GUI. MUHAMMAD KHAN, J.-Through this application the petitioner refers the following question of law to this Court for its opinion "Whether on the facts and in the circumstances of the case, Mr. Javaid Ahmad Noel the Income-tax Officer (Investigation) Circle II, Lahore, had jurisdiction to impose the penalty ?"
Two other reference applications bearing numbers T. R. 339/72 and T. R. 5 of 1973 which seek to refer precisely the same question of law, shall also stand decided by this order.
2. Briefly, the facts leading to this application are that the petitioner, which is a private limited company, carrying on transport business, ran in arrears of Income-tax. The matter came up before Mr. Javed Ahmad Noel, Income-tax Officer, who imposed a penalty of Rs. 10,648 under section 46(l) of the Income-tax Act for the assessm ent year 1963-64 vide his order dated 30th December, 1971. In the two other connected cases the penalties imposed were as under :- T. R. 5 of 1973-Rs. 2,597 per assessm ent year 1963-64.
T. R. 339 of 1972-Rs. 647 per assessme nt year 1959-60.
The petitioner challenged the order of Mr. Javed Ahmad Noel in appeals but the same were dismissed by the Income-tax Appellate Tribunal and hence this application for reference.
3. It is contended by the learned counsel that Mr. Javed Ahmad Noel, Income-tax Officer was not competent to impose the penalties and that his order was void. It is stated - that Mr. Javed Ahmad Noel was transferred from P-Circle Lahore to C-Circle Lahore, by the Commissioner of Income-tax, Lahore Zone, Lahore vide his order dated 27th July, 1971. Mr. Noel was still posted in C-Circle when the Central Board of Revenue vide its order dated 9th October, 1971--- appointed him to hold the post of Income-tax Officer (Investigation Circle) II, Lahore in addition to his own duties w. e. f. 4th October, 1971. There were two separate Commissioners of Income-tax supervising these two circles.
4. Mr. Noel was transferred and posted as Income-tax Officer in the Investigation Circle vide order dated 9th December, 1971 of the Central Board of Revenue. On 31st December, 1971, the Commissioner of Incometax (Investigation) posted Mr. Javed Ahmad Noel as Income-tax Officer (Investigation) Circle III,. Lahore. He was also to hold the additional charge of Income-tax Officer (Investigation) Circles I, III and IV, Lahore, with effect from the date he reported for duty and until further orders.
5. It is contended by the learned counsel for the petitioners that as no order of appointment as Income-tax Officer (Investigation) Circle II, Lahore had ever been passed by the Commissioner of Income-tax, after Mr. Noel's transfer to Investigation Department by the Central Board of Revenue, vide order dated 9th December, 1971, Mr. Noel could not act and pass the impugned orders on 30th December, 1971. The precise contention of the learned counsel is that an order of transfer by. The Board of Revenue is not sufficient and must be followed by an order of the respective Commissioner of Income-tax to clothe an officer with effective authority. It may be 4 clarified that though Mr. Noel was appointed by the Board of Revenue to Circle II (Investigation) on 9th December 1971, yet the Commissioner of Income-tax passed his order of appointment on 31st December, 1971. Mr. Noel imposed the penalties on or before 30th December, 1971.
6. The Appellate Tribunal held that as Mr. Noel had taken charge of the Investigation Circle II on 4th October, 1971 he had the powers and authority to act as such. It was further found that as the two Circles which had been given in the charge of Mr. Noel were under two different Incometax Commissioners, it was only the Board of Revenue which could have issued the said notification of transfer. These findings were given in view of the notification dated 9th October, 1971 of the Central Board of Revenue, appointing Mr. Noel to hold the post of Income-tax Officer in Circle II (Investigation) in addition to his own duties in C-Circle. Obviously such an order could be passed by the Board of Revenue as the two circles were under two different Commissioners of Income-tax.
7. The short question that requires determination is whether a separate notification by the Commissioner, Income-tax was necessary after the Board of Revenue appointed Mr. Noel to hold the post of Income-tax Officer Circle II (Investigation). The Commissioner of Income-tax is empowered under section 5(5) to direct an income-tax Officer to perform his functions in respect of all or any proceedings relating to such cases or classes of cases or of such persons or classes of persons or of such income or classes of income. There is no provision wherein it is provided that this power is exclusively vested in the Commissioner of Income-tax. Under section 5(6), on the other hand, the Central Board of Revenue may by an order in writing Inter alia empower an Income-tax Officer to perform such functions in respect of such cases or classes of cases or such persons or classes of persons or of such income or classes of income or such areas as may be specified in the notification. This provision supersedes other provisions as on promulgation of such a notification other authorities performing those functions cease to act. The only limitation placed on such officer is that he remains subordinate to the Commissioner of Income-tax for the respective area under section 5(7). The Central Board of Revenue is also empowered to transfer any case or any proceedings in respect of any case from one Income-tax Officer to another.
Section 5(7-C) provides a cover to the action taken by the Central Board of Revenue as follows : "(7-C) The powers of the Central, Board of Revenue, Commissioners of Income-tax, and Income- tax Officers, to assign any case to any authority, or to transfer any case from one authority to another, or to perform any function or functions under this section, shall include the power in respect of all or any proceedings relating to such case ; and except as provided in subsection (5- D), no such assignment, transfer or performance of functions shall be called in question by or before any Court or other authority."
8. It is thus clear that order dated 2nd October, 1971 of the Central Board of Revenue appointing Mr. Noel in the leave vacancy for Circle II (Investigation) was valid and effective and no order of an authority subordinate to the Central Board of Revenue was needed to give its validity. Similarly no order by the Commissioner of Income-tax was necessary to make effective the order dated 9th December, 1971.
9. Two of the impugned orders passed by Mr. Noel were dated 30th December, 1971 while the third was passed on 22nd October, 1971. The order appointing Mr. Noel as Income-tax Officer Circle II (Investigation) was dated 9th of October, 1971. No question of retrospective application arose in these cases. Section 5(7-C) in any case protected the action of the Central Board of Revenue from challenge. The petitioner could only make a representation against such order under section (7-D).
In this view of the matter, this application cannot be allowed.
For the reasons given above, the reference shall be answered in the affirmative. The petitioners shall pay the costs of the respondents.