1995 (7) TMI 118 - AT - Income Tax

Summary

Issues:
Jurisdiction of Assessing Officer, Double assessment for the same year, Competency to challenge territorial jurisdiction, Interpretation of Section 124 of the Income-tax Act, Authority to determine territorial jurisdiction.

Analysis:
The appeals were filed by the assessee against the orders of CIT (Appeals) for the assessment year 1986-87, challenging the jurisdiction of the Assessing Officer. The main contention was that two assessments by different Assessing Officers for the same year were impermissible. The CIT (Appeals) set aside the assessment order, questioning the correct jurisdiction of the case, emphasizing that jurisdiction should align with the location of the company's registered office where returns were filed. However, the Assessing Officer passed an order asserting jurisdiction at Delhi based on the CIT (Appeals) observations. Meanwhile, the ITO in Ghaziabad continued proceedings and issued demands against the assessee for subsequent years as well. The second assessment by Company Circle 1(4) was made despite the ongoing proceedings in Ghaziabad.

The assessee challenged the assessment again, raising the jurisdiction issue before the CIT (Appeals), who upheld the jurisdiction exercised by ACIT CC 1(4), New Delhi. The CIT (Appeals) allowed relief on certain additions and disallowances made by the Assessing Officer. The assessee then appealed to the Appellate Tribunal, arguing that territorial jurisdiction should be based on the location of the company's activities and that double assessment is prohibited under the Income-tax Act.

The Departmental Representative contended that challenging the territorial jurisdiction of the Assessing Officer was not competent, citing the decision of the Supreme Court in a relevant case and Section 124 of the Income-tax Act. The Tribunal analyzed Section 124 and concluded that the Assessing Officer cannot decide territorial jurisdiction issues, and such matters must be referred to specified authorities. The Tribunal rejected the objection that the assessee could not challenge jurisdiction as it was not raised before the Assessing Officer, emphasizing that the purpose of the provision is to avoid unnecessary technical disputes.

The Tribunal held that the Assessing Officer should refer jurisdiction matters to the appropriate authorities for determination. Given the circumstances and the earlier order of the CIT (Appeals), the Tribunal set aside the orders of the CIT (Appeals) and the Assessing Officer, restoring the matter to the Assessing Officer for proper jurisdiction determination. The Tribunal did not delve into other grounds raised, allowing the assessee's appeals for statistical purposes.