9911796707
TMI Blog2014 (3) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act on the question of jurisdiction on the basis of residence, class, income etc. The AO, Delhi was wrong in assuming that as returns for the assessment years 1980-81 to 1983-84 were filed in Delhi, he would alone continue or had exclusive jurisdiction for assessment year 1985-86 onwards as well - ITO, Dimapur wrongly accepted the contention and had erroneously understood the legal provisions - the question of jurisdiction or the place of filing has to be examined each year with reference to provisions of Section 124 of the Act - thus, there was failure on the part of the Assessing Officer, Delhi and ITO, Dimapur in not following the procedure prescribed under Section 124 of the Act, but this would not make the assessment in the first round a nullity - The assessment order passed should have been set aside as was directed by CIT(Appeals) and assessments remitted for a fresh decision – Decided in favour of Revenue. Jurisdiction of WTO officer - Whether the Tribunal was correct in law in holding that the Wealth Tax Officer has no jurisdiction to pass the assessment order – Held that:- The assessee did not challenge and object to the jurisdiction of the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see from Income Tax Officer, Salary Circle to AO, Delhi i.e. Assistant Commissioner of Income Tax (Investigation). Proceedings in respect of assessment year 1988-89 were taken up for scrutiny assessment by issue of notice under Section 143(2) of the Act. It appears that proceedings for the assessment year 1984-85 under Section 148 of the Act were dropped. We are not concerned with the said proceedings in the present appeals. We are also not concerned with the proceedings in respect of 1988-89 in the present income tax appeals as these appeals relate to assessment years 1985-86, 1986-87 and 1987-88. Appeals, ITA No. 89/2003 and ITA No. 1579/2006 relating to assessment year 1988-89 were disposed of vide orders dated 7th April, 2011 and 24th July, 2011, due to low tax effect. 5. The respondent assessee did not file returns pursuant to the above notices for the assessment years 1985-86, 1986-87 and 1987-88 under Section 148 of the Act. Subsequently, the assessing officer issued notice under Section 142(1) on 22nd March, 1988 and thereafter vide letter dated 25th March, 1988, the respondent assessee raised objection to the jurisdiction of the AO, Delhi. It was, inter alia, stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or further orders as your Lordships may deem fit and proper. Pending disposal of the Rule be further pleased to pass an Order staying the income Tax proceedings before the Respondent No.5 and also restraining the Respondent No. 5 in exercising any jurisdiction in the aforesaid matter in respect of the Petitioner. And for this act of your Kindness the humble Petitioner as in duty bound shall ever pray. 8. By order dated 17th July, 1993, this writ petition was substantially but partly allowed holding that the two letters issued by the ITO, Dimapur were without following due process as postulated under Section 127 of the Act. The dictum of the Gauhati High Court was as under:- 14. After hearing learned counsel for the parties and on careful examination of the relevant documents placed before me and relied upon by the parties, I am of the view that orders/letters dated 15-3-90 and 20-9-90 cannot be sustained in as much as there is no order of transfer of jurisdiction from Dimapur to Delhi by a competent authority. I also hold that Respondent 5 has no authority to give direction to Respondent 4 regarding transfer of jurisdiction and in calling for the records of the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... March, 1990 relating to assessment year 1986-87 in ITA No. 257/2002). 13. In respect of assessment year 1987-88, the respondent assessee had filed return of income on 27th April, 1988 but defect memo dated 6th July, 1988 was issued on the ground that annexures, statements in columns in the return under the heads of income, computation of gross total income and total income had not been fully filled up; statement of computation of income on statement of facts had not been furnished; dividend warrants have not been attached; TDS and self assessment advance tax challans had not been attached etc. The respondent has not stated or averred that he had filed the requisite papers as mentioned in the said notice dated 6th July, 1988. However, there is no order of the income tax authority at Dimapur declaring the return to be void or invalid. 14. The assessment orders passed by the AO, Delhi dated 27th March, 1990 and 28th March, 1990, were made subject matter of appeals before Commissioner of Income Tax (Appeals), New Delhi [CIT (Appeals), for short] and were decided by a common order dated 26th February, 1993. The said order is fairly detailed and has become the substratum of subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The AO, Delhi should have approached the Board to decide the question of jurisdiction under Section 124(4) of the Act or an order under Section 127 of the Act was required for transfer of jurisdiction from the Commissioner of Income Tax, North Eastern Region (NER), Shillong to New Delhi. (viii) The initiation of proceedings by ITO, Dimapur for assessment years 1985-86, 1986-87 and 1987-88 were legal and valid and there was infirmity in the proceedings assumed/conducted by the AO, New Delhi. All proceedings before the AO, New Delhi were illegal and set aside. (ix) However, AO, Delhi could acquire proper jurisdiction from the Chief Commissioner, NER, Shillong under Section 127 of the Act or Section 120 from CBDT and frame fresh assessment as per law for the three assessment years. (x) As the assessments were set aside on the point of jurisdiction, there was no need to discuss merits as this could be examined during fresh assessment proceedings before the Assessing Officer. It was finally observed as under:- 4. Since the assessment have been set aside on the point of jurisdiction, I do not want to discuss the addition made on merits. The objections of the ld Counsel in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsolidated order on 22nd February, 1993. It means till the disposal of the appeal by the CIT(A), the AO did not assume jurisdiction over the assessee. Hence, the order passed by the AO is defective. Now, the question arises before us whether this defect is curable or it goes to the root of the case and makes the order null and void. In support of his contention that order was passed by an authority having no jurisdiction is a void ab initio and liable to be quashed, ld. counsel for the assessee has relied upon the following judgments:- State of Gujarat v. Rajesh Kumar ChianLal AIR 1996 P.2664 Raza Textiles Ltd. v. ITO 87 ITR 539 (S.C.). ChoubeyJagdish Prasad v. Gaya Pal Chaturvedi AIR 1959 492 P. Das Muni Reddy v. AppaRao AIR 1974 208 Sant Baba Mphan Singh v. CIT 90 ITR 197 77 Taxman 265 SitaramRathore vs. CIT 9. We have carefully perused the aforesaid judgments and we find that whenever an order is passed by an officer having no jurisdiction to pass such order, that order is void ab initio and it deserves to be annulled. The defect in this order is not curable and it cannot be rectified even by sending the matter back to the concerned officer. In these circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer but an order of remand was passed for fresh adjudication after fair opportunity of hearing being given to the respondent assessee. 21. Pursuant to the order of remand, ACIT, Circle 15 (2), New Delhi passed three assessment orders dated 30th March, 1999 assessing total income of the assessee at Rs. 41,19,344/-, Rs. 86,97,227 and Rs.67,79,930/- for the assessment years 1985-86, 1986-87 and 1986-87 respectively. The assessee preferred appeals which were allowed vide order dated 29th February, 2000 of the CIT (Appeals) recording as under:- From the perusal of assessment order and after discussion of the case with the A.O., I find that the infirmities and irregularities pointed by my learned predecessor still persists and there is nothing before me to defer with the decision of my learned predecessor CIT (A) V. I am of the view that these assessments should be set aside again for allowing another opportunity to the A.O. Accordingly, I set aside all the three assessment orders from the stage the A.O. New Delhi assumed jurisdiction for issuing notice u/s 148 and completing the assessment. In my above decision to set aside the order, I am supported by the decision of Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the assessments in the first round. This order of the tribunal has been made subject matter of ITA Nos. 1578/06, 1577/06 and 1580/06. Substantial Questions of Law 27. ITA Nos. 256/02, 257/02 and 255/02 were admitted for hearing vide order dated 10th November, 2005 on the following substantial question of law: Whether the ITAT was correct in law in holding that the order of assessment passed by the ACIT, Investigation Circle 8(1), New Delhi were without jurisdiction and therefore void ab initio? 28. ITA Nos. 314/02, 315/02 and 316/02 were admitted for hearing vide order dated 10th November, 2005 on the following substantial question of law: Whether the Income Tax Tribunal was correct in law in holding that the assessment made by the assessing officer was unsustainable in law? 29. ITA Nos. 1578/06, 1577/06 and 1580/06 were admitted for hearing vide order dated 20th February, 2007 on the following substantial question of law: Whether the Income Tax Appellate Tribunal was correct in law in holding that the assessment made by the Assessing Officer was not sustainable in law? However, in the said ITAs vide order dated 26th November, 2011 the following qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny other income-tax authority as may be assigned to him by the Board; (b) empower the Director General or Chief Commissioner or Commissioner to issue orders in writing that the powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in respect of any specified area or persons or classes of persons or incomes or classes of income or cases or classes of cases, shall be exercised or performed by a 25[Joint] Commissioner 26[or a 25[Joint] Director], and, where any order is made under this clause, references in any other provision of this Act, or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such 25[Joint] Commissioner 26[or 25[Joint] Director] by whom the powers and functions are to be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the 25[Joint] Commissioner shall not apply. (5) The directions and orders referred to in sub-sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, require two or more Assessing Officers (whether or not of the same class) to exercise and perf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s relevant and stipulates that orders/directions under sub-sections (1) and (2) wherever considered necessary and appropriate may require two or more Assessing Officers to perform concurrent power and functions in respect of area, person(s), income(s) or case(s) and when so stipulated, the higher authority may direct the authority lower in rank. This enables distribution of work between two or more Assessing Officers having concurrent jurisdiction under a single higher authority. Under sub-section (6), the Board retains power by way notification to direct furnishing of return or any act or thing under the Act or rules, shall be made before such authority as may be specified, in relation to class of persons. Thus, it is apparent that Act does not by itself confer jurisdiction by way of territory, class of persons, income or cases. It is left to the discretion and wisdom of the Board who have been given wide powers and latitude. The said exercise, is administrative and broad choice/option given to the Board. Though Section 120 refers to jurisdiction of the Assessing Officer or authorities but the said term has been used rather loosely and does not refer to subject matter jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (7) Notwithstanding anything contained in this section, or in section 130A, every Income Tax Officer shall have all the powers conferred by or under this Act on an Income Tax Officer in respect of any income accruing or arising or received within the area for which he is appointed. Post-Amendment Section 124 reads: 124. Jurisdiction of Assessing Officers.- (1) Where by virtue of any direction or order issued under sub-section (1) or sub-section (2) of section 120, the Assessing Officer has been vested with jurisdiction over any area, within the limits of such area, he shall have jurisdiction (a) in respect of any person carrying on a business or profession, if the place at which he carries on his business or profession is situate within the area, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situate within the area, and (b) in respect of any other person residing within the area. (2) Where a question arises under this section as to whether an Assessing Officer has jurisdiction to assess any person, the question shall be determined by the Director General or the Chief Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere the business or profession was carried on in different areas, if the principal place of business or profession was situated within the area. Assessing Officer under sub-clause (b) also had jurisdiction in respect of any other person(s) residing within the area. Residence and place of business being the basis. Sub-section (2) stipulates that question/ dispute of jurisdiction among two or more Assessing Officers, if raised, shall be determined by the Director- General, Chief Commissioner or the Commissioner, or if the question relates to areas falling within the jurisdiction of different Directors- General, Chief Commissioners or Commissioners, then by the Directors- General, Chief Commissioners or Commissioners concerned, and if they are not in agreement, by the Board or by such Director-General, Chief Commissioner or Commissioner that the Board may by an Official Gazette specify. Sub-section (3) further stipulates that the objection to the jurisdiction could be questioned by an assessee or a person within one month from the date on which return of income under Section 139(1) was made or within one month from the date of issuance of notice under Section 142(1) or 143(2) or after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence to the High Court. Thus, the question of place or authority of the particular Assessing Officer was the matter of administrative convenience and not strictly a matter of subject matter jurisdiction and where there was an error or erroneous exercise by the Assessing Officer/Commissioner notwithstanding the challenge within stipulated time, it could be corrected by way of writ jurisdiction. The position is no different under the Act i.e. Income Tax Act 1961, as was elucidated by a Division Bench of this Court in Kanji Mal Sons vs. C.I.T. (1982) 138 ITR 391 (Del), wherein reference to said two decisions was made and it was observed that if the assessee fails to raise objection before the Income Tax Officer within the time, he will be shut out from raising the question altogether. Further, if the issue was raised and decided by the Commissioner, the decision would be final and cannot be questioned in the appellate forums but where the Income Tax Officer does not refer the question to the Commissioner, the following proposition emerges: But where he raises the issue but the ITO does not refer the question to the CIT as in the present case (or the CIT or the Board does not de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as there was no compliance with s. 25A(1) of the Act. It is, however, difficult to agree with the submission made on behalf of the assessee that the duty of the Tribunal ends with making a declaration that the assessments are illegal and it has no duty to issue any further direction. It is well known that an appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh unless forbidden from doing so by the statute. The statute does not say that such a direction cannot be issued by the appellate authority in a case of this nature. In interpreting s. 25A(1), we cannot also be oblivious to cases where there is a possibility of claims of partition being made almost at the end of the period within which assessments can be completed making it impossible for the ITO to hold an inquiry as required by s. 25A(1) of the Act by following the procedure prescribed therefor. We, however, do not propose to express any opinion on the consequence that may ensue in a case where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o reference at the instance of the Commissioner. It would be also important to reproduce the conclusion drawn by the Division Bench of the High Court on the said aspect which reads:- (2) The failure of the ITO to follow the above procedure may not render the assessment invalid. A view is possible that, in appeal, it is open to the AAC or the Tribunal to set aside the assessment and direct a fresh assessment after following the procedure mentioned in s.124(4) (6) provided such a direction does not prejudice or affect the right of the assessee to challenge the reassessment as not being in accordance with any other provision of the Act. It is, however, not necessary to decide this question as the view of the Tribunal seems to be that such an assessment would be invalid and this matter is not in issue before us. 35. The said issue directly arises before us in the present appeals and it is time we give affirmative approval to the aforesaid principle as the question has been raised by the Commissioner. Reasons for the same are mentioned by the Division Bench of this Court in Kanji Mal s case (supra) and is also apparent and clear to us. Sub-section (4) and (6) of Section 124 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lacking in inherent jurisdiction in the sense that it could not have seisin of the case because the subject matter was wholly foreign to its jurisdiction or that the defendant was dead at the time the suit had been instituted or decree passed, or some such other ground which could have the effect of rendering the court entirely lacking in jurisdiction in respect of the subject matter of the suit or over the parties to it. 37. The view we have taken, finds support from the decision of the Patna High Court in MahalliramRamniranjan Das vs. CIT (1985) 156 ITR 885, wherein the decision of Delhi High Court in Kanji Mal Son s case (supra) was referred to. Reference was also made to the decision of the Supreme Court in Guduthur Bros. vs. ITO (1960) 40 ITR 298 (SC), and the matter was remanded to the authority to continue with the proceedings from the stage irregularity had occurred. It was observed that the tribunal was not right in annulling the assessment. It would be also appropriate here to refer to the decision in Hindustan Transport Co. vs. Inspecting Asstt. Commissioner of Income Tax and Anr. (1991) 189 ITR 326 of the Allahabad High Court-Lucknow Bench, wherein it has been ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, prescribed the limit up to which the plea of jurisdiction may be raised. As provided in Section 124(5)(a), the right is lost as soon as the assessment has been completed. Even where the right is exercised before the assessment is completed, the question is to be decided by the Commissioner or by the Board. Courts do not come into the picture. From the above provisions of the Act, it is apparent that the 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. The answer to the first question, therefore, is that the power is administrative and procedural and is to be exercised in the interest of exigencies of tax collection and the answer to the second question is that, under the Act, a defect arising from allocation of functions is a mere irregularity which does not affect the resultant action. 38. In Commissioner of Income Tax vs. ShivkumarAgrawal (1990) 186 ITR 734 (Orissa), it was held that imposition of penalty by the Assistant Commissioner in view of the amendment was without jurisdiction in light of an earlier judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 73) 87 ITR 539 (SC) and Sant Baba Mohan Singh vs. Commissioner of Income Tax, U.P. (1973) 90 ITR 197 (All). We have gone through the said decisions. In Raza Textiles Ltd. (supra) it has been observed that no authority much less the quasi judicial authority could confer jurisdiction on itself by deciding the jurisdictional facts wrongly. Jurisdictional facts could be examined by the High Court in an application for Writ of Certiorari. The said decision does not help us in determining when an order would be a nullity and when an error relates to irregular exercise of jurisdiction. In Sant Baba Mohan Singh (supra), it was observed that the assessment proceedings would be a nullity when the Assessing Officer had no jurisdiction ab initio to take the proceedings i.e. he had no power to have seisin over the case. When, however, the authority has overall jurisdiction over the case and power to initiate the proceedings, an omission to issue notice under Section 23(2) of the Income Tax Act, 1922 did not affect the jurisdiction and could be rectified. These were steps within the overall jurisdiction, therefore, omission to issue notice under Section 23(2) of the Income Tax Act, 1922 had not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and irregular assumption of jurisdiction, and that whereas an order passed by an authority with respect to a matter over which it has no jurisdiction is a nullity and is open to collateral attack, an order passed by an authority which has jurisdiction over the matter, but has assumed it otherwise than in the mode prescribed by law, is not a nullity. It may be liable to be questioned in those very proceedings, but subject to that it is good, and not open to collateral attack. Therefore, even if the proceedings for assessment were taken against a non-registered dealer without the issue of a notice under Section 10(1) that would be a mere irregularity in the assumption of jurisdiction and the orders of assessment in those proceedings cannot be held to be without jurisdiction and no suit will lie for impeaching them on the ground that Section 10(1) had not been followed. This must a fortiori be so when the appellant has itself submitted to the jurisdiction and made a return. We accordingly agree with the learned Judges that even if the registration of the appellant as a dealer under Section 8 is bad that has no effect on the validity of the proceedings taken against it under the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar view was taken earlier by the Kerala High Court in Redwood Hotel (P) Limited versus Chief Commissioner of Income Tax and Others, (2003) 259 ITR 191 (Kerala) wherein an order under Section 127 was upheld in spite of the plea of inconvenience raised by the assessee therein. It was observed that the order of transfer under Section 127 was purely administrative in nature and except when there were allegations of mala fide and want of jurisdiction, there was little scope for interference. An assessee has no vested right to have his assessment decided by an officer at a specific place. Decision of the Delhi High Court in Valvoline Cummins Limited versus Deputy Commissioner of Income Tax and Others, (2008) 307 ITR 103 (Delhi) relates to a different factual matrix. An application under Section 220(6) of the Act was filed but the assessee was advised by Additional Commissioner to approach Deputy Commissioner, who had concurrent jurisdiction. Assessee complied and moved an application requesting Deputy Commissioner for stay of demand by way of two applications and a direction was passed to deposit 15% of the tax liability. Dispute arose whether the application under Section 220(6) sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice issued by the Revenue authority at Delhi as there was no transfer under Section 127 of the Act. The petitioner was all along assessed at Kolkata. In the present case, we have noticed that the respondent was assessed in Delhi and also had properties in Delhi as per the claim of the Revenue. Question of annulment or setting aside was not raised or answered. Lt. Col. Paramjit Singh versus Commissioner of Income Tax and Another, (1996) 220 ITR 446 (P H) has been dissented from by the Delhi High Court in the case of K.K. Loomba vs. CIT and Ors. (2000) 241 ITR 152 (Del.). The last decision referred is in the case of Rishabh Buildcon (P) Limited versus Commissioner of Income Tax, Delhi-V, (2011) 10 Taxman.com 227 (Delhi). In this writ petition, order of transfer under Section 127 was challenged. It was observed that the reasons given by the authority should be cogent and germane having nexus to the facts. Noticing that facts relied by the Revenue were absent and not recorded in the impugned order, direction for fresh decision after affording adequate opportunity of hearing and by ascribing reasons was passed. 46. At this stage, we would like to examine and deal with the contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly:-- (a) any Income-tax Officer or Income-tax Officers ; (b) any Income-tax Officer or Income-tax Officers having concurrent jurisdiction with the Inspecting Assistant Commissioner, to any other Income-tax Officer or Income-tax Officers (whether with or without concurrent jurisdiction with the Inspecting Assistant Commissioner) also subordinate to him and the Board may similarly transfer any case from (i) any Income-tax Officer or Income-tax Officers, or (ii) any Income-tax Officer or Income-tax Officers having concurrent jurisdiction with the Inspecting Assistant Commissioner, to any other Income-tax Officer or Income-tax Officers (whether with or without concurrent jurisdiction with the Inspecting Assistant Commissioner): Provided that nothing in this sub-section shall be deemed to require any- such opportunity to be given where the transfer is from any Income-tax Officer or Income-tax Officers (whether with or without concurrent jurisdiction with the Inspecting Assistant Commissioner) to any other Income-tax Officer or Income-tax Officers (whether with or without concurrent jurisdiction with the Inspecting Assistant Commissioner) and the offices of all such offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing officer or Assessing officers (whether with or without concurrent jurisdiction) also subordinate to him. (2) Where the Assessing officer or Assessing Officers from whom the case is to be transferred and the Assessing officer or Assessing officers to whom the case is to be transferred are not subordinate to the same Director General or Chief Commissioner or Commissioner,-- (a) where the Directors General or Chief Commissioners or Commissioners to whom such Assessing officers are subordinate are in agreement, then the Director General or Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order; (b) where the Directors General or Chief Commissioners o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equires concurrence of the Directors-General, Chief Commissioners or Commissioners. In case of disagreement, matter has to be referred to the Board or Director General/Chief Commissioner/Commissioner notified by the Board in the Official Gazette. However, as per sub-section (3) opportunity of hearing is not required when the transfer is to an officer within the same city, locality or place. It must also be noted that as per sub-section (4) transfer of a case under sub-section (1) or (2) can be made at any stage of the proceedings and re-issue of notice by the Assessing Officer from whom the case is transferred is not mandated. 50. Territorial aspect relating to authority of the Assessing Officer in each assessment year was examined by a Division Bench of this Court in K.K. Loomba (supra). In the said case, notices under Section 148 had been issued by the Assistant Commissioner of Income Tax (Investigation), Circle 11(1), New Delhi, in respect of assessment years 1985-86 to 1987-88, 1988-99 to 1990-91 and 1992-93. Some assessments had been made, while others were pending. Procedure under Section 124(2) was followed and it was held that the Assessing Officer at Delhi had jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted under Section 124(7), the provisions of Section 124(4) will not apply and there is nothing to bar the jurisdiction of the appellate authorities to uphold the assessment on that ground. In such a case, there is no conflict between the procedure outlined in Sub-sections (4) and (6) and the appellate powers of the Appellate Assistant Commissioner and the Tribunal. Section 124(7) is very limited in its operation. All that it saves is an assessment made by an Income Tax Officer (whether he has or not jurisdiction otherwise) provided that the assessment does not bring to tax anything other than income accruing, arising or received within the area over which he exercises territorial jurisdiction. Once it has been found that the two petitioners had their business/profession situated at Delhi, the assessing authority having natural jurisdiction over the area would have jurisdiction to assess them, issue notices under Section 148 as well, though referable to the period when they were assessed or were assessable at Amritsar by virtue of Sections 124(1) and 124(5) read with Section 120(1). No order under Section 127 or even Section124(2) was called for. Such an interpretation and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed declaring the return void or bad on account of the fact that TDS, self assessment and advance tax challans and dividend warrants etc. had not been attached. (8) There was exchange of correspondence between Assessing Officer at Delhi and ITO, Dimapur. ITO, Dimapur conceded and accepted that for the assessment years 1985-86, 1986-87 and 1987-88, the Assessing Officer at Delhi had jurisdiction to initiate and complete the assessment proceedings. However, the procedure under Section 124 of the Act was not followed and the Commissioners concerned did not deliberate in writing upon the said issue. Even if they did, no such document or evidence was brought on record. (9) After the order of the CIT (Appeals) dated 26.02.1993 setting aside the assessment but permitting the Assessing Officer to proceed further from the stage of default and directing compliance of Section 127 of the Act, ITO, Dimapur had passed assessment orders in respect of assessment years 1985-86, 1986-87 and 1987-88. This fact has not been adverted to and noticed by the tribunal in the appeals relating to second and fourth round. Thus the assessment orders in the second round were not passed by the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42(1) were post 1.4.1988. There is no factual finding on service of notices under Section 148 of the Act by the Tribunal. It is imperative to observe that in spite of the amendments, the basic postulates of the provisions both pre and post amendments remain substantially similar. The provisions as they existed before and after the amendments, postulate filing of objections before the Assessing Officer within stipulated periods, reference to the Commissioner or Commissioners concerned and a decision by the said Commissioner/ Commissioners/ the Board/ appropriate authority in case of disagreement between the Commissioners. (13) The provisions indicate that Sections 120, 124 and 127 of the Act recognizes flexibility and choice, both with the assessee and the authorities i.e. the Assessing Office before whom return of income could be filed and assessment could be made. The Assessing Officer within whose area an assessee was carrying on business, resided or otherwise income had accrued or arisen ( in the last case, subject to the limitation noticed above) has jurisdiction. Similarly, the Assessing Officer also has authority due to class of income or nature and type of business. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of K.K. Loomba (supra). On the said aspect, decision of the Delhi High Court in the case of K.K. Loomba (supra) is binding on us. Thus, the question of jurisdiction or the place of filing has to be examined each year with reference to provisions of Section 124 of the Act. Decision in K.K Loomba (supra) was pronounced in the year 2000 and dissents from the view/ratio of the Punjab and Haryana High Court in Lt. Col Paramjit Singh (supra). Thus, when the proceedings were going on, the legal position was not clear and hence, debatable. However, as noticed above, Section 124 of the Act provides flexibility and postulates multiple and concurrent jurisdiction including filing of return and where the assessee has permanent or current residence or where he has sole/only source of income. (17) The Tribunal could not have gone into the question of jurisdiction of AO, Delhi except on the question and issue whether there was any lapse on the part of the Assessing Officer in not following the procedure prescribed under Section 124 of the Act and effect thereof. As in the present case, the procedure under Section 124 was not followed by the Assessing Officer, the effect thereof could have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 1580/06 relating to the second and the fourth round are remitted to the tribunal for fresh decision on merits on the additions made by the Assessing Officer. Paper books relating to the first round subject matter of ITA Nos. 256/02, 257/02 and 255/02 will be also made available and placed before the tribunal. To cut short delay, parties are directed to appear before the tribunal on 15th April, 2014, when a date of hearing will be fixed. WTAs 13/2006, 14/2006, 15/2006, 16/2006 18/2006 54. At the outset, we notice that two appeals being WTA Nos. 15/2006 and 16/2006 have been filed in respect of assessment year 1986-87. The reason, it appears, is that there were two cross appeals before the tribunal for the said assessment year. 55. By order dated 20th February, 2007, the following substantial question of law has been framed in the Wealth Tax Appeals: Whether the Income Tax Appellate Tribunal was correct in law in holding that the Wealth Tax Officer has no jurisdiction to pass the assessment order in the case of Assessee and thereby quash the assessment framed? 56. For the purpose of record, we observe that the tribunal had passed a common order dated 8th February ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be examined and established more appropriately in the income tax proceedings. The assessee did not prefer any appeal against the order of the Commissioner (Appeals) and as noticed above, the question of jurisdiction of the Assessing Officer was not challenged. (4) The Assessing Officer thereupon passed order dated 23rd March, 2001 and taxable wealth was assessed at Rs.23,48,670/-. (5) Commissioner (Appeals) substantially upheld the additions made by the Assessing Officer including additions made on account of 18 commercial flats and he also upheld the issue of notice under Section 17 of the WT Act. He also upheld addition of Rs.18,54,000/- as unexplained deposits and Rs.5,00,000/- and Rs.60,450/- on account of FDRs etc. He directed that income tax and wealth tax liabilities should, however, be allowed as deduction. It is noticeable that the question of territorial jurisdiction of the Assessing Officer was not challenged before the Commissioner (Appeals). WTA 15/2006 (A.Y. 1986-87) 1) In this year notice under Section 17 was issued and return of net wealth of Rs.1,06,900/- was filed on 18th October, 1993 with the address F-5 N.D.S.E. Part II, New Delhi. Respondent did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Delhi in the assessment proceedings. 2) Commissioner (Appeals) set aside the assessment order as done in earlier orders vide order dated 27th January, 1999. Question of jurisdiction was not raised before the Commissioner (Appeals). 3) The assessment was again framed by de novo assessment order dated 23rd March, 2001 at taxable wealth of Rs.53,34,100/-. 4) On appeal, Commissioner (Appeals) vide order dated 31st March, 2005 upheld the validity of notice under Section 17 and several additions made by the Assessing Officer. However, relief was granted in respect of value of construction of structure and eucalyptus trees on the agricultural land, income tax and wealth tax liabilities. Some other reliefs were also granted. 58. In light of the aforesaid discussion and the position of law, the substantial question of law raised in the present wealth tax appeals are answered in favour of the appellant-Revenue and against the respondent-assessee. It is apparent that the respondent assessee did not challenge and object to the jurisdiction of the Assessing Officer at any stage. Reference to the Commissioner/Commissioners was not required as per the Section 124 of the Act. There w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
