1988 (7) TMI 2 - HC - Income Tax

Summary

Issues Involved:
1. Jurisdiction of the Assessing Officer.
2. Validity of the assessment order post-transfer of jurisdiction.
3. Maintainability of the writ petition in light of the alternative remedy of appeal.

Summary:

1. Jurisdiction of the Assessing Officer:
The petitioner challenged the assessment order for the year 1985-86 on the grounds that the Inspecting Assistant Commissioner of Income-tax (Assessment), Central Circle-I, Lucknow (respondent No. 1) lacked jurisdiction to make the assessment. The petitioner argued that the Central Board of Direct Taxes (CBDT) had transferred the case to E-Ward, Lucknow Circle, effective January 20, 1988, making the assessment order dated March 30, 1988, void. The court examined the nature of the power of transfer u/s 127 and the implications of such a transfer on jurisdiction.

2. Validity of the Assessment Order Post-Transfer:
The court noted that the transfer order was issued on March 25, 1988, and received by the respondent on April 19, 1988. The court held that the Act treats the allocation of functions as administrative and procedural rather than substantive. It emphasized that u/s 124(5)(a), objections to jurisdiction must be raised within one month of filing the return or before the assessment is completed, whichever is earlier. Since the assessment was completed before the transfer order was communicated, the court ruled that the assessment was valid despite the procedural defect.

3. Maintainability of the Writ Petition:
The petitioner had filed an appeal u/s 246 of the Income-tax Act but argued that the question of jurisdiction could not be raised in the appeal. The court agreed that the writ petition was maintainable despite the alternative remedy of appeal, as the issue of jurisdiction could not be raised post-assessment. However, based on the merits, the court dismissed the petition, affirming that the procedural defect did not invalidate the assessment.

Conclusion:
The court dismissed the petition, holding that the assessment order was valid despite the procedural defect in jurisdiction transfer. The plea of jurisdiction was deemed an administrative matter, not affecting the substantive validity of the assessment. The petition was dismissed with costs to the opposite parties.