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TMI Blog1991 (11) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... ansferred by the ITO, Ujjain to ITO, Beawar under transfer memo No. 1746 dated 25-5-1970 and the reasons for the transfer were given as under : " The present address of the assessee is Beawar (Ajmer). So please take necessary action. " In the transfer memo in part-C, Col. I, it was written by the ITO, Ujjain as follows :-- " Assessments pending 1966-67 to 1970-71 ". The words and figures "1966-67 to" were scored out. The ITO, Beawar found that assessment records for the assessment years 1966-67 to 1969-70 were not available in the case records. A clarification obtained from the ITO, Ujjain was the following: " Pendency for the assessment years 1966-67 to 1969-70 are filed. The returns for these years do not seem to have been filed by the assessee. " The case of the assessee has been that its place of business was at Ujjain only and that all processes have been served by the Process Server on the assessee at Ujjain and that various applications etc., had been filed from there. According to the assessee, no business was ever done by it in Rajasthan and that business was done in Ujjain in own house. Proceedings were initiated by the ITO, B-Ward, Beawar under section 147/14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he dates 26-2-1969 and 10-3-1969 (Photo copies at pages 109 and 110 of the assessee's paper book) which purported to take the place of the order-sheet suggesting that no returns had been filed for the assessment years 1966-67,1967-68,1968-69 and 1969-70. The Tribunal had observed that a definite finding was required on the reliability of the slips and that if it was found to be reliable, it would be a direct piece of evidence on the part of the ITO, Ujjain for having negatived the case of the assessee and to show that the notices under section 143(2) were correctly issued by him. The Tribunal also observed that if the slip was reliable, it could be as early as 26-2-1969 that no return was filed by the assessee and yet the ITO, Ujjain issued the notices under some misconception, under section 143(2). The Appellate Tribunal also observed that the effect of the letter dated 7-9-1970 written by Shri R.C. Chopra, Addl. ITO (Hqrs.) for and on behalf of the Commissioner of Income-tax, Jaipur to Shri M.N. Khanna, ITO, B-Ward, Beawar was to be considered by the AAC to give the finding whether or not there was a practice of ITO, Ujjain to place slips in the file. The aforesaid letter ran as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to the notice of the ITO vide his letter dated 20-2-1985 (copy at pages 119 - 120 of the assessee's paper book). The following reply was given by the ITO vide his letter dated 25-2-1985 :-- " Insofar as my comments on the alleged 'slips system' are concerned, I have already touched this point in my earlier report. However, I may state that normally separate order sheets are being maintained in each assessment year but that does not mean that any other system to record the proceedings is wrong. It may also be mentioned that wherever the noting system is vogue, the office assistant makes out notes in separate papers and in turn the officer puts his remarks thereon and thus note-sheet take the place of the order-sheet. From the perusal of the records it appears that instead of maintaining the order sheet for the assessment years 1966-67 to 1969-70, the relevant entries were recorded on the slips and that being so in my view the so-called slips system being followed by the ITO Ujjain in the assessment years 1966-67 to 1969-70 was perfectly in order. " He found that the maintenance of the order sheet was regulated vide Part IV of Chapter XII of the Office Manual, Vol. II, dealing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year 1964-65. (vii) The estimate of advance-tax for assessment year 1968-69 filed by the assessee on 26-2-1968 before the ITO, Ujjain. (viii) Copy of letter enclosing advance-tax estimate for 1969-70 filed by the assessee before ITO, Ujjain on 19-7-1968. (ix) Copy of notice under section 143(2) dated 11-9-1968 for assessment years 1966-67 and 1967-68 issued by ITO, B-Ward, Ujjain in the case of Mangilal Nand Kishore, Ujjain. (x) Application for adjournment for assessment years 1966-67 and 1967-68 filed by the assessee before ITO, Ujjain on 19-7-1968. (xi) Copy of notice under section 143(2) issued by ITO, B-Ward, Ujjain on 5-12-1968 to Mangilal Nandkishore, for assessment years 1966-67 to 1968-69. (xii) Application for adjournment dated 10-12-1968 by the assessee to ITO, Ujjain for assessment years 1966-67 to 1968-69 and (xiii) Notice under section 210 for assessment years 1968-69 and 1969-70 issued by ITO, Ujjain on 23-5-1968. " He took the view that those documents could not be lightly brushed aside. So far as the validity of the transfer and the assumption of jurisdiction by ITO, Beawar is concerned, the learned AAC found that the transfer memo was forwarded t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also referred to in detail to the various papers on the assessee's paper books as also to the following decisions : (i) Mangilal Nandkishore v. State of Rajasthan [1971] RRD 58, (ii) Mangilal Nandkishore v. CTO [1973] 7 ITR 36,(iii) Sagarmal Spg. Wvg. Mills Ltd. v. CBDT [1972] 83 ITR 130 (MP), (iv) Ajantha Industries v. CBDT [1976] 102 ITR 281 (SC), (v) Omprakash Agarwal v. ITO [1976] 102 ITR 432 (Cal.), (vi) Joginder Singh v. CIT [1981] 128 ITR 14 (Punj. Har.) and (vii) S.A. Kadre, EPTO v. Binod Mills Co. Ltd. [1986] 157 ITR 177 (Bom.). 5. We have considered the rival submissions, the papers in the paper books of the parties as also the decisions referred to above. The first point which requires consideration is whether the assessments for the assessment years in question could have been validly reopened by virtue of the notices under section 148 issued on 13-8-1970 and 1-9-1970. The validity of the reopening of the assessments solely depends upon the question whether earlier assessments were pending on the basis of any returns filed by the assessee for those years as is the case of the assessee. The case of the Department has been that no returns were filed and that ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 69 (page 48). Then there is a notice dated 12-2-1969 for the same assessment years under section 143(2) fixing 21-2-1969 for hearing for these three years (page 108). They show that the assessment proceedings were pending and that the ITO, Ujjain had been issuing notices under section 143(2) to the assessee. The case taken up by the Department on the basis of the letter dated 8-2-1985 of the ITO, SIC, Ajmer (pages 115 to 118) is that those notices had been wrongly issued by the Office of the ITO, Ujjain. However, it is not possible to accept this case of the Department. So far as the slips are concerned, the first slip dated 26-2-1969 (page 109) reads as follows : " M-327 : None attended on 21-2-1979, there are no returns in the file in 1966-67 onwards. Please put up, if available. Put up case of partner Mangilal Sd/- 26-2-1979. " There is another slip dated 10-3-1969 (page 110) which is to the following effect : " M-327: (i) 1966-67 no return, no 139(2) (ii) 1967-68 no return, no 139(2) (iii) 1968-69 no return, no 139(2) Pendency be liquidated Yes Sd/- ITO 10-3-1960. " As rightly observed by the learned AAC, no slips were found in the assessment records u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffice of the Commissioner of Income-tax, Rajasthan under CIT, Bhopal's letter dated 19-6-1970. There were two letters writen by Shri R.C. Chopra, Addl. ITO (H. Qrs.) Jaipur, one on 1-7-1970 and the other on 10-7-1970 (pages 112 and 113). Then there was a letter dated 7-9-1970 from him to the similar effect. In the letter dated 8-2-1985 (pages 115 - 118) ITO, SIC, Ajmer wrote to the AAC, A-Range, Jaipur. It mentions that there was another cover transferred from ITO, Ujjain wherein also there was a slip which bore the following noting : " No return, no 139(2). Pendency for 1966-67 to 1968-69 be liquidated. " The inference mentioned in that letter is that that slip related to Shri Mangilal, partner. It is not understood as to what was meant by liquidating the pendency for 1966-67 to 1968-69, if there was no return and no notice under section 139(2). The letter referred to above also stated that for the assessment years in question, no pendency was there and whatever the infructuous proceedings were initiated by the ITO were dropped. This is not clear and appears to be an attempt to justify the case of the Department. Therefore, taking into consideration the entirety of the materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee. It was done by the ITO, Ujjain/CIT, Bhopal. The assessee has furnished notice to the effect that it was registered at No. 2281 so far as M.P. Sales-tax is concerned and at No. 1031 dated 27-11-1963 so far as Central Sales-tax is concerned. This is shown by the letter-head at page I. However, the Department has filed paper book (which has been objected to on behalf of the assessee). That paper also contains the same paper at page 6. It is dated 24-12-1969 and the assessee is corresponding from Beawar. There is another letter-head at page 5 having Beawar address and bearing the date 4-6-1969. There is yet another letter dated 26-2-1969 at page 4 giving camp address at Beawar. This letter is addressed to Asstt. Director of Industries (Blanket) Kanpur. They show that the assessee had started operating in 1969 from Beawar, but this by itself would have no effect on the transfer. The assessee has filed a large number of papers to show that the assessee had been appearing before the Sales-tax authorities at Ujjain and carrying on business at Ujjain. In Mangilal Nandkishore v. CTO [1973] 7 TR 36, the assessee's case decided by the Board of Revenue recorded the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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