1985 (1) TMI 132 - AT - Income Tax

Summary

Issues: Jurisdictional challenge regarding assessment authority, validity of assessments, challenge before the Appellate Authority, time limit for questioning jurisdiction, competency of appeals before the Tribunal.

In this judgment delivered by the Appellate Tribunal ITAT DELHI-E, the appeals by partners of Rama Talkies raised identical contentions regarding the jurisdiction of the assessing officer. The appellants challenged the assessments made by the ITO, E-Ward, Ghaziabad for the assessment year 1970-71, claiming that the assessments were invalid as the jurisdiction over them lay with the ITO, Distt. I(2) Ward, New Delhi. The appellants objected to the assumption of jurisdiction by the ITO, Ghaziabad, invoking the provisions of sub-section (6) of section 124, arguing that the assessments were null and void due to lack of jurisdiction. The departmental representative contended that the objection to jurisdiction was not made in time and that the assessments were not invalid but had irregularities. The Tribunal analyzed the provisions of sub-section (5) of section 124, which allow the jurisdiction of an assessing officer to be challenged within a specified time frame. The Tribunal found that the jurisdiction of the ITO had been questioned within the prescribed period, and as per sub-section (6) of section 125, the matter should have been settled by the CITs involved. As the ITO did not follow the legal provisions and the appellants had been assessed by a different ITO, the Tribunal held that the orders passed by the ITO, Ghaziabad, were without jurisdiction, emphasizing that jurisdiction is fundamental to the validity of proceedings. The Tribunal rejected the departmental representative's argument that the challenge to jurisdiction could not be raised before the Appellate Authority, stating that assessments under section 147/148 could be challenged as per the Income Tax Act, 1961.

Furthermore, the Tribunal upheld the preliminary objection raised by the appellants, declaring the orders passed by the ITO, E-Ward, Ghaziabad, as null and void due to lack of jurisdiction. The Tribunal allowed the appeals in part based on the jurisdictional challenge. Additionally, other grounds related to the assessment of unexplained investment in the construction of Rama Talkies were raised in the appeals but were rejected as they did not arise from the order of the AAC. The Tribunal concluded that it was unnecessary to decide on these grounds as the assessments by the ITO, Ghaziabad, were being canceled for lack of jurisdiction.