9911796707
TMI Blog1997 (2) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings under section 132 were conducted at the business and the residential premises of the assessee. (c) On the request of the Income-tax Officer, Bhandara, the cases of the assessee were transferred under section 127 by the CIT, Vidarbha, Nagpur to the 2nd Income-tax Officer (Assessment), Nagpur on 26-10-1983. (d) The returns for the assessment years 1983-84 and 1984-85 were filed before the Income-tax Officer, Nagpur on 7-12-1983 and 7-11-1984 respectively. (e) The assessments for the assessment years 1982-83 to 1984-85 were completed by the Income-tax Officer, Nagpur on 25-3-1986. (f) Against these orders, the assessee filed the appeals before the CIT (Appeals) who set aside all these orders and directed the Assessing Officer to reframe the assessments in accordance with law. This order was passed on 15-4-1988. (g) After completion of the assessment and after decision of the appeals, the CIT, Vidarbha, Nagpur passed an order under section 124 on 25-5-1988 directing that the case of the assessment should be reverted back to the territorial Income-tax Officer. (h) While the cases were pending before the Income-tax Officer, Bhandara, on the request of the ITO, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention that the Commissioner is free to pass appropriate order in accordance with law after hearing the petitioner. Rule accordingly. No costs." while communicating the decision of the Hon'ble High Court, it was further mentioned that the Court has passed the following order:-- "As stated in the accompanied order, the Court disposes of writ and quashes and set aside the order dated 6-9-1989 and direct that the Commissioner is free to pass appropriate order in accordance with law after hearing the petitioner, Court makes this rule accordingly and makes no order as to cost." (o) In compliance with the directions of the Hon'ble High Court dated 3-5-1991, the CIT, Vidarbha, Nagpur, passed a detailed fresh order under section 127 on 9-8-1991 transferring the cases of the assessee from ITO Bhandara to Asstt. CIT, Nagpur, after removing the technical error which had crept in his earlier order dated 6-9-1989. The order is stated to have been passed conformably to the High Court's order dated 3-5-1991 and in continuation of earlier order dated 6-9-1989. (p) The assessee filed the appeals before the CIT (Appeals) on various grounds against the Asstt. orders dated 5-3-1991 and 27-3-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 124(3) did not apply to an order under section 127 of the IT Act. Keeping in view the above fact and also the observations of the various High Courts in the context of jurisdiction possessed by the Assessing Officer, he set aside the assessment for all the three years for reframing by the Assessing Officer initially possessing jurisdiction at the relevant assessment order in accordance with law, that is to say, the Assessing Officer (ITO), Bhandara. (q) Both the assessee and the department are in appeal before us. The department is in appeal against the finding of the operative part of the CIT (Appeals)s order and also the appeals were not decided on merits. The assessee is in appeal against the various operative parts of the CIT (Appeals)s order whereby he did not annul the assessments but only set aside the assessments. 3. The Depatmental Representative assailed the CIT (Appeals)'s order on various grounds. He in the very beginning assailed the CIT (Appeals)'s order on the ground that he cannot sit in appeal on the order of the CIT passed under section 127 of the Act and the relevant decision of the then Federal Court in the case of Wallace Bros. Co. Ltd v. CIT[1945] 13 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontended that this decision of the Hon'ble High Court will have no effect to obliterate the action taken by the Asstt. CIT during the intervening period; i.e., to say, from 6-9-1989 to the various dates on which he passed the orders for the assessment years 1982-83 to 1985-86. At the time of passing the assessment orders, he had valid jurisdiction to do so. The order transferring jurisdiction to him was quashed and set aside by the Court as on 3-5-1991. The Hon'ble High Court, according to him, has neither quashed the notice issued by the Assessing Officer nor the assessment orders and the entire matter was left open to the appellate authorities. The High Court in so many words held that there is absolutely no reason to interfere with the assessment order which is appealable. It would mean that it is the duty of the Appellate Authorities to decide the consequential effect of the High Court's order while disposing of the appeal against the order which was validly passed. He further invited our attention to the decision of the Patna High Court in the case of Raja Bahadur Kamakshya Narain Singh v. ITO [1969] 74 ITR 563 whereby it was held that if an order under section 127 is set asid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the impugned assessment was without jurisdiction had to be dismissed." 4. The Departmental Representative proceeding further relied on the decisions reported in Smt. Sohani Devi Jain v. ITO [1977] 109 ITR 130 (Gau.) (FB); Kanji Mal Sons v. CIT [1982] 138 ITR 391/[1983] 12 Taxman 34 (Delhi), Nund Samont Co.(P.)Ltd v. CIT [1976]102 ITR 376(Pat.), Kistoor Mall v. C.P. Singh, ITO[1983] 140 ITR 95 (Raj.) and Kakunuru Venkata Reddy v. CIT[1979]118 ITR 917(AP)to make astrong submission that to claim that the jurisdiction is not justiciable. Inviting our attention to the order of the Hon'ble Bombay High Court dated 3-5-1991, it was again submitted that the Hon'ble High Court quashed the order of the CIT passed under section 127 but did not interfere with the orders of assessment and the notice, it means that the assumption of jurisdiction by the Asstt. CIT, Nagpur, was proper and the High Court left the entire matter to the discretion of the Appellate Authorities to decide the consequential effect of the High Court's order. It was further submitted that later on the CIT, Vidarbha, Nagpur, in compliance with the Hon'ble High Court's order, passed another order dated 9-8-1991 aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer be declared nullity yet keeping into mind the interests of revenue the matter is set aside to the Assessing Officer who initially had jurisdiction to do so. According to him, the later part of his direction ran contrary to the above and he had not realised the consequences of such invalid order. He has further placed reliance on the written submissions placed by the Assessing Officer before the CIT (Appeals) and had also read over page 9 of the CIT (Appeals)'s order. He, on the basis of above facts, contended that the order of, the CIT (Appeals) may be quashed and he may be directed to decide the appeals on merits. He also contended that the orders passed by the Assessing Officer were in accordance with law and thus the department's appeals be allowed. 5. The learned counsel for the assessee invited our attention to the various provisions of Income-tax Act, 1961. He submitted that as per definition of section 2(7A), the Assessing Officer means the Asstt. Commissioner or the ITO who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of the IT Act and the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing objections arose only after this case was transferred under section 127 on 6-9-1989 and not at any time before it. Replying to the arguments raised by the Departmental Representative that the jurisdiction under the Income-tax Act was not a matter of substance but only procedural and administrative, it was submitted that the order under section 127 is not an administrative or procedural order when the case is transferred from one place to another as held in Ajantha Industries v. CBDT [1976] 102 ITR 281 (SC). which was relied upon by the Hon'ble Bombay High Court in quashing and setting aside the order of the CIT dated 6-9-1989. He, however, contended that the order passed under section 127 is a quasi-judicial order and affected substantial rights of the assessee. He contended that the decision relied upon by the Departmental Representative of the Allahabad High Court reported in Hindustan Transport Co.'s case is distinguishable on facts. Shri Mani further proceeded to submit that the assessee had not questioned the legality of the order of the CIT under section 127 passed on 6-9-1989. Before the CIT (Appeals) that order was not in existence as the same was quashed and set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng an order under section 127 by High Court on 3-5-1991, the position is restored to the stage as on 6-9-1989, that is to say that the assessee's case is restored to the ITO, Bhandara as on 6-9-1989 and anything done during the intervening period is void, ineffective and has no existence in-law. He relied upon the decision of the Karnataka High Court in the case of Y. Moideen Kunhi Co.v. ITO[1993] 204 ITR 29. Our attention was further invited to the decision of the Bombay High Court in the case of CST v. Ravi Coffee Works [1983] 52 STC 432. It was also submitted that the facts of the said case are almost identical with the facts of this case and should be relied upon for annulling the order passed by the Assessing Officer. Regarding the reliance of the Departmental Representative on the decision reported in Smt. Sohani Devi Jain's case and Kanji Mal Sons' case, it was submitted that in these cases, the question of jurisdiction did not involve any transfer under section 127 but it involved the same city and the locality and the question was covered under section 124(3). Finally it was urged that the order under section 127 passed by the CIT on 9-8-1991 purported to be with effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sentative for the assessee are distinguishable on facts and they are of no avail to the assessee. Proceeding further he contended that the CIT (Appeals) had no powers to direct a particular Assessing Officer to frame assessment in spite of the fact that as on that date the CIT had passed fresh order under section 127 as on 9-8-1991 as per directions of the High Court. This aspect of the matter was ignored by the CIT (Appeals). So this latter direction of the CIT (Appeals) is illegal and unwarranted. The CIT (Appeals) according to him should have decided the appeals on merits and not on the point of jurisdiction. 9. We have considered the submissions of the parties and have also gone through the entire material placed on record including the ratio of the decisions relied upon by either of the parties. 10. The first point for determination before us is whether the Assessing Officer validly exercised the jurisdiction by framing assessments on the basis of order passed by the CIT under section 127 on 6-9-1989 and also whether by the decision of the Hon'ble High Court dated 3-5-1991 the said assessment orders have been rendered invalid or nullity or ultra vires. In this connection, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distinct to each other. The meaning of the word "quash" means tearing off and "set aside" means restoration of the order to the authorities below for re-adjudication by passing a fresh order as directions of the superior Court or authority and in the latter case the proceedings are continuous as the same was set aside on account of procedural and curable defect and thus proceedings are pending (or all purposes. This view finds support from the order of the Hon'ble High Court communicated by the Registrar and reproduced above. As already stated above, it was the duty of the CIT (Appeals) to have decided the appeals on merit keeping into account the observations of the Hon'ble High Court passed in the writ petition of the assessee and referred to in pre-paragraph. The Commissioner of Income-tax (Appeals) instead of deciding the appeals on merits preferred to dispose it of on preliminary ground which reads as under:-- "That the A.C. Investigation Circle-I, Nagpur had no jurisdiction to assess the assessee. The orders passed are without jurisdiction and void ab initio including other proceedings." The learned CIT (Appeals) to our mind had ignored this important aspect of the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alous. No other ITO except the one before whom. the tile of a particular assessee was pending in pursuance of the impugned order of transfer, could forward a certificate under section 46(2), and if his forwarding is accepted to be invalid because of the subsequent annulment of the order of transfer, the result will be that the Central Revenue will suffer and no competent officer would be there to realise it by forwarding a certificate under section 46(2) of the Act during the pendency of the proceeding challenging the order of transfer. To my mind, to put such an interpretation or to accept such effect of the action taken by the ITO on the 20th March, 1955, will be too obviously wrong." From this case it is clear that if the Assessing Officer has exercised jurisdiction on the basis of valid order at the relevant point of time, it is still good even if the order of transfer had been annulled. The idea behind this type of order is to protect the interest of Revenue as a consequence of annulment of this order and no competent officer would be there to realize the dues during the pendency of the proceedings challenging the transfer order. The decision relied upon by the authorised re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt while challenging the retrospective effect of the set aside order to be passed under section 127 of the Act (as per direction of the High Court), the Departmental Representative averred that consequential order under section 127 would have no retrospective effect. The Hon'ble High Court had neither dealt with this issue in the body of the order nor taken notice of it while dismissing the writ. Therefore, this assertion of the assessee will have no effect in view of the order of the High Court whereby the CIT had to proceed from the stage the irregularity had intervened by providing opportunity of hearing to the assessee before passing the order under section 127 as per the decision of the Hon'ble High Court. In this connection, the Departmental Representative has drawn our attention to the ratio of the decision of Hon'ble Supreme Court in the case of Guduthur Bros. In this case, their Lordships have held as under: "That as the AAC pointed out only to an illegality which vitiated the proceedings after they were lawfully initiated, the notice issued under section 28(1)(a) did not cease to be operative and it was open to the ITO to take up the matter at the point at which the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellate Court as defined by the Supreme Court in the above two cases. It is obviously clear from the facts mentioned above that after the decision of the Hon'ble High Court dated 3-5-1991, the assessment orders suffered from technical and procedural defect because after 3-5-1991 the CIT had to pass a fresh order under section 127 as per directions of the Court to set right the said controversy. So for these reasons we agree with the submissions of the Departmental Representative that the assessment orders passed by the Assessing Officer as per order under section 127 were validly passed and they cannot be interfered with by the appellate authorities on the point of jurisdiction. It is notable that in view of the aforesaid facts the CIT(A) cannot look into validity of the jurisdiction on a subsequent date and that too after the decision of the High Court. The finding of the CIT(A) on this aspect of the matter is hit by the ratio of the decision in the case of Raja Bahadur Kamakshya Narain Singh. The decision of the Allahabad High Court in the case of Hindustan Transport Co. relied upon by the Departmental Representative is also on all fours, because it has considered the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d his powers. This finding of the CIT(A) to our mind is against the provisions of law. Therefore, we hold that while giving directions, the CIT(A) has acted beyond his powers. Having taken into account the facts and circumstances of the case and the aforesaid legal position, we are of the opinion that the CIT(A) ought to have followed the ratio of the decision in the case of Raja Bahadur Kamakshya Narain Singh and also the case of Guduthur Bros. and would have decided the issue in question as per law. The conditional set aside order of the CIT(A) thus cannot be sustained. 12. It is further notable that the High Court quashed the initial order passed by the CIT under section 127 on the ground that he has not afforded an opportunity of hearing to the assessee. So this procedural mistake was rectified by the Hon'ble High Court as it was a curable defect and thus it cannot be held that the Assessing Officer totally lacked jurisdiction at the time of framing of the assessments. The CIT(A) has neither considered nor examined the legal position about the interregnum period involved in this case. In view of fact we find that the proceedings were continuing and the Assessing Officer had v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after allowing an opportunity of being heard. Therefore, the Asstt. CIT (Investigation) Circle-2, Nagpur, passed a fresh order dated 12-3-1992 again under section 144. The CIT(A) has held that non-compliance under section 143(2) was unintentional and the assessee had a reasonable cause in not complying with the notices. He, therefore, set aside the assessment with a direction that a fresh order in accordance with law be passed. It is notable that the CIT(A) did not set aside the assessment on the ground that the Asstt. CIT, Nagpur, had no jurisdiction. In fact, no such ground was taken before him and the assessee also had no such grievance. When the order under section 144 was passed by the ACIT, Nagpur, dated 12-3-1992, the jurisdiction was with the ACIT, Nagpur and the assessment was made on conferment of jurisdiction by a proper order under section 127 on 9-8-1991. Therefore, the set aside order of the CIT(A) was on a ground different than in the assessment years 1982-83 to 1984-85 and is based on the assessee's reasonable cause in not complying the notices under section 142. That being so the CIT(A) was justified in setting aside the order and no prejudice is shown to be caused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated by the assessee's counsel, section 124 and section 127 operate in different fields, even though both deal with the powers and functions of the Assessing Officers. Such distinction was recognised by the Supreme Court in Rai Bahadur Seth Teomal'case while dealing with the similar corresponding provisions of 1922 Income-tax Act. In this contention, the decision of the Hon'ble Calcutta High Court in Ashoke Glass Works'case is relevant. In this case, the Hon'ble Calcutta High Court has observed that the powers under sections 123 and 124 of the Income-tax Act, 1961 are general administrative act of policy and convenience, particularly, absolute and suffers from no fetters like the power under section 127. The incidents of orders under sections 123 and 127 are completely different and distinct. I am, therefore, of the opinion that in this background, the assessee's right to object cannot be denied. As section 127 places no limitation to the time in which it has to be exercised, it is notable that the objection of the assessee before the CIT(A) is not against the order of the CIT dated 6-9-1989. The assessee's contention before the CIT(A) was that in view of the High Court's order, qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndi Mopeds Ltd v. Church of South India Trust Association AIR 1992 SC 1439. The Hon'ble Supreme Court observed on page 1444 as under:-- "While considering the effect of an interim order staying the operation of the order under challenge, a distinction has to be made between quashing of an order results in the restoration of an order. Quashing of an order results in the restoration of the position as it stood on the date of the passing of the order which has been quashed." In the case of P.D.M. Reddy v. P.A. Rao AIR 1974 SC 2089 pp. 2091, the Hon'ble Supreme Court observed in para 12 as under:-- "The absence of a condition necessary to found the jurisdiction to make an order or give a decision deprives the order or decision of any conclusive effect." The Hon'ble Supreme Court further in the case of Sushil Kumar Mehta v. Govind Ram Bohra 1990 1 SCC 193 pp. 205 observed: "Thus, it is settled law that normally a decree passed by a court of competent jurisdiction, after adjudication on merits of the rights of the parties operates as resjudicata in a subsequent suit or proceedings and the parties or the persons claiming right, title or interest from the suits, its validity shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction to the STO, Enforcement Branch to reassess. The Tribunal then referred the following question of law to the Hon'ble High Court:-- "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the reassessment order passed by the Sales-tax Officer, Enforcement Branch, on 26-12-1968 in respect of the assessment for the period from 1-4-1962 to 31-3-1963, was bad in law being the order passed without jurisdiction?" The Hon'ble Bombay High Court, went through the provisions of section 70 of the Bombay Sales-tax Act and various validation of jurisdiction ordinances. It was held that all such orders passed were bad and had to be annulled. I am of the opinion that the facts of that case are quite similar to the facts of this case. As the provisions of section 70 of the Bombay Sales-tax Act are pari materia with section 127 of the Income-tax Act, 1961. I am of the opinion that same case is enforceable in the entire State of Maharashtra. 5. It is also notable that when the assessee filed the second writ petition before the Bombay High Court challenging the retrospective effect of the second order of the CIT under section 127, it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion that the CIT(A) was right in observing that the assessments should be annulled. He committed an error in setting aside the assessments even after making such an observation in the body of his order. In my opinion, he should not have set aside the assessment orders with a direction to do the assessments de novo. I find that the assessee's counsel was justified in contending that the order which is void cannot be made valid by an appellate authority. This is a case of lack of jurisdiction and, therefore, the assessment orders should have been annulled as held in Sant Baba Mohan Singh v. CIT[1973] 90 ITR 197 (All.). I, therefore, annul the assessments made by the ACIT, Nagpur. Therefore, the departmental appeals are dismissed and the assessee's cross-appeals are allowed. The counsel for the assessee has not pressed the cross-objections, hence they are dismissed. 8. In the result, the assessee's appeals are allowed and the departmental appeals and the assessee's cross-objections are dismissed. Appeal for the assessment year 1985-86: 9. As far as the departmental appeal for the assessment year 1985-86 is concerned, the facts are different. Originally an order under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be referred to me by the President, ITAT, under section 255(4) of the Income-tax Act. The points of difference are as under:-- "1. Whether, on the facts and in the circumstances of the case, the Asstt. CIT, Nagpur, had valid jurisdiction at the time of framing of the assessments or not? 2. Whether, on the facts and in the circumstances of the case, the order of the Assessing Officer was irregular or invalid or it was a nullity and whether it should be set aside and restored to the file of the Assessing Officer, or may be quashed?" The assessee is a Hindu undivided family. This case has a chequered history. Search under section 132 of the Act in this case took place on 30-9-1983. The Commissioner of Income-tax vide order dated 26-10-1983 transferred the case to Income-tax Officer (Assessment), Nagpur. The ITO (Assessment), Nagpur completed the assessments for the assessment years 1982-83 to 1984-85 on 25-3-1986. These assessment orders were set aside by the learned CIT (Appeals) on 15-4-1988. The CIT again transferred the case of the assessee from ITO (Assessment), Nagpur, to ITO, Bhandara, vide order under section 127 of the Act dated 25-5-1988. Another order under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Hon'ble Bombay High Court in the matter of Civil Writ No. 1129 of 1991". It is because the High Court in its order dated 3-5-1991 had mentioned that the Commissioner was free to pass appropriate order in accordance with law after hearing the petitioner. This order was also made effective from 6-9-1989. 4. The assessment orders for the assessment years 1982-83, 1983-84 and 1984-85 dated 5-3-1991, 27-3-1991 and 27-3-1991 respectively were the subject-matter of appeal before the CIT (Appeals), Nagpur, who vide order dated 17-1-1992 set aside the assessment orders of 5-3-1991 and 27-3-1991 to be made afresh by the Assessing Officer "possessing jurisdiction at the relevant point of time for the relevant assessment years in accordance with law". 5. Both the assessee and the revenue came in appeal before the Tribunal. 6. Broadly speaking, while the revenue challenged the setting aside of the assessment orders by the learned CIT (Appeals), the assessee projected its grievance that instead of cancelling the assessment orders, the learned CIT (Appeals) had merely set aside the same. 7. The matter was heard by the Tribunal. The learned Judicial Member who wrote the leading or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessments and such assessments cannot be assailed. Reliance in this regard was placed on the ratio of the Patna High Court's decision in Raja Bahadur Kamakshya Narain Singh's case for the proposition that the decision of the Supreme Court setting aside the order of transfer to the Officer at Calcutta had not the effect of declaring the order of transfer ultra vires or a nullity for all purposes or of invalidating all orders passed by the Officer at Calcutta or any action taken by him during the pendency of the income-tax file of the petitioner before him. It was pointed out that in that case also the order of transfer passed by the CIT had been quashed by the Supreme Court, but in the meantime ITO, Calcutta, had issued the recovery certificate and this action of the ITO, Calcutta, was found to be legal and valid by the Patna High Court. My attention was specifically drawn to the observation of the Patna High Court at page 574 of the report in which the High Court observed that until the order of transfer is successfully challenged, it cannot be assumed that the ITO, who is in seisin of the file in pursuance of the order of transfer, is to sit idle and take no action in regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roposition that the Board or the Commissioner exercised the power of allocation of functions to various authorities or officers in the exigency of tax collection and the allocation is a measure of administrative convenience and that in such a situation the concept of jurisdiction cannot be imported and certainly not in the sense of invalidating the resultant action on account of the defect in the exercise of functions. My attention was specifically drawn to the observations at pages 331 and 332 of the report according to which the High Court observed that the Income-tax Act does not treat the allocation of functions to various authorities or officers as one of substance: it treats the matter as one of procedure and a defect of procedure does not invalidate the end action and that a defect arising from allocation of functions is a mere irregularity which does not affect the resultant action. 13. The learned Departmental Representative also referred to the Kamataka High Court's decision in Y. Moideen Kunhi Co.'s case. That was a case where the Chief Commissioner of Income-tax had transferred the case from one Assessing Officer to another Assessing Officer and no opportunity had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, submitted that the AC(IT), Investigation Circle-I, Nagpur, had valid jurisdiction at the time of framing of assessments and that it was not even necessary to set aside the assessments for being made de novo. 16. Shri M. Mani, the learned counsel for the assessee, submitted that jurisdiction was not a procedural matter. Relying on the Bombay High Court's decision in Devidas v. Union of India [1993] 200 ITR 697, it was submitted that in that case the order of transfer was vitiated because of absence of hearing and recording of reasons. It was submitted that in the present case also the order of transfer under section 127 of the Act in the absence of an opportunity of hearing given to the assessee had been quashed and set aside by the High Court because the mandatory requirements of law had not been complied with. 17. Relying on the Supreme Court's decision in Bidi Supply Co. v. Union of India [1956] 29 ITR 717. It was submitted that the order of transfer by the Commissioner is calculated to inflict considerable inconvenience and harassment on the petitioner and was, therefore, liable to be set aside. 18. Reliance was also placed on the Supreme Court's decision in R.B. Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced on the observations of the Supreme Court that when a decree or order is a nullity, it will be deemed to have no existence at all and any sale held in execution of such a decree or order must also be held to be null and void. Relying on this decision, the learned counsel for the assessee submitted that in the present case also since the order of transfer by the Commissioner was a nullity, any assessment order passed by the Assessing Officer in pursuance of the order of transfer would also be null and void. 22. The learned counsel for the assessee submitted that the Karnataka High Court's decision in Y. Moideen Kunhi Co.'s case, was also an authority for the proposition that where the order of transfer was quashed, the assessment order passed pursuant to the transfer order was held to be void. It was submitted that the observations of the High Court were not by way of an obiter dicta, but were of a binding character. As regards the Patna High Court's decision in the case of Raja Bahadur Kamakshva Narain Singh, relied upon by the learned Departmental Representative, the learned counsel for the assessee submitted that when the Patna High Court rendered the decision, the concept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been quashed. It was also submitted that the Supreme Court's decision in the case of Surinder Nath Kapoor, was distinguishable because in that case there was inherent lack of jurisdiction because the demand itself was fictitious and on top of it no opportunity of hearing was granted. It was submitted that the Supreme Court in Ice General Mills v. ITO[1980] 121 ITR 547/[1979] 2 Taxman 543, observed that where jurisdictional or foundational notice under section 148 of the Act was quashed any orders passed pursuant to the said notice would be of no avail to the revenue. It was submitted that in that case the jurisdictional notice itself has been quashed and hence there was lack of inherent jurisdiction. It was submitted that this was not the position in the present cases where jurisdiction to assess was very much there and only the procedure for transferring the case had not been followed. The learned Departmental Representative vehemently argued that what was to be decided in this case was as to what would happen to the proceedings which had been completed during the interregnum i.e., between the date of the order of transfer and the date of quashing of the same by the High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The authority which is nearest to the facts of the present case is the authority of the Patna High Court in the case of Raja Bahadur Kamakshya Narain Singh. In that case the order of transfer was set aside and quashed by the Supreme Court and in the meantime the ITO to whom the case had been transferred had taken some necessary action. This action was upheld by the High Court on the ground that it was the ITO who was in seisin of the file in pursuance of the order of transfer and he could not sit idle and take no action. His inaction in such a situation would have meant loss of central revenue. In the present case also if Assessing Officer had been sitting quiet because for two years at least the assessee had challenged his jurisdiction to assess, the result would have been considerable loss of Central Revenue. 28. I also agree with the learned Departmental Representative that jurisdiction as contemplated in the fiscal statute has a different connotation. If the income is not chargeable, then there is inherent lack of jurisdiction on the part of the Assessing Officer to assess that income. But if the income is chargeable and returns etc. have been filed by the assessee, the juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der quashed would not be a nullity per se. This is one of those cases where the assessment orders passed by the Assessing Officer, Nagpur, would not be a nullity otherwise the Central Revenue would suffer irretrievably. This is particularly so when the CIT had since rectified the procedural irregularity and passed a fresh order u/s 127 with effect from 6-9-1985, after hearing the assessee. 31. Taking into consideration the entire facts and circumstances of the case and the case law cited by both the sides and perusing the material on record, I hold that the Assessing Officer had valid jurisdiction at the time of framing of assessments on 5-3-1991, 27-3-1991 and 27-3-1991 respectively. So far as question No. I is concerned, I would agree with the view expressed by the learned Judicial Member. 32. As regards question No. 2, left to myself, I may have come to a different conclusion. I may have held that if the assessments had been made validly, there was no question of setting aside the same for de novo assessments. As Third Member, however, my job is tailor-made. I have either to agree with one learned Member or with the other learned Member and cannot give expression to my own v ..... 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