1987 (1) TMI 178 - AT - Income Tax

Summary

Issues:
1. Jurisdiction of the Commissioner over the assessee's case for the assessment year 1979-80.
2. Allowance of earned leave with wages as deduction in computing the net income of the assessee.

Jurisdiction Issue:
The assessee challenged the jurisdiction of the Commissioner over the case, arguing that the transfer of the file from one Income Tax Officer (ITO) to another was not valid as proper procedures were not followed. The Commissioner transferred the case under section 127(1) without issuing a notification under section 123(1). The assessee contended that the subsequent assessment order by the IAC (Assessment) was void ab initio due to lack of proper authority. The Commissioner's Appeals rejected the preliminary objection, stating that objections regarding jurisdiction should have been raised before the assessing officer and not during the appeal. The assessee argued that the jurisdiction issue could be raised at any stage, including the appellate stage. The Tribunal upheld the order of the IAC (Assessment), stating that the transfer of the case was permissible under section 127(1) even when the matter was pending before the IAC, Range-I.

Allowance of Deduction Issue:
The assessee also raised an objection regarding the deduction of earned leave with wages in computing the net income. The Commissioner (Appeals) held that the IAC (Assessment) had concurrent jurisdiction with the ITO, Special Investigation Circle, from a certain date, and objections related to jurisdiction should have been raised earlier in the proceedings. The Tribunal did not delve into this issue extensively due to the decision on the jurisdiction matter, upholding the order of the IAC (Assessment) based on the transfer of the case.

In summary, the Tribunal ruled in favor of the revenue, upholding the jurisdiction of the Commissioner to transfer the case despite objections raised by the assessee. The decision emphasized procedural aspects and the validity of the transfer under section 127(1). The issue of allowing the deduction for earned leave with wages was not extensively discussed due to the primary focus on the jurisdiction matter.