   It  may  be noted,  however  that  these orders were all  prior  to  the Constitution and 240 having  been  made  on  July 27,  1946,  as  aforesaid  were followed  up by completed assessment proceedings in  respect

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of   the   said  respective  years  and   also   certificate proceedings  under S. 46(2) of the Act.  There were  further orders  dated December 15, 1947, and sometime in  September, 1948,  transferring  the cases of the  petitioner  from  the Income-tax  Officer,  Central Circle IV,  Calcutta,  to  the Income-tax  Officer,  Central Circle 1, Calcutta,  and  back from  him  to  the  Income-tax  Officer,  Central  Circle,IV Calcutta.    These,  however,  are  not  material  for   our purposes,  the only order challenged being the order of  the Commissioner of Income-tax Central, Calcutta. dated July 27, 1946, which was passed under s. 5(7A) of the Act. Petitions Nos. 225 to 229 of 1956: These  Petitions may be classed as the Raichur group.   They concern  the assessment for the respective assessment  years 1950-5l,   1951-52,  1952-53,  1953-54  and  1954-55.    The petitioner  in  each  of them is the  same  individual,  one Kalloor  Siddannal  who resides and carries on  business  in Raichur  in the State of Hyderabad as commission  agent  and distributor of agricultural products.  Income-tax was  first imposed  in the Hyderabad State in 1946 by a special Act  of the  Legislature and the petitioner was assessed  under  the Hyderabad  Income-tax  Act  by  the  Additional   Income-tax Officer, Raichur, for the assessment years 1948-49 and 1949- 50.   As from April 1, 195o, the Indian Income-tax  Act  was applied to Hyderabad but the Additional Income-tax  Officer, Raichur,  continued to assess the petitioner.  The cases  in respect of -the assessment years 1950-51, 1951-52 and  1952- 53  were  pending before that officer and  proceedings  were taken  in connection with the -assessment for  those  years. On  December 21, 1953, however, the Commissioner of  Income- tax Hyderabad, issued a notification under S. 5(7)  ordering that  the case of the petitioner should be transferred  from the  Additional income-tax Officer, Raichur, to the  Income- tax Officer, Special Circle, Hyderabad.  The latter  officer continued  the  assessment proceedings  and  issued  notices under  s.  22(.4) of the Act on July 1,  1954,  November  2, 1954, November 30,1954, 241 December  19,  1954, and March 11, 1955, in respect  of  the said  years of assessment.  Assessments for the  said  years were  made  on March 21, 1955, and on April  24,  1955,  the petitioner  made  an application under s. 27 of the  Act  to reopen  the  assessment for the year 1950-51 as  on  default under  s.  23  (4) of the Act.  It  appears,  however,  that shortly before May 19, 1955, the Commissioner of Income-tax, Hyderabad,  made  another order under s. 5 (7A)  and  s.  64 (5)(b)  of  the  Act  transferring  all  the  cases  of  the petitioner   to  the  main  Income-tax   Officer,   Raichur. Curiously enough, the petitioner challenged both the  orders one dated December 21, 1953, and the other made sometime  in May,  1955, under s. 5 (7A) of the Act and  the  proceedings continued   and  instituted  by  the   respective   officers thereunder  as unconstitutional and void on the ground  that s.  5  (7A)  was ultra vires the  Constitution  even  though ultimately  he  was being assessed by  the  main  Income-tax Officer, Raichur, under the latter order. This  is  the common question in regard to the  ultra  vires character  of  s. 5 (7A) of the Act which is raised  in  all these  petitions, though in regard to each group  there  are several questions of fact involving the consideration of the discriminatory  character  of  the  specific  orders  passed therein  which  we  shall  deal  with  hereafter  in   their appropriate places. Section 5 (7A) of the Act runs as under: "  5 (7A) : The Commissioner of Income-tax may transfer  any

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ease  from  one  Income-tax Officer subordinate  to  him  to another,  and the Central Board of Revenue 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 reissue of any notice already issued  by  the  Income-tax Officer from whom  the  case  is transferred." This sub-section was inserted by s. 3 of the Indian  Income- tax  Amendment Act, 1940 (XL of 1940) which was passed as  a result of the decision of the Bombay High Court in  Dayaldas Kushiram v. Commissioner of Income-tax, (Central) (1)  I.L.R. 194o Bom. 650, 31 242 By the Indian Income-tax Amendment Act, 1956 (XXVI of  1956) an explanation was added to s. 5(7A) in the terms  following as a result of the decision of this Court in Bidi Supply Co. v- The Union of India(1): " Explanation :-In this sub-section, I case’ in relation  to any person whose name is specified in the order of  transfer means all proceedings under this Act in respect of any  year which  may  be  pending on the date of  the  transfer,,  and includes  all  proceedings  under  this  Act  which  may  be commenced  after the date of the transfer in respect of  any year." Section 5(7A) together with the explanation thus falls to be considered by us in these petitions. The  argument  on behalf of the petitioners is that  a.  64, sub-ss.  (1) and (2) of the Act confer upon the  assessee  a valuable  right  and  he  is entitled  to  tell  the  taxing authorities  that he shall not be called upon to  attend  at different places and thus upset his business.  Section 5(7A) invests the Commissioner of Income-tax and the Central Board of  Revenue with naked and arbitrary power to  transfer  any case from any one Income-tax Officer to another without  any limitation  in point of time, a power which is unguided  and uncontrolled  and is discriminatory in its nature and it  is open to the Commissioner of Income-tax or the Central  Board of  Revenue to pick out the case of one assessee from  those of others in a like situation and transfer the same from one State  to  another  or from one end of India  to  the  other without  ’specifying  any  object  and  without  giving  any reason,   thus   subjecting  the  particular   assessee   to discriminatory   treatment  whereas  the   other   assessees similarly situated with him would continue to be assessed at the  places where they reside or carry on business under  s. 64  (1)  and (2) of the Act.  Section 64(5)  which  provides with  retrospective effect that the provisions of s. 64  (1) and (2) shall not apply, inter alia, where an order has been made  under  s. 5(7A) was inserted  simultaneously  with  s. 5(7A) and would not have the effect of depriving the (1)  [1956] S.C.R. 267.                             243 assessee  of the valuable right conferred upon him under  s. 64 (1) and (2) unless and until s. 5(7A) was intra vires but s.  5(7A),  as  stated above, being  discriminatory  in  its nature  is ultra vires the Constitution and cannot  save  s. 64(5)  which  is merely consequential.   The  discrimination involved  in  s.  5(7A) is  substantial  in  character  and, therefore, infringes the fundamental right enshrined,in Art. 14  of the Constitution.  It also infringes Art. 19 (1)  (g) in  so far as it imposes an unreasonable restriction on  the fundamental  right  to  carry on  trade  or  business  (Vide Himmatlal Harilal Mehta v. The State of Madhya Pradesh(1)). The very same question as regards the unconstitutionality of

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s.  5(7A)  of the Act had come up for decision  before  this Court in Bidi Supply Co. v. The Union of India (supra).  The case  of  the  assessee there had been  transferred  by  the Central Board of Revenue under s. 5(7A) of the get from  the Income-tax  Officer, District 111, Calcutta, to the  Income- tax  Officer,  Special Circle, Ranchi.  The  -order  was  an omnibus  wholesale  order of transfer expressed  in  general terms without any reference to any particular case and with- out any limitation as to time and was challenged as void  on the ground that s. 5(7A) under which it had been passed  was unconstitutional.  This Court, by a majority judgment, after discussing  the general principles underlying Art.  14,  did not adjudicate upon that question, observing at p. 276: "We  do not consider it necessary, for the purpose  of  this case, to pause to consider whether the constitutionality  of Sub-section.(7A)  of  section  5 can  be  Supported  on  the -principle  of  any reasonable classification laid  down  by this  Court or whether the Act lays down any  principle  for guiding  or  regulating the exercise of  discretion  by  the Commissioner or Board of Revenue or whether the  sub-section confers an unguided and arbitrary power on those authorities to  pick  and  choose individual  assessee  and  place  that assessee   at  a  disadvantage  in  comparison  with   other assessees. it is enough for the purpose of this case to  say that   the   omnibus  order  made  in  this   case,   is-not contemplated (I)  [1954] S.C.R. 1122. 244 or  sanctioned by sub-section (7A) and that, therefore,  the petitioner   is  still  entitled  to  the  benefit  of   the provisions  of sub-sections (1) and (2) of section 64.   All assessees are entitled to the benefit of those pro.  visions except  where  a particular case or cases  of  a  particular assessee   for  a  particular  year  or  years  is  or   are transferred  under sub-section (7A) of section  5,  assuming that  section to be valid and if a particular case or  cases is  or  are  transferred his right under  section  64  still remains as regards his other case or cases." The majority judgment then proceeded to consider the  effect of  such an omnibus order unlimited in point of time on  the rights of the assessee and further observed in that  context at p. 277: "   This  order  is  calculated  to   inflict   considerable inconvenience  and harassment on the petitioner.  Its  books of  account will have to be produced before  the  Income-tax Officer,  Special Circle, Ranchi-a place hundreds  of  miles from Calcutta, which is its place of business.  Its partners or  principal  officers will have to be away from  the  head office  for  a  considerable  period  neglecting  the   main business of the firm.  There may be no suitable place  where they can put up during that period.  There will certainly be extra  expenditure  to be incurred by it by way  of  railway fare, freight and hotel expenses.  Therefore the reality  of the discrimination cannot be gainsaid.  In the circumstances this  substantial discrimination has been inflicted  on  the petitioner by an executive fiat which is not founded on  any law  and  no  question  of  reasonable  classification   for purposes  of legislation can arise.  Here "the State"  which includes  its Income-tax department has by an illegal  order denied  to the petitioner, as compared with other Bidi  mer- chants who are similarly situate, equality before the law or the  equal  protection of the laws and  the  petitioner  can legitimately  complain of an infraction of  his  fundamental right under Article 14 of the Constitution." The question as to the constitutionality of s. 5 (7A) of the

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Act was thus left open and the decision turned merely on the construction of the impugned order.                             245 Learned   counsel   for  the  petitioners,   however,   lays particular  stress on the observations of Bose, J.,  in  the minority judgment which he delivered in that case whereby he held  that  ss.  5  (7A) and 64 (5)  (b)  of  the  Act  were themselves  ultra vires Art. 14 of the Constitution and  not merely  the  order  of the Central Board  of  Revenue.   The learned  Judge  referred to a passage from the  judgment  of Fazl  Ali,  J.,  in The State of West Bengal  v.  Anwar  Ali Sarkar(1) and also pointed out the decision of this Court in M/S.  Dwarka  Prasad  Laxmi Narain v.  The  State  of  Uttar Pradesh and Two Others(2) and observed: "  What  is  the position here?  There  is  no  hearing,  no reasons  are recorded: just peremptory  orders  transferring the case from one place to another without any warning;  and the  power given by the Act is to transfer from one  end  of India  to  the  other; nor is that power  unused.   We  have before  us in this Court a case pending in which a  transfer has  been ordered from Calcutta in West Bengal to Ambala  in the Punjab." (p. 283) "  If the Legislature itself had done here what the  Central Board of Revenue has done and had passed an Act in the  bald terms  of the order made here transferring the case of  this petitioner, picked out from others in a like situation, from one State to another, or from one end of India to the other, without specifying any object and without giving any reason, it would, in my judgment, have been bad.  I am unable to see how  the position is bettered because the Central  Board  of Revenue has done this and not Parliament." (p. 284-5) " In my opinion, the power of transfer can only be conferred if  it  is hedged round with  reasonable  restrictions,  the absence  or existence of which can in the last  instance  be determined by the courts; and the exercise of the power must be in conformity with the rules of natural justice, that  is to  say,  the parties affected must be heard  when  that  is reasonably  possible, and the reasons for the order must  be reduced,  however briefly, to writing so that men  may  know that (1) [1952]  S. C. R. 284, 309-310. (2) [1954] S. C. R. 803. 246 the  powers  conferred on these  quasi-judicial  bodies  are being justly and properly exercised." (p. 287) The answer furnished on behalf of the State to this argument is fourfold: (i)that the provision contained in s. 5 (7A) of the Act is a measure  of administrative convenience enacted with a  view- to more conveniently and effectively deal with the cases  of the assessees where the Commissioner of Income-tax considers it  necessary  or desirable to transfer any  case  from  one Income-tax  Officer  subordinate to him to  another  or  the Central Board of Revenue similarly considers it necessary or desirable  to  transfer  any case from  any  one  Income-tax Officer  to another.  The real object with which s.  5  (7A) was  inserted by the Indian Income-tax Amendment  Act,  1940 (XL of 1940), has been thus set out in the affidavit of Shri V. Gouri Shankar, Under Secretary, Central Board of Revenue, dated  November  19, 1956, which is the pattern of  all  the affidavits filed on behalf of the State in these petitions: "  4......  I  say that the provisions of  s.  5  (7A)  were inserted  by the Income-tax Amendment Act, XL of 1940,  with the  object of minimising certain  procedural  difficulties. Before  this  amendment  was passed there  was  no  specific

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provision  in  the  Act for transferring  a  case  from  one Income-tax  Officer  to  -another  except  by  a  long   and circuitous course even at the request of the assessees.   In order therefore to be able to transfer the case from one  1. T.  0.  to  another either because of  the  request  of  the assessee  or  for  dealing  with  cases  involving   special features  such  as cases of assessees  involving  widespread activities   and   large  ramifications   or   inter-related transactions, power to transfer cases was conferred upon the Central Board of Revenue and the Commissioner of  Income-tax as the case may be.  I say that the provisions of s. 5  (7A) ate  thus  administrative in  character........ (ii)that  the  assessee whose case is  thus  transferred  is not subjected to any discriminatory procedure in the  matter of his assessment.  The Income-tax Officer to whom his  case is transferred deals with it under the same procedure  which is laid down in the relevant                             247 provisions  of  the  Act.  The decision  of  the  Income-tax Officer is subject to appeal before the Appellate  Assistant Commissioner  and  the  assessee has the  further  right  to appeal to the Income-tax Appellate Tribunal and to  approach the High Court and ultimately the Supreme Court, as provided in the Act.  All assessees, whether they are assessed by the Income-tax Officer of the area where they reside or carry on business or their cases are transferred from one  Income-tax Officer  to another, are subject to the same  procedure  and are entitled to the same rights and privileges in the matter of redress of their grievances, if any, and there is no dis- crimination whatever between assessees and assessees; (iii)that  the  right, if any, conferred upon  the  assessee under s. 64 (1) and (2) of the Act is not an absolute  right but is circumscribed by the exigencies of tax collection and can  be  negatived  as  it  has  been  in  cases  where  the Commissioner of Income-tax or the Central Board of  Revenue, as  the  case  may be, think it necessary  or  desirable  to transfer  his  case from one Income-tax Officer  to  another under  s.  5  (7A)  of the Act  having  regard  to  all  the circumstances of the case.  The argument of inconvenience is thus sought to be met in the same affidavit: " 5. 1 further say that as a result of any transfer that may be  made  under  the provisions of s. 5  (7A)  there  is  no discriminatory  treatment with regard to the  procedure  and that  no  privileges  and  rights which  are  given  to  the assessees  by the Income-tax Act are taken away nor  is  the assessee  exposed  to  any  increased  prejudice,   punitary consequences or differential treatment.  I say that in cases where  transfers under this section are made otherwise  than on request from assessees, the convenience of the  assessees is taken into consideration by placing the case in the hands of an Income-tax Officer who is nearest to the area where it will  be  convenient  for the assessee  to  attend.   If  on account  of administrative exigencies this is  not  possible and  the assessee requests that the examination of  accounts or  evidence to be taken should be in a place convenient  to him, the I.T.O. complies with the request 248 of  the  assessee  and  holds  the  hearing  at  the   place requested." Even  if there be a difference between assessees who  reside or carry on business in a particular area by reason of  such transfers  the  difference is not material. -It  is  only  a minor deviation from a general standard and does not  amount to a denial of equal rights; (iv)that  the power which is thus vested is a  discretionary

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power  and is not necessarily discriminatory in  its  nature and  that abuse of power is not to be easily  assumed  where discretion  is vested in such high officials of  the  State. Even if abuse of power may sometimes occur, the validity  of the   provision   cannot  be  contested  because   of   such apprehension.  What may be struck down in such cases is  not the  provision  itself but  the  discriminatory  application thereof. The petitioners rejoin by relying upon the following passage from  the  judgment of Fazl Ali, J., in The  State  Of  West Bengal  v. Anwar Ali Sarkar, (Supra), which was referred  to by Bose, J., in his minority judgment in Bidi Supply Co.  v. The Union of India, (Supra), at page 281: " It was suggested that the reply to this query is that  the Act  itself being general and applicable to all persons  and to all offenses, cannot be Said to discriminate in favour of or  against  any particular case or classes  of  persons  or cases, and if any charge of discrimination can be leveled at all,  it  can  be  levelled only  against  the  act  of  the executive  authority  if the Act is misused.  This  kind  of argument  however  does  not  appear  to  me  to  solve  the difficulty.   The result of accepting it would be that  even where discrimination is quite evident  one cannot  challenge the  Act simply because it Is couched in general terms;  and one cannot also challenge the act of the executive authority whose  duty  it  is  to administer  the  Act,  because  that authority  will say:-I am not to blame as I am acting  under the  Act.   It  is clear that if the  argument  were  to  be ,accepted, article 14 could be easily defeated.  I think the fallacy  of the argument lies in overlooking the  fact  that the I insidious discrimination complained of is incorporated in the Act itself’, it being so drafted                             249 that whenever any discrimination is made such discrimination would be ultimately traceable to it. The  pivot of the whole argument of the petitioners  is  the provisions  contained in s. 64(1) and (2) of the  Act  which prescribe the place of assessment.  They are:- "  64.  (1)  Where  an  assessee  carries  on  a   business, profession or vocation at any place, he shall be assessed by the  Income-tax Officer- of the area in which that place  is situate  or, where the business, profession or  vocation  is carried  on  in  more places than  one,  by  the  Income-tax Officer  of  the area in which the principal  place  of  his business, profession or vocation is situate. (2)In all other cases, an assessee shall be assessed by  the Income-tax Officer of the area in which he resides." These provisions were construed by the Bombay High Court  in Dayaldas  Kushiram  v. Commissioner  Income-tax,  (Central), (supra), and Beaumont, C.J., observed at p. 657: "  In my opinion section 64 was intended to ensure  that  as far  as practicable an assessee should be assessed  locally, and  the  area to which an Income-tax Officer  is  appointed must,  so  far as the ’exigencies of tax  collection  allow, bear  some  reasonable  relation  to  the  place  where  the assessee carries on business or resides." Kania, J., as he then was, went a step further and stated at p. 660: "A  plain  reading  of the section shows that  the  same  is imperative  in  terms.   It also gives  to  the  assessee  a valuable   right.   He  is  entitled  to  tell  the   taxing authorities  that he shall not be called upon to  attend  at different places and thus upset his business." The  learned  Judges  there  appear  to  have  treated   the provisions  of s. 64(1) and (2) more as a question of  right

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than as a matter of convenience only.  If there were thus  a right  conferred upon the assessee by the provisions  of  s. 64(1)  and  (2) of the Act and that right  continues  to  be enjoyed. by all the assessees except the 32 250 assessee whose case is transferred under s. 5(7A) of the Act to  another  Income-tax Officer outside the  area  where  he resides or carries on business, the assessee can urge  that, as compared with those other assessees, he is  discriminated against  and is subjected to inconvenience  and  harassment. It  is,  therefore, necessary to consider whether  any  such right is conferred upon the assessee by s. 64(1) and (2)  of the Act. Prima  facie  it would appear that an assessee  is  entitled under  those  provisions to be assessed  by  the  Income-tax Officer of the particular area where he ,resides or  carries on  business.  Even where a question arises as to the  place of  assessment  such  question  is  under  s.  64(3)  to  be determined   by  the  Commissioner  or   the   Commissioners concerned  if the question is between places in more  States than  one or by the Central Board of Revenue if  the  latter are,  not  in  agreement  and  the  assessee  is  given   an opportunity  of  representing  his  views  before  any  such question  is determined.  This provision also goes  to  show that   the   convenience  of  the  assessee  is   the   main consideration in determining the place of assessment.   Even so  the  exigencies  of  tax  collection  have  got  to   be considered  and  the primary object of the  Act,  viz.,  the assessment  of  income-tax,  has got to  be  achieved.   The hierarchy  of income-tax authorities which is set  up  under Chapter  11  of the Act has been so set up with  a  view  to assess  the  proper income-tax payable by the  assessee  and whether the one or the other of the authorities will proceed to assess a particular assessee has got to be determined not only  having regard to the convenience of the  assessee  but also  the exigencies of tax collection.  In order to  assess the-tax  payable  by  an  assessee  more  conveniently   and efficiently  it may be necessary to have him assessed by  an Income-tax  Officer of an area other than the one in  which, he  resides  or  carries on business.  It may  be  that  the nature  and  volume of his business operations are  such  as require investigation into his affairs in a place other than the  one where he resides or carries on business or that  he is so, connected with various other individuals or organiza- tions in the way of his earning his income as to render                             251 such  extra-tertitorial investigation necessary:  before  he may  be properly assessed.  These are but instances  of  the various situations which may arise wherein it may be thought necessary by the Income-tax authorities to transfer his case from the Income-tax, Officer of the area in which he resides or  carries  on  business  to,  another  Income-tax  Officer whether  functioning in the same State or beyond  it.   This aspect of the question wag emphasized by Beaumont, C.J.,  in Dayaldas Kushiram v. Commissioner of Income-tax,  (Central), (supra),  at page 146, when he used the expression " as  far as practicable " in connection with the assessee’s right  to be  assessed  locally  and  the  expression  "  so  far   as exigencies of tax collection allow " in connection with  the appointment  of  the Income-tax Officer to  assess  the  tax payable  by the particular assessee.  In the later  case  of Dayaldas    Kushiram   v.   Commissioner   of    Income-tax, (Central)(1), Beaumont, C.J., expressed himself as follows: "  The  Income-tax  Act  does not  determine  the  place  of

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assessment.  What it does is to determine the Officer who is to  have  power to assess and in some cases it  does  so  by reference  to locality but I apprehend that an appeal  would be not against an order of the Commissioner as to the  place of  assessment, but against the order of assessment  of  the Income-tax, Officer," thus  stating  in effect that this section does not  give  a right  to the assessee to have his assessment, at  a  parti- cular place but determines the Income-tax Officer who is  to have power to assess him. This  aspect was further emphasized by the Federal Court  in Wallace  Brothers  &  Co. v.  Commissioner  of,  Income-tax, Bombay, Sind & Baluchistan (2), where Spens, C.J., observed: Clause  (3)  of s. 64 provides that any question as  to  the place of assessment shall be determined’ by the Commissioner or  by the Central Board of Revenue Proviso 3 to the  clause enacts  that  if  the  place -of  assessment  is  called  in question by the assessee, the Income-tax Officer -shall,  if not satisfied, with the (1) [1943] 11 I.T.R.  67, 101. (2) A.I.R. 1945 F.C. 9,13. 252 correctness of the claim, refer the matter for determination under  this  sub-section before assessment is  made.   These provisions  clearly indicate that the matter is more one  of administrative convenience than of jurisdiction and that  in any event it is not one for adjudication by the Court." It may be noted, however, that in the passage at page 276 of the  majority  judgment in Bidi Supply Co. v. The  Union  of India (supra), this court regarded the benefit conferred  on the assessee by these provisions of a. 64(1) and (2) of  the Act as a right and it is, too late in the day for us to  say that no such right to be assessed by the Income-tax  Officer of  the particular area, where he resides or carries on  his business is conferred on the assessee.  This right, however, according to the authorities above referred to, is hedged in with  the limitation that it has to yield to the  exigencies of tax collection. The  position, therefore, is that the determination of  the, question  whether  a particular  Income-tax  Officer  should assess  the  case  of  the  assessee  depends  on  (1)   the convenience of the assessee as posited in s. 64 (1) and  (2) of the Act, and (2) the exigencies of tax collection and  it would  be  open to -the Commissioner of Income-tax  and  the Central  Board  of Revenue who are the highest  amongst  the Income-tax.  Authorities under the Act to transfer the  case of a particular assessee from the Income-tax Officer of  the area  within which he resides or carries on business to  any other Income-tax Officer if the exigencies of tax collection warrant the same. It  is further to be noted that the infringement of  such  a right  by the order of transfer, under s. 5 (7A) of the  Act is not a material infringement.  It is only a deviation of a minor  character  from  the general standard  and  does  not necessarily involve a denial of equal rights for the  simple reason that even after such transfer the case is dealt  with under the normal procedure which is prescribed in the  -Act. The  production and investigation of the books  of  account, the  enquiries to be made by the Income-tax Officer and  the whole  of  the  procedure as  to  assessment  including  the further                             253 appeals  after  the  assessment is  made  by  the  Incometax Officer  are  the same in a transferred case  as  in  others which  remain  with the Income-tax Officer of  the  area  in

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which the other assesees reside or carry on business.  There is  thus  no  differential treatment and no  scope  for  the argument  that  the  particular  assessee  is  discriminated against with reference to others similarly situated.  It was observed by this Court in, M.   K. Gopalan v. The State of Madhya Pradesh(1): " In support of the objection raised under article 14 of the Constitution,  reliance  is placed on the decision  of  this Court  in Anwar Ali Sarkar’s case.  That decision,  however, applies  only  to  a  case where  on  the  allotment  of  an individual case to a special Court authorised to conduct the trial  -by  a  procedure substantially  different  from  the normal  procedure, discrimination arises as between  persons who  have committed similar offences, by one or more out  of them  being  subjected to a procedure, which  is  materially different  from  the normal procedure and  prejudicing  them thereby.   In  the pre-’ sent case, the  Special  Magistrate under  s. 14 of the Criminal Procedure Code has to try-  the case   entirely   under  the  normal  procedure,   and   ’no discrimination  of the kind contemplated by the decision  in Anwar  Ali  Sarkar’d case and the other cases  following  it arises here.  A law vesting discretion in an authority under such  circumstances cannot be said to be  discriminatory  as such,  and  is  therefore  not hit  by  article  14  of  the Constitution.   There  is, therefore, no substance  in  this contention." To a similar effect were the observations of Mukherjea,  J., as  he  then was, in The State of West Bengal v.  Anwar  Ali Sarkar, (supra), at p. 325: "I  agree with the Attorney-General that if the  differences are not material, there may not be any discrimination in the proper  sense  of  the word and minor  deviations  from  the general  standard  might  not  amount  to  denial  of  equal rights." It  is pointed out that as s. 64 (5) stands at present,  the provisions of s. 64 (1) and (2) do not apply and are (1)  [1955] 1 S.C.R. 168, I71. 254 deemed  never  at any time to have applied  to  an  assessee where, in consequence of any transfer made under s. 5  (7A), a  particular Income-tax Officer has been charged  with  the function  of  assessing that assessee. section  64  (5)  was incorporated  by the Income-tax Law Amendment Act, 1940  (XL of  1940) simultaneously with s. 5 (7A).  It is’  therefore, urged  that an assesse whose case has been thus  transferred has  no  right under s. 64 (1) and (2) and  those  assessees alone  who do not come within the purview of s. 64  (5)  can have  the  benefit  of s. 64 (1) and  (2).   This  argument, however,  ignores the fact that s. 5 (7A) is the very  basis of the enactment of the relevant provision in s. 64 (5)  and if   a.  5  (7A)  cannot  stand  by  virtue  of  its   being discriminatory in character, the relevant portion of s.   64 (5) also must fall with it. It   is  then  contended  that  a.  5  (7A)  is  in   itself discriminatory  and violative of the fundamental  right  en- shrined  in  Art.  14.  The power which  is  vested  in  the Commissioner of Income-tax and the Central Board of  Revenue is a naked and arbitrary power unguided and uncontrolled  by any  rules.   No rules have been framed  and  no  directions given  which would regulate or guide their discretion or  on the basis of which such transfers can be made and the  whole matter is left to the unrestrained will of the  Commissioner of Income-tax or the Central Board of Revenue without  there being anything which could ensure a proper execution of  the power  or operate as a check upon the injustice  that  might

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result from the improper execution of the same.  To use  the words  of  Mr. Justice Matthews in the case of  Yick  Wo  v. Hopkins(1): "......  when we remember that this action or nonaction  may proceed  from  enmity or prejudice, from  partisan  zeal  or animosity, from favoritism and other improper influences and motives easy of concealment and difficult to be detected and exposed,  it becomes unnecessary to suggest or comment  upon the injustice capable of being wrought under cover of such a power,  for that becomes apparent to every one who gives  to the subject a moment’s consideration." 118 U. S. 356, 373; 30 L. Ed. 220, 227.                             255 In  other  words,  "  it is not  a  question  of  an  uncon- stitutional  administration of a statute otherwise valid  on its  face but here the unconstitutionality is writ large  on the  face of the statute itself " (Per Das, J., as  he  then was,  in  The  State of West Bengal v.  Anwar  Ali,  Sarkar, (supra) at p. 346). It  has to be remembered that the purpose of the Act  is  to levy income-tax, assess and collect the same.  The  preamble of  the  Act  does not say so in terms it being  an  Act  to consolidate  and  amend the law relating to  income-tax  and super-tax but that is the purpose of the Act as disclosed in the preamble of the First Indian Income-tax Act of 1886 (Act II of 1886).  It follows, therefore, that all the provisions contained  in the Act have been designed with the object  of achieving that purpose.  There is in the first instance, the charge  of  income-tax.   Then we find set  up  the  various authorities  in  the hierarchy who are  entrusted  with  the function  of assessing the income-tax, the Central Board  of Revenue  being  at  the apex.  There is  also  an  Appellate Tribunal  which is established for hearing  appeals  against the  decisions  of the  Appellate  Assistant  Commissioners. Then follow the provisions in regard to taxable income, mode of  assessment  and  cognate  provisions.   The   Income-tax Officers  are  invested  with the  duty’  of  assessing  the income-tax  of  the assessees in the  first  instance.   The Assistant  Commissioners  of Income-tax, are  the  appellate authorities  over the decisions of the  Income-tax  Officers and the Income-tax Appellate Tribunal is the final appellate authority barring of course references under s. 66(1) of the Act   to   the  High  Court  on  questions  of   law.    The Commissioners of Income-tax and the Central Board of Revenue are  mainly administrative authorities over  the  Income-tax Officers  and the Assistant Commissioners of Income-tax  and they  are to distribute and control the work to be  done  by these authorities.  All officers and persons employed in the execution  of the Act are to observe and follow  the  orders instructions  and  directions  of  the.   Central  Board  of Revenue which is the highest authority in the hierarchy and, even though normally in accordance 256 with  the  provisions  of  s. 64 (1) and  (2)  the  work  of assessment  is to be done by the Income-tax Officers of  the area within which the assessees reside or carry on business, power is given by s. 5(7A) to the Commissioner of Income-tax to transfer any case from one Income-tax Officer subordinate to  him  to another and to the Central Board of  Revenue  to transfer  any  case  from  any  one  Income-tax  Officer  to another.  This is the administrative machinery which is  set up  for  assessing the incomes of the  assessees  which  are chargeable to income-tax.  There is, therefore, considerable force  in the contention which has been urged on  behalf  of the  State that s. 5(7A) is a provision  for  administrative

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convenience. Nevertheless  this power which is given to the  Commissioner of  Income-tax  and the Central Board of Revenue has  to  be exercised in a manner which is not discriminatory.  No rules or  directions  having  been  laid down  in  regard  to  the exercise of that power in particular cases, the  appropriate authority  has  to determine what are the  proper  cases  in which  such power should be exercised having regard  to  the object of the Act and the ends to be achieved.  The cases of the  assessees which come for assessment before the  income- tax  authorities  are of various types and no  one  case  is similar  to another. there are complications  introduced  by the  very nature of the business which is carried on by  the assessees  and  there  may be,  in  particular  cases,  such widespread  activities  and large  ramifications  or  inter- related transactions as might require for the convenient and efficient  assessment  of income-tax the  transfer  of  such cases from one Income-tax Officer to another.  In such cases the  Commissioner  of  Income-tax or the  Central  Board  of Revenue, as the case may be, has to exercise its  discretion with  due regard to the exigencies of tax collection.   Even though there may be a common attribute between the  assesses whose  case  is  thus transferred  and  the  assessees;  who continue  to  be assessed by the Income-tax Officer  of  the area  within  which they reside or carry  on  business,  the other attributes would not be common.  One assessee may                             257 have  such widespread activities and ramifications as  would require  his  case  to be transferred  from  the  Income-tax Officer  of the particular area to an Income-tax Officer  of another  area in the same State or in another  State,  which may be called " X ". Another assessee, though belonging to a similar  category may be more conveniently  and  efficiently assessed  in another area whether situated within the  State or  without it, called " Y ". The considerations which  will weigh  with  the Commissioner of Income-tax or  the  Central Board of Revenue in transferring the cases of such  assessee either to the area " X " or the area " Y " will depend  upon the  particular circumstances of each case and no  hard  and fast  rule  can  be laid down for  determining  whether  the particular  case  should , be transferred at ’all or  to  an Income-tax  Officer of a particular area.   Such  discretion would  necessarily  have  to  be  vested  in  the  authority concerned  and  merely  because the  case  of  a  particular assessee  is transferred from the Income-tax Officer  of  an area  within  which  he resides or carries  on  business  to another  Income-tax  Officer whether wit in or  without  the State  will not by itself be sufficient to characterize  the exercise of the discretion as discriminatory.  Even if there is  a  possibility of discriminatory  treatment  of  persons falling within the same group or category, such  possibility cannot necessarily invalidate the piece of legislation. It  may also be remembered that this power is vested not  in minor  officials  but in top-ranking  authorities  like  the Commissioner of Income-tax and the Central Board of  Revenue who  act on the information supplied to them by the  Income- tax Officers concerned.  This power is discretionary and not necessarily  discriminatory  and abuse of  power  cannot  be easily  assumed where the discretion is vested in such  high officials. (Vide Matajog Dobey v. H. S. Bhari(1)).  There is moreover a presumption that public officials will  discharge their  duties honestly and in accordance with the  rules  of law. (Vide People of the State of (1)  [1955] 2 S.C.R. 925, 932. 33

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258 New.  York v. John E. Van De Carr, etc.(1) It has also  been observed  by this Court in A. Thangal Kunju Musaliar  v.  M. Venkitachalam Potti(2) with reference to the possibility  of discrimination  between  assessees  in  the  matter  of  the reference  of  their cases to the  Income-tax  Investigation Commission that " It is to be presumed, unless the, contrary were  shown,  that the ’administration of a  particular  law would  be done I not with an evil eye and unequal hand’  and the selection made by the Government of the cases of persons to be referred for investigation by the Commission would not be discriminatory." This  presumption, however, cannot be stretched too far  and cannot be carried to the extent of always holding that there must  be some undisclosed and unknown reason for  subjecting certain   individuals   or  corporations  to   hostile   and discriminatory treatment (Vide Gulf, Colorado, etc. v. W. H. Ellis (3)).  There may be cases where improper execution  of power will result in injustice to the parties.  As has  been observed,  however, the possibility of  such  discriminatory treatment cannot necessarily invalidate the legislation’ and where there is an abuse of such power, the parties aggrieved are not without ample remedies under the law (Vide Dinabandu Sahu v. Jadumony Mangaraj (4)).  What will be struck down in such  cases  will  not be the provision  which  invests  the authorities  with  such  power but the abuse  of  the  power itself. It  is  pointed that it will be next to impossible  for  the assessee  to  challenge  a  particular  order  made  by  the Commissioner of Income-tax or the Central Board of  Revenue, as  the case may be, as discriminatory because the  reasons. which  actuated  the authority in making the order  will  be known to itself not being recorded in the body of the  order itself or communicated to the assesse.  The burden  moreover will  be  on the assessee to demonstrate that the  order  of transfer  is  an  abuse of power  vested  in  the  authority concerned.   This  apprehension  is,  however,  ill-founded. Though the (1)  (1905) 310-199 U.S. 552; 50 L. Ed. 305. (2)  (1955)2 S. C. R. 1196. (3)  (1897) 165 U.S. 150 ; 41 L.Ed. 666. (4)  [1955] I S.C.R. 140. 146.                             259 burden  of proving that there is an abuse of  power,lies  on the  assessee  who challenges the order  as  discriminatory, such  burden is not by way of proof to the hilt.  There  are instances where in the case of an accused person rebutting a presumption  or proving an. exception which  will  exonerate him  from  the liability for the offence with which  he  has been  charged,  the  burden  is held  to  be  discharged  by evidence  satisfying  the jury of the  probability  of  that which  the accused is called upon to establish (Vide Rex  v. Carr-Briant  (1)),  or in the case of a  detenue  under  the Preventive Detention Act seeking to make out a case of  want of  bona  fides in the detaining authority,  the  burden  of proof is held not to be one which requires proof to the hilt but such as will render the absence of bona fides reasonably probable  (Vide Ratanlal Gupta v. The District Magistrat  of Ganjam also Brundaban Chandra Dhir Narendra v. The State  of Orissa  (Revenue  Department)  (3)).  If,  in  a  particular ,case,  the assessee seeks to impeach the order of  transfer is an abuse of power pointing out circumstances which  prima facie and without anything more would make out the  exercise of the power discriminatory qua him, it will be incumbent on the  authority to explain the circumstances under which  the

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order  has  been  made.   The court  will,  in  that  event, scrutinize  these Circumstances having particular regard  to the  object  sought to be achieved by the  enactment  of  s. 5(7A)  of the Act as set out in para 4 of the  affidavit  of Shri  V.  Gouri Shankar, Under Secretary, Central  Board  of Revenue, quoted above, and come to its own conclusion as  to the bona fides of the order and if it is not satisfied  that the order was made by the authorities in bona fide  exercise of  the power vested in them under s. 5(7A) of the  Act,  it will certainly quash the lame.  The standard of satisfaction which  would have to be attained will necessarily depend  on the Circumstances of each case and the court will arrive  at the conclusion one way or the other having regard to all the circumstances of the case disclosed in the (1)  [1943] 1 K.B. 607. (2)  I.L.R. 1951 cuttack 441, 459. (3)  I.L.R. 1952 Cuttack 529, 573. 260 record.  The court will certainly not be powerless to strike down  the  abuse  of  power in  appropriate  cases  and  the assessee  will not be without redress.  The observations  of Fazl  Ali,  J.,  in The State of West Bengal  v.  Anwar  Ali Sarkar,  (supra), at pages 309-310 that the  authority  will say " I am not to blame as I am acting under the Act "  will not necessarily save the order from being challenged because even though the authority purported to act under the Act its action  will be subject to scrutiny in the manner  indicated above and will be liable to be set aside if it was found  to be mala fide or discriminatory qua the assessee. Particular  stress is laid on behalf of the  petitioners  on the  observations  at page 277 of the majority  judgment  in Bidi Supply Co. v. The Union of India, (supra), which in the context   of  the  omnibus  wholesale  order   in   question emphasized  the  substantial  discrimination  to  which  the assessee  there  had been subjected as compared  with  other bidi   merchants   who   were   similarly   situated.    The inconvenience and harassiment to which the assessee was thus put  were  considered  to be violative of  Art.  14  of  the Constitution   and   it  is  urged  that  s.   5   (7A)   is unconstitutional  in Boar as it is open to the  Commissioner of  Income-tax or the Central Board of Revenue, as the  case may be, to make an order of transfer subjecting the assessee to such inconvenience and harassment at their sweet will and pleasure.   This argument of inconvenience, however, is  not conclusive.  There is no fundamental right in an assessee to be  assessed  in  a  particular  area  or  locality.    Even considered  in the context of s. 64 (1) and (2) of  the  Act this  right  which  is conferred upon  the  assessee  to  be assessed in a particular area or locality is not an absolute right  but is subject to the exigencies of  tax  collection. The  difference,  if  any, created in the  position  of  the assessee  qua  others who- continue to be  assessed  by  the Income-tax Officer of the area in which they reside or carry on  business  is  not  a material  difference  but  a  minor deviation  from the general standard and  would,  therefore, not amount to the denial of equal rights (Per Mukherjea, J., as  he  then was, in The State of West Bengal v.  Anwar  Ali Sarkar., (supra), at 261 p.   325)).  There is also the further fact to be borne mind that  this  inconvenience  to the assessee is  sough  to  be minimised  by the authority concerned transferring the  case of such assessee to the Income-tax Officer who is nearest to the  area where it would be convenient for the  assessee  to attend and if, on account of administrative exigencies, this

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is   not  possible  an  the  assessee  requests   that   the examination of account or evidence to be taken should be  in a  place  convenient  to  him,  by  the  Income-tax  Officer complying  with the request of the assessee and holding  the hearing  at the place requested.  We are bound to  take  the statement contained in para 5 of the affidavit of Shri.   V. Gouri  Shankar at its face value and if this is done  as  it should be, the assessee will not be put to any inconvenience or  harassment and the proper balance between the rights  of the subject and public interest will be preserved. It is, therefore, clear that the power which is veste in the Commissioner of Income-tax or the Central Board of  Revenue, as  the  case may be, under s. 5 (7A) of the Act  is  not  a naked   and   arbitrary  power,  unfettered,   unguided   or uncontrolled  so  as  to enable the authority  to  pick  and choose  one  assessee out of those  similarly  circumstanced thus subjecting him to discriminatory treatment as  compared with others who fall within the same category.  The power is guided and controlled by the purpose which is to be achieved by  the  Act  itself, viz., the charge  of  income-tax,  the assessment  and collection thereof, and is to  be  exercised for the more convenient and efficient collection of the  tax A wide discretion is given to the authorities concerned  for the  achievement  of  that purpose, in  the  matter  of  the transfer  of the cases of the assessees from one  Income-tax Officer  to another and it cannot be urged that  such  power which is vested in the authorities is discriminatory in  its nature. There is a broad distinction between discretion which has to be  exercised with regard to a fundamental right  guaranteed by  the Constitution and some other right which is given  by the statute.  If the statute deals with a right which is not fundamental in character 262 the  statute  can take it away but a fundamental  right  the statute cannot take away.  Where, for example, a  discretion is  given in the matter of issuing licences for carrying  on trade,  profession  or business or  where  restrictions  are imposed  on  freedom  of speech, etc., by  a  imposition  of censorship, the discretion must be controlled by clear rules so   as   to  come  within  the   category   of   reasonable restrictions.    Discretion   of   that   nature   must   be differentiated  from  discretion in respect of  matters  not involving fundamental rights such as transfers of cases.  An inconvenience  resulting  from a change of  place  or  venue occurs  when  any  case is transferred  from  one  place  to another  but  it  is  not open to a  party  to  say  that  a fundamental right has been infringed by such transfer.   Ili other words, the discretion vested has to be looked at  from two  points  of  view,  ViZ.,  (1)  does  it  admit  of  the possibility of any real and substantial discrimination,  and (2) does it impinge on a fundamental right guaranteed by the Constitution?   Article  14 can be invoked  only  when  both these  conditions are satisfied.  Applying this test, it  is clear  that  the  discretion which is  vested  in  the  Com- missioner of Income-tax or the Central Board of Reevenue, as the   case  may  be,  under  s.  5  (7A)  is  not   at   all discriminatory. It  follows,  therefore, that s. 5 (7A) of the  Act  is  not violative  of Art. 14 of the Constitution and also does  not impose any unreasonable restriction on the fundamental right to  carry on trade or business enshrined in Art. 19 (1)  (g) of the Constitution.  If there is any abuse of power it  can be remedied by appropriate action -either under Art. 226  or under  Art.  32 of the constitution and what can  be  struck

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down is not the provision contained in s. 5 (7A) of the  Act but  the order passed thereunder which may be mala  fide  or violative,of  these fundamental rights.  This  challenge  of the vires of s. 5 (7A) of the Act, therefore, fails. We may, however, before we leave this topic observe that  it would  be prudent if the principles of natural justice  are, followed,  where circumstances permit, before any  order  of transfer  under  s.  5  (7A)  of the  Act  is  made  by  the Commissioner of Income-tax or the                             263 Central Board of Revenue, as the case may be, and notice  is given to the party affected and he is afforded a  reasonable opportunity  of representing his views on the  question  and the  reasons  of the order are reduced  however  briefly  to writing.   It is significant that when any  question  arises under s. 64 as to the place of assessment and is  determined by the Commissioner or Commissioners or by the Central Board of  Revenue,  as the case may be, the assessee is  given  an opportunity under s. 64(3) of representing his views  before any such question is determined.  If an opportunity is given to the assessee in such case, it is all the more ,surprising to  find that, when an order of transfer under s.  5(7A)  is made transferring the case of the assessee from one  Income- tax ’Officer to another irrespective of the area or locality where  he resides or carries on business, he should  not  be given such an opportunity.  There is no presumption  against the  bona fides or the honesty of an assessee  and  normally the  Income-tax  authorities  would  not  be  justified   in refusing   to  an  assessee  a  reasonable  opportunity   of representing  his views when any order to the  prejudice  of the  normal procedure laid down in s. 64 (1) and (2) of  the Act is sought to be made against him, be it a transfer  from one  Income-tax Officer to another within the State or  from an  Income-tax  Officer within the State  to  an  Income-tax Officer  without it, except of course where the very  object of  the transfer would be frustrated if notice was given  to the party affected.  If the reasons for making the order are reduced  however  briefly to writing it will also  help  the assessee  in  appreciating the circumstances which  make  it necessary or desirable for the Commissioner of Income-tax or the  Central  Board  of  Revenue, as the  case  may  be,  to transfer his case under s. 5(7A) of the Act and it will also help the court in determining the bona fides of the order as passed  if and when the same is challenged in court as  mala fide or discriminatory.  It is to be hoped that the  Income- tax  authorities will observe the above  procedure  wherever feasible. The next point of attack is that the orders which Were  made by the Commissioner of Income-tax or the 264 Central  Board  of  Revenue, as the case may  be,  in  these petitions  are omnibus wholesale orders of  transfer  coming within  the  mischief  of Bidi Supply Co. v.  The  Union  of India,  (supra),  and are, therefore, hit  by  the  majority judgment in that case.  The answer of the State is that  the orders  are valid by virtue of the explanation to  s.  5(7A) which was added by the Indian Income-tax Amendment Act, 1956 (26 of 1956). It  will be remembered that the explanation was added to  s. 5(7A)  in order to get over the situation which was  created by   the  majority  judgment  in  that  case  and  all   the proceedings against a particular assessee whether they  were in respect of the same year or the previous years which were pending  before  the Income--tax Officer were sought  to  be comprised  in the order of transfer as also all  proceedings

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under  the  Act  which may be commenced after  the  date  of transfer  in respect of any year whether it be the  year  of transfer  or any year previous or subsequent  thereto.   The main structure of s. 5(7A) was, however, maintained and  the explanation  was  added  thereto  in  order  to  expand  the connotation of the word " case " which was used in s. 5(7A). The manner in which this result was brought about is subject to  criticism that the word ,case" was thus  really  equated with  the  word  " file " and when a case  of  a  particular assessee  was transferred under s. 5(7A) it was  meant  that his  whole  file would be transferred  from  one  Income-tax Officer  to another.  This inartistic mode appears,  however to  be adopted by the supposed necessity of  maintaining  s. 5(7A) in the form in which it stood but what we have got  to see  is  whether  the desired result has  been  achieved  by adding  the explanation in the manner in which it was  done. Reading  s. 5(7A) and the explanation thereto, it  is  clear that when any case of a particular asssssee which is pending before  an  Income-tax  Officer  is  transferred  from  that officer  to  another Income-tax Officer whether  within  the State  or  without  it, all proceedings  which  are  pending against  him under -the Act in respect of the same  year  as also   previous   years   are  meant   to   be   transferred simultaneously and all proceedings under the                             265 Act  which may be commenced after the date of such  transfer in respect of any year whatever are also included therei  in so  that  the  Income-tax  Officer  to  whom  such  case  is transferred  would be in a position to continue the  pending proceedings  and also institute further proceedings  against the  assessee  in  respect of  any  year.   The  proceedings pending  -at the date of transfer can be thus continued  but in  the case of such proceedings the provision in regard  to the issue of notices contained in the main body of s.  5(7A) would  apply  and it would not be necessary to  reissue  any notice  already issued by the Income-tax Officer  from  whom the case is transferred.  This provision applies to  pending proceedings  which have been transferred leaving  unaffected the  further proceedings which may be commenced against  the assessee after the date of the transfer where fresh  notices would have to be issued. It  is,  however, contended that the cases of  the  assessee which have been already closed in the previous years  cannot be  reopened by the Income-tax Officer to whom the  case  of the  assessee is thus transferred and the words " after  the date  of transfer in respect of any year " occurring at  the end of the explanation are sought to be construed to mean  " after  the  date of the transfer in respect of the  year  of transfer  " thus rendering it incompetent to the  Income-tax Officer to whom the case is transferred to institute further proceedings  in respect of cases of the assessee which  have been  already  closed  before the date  of  transfer.   This contention is, in our opinion, unsound.  The words used  are "  in respect of any year" and not " in respect of the  year ".  Moreover  they are to be read with the  preceding  words "may  be commenced " and not with the words "after the  date of  transfer".  A proper reading of the explanation will  be that  the inclusive part thereof refers to  all  proceedings under the Act which may be commenced in respect of any  year after  the date of the transfer.  The date of  the  transfer has  relation only to the particular year in which the  case of the assessee is thus transferred and to attach the  words " in respect of any year " to the words " after 34 266

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the date of transfer" do not make any sense.  The words " in respect  of  any year " appropriately go with  the  words  " which  may commenced" and read in this juxtaposition  render the  inclusive  part  of the explanation  susceptible  of  a proper meaning.  The language of the explanation read in the manner  suggested  above is thus sufficient to  dispel  this contention of the petitioners. it follows, therefore, that the omnibus wholesale orders  of transfer made against the petitioners by the Commissioner of Income-tax or the Central Board of Revenue, as the case  may be,  are  saved by the explanation to s. 5(7A) and  are  not unconstitutional and void: It  remains  now to consider whether the  individual  orders against  the petitioners are discriminatory in fact  or  are mala  fide  and  in  abuse  of  the  power  vested  in   the Commissioner of Income-tax or the Central Board of  Revenue, as the case may be, under s. 5(7A) of the Act. Petitions  Nos.  211  to  215  of  1956,  i.e.,  the  Shiram Jhabarmull group, may be dealt with in the first instance as they  have  a  peculiar characteristic of  their  own.   The orders  complained against in these petitions were all  made by the Commissioner of Income-tax Central, Calcutta, on July 27,  1946, and further proceedings were entertained  against the  petitioners by the Income-tax Officer,  Central  Circle IV,   Calcutta,   immeasurable   thereafter.    All    these proceedings culminated in assessment orders and  certificate proceedings under s. 46(2) of the Act were also taken by the authorities against the petitioners for recovery of the tax so  assessed before  the  advent  of  the  Constitution.   The  question, therefore,  arises whether these orders of transfer  can  be challenged by the petitioners as unconstitutional and void. It  is  settled  that Art. 13 of  the  Constitution  has  no retrospective effect and if, therefore, any action was taken before the commencement of the Constitution in pursuance  of the provisions of any law which was a valid law at the  time when such action was taken, such action cannot be challenged and the law under                             267 which  such  action  was  taken  cannot  be  questioned   as unconstitutional and void on the score of its infringing the fundamental rights enshrined in Part III of the Constitution (See Keshavan Madhava Menon v. The State of Bombay(1)).  The following observations of Das, J., as he then was, at p. 235 of  that  case,  may be appropriately referred  to  in  this context: "As already explained, article 13(1) only has the effect  of nullifying  or  rendering  all  inconsistent  existing  laws ineffectual  or  nugatory and devoid of any legal  force  or binding  effect  only  with  respect  to  the  exercise   of fundamental rights on and after the date of the commencement of the Constitution.  It has no retrospective effect and if, therefore,  an act was done before the commencement  of  the Constitution  in contravention of any law which,  after  the Constitution,  becomes void with respect to the exercise  of any  of the fundamental rights, the inconsistent law is  not wiped  out so far as the past act is concerned, for, to  say that   it  is,  will  be  to  give  the  law   retrospective effect.........  So far as the past acts are  concerned  the law  exists,  notwithstanding that it does  not  exist  with respect to the future exercise of fundamental rights."  (See also  Syed  Qasim  Razvi v. The State  of  Hyderabad(2)  and Laxmanappa  Hanumanthappa Jamkhandi v. Union  of  India(1)). It  is  clear,  therefore,  that  the  petitioners  are  not entitled  to  complain against the said orders  of  transfer

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dated July 27, 1946. Petitions Nos. 225 to 229 of 1956, i.e., the Raichur  group, and  Petitions  Nos. 86, 87, 88, 111, 112 and 158  of  1956, i.e.,  the Amritsar group, all belong to the same  category. In  the  first  group, there was an  order  of  transfer  on December 21, 1953, passed by the Commissioner of Income-tax, Hyderabad, transferring the cases of the petitioner from the Additional  Income-tax Officer, Raichur, to the  Income-tax, Officer, Special Circle, Hyderabad.  There was, however,  an order  passed  by the Commissioner shortly  before  May  19, 1955,  transferring  the cases of the  petitioner  from  the Income-tax (1)  [1951] S.C.R. 228, 235. (2)  [1953] S.C.R. 589. (3)  [1955] 1 S.C.R. 769. 268 Officer,  Special Circle, Hyderabad, to the main  Income-tax Officer,  Raichur.  The  petitioner  thus  reverted  to  the Income-tax Officer, Raichur, and it passes one’s imagination what  possible  argument  he  can  urge  on  the  score   of inconvenience  and  harassment.  The whole attitude  of  the petitioner is motivated by an intention to delay the payment of income-tax legitimately due by him to the Revenue  trying to  take  advantage of a mere technicality.  In  the  second group,  there  were  orders passed by  the  Commissioner  of Income-tax  transferring the cases of the  petitioners  from the Income-tax Officer, "AWard, Amritsar, or the  Income-tax Officer,’F’Ward,   Amritsar,  to  the  Income-tax   Officer, Special Circle, Amritsar.  Both these officers were situated in the same building and under the same roof.  The  argument of   inconvenience   and   harassment   can,   under   these circumstances, be hardly advanced by them. There  is moreover another feature which is common  to  both these  groups and it is that none of the petitioners  raised any objection to their cases being transferred in the manner stated  above and in fact submitted to the  jurisdiction  of the  Income-tax  Officers  to  whom  their  cases  had  been transferred.  It was only after our decision in Bidi  Supply Co. v. The Union of India, (supra), was pronounced on  March 20, 1956, that these petitioners woke up and asserted  their alleged  rights, the Amritsar group on April 20,  1956,  and the  Raichur group on November 5, 1956.  If they  acquiesced in the jurisdiction of the Income-tax Officers to whom their cases were transferred, they were certainly not entitled  to invoke the jurisdiction of this Court under Art. 32.  It  is well  settled  that such conduct of  the  petitioners  would disentitle  them  to any relief at the hands of  this  Court (Vide  Halsbury’s  Laws of England’, Vol.  II, 3rd  Ed.,  p. 140, para 265; Rex v. Tabrum, Ex Parte Dash(1); 0. A. 0.  K. Lakshmanan  Chettiar v. Commissioner, Corporation of  Madras and Chief Judge,Court of Small Causes, Madras(2) ). The  orders of transfer made by the Commissioner of  Income- tax or the Central Board of Revenue, as the (1) [1907] 97 L. T. 551. (2) [1927] 1. L. R. 50 Mad. 130.                             269 case may be, against the three groups of petitioners,  viz., Sriram Jhabarmull group, the Raichur group and the  Amritsar group,   cannot,  therefore,  be  challenged  by   them   as unconstitutional and void This  leaves  two sets of petitioners,  the  petitioners  in Petitions  Nos.  97 & 97-A of 1956 and  the  petitioners  in Petitions Nos. 44/56 and 85/56. Petitions  Nos.  97  & 97-A of 1956  :-The  petitioners  are oilmill owners, merchants and commission agents, carrying on

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business  at Sahibganj in the district of  Santhal  Parganas and  have  a  branch at 97, Lower  Chitpur  Road,  Calcutta. Their  cases were referred to the  Income-tax  Investigation Commission  as they were believed to have evaded payment  of tax  on  a substantial amount.  They were alleged  -to  have concealed  income  exceeding  Rs. 8 lakhs  and  indulged  in business  activities  spread over a wide area  resulting  in large  profits not disclosed in the books of account  or  in the  various returns filed by them.  After the  judgment  of this  Court  in Surajmull Mohta & Co. v.  A.  V.  Viswanatha Sastri(2),  about  320  cases  referred  to  the  Income-tax Investigation  Commission  under  s. 5 (4)  of  Taxation  on Income  Investigation  Commission  Act (XXX  of  1947)  were affected  and  had to be reopened under s. 34  (IA)  of  the Income-tax  Act.   To dispose of these  cases,  "since  they involved  many  back  years’ cases"  quickly  and  promptly, special  circles without reference to area were  created  at Bombay  and  Calcutta, because the existing  circles,  whose hands  were full, could not take up this extra work.   These 320  cases  were distributed between these  circles  on  the basis  of  the geographical area to  which  these  assessees belonged.   The  petitioners belonged to Bihar  and  had  a- branch at Calcutta and their cases were, therefore, allotted to one of the Central Circles at Calcutta. Later on in October 1954, this Court struck down S. 5 (1) of the Taxation on Income Investigation Commission Act (XXX  of 1947) in Meenakshi Mills Ltd. v. Viswanatha Sastri. (2 ) and as  a result thereof cases referred under that  section  and pending with the (I)  [1055] 1 S.C. R. 448. (2)  [1955] I S.C. R. 787. 270 Income-tax  Investigation Commission on July 17,1954,  could not  be  preceded with under the provisions of that  Act.  - These cases numbering about 470 had to be reopened under  s. 34 (1A) of the Income-tax Act.  The Government thought  that as  in  the  earlier lot of cases, it  would  help  speedier disposal  of the cases, if they were allotted to  Income-tax Officers  appointed without reference to area to  deal  with the  same.   In addition to the circles already  created  in Bombay  and  Calcutta, five more circles at Calcutta  and  4 more  circles  at  Bombay and 9 more  circles  at  important centers such as Kanpur, Ahmedabad, Madras and Delhi were set up to deal with all these cases.  As a result of the  influx of these cases, it was found that the 9 circles at  Calcutta had  about  280  cases of assessees  belonging  to  Calcutta itself  to dispose of and therefore cases not  belonging  to that  area  had to be taken out and assigned to one  of  the newly created circles, Where the work load was low.  It  was found  then  that Central Circle VI had a  lower  work  load compared  to other circles and, therefore, the cases of  the petitioners  were  transferred to  the  Income-tax  Officer, Central Circle VI, Delhi. Having regard to these circumstances which are disclosed  in the  affidavits of Shri V. Gouri Shankar,  Under  Secretary, Central  Board  of  Revenue, dated November  19,  1956,  and December 3, 1956, it is clear that the transfer of the cases of  the petitioners, firstly, from the  Income-tax  Officer, Special  Circle, Patna, to the Income-tax  Officer,  Central Circle  XI, Calcutta, and next, from the latter  officer  to the Income-tax Officer, Central Circle VI, Delhi, were  made as a matter of administrative convenience only. It  further  appear;  from  the  said  affidavits  that  the examination  of  accounts and the evidence was done  at  the places  desired  by  the assessees in order  to  suit  their

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convenience  and  the Income-tax  Officers  were  instructed accordingly.   As a matter of fact the  Income-tax  Officer, Central Circle VI, Delhi, went to Sahibganj and examined the accounts there in the case of the petitioner No. 1 and  when the assessee voluntarily requested the Income-tax Officer to have                             271 the examination done at Delhi (the assessee had then come to Delhi  for  some other work of his) the  Income-tax  Officer promptly posted the case and examined the accounts. If these were the circumstances under which the cases of the petitioners were transferred from Patna to Calcutta and from Calcutta  to  Delhi and the petitioners  were  afforded  all conveniences  in  the  matter of the  examination  of  their accounts and evidence, there is no basis for the charge that the  orders of transfer made against these petitioners  were in any manner whatever discriminatory. Petitions Nos. 44 and 85 of 1956 The  petitioner in Petition No. 44/56 is Shri A. L. Sud  who originally  belonged  to Hoshiarpur district in  Punjab  and since  1948 resides and has his office in Calcutta.   He  is the  son of one Shri Bhagwan Das Sud and is a member of  the Hindu  undivided family styled M/S.  Bhagwan Das Sud &  Sons with  Shri.   Bhagwan Das Sud as the  karta  thereof.   This Hindu  undivided  family has been carrying  on  business  at Hoshiarpur  and  at  various  other  places  like  Bareilly, Calcutta  and Bombay.  The petitioner has been  carrying  on business  both as the member of the Hindu  undivided  family and  also in his individual capacity since 1946.   The  said joint  family of Bhagwan Das Sud & Sons was alleged to  have evaded  income-tax to a large extent and  had  inter-related transactions  in respect of their dealings,  the  petitioner being  a  copartner  of  the said  joint  family.   It  was, therefore,  considered necessary in order to have  a  proper assessment  of  the petitioner’s income that his  case  also should be dealt with by the Income-tax Officer assessing the joint  family and the petitioner was informed that,  in  the matter  of hearing, he would be put to least  inconvenience. These  were  the  circumstances under  which  his  case  was transferred  from  the Income-tax  Officer,  Survey  Circle, Calcutta, to the Income-tax Officer, Special Circle, Ambala, by  an order of the Central Board of Revenue dated June  29, 1955. The  case  of M/S.  Bhagwan Das Sud & Sons,  petitioners  in Petition No. 85/56; had already been 272 transferred  by  the  Commissioner of  Income-tax  from  the Income-tax  Officer, Hoshiarpur, to the Income-tax  Officer, Special  Circle, Ambala, by an order under s. 5(7A)  of  the Act  dated  October  20, 1953.  The  petitioners  had  their office  at  Hoshiarpur in Punjab but their  activities  were scattered  in various parts of India some of them  being  in Assam,  Bombay, Bareilly, Calcutta and Kanpur in respect  of the  contracts they undertook with the Government and  other parties.   They  were  alleged  to  have  concealed   income assessable  to income-tax exceeding Rs. 30 lakhs and it  was thought  necessary  to make proper  investigation  of  their widespread  activities  resulting’ in extensive  evasion  of income-tax.  These were the circumstances under which  their case  was  transferred  to the  Incometax  Officer,  Special Circle, Ambala, as above.  That officer, however, agreed  to examine  the accounts and evidence at Hoshiarpur  itself  to suit the convenience of the petitioners but the  petitioners did not agree on the ground that their Advocate was to  come from Delhi and therefore Ambala would suit them as well.

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The   cases  of  both  the  petitioners  thus  came  to   be transferred from the respective Income-tax Officers who used to  assess them at Calcutta and Hoshiarpur  respectively  to the  Income-tax  Officer, Special Circle,  Ambala,  and  all conveniences  were  afforded to them in the  matter  of  the examination of their accounts and evidence.  The argument of discrimination  and inconvenience and harassment thus  loses all  its force and the orders of transfer made against  them cannot be challenged as in any way discriminatory. It  may be noted that in the last mentioned four  petitions, viz.,  Petitions Nos. 97 & 97-A of 1956 and  Petitions  Nos. 44/56  and  85/56,  the  Central Board  of  Revenue  or  the Commissioner  of Income-tax, as the case may be,  instructed the   Income-tax   Officers  concerned   to   minimise   the inconvenience  caused to the assessees and even  proceed  to their  respective residences or places of business in  order to  examine  the  accounts and  evidence.   Inspite  of  the denials of the assessees in the affidavits which they  filed in                             273 rejoinder, we presume that such facilities will continue  to be afforded to them in the future and the inconvenience  and harassment  which would otherwise be caused to them will  be avoided.   A  humane and considerate administration  of  the relevant  provisions of the Income-tax Act would go  a  long way  in allaying the apprehensions of the assessees  and  if that  is done in the true spirit, no assessee will be  in  a position  to  charge  the  Revenue  with  administering  the provisions of the Act with " an evil eye and unequal hand ". We have, therefore, come to the conclusion that there is  no substance  in these petitions and they should  be  dismissed with  costs.   There  will, be, however, one  set  of  costs between respondents in each of the petitions and one set  of costs in each group of these petitions, viz., (1)  Petitions Nos. 97 & 97-A of 1956, (2) Petitions Nos. 44/56 and  85/56, (3)  Petitions Nos. 86/56, 87/56, 88/56, 111/56, 112/56  and 158/56,  (4)  Petitions  Nos. 211 to 215 of  1956,  and  (5) Petitions Nos. 225 to 229 of 1956. Petitions dismissed.