Kalyan Jyoti Sengupta, J.
1. By this writ petition, the petitioners have challenged the authorization issued by the Joint Commissioner of Income-tax (TDS), Range-21, Calcutta, empowering the inspectors of income-tax to make a survey under Section 133A of the Act in the office premises of the petitioners on February 22, 2000, and the survey by the inspectors of income-tax on the said date and also summons issued by respondent No. 1 under Section 131 of the Act dated March 28, 2000.
2. The short facts of the case are as follows :
3. The petitioner has been carrying on business of manufacture and sale of various food, household and medicinal products like purity barley, pearl barley, dettol, dettolin, steradent, brasso, silvo, etc. There are products, which are sold by the petitioners but not manufactured by it. In the usual course of its business, the petitioner from time to time issued debentures. The petitioner has to deduct income-tax at source from the payment made to the various persons and creditors including shareholders and debenture holders under Sections 194, 194A, 194C, 194-I, 194J and 200. The petitioner has to file returns. To pay interest against the aforesaid debentures the petitioner has to deduct tax on interest which is paid on debentures where the amount of such payment exceeds Rs. 2,500. After deduction the petitioner filed Form No. 25 with respondent No. 1. Similarly, the petitioner is required to deduct tax under Section 194 of the Act where payment of dividend exceeds Rs. 2,500.
4. The aforesaid deduction of tax is made under Section 194 of the Income-tax Act wherever it is applicable and the same is paid under Section 200 of the Act and Form No. 26 duly filed with respondent No. 1. Section 115-O was introduced by the Finance Act, 1997, with effect from June 1, 1997. In view of the aforesaid Section, the petitioner was no longer required to deduct any tax from and out of the dividend or to file any Form No. 26 with effect from June 1, 1997. Similar deduction was made in the case of payment to the various contractors and sub-contractors where the payment exceeds Rs. 20,000 per contract and in this case the petitioner has to file Form No. 26C. The petitioner as such is a regular assessee and assessed by the Deputy Commissioner of Income-tax, Special Range-4. Therefore, respondent No. 1 is only the prescribed income-tax authority within the meaning of Section 206 of the said Act who has been designated by the Chief Commissioner of Income-tax under Rule 36A of the said rules. The petitioner duly filed returns of income under Section 139 of the said Act up to the assessment year 1999-2000. The petitioner has also been filing TDS returns as required under law.
5. Mr. P. K. Pal, the learned senior advocate, in support of the writ petition contends that the prescribed income-tax authority under Section 206 of the Income-tax Act has no competence, authority, jurisdiction to make any enquiry, investigation, or authorise any person to cause any survey to be made under Section 133A of the Income-tax Act and/or issue any summons under Section 131 of the Income-tax Act, 1961, in respect of the prescribed returns under Section 206 of the Income-tax Act in view of the object and scheme of the Income-tax Act, 1961.
6. Under Section 4(1) of the said Act being the charging provision, income-tax is payable by an assessee on its assessable total income of the previous year at the rate or rates prescribed by the Central Act which is the Finance Act passed in every year. Therefore, the total income of any particular assessee has to be computed as per the provisions of the Income-tax Act. In computing the total income certain incomes are not at all includible in the total income. Certain deductions are also allowed in computing the total income. Certain incomes of other persons are also included in the total income. Aggregation of income and setting off or carry forward of loss is also taken into account. There are certain special deductions for computing the total income. The rate of tax is fixed by the Finance Act each year. Chapter VIII which starts with Section 87 and ends with Section 89 deals with rebates and reliefs of the income-tax, Chapter IX which consists of Sections 90 and 91 deals with double taxation relief, Chapter X consists of Sections 92, 93 and 94 deals with special provisions relating to avoidance of tax.
7. Unlike Chapter XIII read with Chapter XIV. Chapter XVII of the Income-tax Act, headings 'A', 'B', 'BB', and 'C' do not contemplate any proceeding in respect of the prescribed returns filed under Section 206 of the Income-tax Act before the prescribed income-tax authority. Section 4(2} of the Income-tax Act read with Sections 190 and 191 thereof makes it abundantly clear that the liability is of the assessee, namely, the payee, to pay the tax and not the payer. The payer is only assisting to realise tax by one of the modes of realisation, namely, TDS.
8. Chapter XVII heading 'B' merely requires the payer to deduct tax, deposit the same under Section 200, issue certificates to the payee under Section 203 and file prescribed returns before the prescribed income-tax authorities under Section 206 of the Income-tax Act. Neither Chapter XVII-B nor the rules authorise the prescribed income-tax authority to make any investigation and/or enquiry in respect of the prescribed returns under Section 206 of the Income-tax Act for the very obvious reasons that the tax which they have paid for which they filed the prescribed returns to their prescribed income-tax authority is not their tax but of the payee whose particulars and/or information are being furnished by the payer in the prescribed form under Section 206 of the Income-tax Act and also in the certificate issued to the payee under Section 203 of the Income-tax Act which the payee is required to enclose with their return and it is the Assessing Officer of the payee who is to make ail these enquiries.
9. Section 120(1) of the Income-tax Act gives power only to the Board to confer jurisdiction under Chapter XIII in respect of the returns filed under Section 139 of the Income-tax Act. Section 120(2) of the Income-tax Act gives power to the Board to delegate the power which the Board has under Section 120(1) of the Income-tax Act in respect of the assessees within the jurisdiction specified in Section 120(3) of the Income-tax Act. The Board is not the prescribed income-tax authority under Section 206 of the Income-tax Act. The Board, therefore, cannot delegate any power which the Board itself docs not have under Section 120(2) of the Income-tax Act to any other income-tax authority and the purported delegation to the Chief Commissioner therefore is ultra vires. Section 206 of the Income-tax Act speaks of prescribed returns to be filed before the prescribed income-tax authorities. Section 2(33) of the Income-tax Act defines 'prescribed' which means prescribed by the rules. Rule 37 prescribes the returns and Rule 36A prescribes the income-tax authorities which does not confer any jurisdiction on the Board. Therefore, under Section 120(2) of the Income-tax Act the Board has no power to delegate to the Chief Commissioner or Commissioner the jurisdiction in respect of the prescribed returns filed before the prescribed income-tax authorities under Section 206 of the Income-tax Act read with the relevant rules. The notifications relied upon by the respondents are, therefore, contrary to Section 206 of the Income-tax Act read with Section 120 of the Income-tax Act and as such they are ultra vires in view of the principles of law laid down by the Supreme Court.
10. Even Sections 194C(4), 194G(2), 194J(2) and 195(2) of the Income-tax Act speak of the Assessing Officer from whom certificate should be obtained for short deduction of tax. Similarly, Section 197 of the Income-tax Act also speaks of certificate from the Assessing Officer for short deduction of tax in respect of other Sections of Chapter XVII-B of the Income-tax Act where there is no specific provision like the above Sections. All these Assessing Officers referred to in the above Sections can only be the Assessing Officers of the payee and not the payer. These provisions clearly go to show that the Legislature is not only aware of but maintains the difference between the Assessing Officers and the prescribed income-tax authorities by using dual expressions. Section 203A of the Income-tax Act requires tax deduction account number to be obtained by the payer from the Assessing Officers unless the function of allotment of tax deduction account number under Section 205A of the Income-tax Act has been assigned by the Chief Commissioner or Commissioner to any particular Assessing Officer as will be evident from Rule 114A of the Income-tax Rules. Here again a clear distinction has been maintained between the prescribed income-tax authority under Section 206 of the Income-tax Act and the Assessing Officer of the payer having jurisdiction under Section 120 of the Income-tax Act.
11. Therefore, Chapter XVII-B requires the prescribed returns to be filed before the prescribed income-tax authorities under Section 206 of the Income-tax Act and not to the Assessing Officer. Chapter XVII-B of the Income-tax Act, therefore, speaks of three different categories of officers, namely, the Assessing Officers of the payee, the Assessing Officers of the payer and the prescribed income-tax authorities. The above intention of the Legislature has been made clear even by Section 206(2) and (3) of the Income-tax Act where also the expression Assessing Officer has been used and the said Assessing Officer means the prescribed income-tax authority under Rule 36A of the Income-tax Rules as will be evident from Rule 37B thereof. The evidences referred to in Sub-section (2) are required only for making assessments either of the payer or of the payee inasmuch as there is no scope for any proceedings under Chapter XVII-B. Section 206(2) and (3) speaks of the Assessing Officer. Rule 37B of the Income-tax Rules clarifies it by confining it to the prescribed income-tax authorities under Rule 36A of the Income-tax Rules. Even the said provision does not give any power to make any enquiry by the prescribed income-tax authority but only to check its authenticity and to preserve them.
12. He contends that the circular being annexure 'A' to the affidavit-in-opposition merely clarifies certain provisions relating to TDS and not on merit. In the present writ application the petitioner is only concerned with the question of competence, authority or jurisdiction of the prescribed income-tax authority under Section 206 of the Income-tax Act to make any enquiry and/or investigation in respect of prescribed returns under Section 206 of the Act and not on the merits.
13. Mr. Agarwal, learned counsel appearing for the respondents, while opposing this application contends that the Joint Commissioner of Income-tax, Range 21 (Tax Deduction at Source Circle), Calcutta, authorised to conduct survey under Section 133A of the Income-tax Act, 1961, regarding the TDS matters in the premises of the writ petitioner on February 22, 2000. In the course of the survey, it was detected that no tax was deducted as required under Section 194C of the Income-tax Act from payment of Rs. 4.5 crores approximately on account of specific printing. TDS was not deducted from payment of Rs. 137.64 crores approximately for production of different items on contract basis. No tax was deducted from payment of rent amounting to Rs. 2.07 lakhs approximately under Section 194-1. The Joint Commissioner of Income-tax, Range 21, Calcutta, passed on the information to the Assistant Commissioner of Income-tax, TDS Circle 21(2), Calcutta, who is the prescribed income-tax authority for receiving annual returns under Section 206 of the Income-tax Act by virtue of the orders passed by the Chief Commissioner of Income-tax under Section 120 of the Income-tax Act, read with Rule 36A of the Income-tax Rules, 1962, in respect of the writ petitioner. The writ petition was directed against show-cause notice dated April 5, 2000, calling upon the writ petitioner to explain the failure of the writ petitioner to deduct tax at source as noticed in the course of the survey.
14. He contends that the writ petition is liable to be dismissed at the threshold, as a writ does not lie against a show-cause notice as held in the case of Indo Asahi Glass Co. v. ITO : [1996]222ITR534(Cal) . In the case of B. K. Soha and Bros. Pvt. Ltd. v. ITO : [1989]180ITR293(Cal) , a writ against a notice under Section 131 was rejected on similar ground.
15. He further contends that the authority concerned in this case may charge interest under Section 201(1A) or impose penalty under Section 221 of the Income-tax Act, if the company is found to be in default. The asses-see is entitled to prefer appeal under Section 246A(1)(ha) and (j)(A) of the Income-tax Act, 1961. Since an effective and alternative remedy is available to the assessee, the writ is liable to be dismissed. In support of this submission he has relied on a decision of this court reported in Karam Chand Thapar and Bros. (Coal Saks) Ltd. v. Deputy CIT : [1997]227ITR793(Cal) .
16. He contends that the Assistant Commissioner, TDS Circle 21(2), has jurisdiction over the writ petitioner in respect of TDS matters. The writ petitioner has been submitting annual returns in terms of Section 206 of the Income-tax Act with the Assistant Commissioner, TDS Circle 21(2), over a number of years without any demur. Rule 36A(i) of the Income-tax Rules, 1962, provides that the annual returns regarding tax deducted at source under Section 206 of the Income-tax Act, as provided in Rule 37, shall be submitted to the Assessing Officer designated by the Chief Commissioner or Commissioner of Income-tax. In cases where no Assessing Officer has been designated, the annual returns prescribed in Rule 37 shall be furnished to the territorial Assessing Officer under Rule 36A(ii). Rule 37 also provides that the annual returns in question shall be delivered to the Assessing Officer referred to in Rule 36A, that is, to the prescribed income-tax authority, and if no authority is prescribed then to the territorial Assessing Officer. There is no challenge against validity of Rules 36A and 37. In other words, the jurisdiction of the Assistant Commissioner of Income-tax, TDS, Circle 21(2), remains unassailed. Therefore, he contends that the Assistant Commissioner of Income-tax, TDS Circle 21(2), has jurisdiction over the assessee by virtue of the notification issued by the Chief Commissioner under Rule 36A(i). The expression used in the rule is the 'Assessing Officer' and not the prescribed income-tax authority. He submits that the prescribed income-tax authority is the Assessing Officer for purposes of Section 206. Where the prescribed income-tax authority, referred to in Section 206, is designated, the income-tax authority concerned with the assessment of the income of the assessee is divested of the jurisdiction in respect of TDS matters. He has jurisdiction for the purpose in cases covered by Rule 36A(ii) and not 36A(i).
17. He contends that the phrase 'Assessing Officer' does not mean only an Officer concerned with the assessment of the income. Under Section 2(7A) of the Income-tax Act an 'Assessing Officer' means the Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under Sub-section (1) or Sub-section (2) of Section 120 or any other provision of this Act, and the Joint Commissioner or Joint Director who is directed under Clause (b) of Sub-section (4) of that Section to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Act.
18. He contends that the Chief Commissioner, who has passed the order under Rule 36A, had the jurisdiction to pass this order by virtue of the jurisdiction assigned to him under Section 120. In the circumstances, it cannot be said that the Assistant Commissioner of Income-tax, TDS Circle 21(2), is not the 'Assessing Officer' or that the Central Board of Direct Taxes and the Chief Commissioners of Income-tax do not have the power to pass orders to confer relevant jurisdiction on the income-tax authorities other than those concerned with the assessment of the income for discharging functions other than assessment of income. So also regarding conferring power on them therefor under Section 221 of the Income-tax Act for levying penalty and charging interest under Section 201{1A) as well as regarding conferring power on them, inter alia, under Sections 131 and 133A. There is no constraint on them that these powers should be conferred only on those officers who have jurisdiction for assessment of the income of the assessees. Different persons can be conferred jurisdiction for different functions for various purposes of the Act within the jurisdiction of the income-tax authority provided the person concerned is an income-tax authority subordinate to him.
19. He contends that powers are mentioned in Part 'C' of Chapter XIII. They are conferred on authorities mentioned in Part 'A' of the same Chapter. They are to be exercised by them for all other Chapters starting with Chapter XIV including Chapter XVII of the Act. Under Sub-section (2) of Section 120 the Board can delegate power to issue directions for exercise of the powers and performance of the functions. Under Section 120(6) the Board may issue directions for the purpose of furnishing of the return or the doing of any other act or thing under this Act or any rule made thereunder. In support of his contentions, he has referred to a decision reported in ITO v. Ashoke Glass Works : [1980]125ITR491(Cal) .
20. He submits that in this case, the Joint Commissioner of Income-tax, Special Range 4, receives return of income of the writ petitioner and has the authority and duty to determine its total income. The Assistant Commissioner, TDS Circle 21(2), under the Additional (then Joint) Commissioner of Income-tax, Range 21, Calcutta, receives the returns of TDS matters of the writ petitioner. She is the authority to scrutinize the TDS returns and levy interest under Section 201(1A) and impose penalty under Section 221 with the reference to the TDS matters.
21. He refers to a decision of the Supreme Court reported in Asst. Collector of Central Excise v. National Tobacco Co. of India Ltd., : 1978(2)ELT416(SC) on the proposition that a power to do something essential for the proper and effectual performance of the work, which the statute has in contemplation, may be implied and further that courts must endeavour to ascertain the legislative intent and purpose and then adopt a rule of construction which effectuates rather than the one that may defeat these.
22. Having heard the respective contentions of the learned lawyers the points involved in this case, which require consideration of this court are-- (i) whether respondent No. 1 being 'the prescribed income-tax authority' who is empowered to receive returns of collection of tax deducted at source has any authority and/or jurisdiction either under the Act itself or by delegated power to make survey under Section 133A of the Income-tax Act or to issue summons for production of documents and books under Section 131 of the said Act, and (ii) whether conferment of jurisdiction by the Board as well as the Chief Commissioner of Income-tax is lawful and valid or not.
23. In this case, on the allegation of failure to deduct tax at source under Sections 194C and 194-I, the aforesaid enquiry and/or survey have been undertaken treating the writ petitioners to be a defaulter assessee within the meaning of Section 201 of the said Act. It is the settled position of law as has been rightly argued by Mr. Agarwal that ordinarily issuance of the summons and notice as aforesaid is never interfered with by the writ court as it does not affect anyone's right particularly when the statutory authority has undertaken to make enquiry and investigation as it has been decided by this court in the case of Indo Asahi Glass Co. v. ITO : [1996]222ITR534(Cal) . But in this case the authority and/or jurisdiction of respondent No. 1 who is designated as a prescribed income-tax authority within the meaning of Section 206 of the said Act has been questioned, as such the writ is maintainable. Even the theory of alternative remedy as argued by Mr. Agarwal citing the decision reported in Karam Chand Thapar and Bros. (Coal Sales) Ltd. v. Deputy CIT : [1997]227ITR793(Cal) is also not applicable, as no final order has been passed herein.
24. In order to ensure collection of revenue and further to prevent the payment of tax being evaded and/or dozed (sic) the Legislature has provided with one of the methods evolved in Chapter XVII of the aforesaid Act. Usually a taxpayer is obliged to file returns for his or its own income with the concerned Assessing Officer. Under the scheme of the aforesaid Act, it is the primary responsibility of the person who earns is to pay income-tax but under Chapter XVII the person who makes payment has been saddled with statutory responsibility to collect tax at the time of payment from the classified person or persons as mentioned in the said Chapter. Sections 191 to 196D of the Act mention the manner under which and the persons from whom such collection shall be made by the payer. Under Section 206 of the aforesaid Act, the payer is duty bound to furnish the prescribed returns in the prescribed form for collection of the aforesaid taxes af the time of payment from the payee. This method of collection of taxes is in addition and/or supplement to the usual method of collection of taxes.
25. Under Section 203 of the said Act within Chapter XVII it is provided that in the case of such collection of taxes at source necessary certificates are issued to the payee enabling it or him to get exemption from payment of tax to the extent collected.
26. Under Section 201 consequence of failure to deduct or pay the collected tax has been provided. It is clear from the aforesaid Section in the event o!' there being' any failure the payer is deemed to be an assessee in default in respect of the tax. Consequently, all the mischiefs of penal provisions for failure to collect or pay tax will be applicable.
27. Here is a question on the allegation of default in deducting taxes by the writ petitioner, whether for the purpose of recovery thereof treating the petitioners to be an assessee in default, survey enquiry as provided under Sections 131 and 133A can be resorted to by the prescribed income-tax authority under Section 206 or not.
28. Mr. Pal wants me to be persuaded that survey and issuance of summons as provided under Sections 131 and 133A can be resorted to only in case where income-tax authority proceeds under Chapter XIV for regular assessment. His further contention is that the petitioner is not an assessee under and/or is subjected to jurisdiction of respondent No. 1 who is only empowered to collect returns under Section 206. Mr. Pal also wants to draw a distinction between the definition of the prescribed income-tax authorities as mentioned in Section 206 and in the income-tax authorities as mentioned in Section 139 of the said Act. I am unable to accept the contention of Mr. Pal that the procedure as laid down in Sections 131 and 133A is meant for and/or can only be resorted to only in the case of proceedings under Chapter XIV of the said Act. In my view, the power has been vested by the statute under Sections 131 and 133A of the said Act in general. The authorities mentioned in the aforesaid two Sections can exercise this power whenever appropriate situation will be arising and the same is not restricted to any proceedings under Chapter XIV of the said Act. In Section 116 various officials have been described to be income-tax authorities. Therefore, it would be convenient to quote the aforesaid Section.
'116. Income-tax authorities.--There shall be the following classes of income-tax authorities for the purposes of this Act, namely :-
(a) The Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963 (54 of 1963),
(b) Directors-General of Income-tax or Chief Commissioners of Income-tax,
(c) Directors of Income-tax or Commissioners of Income-tax or Commissioners of Income-tax (Appeals),
(cc) Additional Directors of Income-tax or Additional Commissioners of income-tax or Additional Commissioners of Income-tax (Appeals),
(d) Deputy Directors of Income-tax or Deputy Commissioners of Income-tax or Deputy Commissioners of Income-tax (Appeals),
(e) Assistant Directors of Income-tax or Assistant Commissioners of Income-tax,
(f) Income-tax Officers,
(g) Tax Recovery Officers, (h) Inspectors of Income-tax.'
29. The Inspector of Income-tax is the lowest rank of the income-tax authorities who is also empowered to conduct survey. However, to carry out such survey the purpose therefor must be in furtherance of fulfilment of the provisions of the Act.
30. In this case as it appears from the affidavit-in-opposition and notice itself in order to find out the correct position as to default in deducting taxes, necessary summons has been issued for survey under Section 133A and also for production of the documents under Section 131 of the Act. The default is alleged to have been committed by the writ petitioner not as an income-tax payer assessee but as a collecting agent under Chapter XVII of the said Act. As a remedial measure for such default under the aforesaid Chapter the respondent-Department has taken this step. Unlike other statutes power and jurisdiction of the income-tax authorities excepting the Board has not been specified. Any of the income-tax officials is competent to exercise power and jurisdiction as may be conferred upon them by the Board not otherwise. So power of allocation of business under the scheme of the Income-tax Act has been exclusively vested upon the Board and this will he clear from Sections 119 and 120 of the said Act. So it is necessary for this case to reproduce Section 120 of the Act.
'120. Jurisdiction of income-fax authorities.--(1) Income-tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, as the case maybe, assigned to such authorities by or under this Act in accordance with such directions as the Board may issue for the exercise of the powers and performance of the functions by all or any of those authorities.
(2) The directions of the Board under Sub-section (1) may authorise any other income-tax authorities to issue orders in writing for the exercise of the powers and performance of the functions by all or any of the other income-tax authorities who are subordinate to it.
(3) In issuing the directions or orders referred to in Sub-sections (1) and (2), the Board or other income-tax authority authorised by it may have regard to any one or more of the following criteria, namely :--
(a) territorial area ;
(b) persons or classes of persons ;
(c) incomes or classes of income ; and
(d) cases or classes of cases.
(4) Without prejudice to the provisions of Sub-sections (1) and (2), the Board may, by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein,--
(a) authorise any Director-General or Director to perform such functions of any other income-tax authority as may be assigned to him by the Board ;
(b) empower the Director-General or Chief Commissioner or Commissioner to issue orders in writing that the powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in respect of any specified area or persons or classes of persons or incomes or classes of income or cases or classes of cases, shall be exercised or performed by a Deputy Commissioner or a Deputy Director, and, where any order is made under this clause, references in any other provisions of this Act, or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such Deputy Commissioner or Deputy Director by whom the powers and functions are to be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the Deputy Commissioner shall not apply.
(5) The directions and orders referred to in Sub-sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, require two or more Assessing Officers (whether or not of the same class) to exercise and perform, concurrently, the powers, and functions in respect of any area or persons or classes of persons or incomes or classes of income or cases or classes of cases ; and, where such powers and functions are exercised and performed concurrently by the Assessing Officer of different classes, any authority lower in rank amongst them shall exercise the powers and perform the functions as any higher authority amongst them may direct, and, further, references in any other provision of this Act or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such higher authority and any provision of this Act requiring approval or sanction of any such authority shall not apply.
(6) Notwithstanding anything contained in any direction or order issued under this Section, or in Section 124, the Board may, by notification in the Official Gazette, direct that for the purpose of furnishing of the return of income or the doing of any other act or thing under this Act or any rule made thereunder by any person or class of persons, the income-tax authority exercising and performing the powers and functions in relation to the said person or class of persons shall be such authority as maybe specified in the notification.'
31. It appears from the aforesaid Section 120 that the Board cannot confer jurisdiction whimsically or arbitrarily, and it is to be done within the guidelines mentioned in Sub-section (3). It also appears from Sub-section (6) that the Board can give directions for the purpose of, amongst others doing any other act or thing under this Act or any rule made thereunder by any person or class of persons, the income-tax authority exercising and performing the powers and functions in relation to the said person or class of persons shall be such authority as may be specified in the notification. The import of these words 'doing any other act or thing' is, to my mind, of wide amplitude, however, not the extent beyond scope and purport of the Act itself. So it is clear that 'any act or thing' means to achieve fulfilment of the object of the Act.
32. Under Chapter XVII of the said Act it has not been expressly provided whether the prescribed income-tax authority while accepting the returns under Section 206 of the said Act can take any subsequent step in the case of failure in deducting tax or depositing tax so collected. Complete machinery has not been provided for therein. In my view, the writ petitioner has taken advantage of the absence of this express provision. In order to obviate this difficulty the Board by a circular dated February 12, 1991, being annexure B to the affidavit-in-opposition has instructed the Chief Commissioner and Director-General of Income-tax to vest the power of the Assessing Officer upon the prescribed income-tax authority under Section 206 of the said Act for levying penalties and for taking other suitable measures. Incidentally, it is observed as rightly argued by Mr. Agar-wal that the prescribed income-tax authority is a designated official and it is not different from the Assessing Officer as will be apparent from rule 3GA of the Income-tax Rules, 1962.
33. Accordingly, the Chief Commissioner by a notification dated September 15, 1999, being annexure C to the affidavit-in-opposition has conferred power and/or jurisdiction amongst others upon respondent No. 1 herein and also other officials to take steps for failure to deduct tax at source and also to pay the collected tax. This investment of power and conferment of jurisdiction are perfectly lawful as has been rightly argued by Mr. Agarwal citing two decisions of this court in support of this proposition, viz., ITO v. Ashoke, Glass Works : [1980]125ITR491(Cal) and Jubilee Investments and Industries Ltd. v. Asst. CIT : [1999]238ITR648(Cal) .
34. I am unable to accept the submission of Mr. Pal that the circulars being annexures B and C to the affidavit-in-opposition have no relevancy in deciding the present case. The authority cited by Mr. Pal, viz., Keshavji Ravji and Co. v. CIT : [1990]183ITR1(SC) , has no manner of application in this case. I cannot accept the logic that the aforesaid circulars are contrary to the provisions of the statute. As I have already held that the Board has power to issue circulars, therefore, the said decision is not applicable here. By the circulars no attempt has been made to interpret any particular provision of the Income-tax Act rather the same have been issued under Section 120 of the Income-tax Act. The circulars have been issued in terms of the provisions of the aforesaid Act and it is not contrary to any of the provisions of the Income-tax Act. So the authorities cited by Mr. Pal, viz., Kerala Financial Corporation v. CIT : [1994]210ITR129(SC) ; State Bank of Travancore v. CIT : [1986]158ITR102(SC) and Indo-Gulf Fertilizers and Chemicals Corporation Ltd. v. Union of India : [1992]195ITR485(All) , have no manner of application.
35. As far as the decisions of this court cited by Mr. Pal reported in CIT v. Blackwood Hodge (India) P. Ltd. : [1971]81ITR807(Cal) and CIT v. Dunlop Rubber Co. (India) Ltd. : [1980]121ITR476(Cal) , are concerned, the same were rendered on a different issue and there is no dispute about the law laid down by this court. In this case the question is whether any Income-tax Officer including the prescribed income-tax authority under Section 201 can be conferred with any power or jurisdiction or not. Therefore, the aforesaid two decisions of this court have no manner of application.
36. Conferment of jurisdiction emanates from Section 120 not from Section 206 of the Income-tax Act and the Board has exercised its power under the aforesaid Section. Section 206 of the Income-tax Act is not the source of conferment of jurisdiction. Therefore, the decision reported in State of Orissa v. Titaghur Paper Mitts Co. Ltd. : [1985]3SCR26 , has no manner of application.
37. I am unable to accept the contention of Mr. Pal that there is no scope for any proceedings under Chapter XVII under headings 'B', 'BB' and 'C' of the Income-tax Act. As I have already observed that in the case of default the writ petitioner would be termed and/or treated to be an assessee in default, enquiry is must. One cannot be held to be an assessee in default within the meaning of Section 201, of the Act without enquiry, survey or giving an opportunity of being heard. All these exercise can be undertaken by the Assessing Officer mentioned in the proviso of Sub-section (1) of Section 201. In the case of failure to pay after assessment, the proceedings for recovery of the tax shall be resorted to. Therefore, the decisions cited by Mr. Pal reported in Dwijendra Lal Brahmachari v. New Central Jute Mills Co. Ltd. : [1978]112ITR568(Cal) ; ITO v. James Joseph O'Gorman : [1993]204ITR454(Cal) and Jamnadas Madhavji and Co. v. Panchal (J. B.), ITO : [1986]162ITR331(Bom) have no manner of application.
38. As I have held that in this case the steps taken by respondent No. 1 are lawful and valid the question of application of the principle of law laid down by the Supreme Court reported in Commissioner of Commercial Taxes v. Ramkishan Shrikishan Jhaver : [1967]66ITR664(SC) does not arise.
39. In view of the above discussion it is difficult to accept the contention of Mr. Pal that the aforesaid two notifications issued by the Board as well as Chief Commissioner of Income-tax, Calcutta, are illegal and ultra vires the provisions of Section 206 of the said Act. The provision of Section 206 of the said Act provides for furnishing returns but the person who is to receive them is not stipulated or mentioned therein but it is specified by the Rules. By and under Rule 36A the Chief Commissioner of Income-tax will designate any Assessing Officer for this purpose. This power and jurisdiction either of the Chief Commissioner or of the Assessing Officer qua the prescribed income-tax authority do not conflict with the power and jurisdiction under Section 120 of the Act, nor does this provision visualise exclusion of applicability thereof if the situation so arises.
40. Therefore, I hold that both the aforesaid two circulars are lawful and valid. Consequently, I hold respondent No. 1 as well as the other officials have acted lawfully within their power as lawfully conferred upon them.
41. The power under Section 131 of the said Act can, however, be exercised by the authorities mentioned in that Section itself and this power cannot be exercised by any official subordinate to the rank of the Assessing Officer. However, the power of survey under Section 133A can be exercised by any income-tax authority including the income-tax inspector. Sections 131 and 133A are accordingly quoted hereunder.
'131. Power regarding discovery, production of evidence, etc.--(1) The Assessing Officer, Deputy Commissioner (Appeals), Deputy Commissioner, Commissioner (Appeals) and Chief Commissioner or Commissioner shall, for the purposes of this Act, have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the following matters, namely :--
(a) discovery and inspection ;
(b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath ;
(c) compelling the production of books of account and other documents ; and
(d) issuing commissions.
(1A) if the Director-General or Director or Deputy Director or Assistant Director, or the authorised officer referred to in Sub-section (1) of Section 132 before he takes action under Clauses (i) to (v) of that sub-section, has reason to suspect that any income has been concealed, or is likely to be concealed, by any person or class of persons, within his jurisdiction, then, for the purposes of making any inquiry or investigation relating thereto, it shall be competent for him to exercise the powers conferred under Sub-section (1) on the income-tax authorities referred to in that sub-section, notwithstanding that no proceedings with respect to such person or class of persons are pending before him or any other income-tax authority.
(2) Omitted by the Direct Tax Laws (Amendment) Act, 1987 with effect from 1-4-1989.
(3) Subject to any rules made in this behalf, any authority referred to in Sub-section (1) or Sub-section (1A) may impound and retain in its custody for such period as it thinks fit any books of account or other documents produced before it in any proceeding under this Act :
Provided that an Assessing Officer or an Assistant Director shall not--
(a) impound any books of account or other documents without recording his reasons for so doing, or
(b) retain in his custody any such books or documents for a period exceeding fifteen days (exclusive of holidays) without obtaining the approval of the Chief Commissioner or Director-General or Commissioner or Director therefore, as the case may be.'
'133A Power of survey.--(1) Notwithstanding anything contained in any other provision of this Act, an income-tax authority may enter--
(a) any place within the limits of the area assigned to him, or
(b) any place occupied by any person in respect of whom he exercises jurisdiction, or
(c) any place in respect of which he is authorised for the purposes of this Section by such income-tax authority, who is assigned the area within which such place is situated or who exercises jurisdiction in respect of any person occupying such place, at which a business or profession is carried on, whether such place be the principal place or not of such business or profession, and require any proprietor, employee or any other person who may at that time and place be attending in any manner to, or helping in, the carrying on of such business or profession,--
(i) to afford him the necessary facility to inspect such books of account or other documents as he may require and which may be available at such place,
(ii) to afford him the necessary facility to check or verify the cash, stock or other valuable article or thing which may be found therein, and
(iii) to furnish such information as he may require as to any matter which may be useful for, or relevant to, any proceeding under this Act.
Explanation--For the purposes of this sub-section, a place where a business or profession is carried on shall also include any other place, whether any business or profession is carried on therein or not, in which the person carrying on the business or profession states that any of his books of account or other documents or any part of his cash or stock or other valuable article or thing relating to his business or profession are or is kept.
(2) An income-tax authority may enter any place of business or profession referred to in Sub-section (1) only during the hours at which such place is open for the conduct of business or profession and, in the case of any other place, only after sunrise and before sunset.
(3) An income-tax authority acting under this Section may,--
(i) if he so deems necessary, place marks of identification on the books of account or other documents inspected by him and make or cause to be made extracts or copies therefrom,
(ii) make an inventory of any cash, stock or other valuable article or thing checked or verified by him,
(iii) record the statement of any person which may be useful for, or relevant to, any proceeding under this Act.
(4) An income-tax authority acting under this Section shall, on no account, remove or cause to be removed from the place wherein he has entered, any books of account or other documents or any cash, stock or other valuable article or thing.
(5) Where, having regard to the nature and scale of expenditure incurred by an assessee, in connection with any function, ceremony or event, the income-tax authority is of the opinion that it is necessary or expedient so to do, he may, at any time after such function, ceremony or event, require the assessee by whom such expenditure has been incurred or any person who in the opinion of the income-tax authority, is likely to possess information as respects the expenditure incurred, to furnish such information as he may require as to any matter which may be useful for, or relevant to, any proceeding under this Act and may have the statements of the assessee or any other person recorded and any statement so recorded may thereafter be used in evidence in any proceedings under this Act.
(6) If a person under this Section is required to afford facility to the income-tax authority to inspect books of account or other documents or to check or verify any cash, stock or other valuable article or thing or to furnish any information or to have his statement recorded either refuses or evades to do so, the income-tax authority shall have all the powers under Sub-section (1) of Section 131 for enforcing compliance with the requirement made.
Explanation.--In this Section,--
(a) 'income-tax authority' means a Commissioner, a Deputy Commissioner, a Director, a Deputy Director, an Assistant Director or an Assessing Officer, and for the purposes of Clause (i) of Sub-section (1), Clause (i) of Sub-section (3) and Sub-section (5), includes an Inspector of Income-tax, if so authorised by any such authority ;
(b) 'proceeding' means any proceeding under this Act in respect of any year which may be pending on the date on which the powers under this Section are exercised or which may have been completed on or before such date and includes also all proceedings under this Act which may be commenced after such date in respect of any year.'
42 .The aforesaid powers, as it appears from the scheme of the Act, are of general nature do not confine to Chapter IV only and to be exercised by the respective authorities mentioned therein whenever necessary for any purpose of the Act. Such power can even be required to be exercised by the Board and the Chief Commissioner by issuing valid notification under Section 120 of the said Act. Therefore, I hold that respondent No. 1 has correctly exercised her power ; so also the other respondents. Therefore, I do not find any merit in this writ petition and the writ petition is accordingly dismissed. Interim order stands vacated.
43. There will be no order as to costs.
44. Though the writ petition is dismissed, the interim order already passed shall continue till the following day after the summer vacation.
45. Certified xerox copy on urgent basis shall be made available to the parties concerned.