Pannalal Binjraj v. Union of India

S.C.R. SUPREME COURT REPORTS 233 PANNALAL BINJRAJ _v._ UNION OF INDIA. (BHAGWATI, JAGANNADHADAS, VENKATARAMA ###### AYYAR, B. P. SINHA and S. K. DAs JJ.) _Income-tax-Transfer of cases-Discretion vested in the_ _Com-_ _missioner_ _or_ _the Board,_ _if_ _discriminatory and violative of_ _funda-_ _mental rights-Omnibus wholesale order of transfer,_ _if_ _constitution-_ _ally valid-Indian Income-tax Act_ _(XI_ _of_ 1922), _as_ _amended by_ _Amending Act_ _XXVI_ _of_ _1956,_ _JS._ _5(7_ A), _64(1), (2)-Constitution of_ _India Arts._ _14,_ _19(J)(g)._ 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 obsenrations 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 cf 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 minimise administrative inconvenience. there was no discrimination aftc-.r transfer because the same relevant provisions of the Act as applied to others similarly situated, were applied after the transfer and any resulting inconveni ence to the asscsscc 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 : _D1e1mher,_ 21. _Held,_ that s. 5(7A) of the Indian Income-tax Act was a measure of administrative convenience, was con~titutionally valid 2nd 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 wen: constitutionally valid. 1956 _**P•M-1.J**_ _**Binjraj**_ v. _**Ullio11**_ _**If**_ _**India**_ 234 SUPREME COURT REPORTS [1957] The right conferred on the assessec by s. 64( I) and ~2) of the **Act was hot an absolute right and must** **be** **subject to** **the- primary-** **objcct** **of** **the** **Act itself, namely, the assessment and collection** **of** incomc~tax, **and** **\Vhc:rc** **the .exigencies** **of** **tax** **colli:ction** **so** **required,** **the** **Co111missioncr** **of** lncomc~tax **or the Central** **Board,** o{ Revenue had the power under s. 5(7A) of the A<:t t.<> transfer **his** **case** **to some other** **officer** **outside** **the** **area** **where** **he** **resided** **or** **carried on business and** **any difference** **in his** **pos1t1on** **created** thereby as compared to that of others similarly situa<ed would be **no more than a minor deviation from the** **general** **standard** **and** would not amount to a denial of equ•lity before the law. **This discretionary** **power vested in** **the** **Authecitics** **by** **the** **section to** **override_** **the** **statutory right of the assascc 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, ( 1 ) 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,** **IO** 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._ _Gopa/an_ v. _The State of Madhya Pradesh,_ (1955) I S.C.R. 168; _The State of West Bengal_ v. _Anwar_ _Ali_ _Sarlr.u,_ (1952) S.C.R. 284 ; _Daya/das_ _Kushiram_ v. _Commission" of lnc.,,,,e-tu,_ ( Centrlll)~ l.L.R. 1940 Born. 650; _Dayaldas Kushiram_ v. _Commission"_ _of_ _Income-tax, Central,_ (1943) 11 I.T.R. 67; and _Wallace_ _Brothers_ _6'_ _Co.,_ _/Jd._ v. _Commissioner_ _of Income-tax,_ _Bombay,_ _Sinll_ & _Baluchistan,_ A.l.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 bouad** **by** **the statements made in their affidavits and where an** **asscncc** **could make out a** _**prima facie**_ **case** **of a** _**maid**_ _**fide**_ **or discriminatory** **exercise of the discretion vested** **in** **them,** **the** **Court will scrutinise** the circumstances in the light of thoS. statements and where necessary quash an abuse of the power under Arts. 226 and 32 of the Constitution. _Raton/a/ Gupta_ v. _The District M•gistrate of Ganiam,_ 1.L.lt. 1951 Cuttack 441 and _Brundaban Chandr• Dhir Narenlir•_ **Y.** S.C.IL SUPREME COURT REPORTS 235 _The State_ _·of_ _Oriua (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 he may represent his view of the matter and record the reasons of the transfer, however, briefly, •to enable the Court to judge whether such transfer was _ma/a_ _fide_ or discriminatory, if and when challenged. 1956 _Pannalal_ _Bi'!frlfi_ _v._ _Union_ _of India_ ORIGINAL JuRISDICTION : Petitions Nos. _97,_ _97_ A, 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 _Tarachand Bnjmohan_ _Lal,_ for the petitioners in Petitions Nos. 97 and _97_ A of 1956. __N._ _C._ _Chatterji_ and _V._ S. _Sawhney,_ for the 'Petitioners in Petitions Nos. 44, 86 to 88, 111 and 112 of 1956. _N._ _C._ _Chatterji_ and _D._ _N._ _Mukherji,_ for the petitioners in Petition No. 85 of 1956. _Purshottam Tirukumdas_ and _C._ _P._ _Lal,_ for the petitioners in Petitions Nos. 211 to 215 of 1956. S. _C._ _Isaacs_ and _K._ _R._ _Chaudhury,_ for the petitioners in Petitions Nos. 225 to 229 of 1956. _Bhagirath_ _Das_ and _M._ _L._ _Kapur,_ for the petitioner in Petition No. 158 of 1956. _C._ _K._ _Dapht11ry,_ _Solicitor-General of India,_ _G._ _N._ _Joshi, Porus_ _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._ _Chose,_ for the State of West Bengal (Respondents Nos. 2 and 3 in Petitions Nos. 211 to 215 of 1956). 1956. Dec~mbcr 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 1956 _**Panrralal**_ _**Bin.fraj**_ v. _**Union**_ _**of /,,,,tiia**_ _**Bhagwati**_ _**J.**_ _Petitions Nos._ 97 _&97-A of 1956:_ The petitioners are M/ s. Pannalal Binjraj, Oil~ill owners, merchants and commission agents, carrymg on business at Sahibganj in the district of Santhal Parganas, having their branch at 94, Lower Chitpur Road, Calcutta, 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 Binjraj, petitioner No. 2. Before September 28, 1954, they were 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 Centril 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. 1 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 orders as well as the order levying penalty for non-payment of the income-tax which had been already assessed prior thereto, on the ground that s. 5 (7 A) 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 Incometax Officer, Central Circle VI, Delhi, were without j uris<liction and void. **236** SUPREME COURT REPORTS [19571 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 filirig of the petitions may be shortly stated. _Petitions Nos._ _44_ _and 85_ _of_ _1956_ : The petitioner in Petition No. 44/56 is Shri A. L Sud, the sole proprietor of M/s. Amritlal Sud (Construction), who originally belonged to Hoshiarpur district in **the** S.C.R. SUPREME COURT REPORTS 237 State of Punjab but has since 1948 been residing and carrying on business in Calcutta. Prior to June 29, 1955, 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 pn>· cec:dings 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 Constitutipn. 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 1950-51 and complc:tc:d the assessment for the assessment years 1947-48, 1950-51 and 1951-52. These: petitioners also thereupon filed the: petition challenging validity of the: order of transfer made by the Commissioner of Income-tax on October 20, 1953, and the proceedings entertained by the Incometax 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 stylt ·of M/s. Bhagwan Das Sud & Sons and the cases oi both these petitioners were transferred to the Income-tax Offier, Special 195b _PannalaJ_ _Binjra_ _v._ _Union_ _of lntia_ _Bhagwali]._ 1956 _**P•nt1alal**_ _**Binjraj**_ v. **UflliOJI** _**of l'Niia**_ 238 SUPREME COURT REPORTS [1957] 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. Sairmukh Singh, son of S. Narain Singh. The petitioner in Petition No. 112/56 is S. Ram Singh, son of S. Narain Singh. These three arc brothers and the petitioner in Petition No. 88/56 is the father, S. Narain Singh, son of S. Basdcv Singh. The father and the three sons were the directors in the Hindustan Embroidery Mills (Private) Ltd., petitioner No. l in Petition No. 111/56, which is located at Chheharta near Amritsar. All these petitioners were, prior to the or<lers of transfer made by the Commissioner of Income-tax under s. 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 Incodle-tax Officer, 'A' Ward, Amritsar, to the Income-tax Officer Special Circle, Amritsar. These cases were continueJ by the latter officer and notices under s. 34 of the Act w~c 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 entert:llned by the Income-tax Officer, 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 _l(arta_ of. the Hindu undivided family carrying on business outside Ghee Mandi Gate, Amritsar. His case also which, prior to the order complained against, was being ~tertained by the Income-tax Officer, 'F' Ward, ###### Amritsar, was traruferred on SOIXlC date in 1954 by a., order of the Commissioner of Income-tax under ###### s. 5(7 A) of the Act to the Income-tax Officer, Special Circle, Amritsar. No objection was talcen 9y the S.C.R. SUPREME COURT REPORTS 239 petitioner to this order of transfer until after the assessment order - was passed against him but he a1so 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. 1956 _Pannolal_ _Binjraj_ v. _Union_ _of India_ _8"agwati_ _j._ _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 individual, Nandram Agarwalla, who is the sole proprietor of a business which he carries on under the name and style of 'Sriram Jhabarmull'. It is a business, _inter_ _rdia,_ 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 I, 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 I, Calcutta, and on July 27, 1946, orders were passed by the Commissioner ol Income-tax Central, Calcutta, under s. 5 (7 A) 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 "Mnconstitutionality of s. 5(7 A) of the Act. It may be noted, however, that these orders were all prior to the Constitution and 1956 _**Pannalal**_ _**BinJroj**_ _v._ _**Union**_ _**of India**_ _**Bha.!{Wati**_ _]._ 240 SUPREME COURT REPORTS (1957] having been made on July 27, 1946, as aforesaid were followed up by completed · assessment proceedings iru respect 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 I, 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 1950-51, 1951-52, 1952-53, 1953-54 and 1954-55. The petitioner in each of them is the same individual, one Kalloor Siddanna, who resides and carries on business in Raichur ·in the State of Hyderabad as commission agent and distributor of agricultural pre>ducts. 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 l, 1950, the Indian Incometax Act was applied to Hyderabad but the Additional Income-tax Officer, Raichur, continued to assess the pet1t1oner. The cases in · respect of the assessment years 1950-51, 1951-52 and 1952-53 were pending before that officer and proceedings were tal<en 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 A) 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, S.C.R. SUPREME COURT REPORTS 241 December 19, 1954, and Mar.ch 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 (7 A) 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 _ttltra_ _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_ _vzres_ character of s. 5 (7 A) 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_ (7 _A)_ : The Commissioner of Income-tax may transfer any case 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 trans-· £erred.;' This sub-section was inserted by s. 3 of the Indian Income-tax Amendment Act, .1940 (XL of 1940) which 1956 _Pannalal Binjraj_ v. _Union_ _of India_ _Bhagwati_ _J._ w~s passed as a restdt of the decision of the Bombay High Court in _Dayaldas_ _Kushiram_ v. _Commissioner_ _of_ _Income-tax,_ _(Central)_ ( [1 ] ) • (1) I.L.R. 1940 Bom. 650. 1956 _**.Pannalal Bi,,jraj**_ v. _**•llnion**_ _**()f**_ _**India**_ _**.Rhagwo.li**_ _]._ ###### 242 SUPREME COURT REPORTS [1957] 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. _Tht:_ _Union_ _of_ _India(•.)_ : _"Explanation :-in_ this sub-section, 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 whicli 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 (7 A) together with the explanation thus falls to be considered by us in these petitions. The argument on behalf of the petitioners is that s. 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 ( l) and (2) of the Act. Section 64(5) which provides with retrospective effect that the provisions of s. 64 ( l) and ( 2) sha U not apply, inter alia, where an order has been made under s. 5(7A) was inserted simultaneously with s. 5 (7 A) and would not have the effect of depriving the <•l [1956] s.c.R. 267. S.C.R. SUPREME COURT REPORTS 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 s. 5(7A) of the Act had come up for decision before this Court in _Bidi_ _Supply Co._ v. _The_ 1956 _POflllolol_ _BinpO:i_ v. _Unio11_ _of Illlli"'_ _Blr•gr.oai_ _J._ _U111011_ _of India_ (supra). The case of the assessee there had been transferred by the Central Board of Revenue under s. 5(7A) of the Ad from the Income-tax Officer, District III, 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 without any limitation as to time and was challenged as void on the ground that s. 5 (7 A) 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 constitu- · tionality 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 _(1j_ [195f] S.C R. 1122. 1956 ~fannalal _**Di11.fraj**_ v. _**Union**_ _**tJj**_ _**India**_ _**Bhagwali**_ _**J.**_ 244 SUPREME COURT REPORTS [1957] or sanctioned by sub-section (7 A) 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 provisions except . where a particular case or cases of a particular assessee for a particular year or years is or are transferred under sub-section (7 A) of section 5, assuming that section to he 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 he 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 he extra expenditure to he incurred by it by way of railway fare, freight and hotel expenses. Therefore the reality of the discrimination cannot he 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 anse. Here "the State" which includes its Income-tax department has by an illegal order denied to the petitioner, as compared with other Bidi merchants 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 (7 A) of the Act was thus left open and the decision turned merely on the construction of the impugned order. S.C.R. SUPREME. COURT REPORTS 245 Learned counsel for the petitioners, however, lavs 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 p~inted out th~ decision of this Court in _M/s. Dwarka Prasad Laxmt_ _Narain_ v. _The_ _State of Uttar Pradesh and_ _Two_ _Others(')_ and observed : . "What is the position here ? There is no hearing. no reasons are recorded : just peremptory orders tramferring the case from one place to another without any warning ; and the power given by the A.ct is to tramfer 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." 1956 _Pannalal Binjraj_ v. _Union_ _of India_ _Bhatwati_ _]._ (p. 283) ''If the Legislature itself had done here what the Central Board of Revenue has done and had passed a11 Act in the bald terms of the order made here transferring the case of this petitioner, picked out from othen 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 res trictions, the absence or existence of which can in the last instance be determined bv 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 thar _(1)_ [19511] s,c.~. 284, 3og·310. - (2) [1954) s.c.R. 8o3. 1956 _**Pannalal**_ _**Binjraj**_ v. **Utcio11** _**of India**_ _**B/iagw•tiJ.**_ 246 SUPREME COURT REPORTS (1957] the powers conferred on these quasi-judicial bodies arcbeing 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 (7 A) of th<" 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 ro 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 anothrr. The real o~ject 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 Stare 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 provisions 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 ro transfer the case from one l.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 laqre **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 (7 A) are 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 t0o whom his case is transferred deals with it under the same procedure which is laid down in the **relevant** S.C.R. SUPREME COURT REPORTS 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 discrimination 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 Incometax Officer to another under s. 5 (7 A) 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 : "S. I 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 am 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 (lttend. 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 ###### 2-JOO s.c. ludia/59 1956 _Panna/al_ _Binjraj_ v. _Union_ _of India_ _Bhagwali_ _J._ 1956 _**Pannalal Bi,Yraj**_ v. _**Union**_ _**of India**_ _Bhagwati_ _J._ 248 SUPREME COURT REPORTS [19571 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 standord and .does not amount to a denial of equal rights ; (iv) that the power which is thus vested is a discretionary 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 Faz! Ali, J. in _Tlze_ _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 offences, 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 levelled ·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 lx:cause 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 s.ay :-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 <>f the argument lies in overlooking the fact that the 'insidious discrimination complained of is incorporated in the Act itself', it being so drafted S.C.R. SUPREME COURT REPORTS 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 lncome-_ _ta:t,_ _(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 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 . 1956 _Pannalal Bi,Yraj_ . v. _Union_ _of lntfia_ _Bhagwati]._ 1956 _**Pannalal**_ _**Bi,Yraj**_ v. _**Union**_ _**of India**_ _BhagwatiJ._ 250 SUPREME COURT REPORTS [1957] 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, _tJiz.,_ the assessment of income-tax, has got to be achieved. The hierarchy of income-tax authorities which is set up under Chapter II 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. _lt_ 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 organizations in the way of his earning his income as to render S.C.R. SUPREME COURT REPORTS 251 such extra-territorial investigation n,ecessary 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 was 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 : 1956 _PaMalal Bi'lfraj_ v. _Union of India_ _Bhagwoti_ _]._ "The Income-tax Act does not determine the place of 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 particular 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 _W a/lace 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. g, 13. 1956 _**Pdn.nalal**_ _**BirfjraJ**_ v. _**Union**_ _**of**_ _**India**_ _Bhatwoti_ _J._ 252 SUPREME COURT REPORTS [1957) 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 s. 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 amongs,t 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 ### S.C.R: SUPREME COURT :c PORTS 253 appeals after the assessment is made by the I11come 1956 _**Pannalal**_ _**Binjraj**_ v. _Union_ ef _India_ _Bhagwati]._ ) ) # ., #### ... ' # #### •• tax Officer are the same in a transferred case as in others which remain with the Income-tax Officer of. the area in which the other assessees 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. Copa/an_ v. _The State of Madhya Pradesh(')_ : "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 pro cedure, 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' s_ _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 his by article 14 of the Constitution. There is, therefore, no substance in this **.contention."** To a similar effect were the observations of Mukher###### jea, 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 <lifferences 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 ###### \l) l\%511S.C.R.168, 171. i956 _**Fannaial**_ _**Bfojraj**_ v. _**l'nion**_ _**of India**_ _**BhagwatiJ.**_ 254 SUPREME COURT REPORTS [1957] deemed never at any time to have applied to an assessee where, in consequence of any transfer made under s. 5 (7 A), 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 (7 A). It is, therefore, urged that an assessee 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 thats. 5 (7A) is the very basi• of the enactment of the relevant provision in s. 64 (5) and if s. 5 (7A) cannot ~.tand 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 _s._ 5 (7A) is in itself discriminatory an<l violative of the fundamental right enshrined 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 bacis of which such transfers can be made and the whole matter is left to the unrestrained will of the Commissioner of Incomc tax or the Central Board of Revenue without there being a:1ything which could ensure a proper execution of the power or operate as a check upon the injustice that might result from the improper execution of the same. To use the words of Mr. Justice Matthews in the case of _Yick Wo_ v. _Hopkins('):_ " ...... when we remember that this action or nonaction may proceed from enmity or prejudice, from partisan zeal or animosity, from favouritism and other improper influences and motives easy of concealment and difficult to be detected and exposed, it becomes unnece,,ary 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 give.< to the subject a moment's consideration." **fl)** **118 U.S.** ~36, **373;** **3<.•** **L. Ed.** :i20, **227.** ## _!_ #### \ ###### • #### ' S.C.R. SUPREME COURT REPORTS 255 In other words, "it'is not a question of an unconstitutional 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 AEt 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 h:;i.ve 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 arc 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 thr orders, instructions and directions of the Central Board of Revenue which is the highest authority in the hierarchy and, even though normally in accordance 1956 _Pannalal_ _Binjraj_ v. _Union_ _of India_ _Bhagwati]._ 1956 _**Ponna/tll Bi'l}'raj**_ v. _**Union of India**_ _Bhagwoti_ _J._ 256 SUPREME COURT REPORTS [1957} 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(7 A) is a provision for administrative convenience. Nevertheless this "pqwers 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 Inc.ome-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 assessee whose case is thus transferred and the assessees who continue to be assessed by the Income-tax Officer of the area within wl1i.ch they reside or carry on business, the other attributes would not be common. One assessee may S.C.R. SUPREME COURT REPORTS 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 simil~r category may be more conveniently and efficiently assessed in another area whether situated within the State or without it, calk<l "Y". The considerations which will weigh with the Commissioner of Incometax or the Central Board of Revenue in transferring the cases of such assessees 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 partir:ular 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 assessec is transferred from the Income-tax Officer of an area within which he resides or carries on business to another Income-tax Officer whether within or without the State will not by itself be sufficient to characterize the exercise of the discretion as discr!m!natory. Even if there is a possibility of discnmmatory 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 discriminator)-1 and abuse of power cannot be easily assumed where the discretion is vested in such high officials. (Vide _Matajog_ _Dobey_ v. _H._ _S._ _Bhari(l)_ ). 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, 1132. 1956 _Pannalal Bit!iraj_ v. _Union_ _of India_ _Bhagwali]._ 1956 _**Panna/ol BinjraJ**_ v. _**Union**_ _**of India**_ _**BhagwatiJ.**_ ###### 258 SUPREME COURT REPORTS [1957] _New_ _York_ v. _/ohn_ _E._ _Van De_ _Carr,_ _etc.(')._ It has also been observed by this Court in _A._ _T hangal_ _Kunju_ _Musaliar_ v. _M._ _Venkitachalam_ _Potti(•)_ 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 '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 Jnd 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(')_ ). 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. _/adumony Mangaraj(')_ ). 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 lncome-tax or the Central Board of Revenue, as the case may be, as discriminatory be.cause 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 assessee. 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. ng6. (3) (1897) 165 U.S. 150; 41 L. Ed. 666. **(4) [1955] I S.C.R.** **140, 146.** ##### ' S.C.R. SUPREME COURT REPORTS 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_ _ft.des_ 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_ _ft.des_ reasonably probable (Vide _Ratanlal Gupta_ v. _The District_ _Magistrate_ _of Ganjam(_ _[2]_ _);_ 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 as an abuse of power pointing out cir.cumstances which #### prim a f acie 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 order has been made. The court will, in that event, scrutm1ze these circumstances having particular regard to the object sought to be achieved by the enactment of s. 5 (7 A) 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 jtdes 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 imder s. 5 (7 A) of the Act, it will certainly quash the same. 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 o~her having regard to all the circumstances of the case disclosed in the(1) (1943) I K.B. 607. (2) I.L.R. 1951 Cuttack 411, 459. (3) I.L.R. 1952 Cuttack 529, 573· 1956 _Pannalal Binjraj_ v. _Union_ _of India_ _Bhagwati_ _J._ 1956 _**Pannalal**_ _**Binjraj**_ v. _**L'nion**_ _**of India**_ _**Bhagwati**_ _**:J.**_ 260 SUPREME COURT REPORTS [1957 J record. The court will certainly not be powerless to strike down the abuse of power in appropriate cases and the assessec will not be without redress. The ###### observations of Faz! 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 he 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 harassment 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 (7 A) is unconstitutional in so far 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 ~ncon­ venience 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 assessce 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 T!te _State of West Bengal_ v. _Anwar_ _Ali_ _Sarkar,_ (supra), at S.C.R. SUPREME COURT REPORTS 261 p. 325) ). There is also the further fact to be borne in mind that this inconvenience to the assessee is sought to be minimi~ed 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 is not pqssible and the assessee requests that the examination of accounts 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 this 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 vested in the Commissioner of Income-tax or the Central Board of Revenue, as the case may be, under s; 5 (7 A) 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 assess ment 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 1956 _Pannalal Bi,Yraj_ v. _Union_ _of India_ _Bhagwati]._ 1956 _**Pannalal Binjroj**_ v. _**Union**_ _**of lndi•**_ _BhagwaJi]._ 262 SUPREME COURT REPORTS [1957] the statute can take it away but a fundam~ntal 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 the 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 invG!ving 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. In other words, the discretion vested has to be looked at from two points of vie\\', _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 Commissioner of Income-tax or the Central Board of Revenue, as the case may be, under s. 5 (7 A) is not at all dis.criminatory. It follows, therefore, that s. 5 (7 A) 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 down is not the provision contained ins. 5(7A) of the Act but the order passed thereunder which i;nay be _mala fide_ or violative of these fundamental rights. This challenge of the vires of s. 5 (7 A) 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 (7 A) of the Act is made by the Commissioner of Income-taX or the S.C.R. SUPREME COURT REPORTS 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, lie 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 (7 A) 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 3-100 S. C. India159 1956 _PannalallBinjraj_ .v. _Union:of lndiaf_ _BhagwatiJ._ 1956 _**Pannalal BinJraJ**_ v. _**Union**_ _**of India**_ _**Bhagwati].**_ SUPREME COURT REPORTS [ 1957] 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,_ (rupra), and are therefore, hit bv the majority judgment in that case. The answer of th~ 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 (7 A) 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 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 (7 A). 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 asse5see was transferred und.er s. 5 (7 A) 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(7 A) 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 c:.sc of a• particular assessee 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 arc meant to be trans ferred simultaneously and all proceedings under the ###### S.C.R. SUPREME COURT REPORTS 265 Act which may be commenced after the date of such transfer in respect of any year whatever are also included therein 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 (7 A) would apply and it would not be necessary to re-issue 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 dosed in the previous years cannot be re-opened 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 arc 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 1956 _Pannalal Binjraj_ v. _Unio10_ _of India_ _BhagwatiJ._ 1956 _**Pannalal**_ _**Bin.}raj**_ v. _**Union of India**_ _Bhagwoli]._ 266 SUPREME COURT REPORTS [1957J 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-tox or the Central Board of Revenue, as the case may be, are saved by the explanation to s. 5 (7 A) and are not unconstitutional and void. It remains now to consider whether the individual orders against the petitioners are discriminatory in fact or are _ma/a_ _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(7 A) of the Act. _Petitions Nos._ _211_ _to_ _215_ _of_ _1956,_ i.e., the Sriram 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, C~ntral Circle IV, Calcutta, immediately 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 adYent 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 nC> retrospi:ctive 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 S.C.R. SUPREME COURT REPORTS 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 ### I:>as, l ., as he then was, at p. 235 of that case, may be appropriately referred to in this context : 1956 _Pannalal_ _Binjraj_ v. _Union_ _of India_ _Bhagwati]._ "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 exer cise 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 ariy 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_ _famkhandi_ v. _Union_ _-0f_ _lndia(3)_ ). It is clear, therefore, that the petitioners are not entitled to complain against the said orders of transfer 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 (~) [1951) S.C.R. 228, 235. (2) (1953) S.C.R. 589. (3) (1955] I S.C.R. 769. 1956 _Pannalal Bil!iraj._ v. ##### _u.; .. of 1ru11a_ _BhapaJi_ J. 268 SUPREME COURT REPORTS [1957] 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 case.s of the petitioners from the Income-tax Officer, 'A' Ward, Amritsar, or the Income-tax Officer, 'F' Ward, Amritsar, to the Income-tax Officer, Special Circle, Amritsar. Both these offices 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 a.hove and in fact submitted to the jurisdiction of the Income-tax Officers to whom their cases had been transferred. It w'as 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(')_ ; _0. A. 0. K. Lakshmanan Chettiar._ v. _Commissioner, Corporation of_ _Madras_ _and Chief fudge,_ _Court of Smalf'9auses, Madras('))._ The orders ·of transfer made by the Commissioner of Income-tax or the Central Board of Revenue, as the (') [z907] 97 L. T. 55'· (') [1927] I. L. R. 50 Mad. z30. S.C.R. SUPREME COURT REPORTS case may be, against the three groups 0£ peut1oners, ###### viz., Sriram Jhabarmull group, the Raichur group and the Amristar 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 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 _Surajmutl Mohta_ & _Co._ '" _A._ _V. Viswanatha Sastri(_ _[1]_ _),_ 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(1A) 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 ex1stmg 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(')_ and as a result thereof cases referred under that section and pending with the (11 (1955] r $.C.R. 448. (2) (1955 r S.C.R. 787. 1956 _Ptmaalal Binfr•j_ _v._ _Union of lttdia_ _B1tapali_ J. 1956 Pannalal~Binjraj **T•** _**L"nion;of**_ _**India**_ _**Ehagwati**_ _]._ 270 SUPREME COURT REPORTS [1957] Income-tax Investigation Commission on July 17, 1954, could not be proceeded with under the provisions of that Act. These cases numbering about 470 had t<' be reopened under s. 34 ( lA) 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 centres 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 appears 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 convenience and the Income-tax Officers were instructed accorclingly. 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 petit10ner No. 1 and when the assessee voluntarily requested the Income-tax Officer to have ###### S.C.R. SUPREME COURT REPORTS 271 the examination done at Delhi (the. assessee had then come to Delhi for some other work of his) the Incometax Officer promptly posted the case and examined. the accounts. ###### If these were the circumstances unde; 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 tr an sf er 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 th!! 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 coparcener 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 Incometax Officer, Survey Circle, · Calcutta, to the Incometax 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, pctiti()ners in Petition No. 85/56, had already been 1956 _Pannalal Binft:qj_ **v.** _Union_ _of India_ _BhagwatiJ._ 1956 _**Pa1111alal**_ _**Bi1ljraj**_ v. _**Union**_ _**of India**_ _**BhagwatiJ.**_ 272 SUPREME COURT REPORTS (19571 transferred by the Commissioner of Income-tax fron: the Income-tax Officer, Hoshiarpur, to the Incometax Officer, Special Circle, Ambala, by an order under s. 5 (7 A) 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 act1v1t1es 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. 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 la•t mentioned four petmons, _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 S.C,R. SUPREME COURT REPORTS 1J3 rejoinder, we presume that such facilities will continue to be afforded to them in the future and the inconvcmence 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._ RATAN RAI _ti,_ ST ATE OF BIHAR ###### [BHAGWATI, B. P. SINHA and J. K. KAPUR JJ.] _Reference-fury_ _trial-fudge_ _disagreeing_ _with_ _the_ _verdict-_ _Procedure-Duty_ _of_ _counsel-High_ _Cou1·t-lf_ _can_ _accept_ _majority_ _verdict without considering the entire evidence-Supreme_ _Court-_ _lf_ _should adopt the procedure-Cude of Criminal Procedure_ _(Act_ _V of_ _1898),_ _as_ ame~dt:d _by_ _Act XXVI_ _of_ _1955,_ _s._ _307._ The appellal'lts were charged under ss. 435 and 436 of the Indian Penal Code and were tried by a jury, who returned a ~ajority ~erdict ?f guil.ty. The Assistant Sessions Judge disagreed with the said verdict and made a reference to the. High Court. At the hearing of the reference the counsel for the appellants only contended that the charge to the jury was defective, and did not place the entire evidence before the Judges, - who only considered the objections urged, and nothing more, and held the 1956 _Pa•Mlal Bitifraj_ v. _Unum_ _of l•di<>_ _Blragwali]._ 1957 _January_ 3(}.