2018 (6) TMI 211 - HC - Income Tax

Validity of reopening of assessment - notice issued u/s 148 - lack of jurisdiction - whether the transfer of case from one ward to another ward is valid - Jurisdiction of AO to pass assessment order u/s 124(2) - Held that - Section 124(5) of the Act saves assessment made by an assessing officer provided that the assessment does not bring to tax anything other than income accruing, arising or received in that area over which the assessing officer exercises jurisdiction. However, notwithstanding Section 124(5), the Act does not postulate multiple assessments by different assessing officers, or assessment of part or portion of an income see Kanjimal & Sons Vs. Commissioner of Income Tax, New Delhi, 1982 (3) TMI 41 - DELHI HIGH COURT . Thus, it is necessary that the Assessing Officers having concurrent jurisdiction ensure that only one of them proceeds and adjudicate. This is the purport and objective behind sub-section (2) to Section 124 of the Act. Contention of the petitioner that the transfer by Income-Tax Officer, Ward-1(1), Noida to Income-Tax Officer, Ward-58 (2), Delhi required an order u/s 127 is fallacious and without merit - since Income-Tax Officer, Ward-1 (1), Noida accepted the request/prayer of the petitioner and had transferred pending proceeding to the Assessing Officer, Ward-58 (2), Delhi, therefore there was no need to invoke and follow the procedure mentioned u/s 127(2) - Section 127 of the Act would come into play when the case is to be transferred from the Assessing Officer having jurisdiction to a third officer not having jurisdiction over an assessee u/s 120 - thus Income-Tax Officer Ward 1(1), Noida would not per se lack jurisdiction, albeit he had concurrent jurisdiction with the Income-Tax Officer Ward 36(1)/58, Delhi. In the facts of the present case the contention raised about the lack of jurisdiction would not justify quashing the notice under Section 147 /148 of the Act - petition is dismissed.

Issues Involved:
1. Jurisdiction of Income-Tax Officer, Ward No.1(1), Noida.
2. Validity of the transfer of proceedings to Income-Tax Officer, Ward No.58(2), Delhi.
3. Compliance with statutory provisions under Section 127(2)(a) of the Income-tax Act, 1961.
4. Service of notice under Section 148 of the Income-tax Act, 1961.
5. Concurrent jurisdiction of multiple Assessing Officers.
6. Validity of proceedings initiated by an officer without jurisdiction.

Issue-wise Detailed Analysis:

1. Jurisdiction of Income-Tax Officer, Ward No.1(1), Noida:
The petitioner argued that the Income-Tax Officer, Ward No.1(1), Noida did not have jurisdiction to issue the notice under Section 148 read with Section 147 of the Income-tax Act, 1961 for the assessment year 2009-10. The court examined the facts and found that the petitioner had a bank account in Noida and had not updated his permanent address in the bank records. Notices were sent to the Noida address, and the petitioner did not respond. The court concluded that the Income-Tax Officer, Ward No.1(1), Noida had jurisdiction based on the location of the bank account and the petitioner's place of work, which were within Noida.

2. Validity of the Transfer of Proceedings to Income-Tax Officer, Ward No.58(2), Delhi:
The petitioner contended that the transfer of the case from Income-Tax Officer, Ward No.1(1), Noida to Income-Tax Officer, Ward No.58(2), Delhi was void as the procedure under Section 127(2)(a) of the Act was not followed. The court held that the transfer was not under Section 127 but was based on the petitioner's objection that he was regularly filing returns in Delhi. The court found that the transfer was valid as the Income-Tax Officer, Ward No.1(1), Noida accepted the petitioner's request and transferred the case to the Delhi officer without invoking Section 127.

3. Compliance with Statutory Provisions under Section 127(2)(a):
The petitioner argued that the transfer was invalid as the Chief Commissioner having jurisdiction over the Income-Tax Officer, Ward No.1(1), Noida had not passed any order for the transfer. The court clarified that Section 127 relates to the transfer of cases between officers who do not have concurrent jurisdiction. In this case, both officers had concurrent jurisdiction, and the transfer was based on the petitioner's request, not under Section 127. Therefore, the statutory provisions under Section 127(2)(a) did not apply.

4. Service of Notice under Section 148:
The petitioner claimed that he was not properly served with the notice under Section 148. The court noted that notices were sent to the petitioner's Noida address and were not returned unserved. Additionally, a notice was affixed at the Laxmi Nagar address. The court found that the petitioner deliberately did not respond to the notice to object to jurisdiction after the statutory period had lapsed. The court concluded that the service of notice was proper and the petitioner had waived his right to object by not responding in a timely manner.

5. Concurrent Jurisdiction of Multiple Assessing Officers:
The court examined Sections 120 and 124 of the Act, which allow for concurrent jurisdiction of multiple assessing officers. The court noted that the Act does not confer exclusive jurisdiction on a single officer but allows for concurrent jurisdiction based on territorial area, class of persons, income, and cases. The court held that both the Noida and Delhi officers had concurrent jurisdiction over the petitioner, and the proceedings initiated by the Noida officer were valid.

6. Validity of Proceedings Initiated by an Officer Without Jurisdiction:
The petitioner argued that the proceedings initiated by the Noida officer were invalid due to lack of jurisdiction. The court referred to previous judgments and statutory provisions to conclude that the objection to jurisdiction should be raised within the stipulated time. The court found that the petitioner had lost the right to question the jurisdiction of the Noida officer by not raising the objection in a timely manner. The court held that the proceedings were valid and dismissed the petition.

Conclusion:
The court dismissed the petition, finding no merit in the petitioner's arguments. The stay order was vacated, and there was no order as to costs. The court upheld the jurisdiction and actions of the Income-Tax Officer, Ward No.1(1), Noida, and validated the transfer of the case to Income-Tax Officer, Ward No.58(2), Delhi.

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