9911796707
TMI Blog2014 (3) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent assessee, return for the assessment year 1984-85 was filed by the respondent at Dimapur, Nagaland on or about 8th August, 1985. The return was not taken up for scrutiny assessment but was processed on 31st March, 1987 under Section 143(1) of the Act. 3. The respondent assessee was subjected to search by the Central Bureau of Investigation on 27th March, 1987. It is the case of the Revenue that the assessee had acquired 18 commercial properties in Delhi, 370 acres agricultural land in and around Delhi and had substantial unaccounted/undisclosed deposits in form of Fixed Deposit Receipts. These assets/properties were in names of the respondent and his family members. 4. The Assessing Officer at Delhi i.e. Assistant Commissioner of Income Tax (Investigation), Circle 8(1) (hereinafter referred to as the AO, Delhi) issued notice under Section 148 of the Act dated 26th June, 1987 in respect of assessment years 1984-85, 1985-86, 1986-87 and 1987-88. Commissioner of Income Tax, Delhi by order dated 10th November, 1987 transferred the case of the respondent assessee from Income Tax Officer, Salary Circle to AO, Delhi i.e. Assistant Commissioner of Income Tax (Investigation). P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The prayers made in the writ petition read as under: "In the premises aforesaid, it is prayed that your Lordships may graciously be pleased to issue Rule, call for the records directing the Respondents to show cause as to why an appropriate Writ shall not be issued declaring the impugned Orders dated 15.03.1990 and dated 20.09.1990 (Annexure - A and B) and any orders passed by the Respondent No. 5 under given assessment jurisdiction and as illegal, unconstitutional and void ab initio and/or why a Writ in the nature of Mandamus/Certiorari/Prohibition and/or any other appropriate Writ shall not be issued quashing the aforesaid impugned Orders dated 15.03.1990 and 20.09.1990 and any orders passed by the Respondent No. 5 under given assessment jurisdiction and prohibiting the Respondent No. 5 from proceeding further in the matter or exercising any jurisdiction in the matter of Income Tax not vested in him in respect of the Petitioner and on cause or causes being shown and upon hearing the parties, be pleased to make the Rule absolute and/or pass any other Order or further orders as your Lordships may deem fit and proper. Pending disposal of the Rule be further pleased to pass an Ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd defect memo dated 31st March, 1987 was issued. As per Section 139(9) of the Act, defects were required to be removed by 30th April, 1987. The same were not removed and as per respondent, he had written a letter on 18th April, 1988. The ITO, Dimapur thereupon issued notice dated 26th June, 1987 under Section 148 of the Act for the assessment year 1985-86. 12. In respect of assessment year 1986-87, there is a dispute. As per the Revenue, no return was filed by the respondent before the ITO, Dimapur and notice under Section 148 of the Act dated 26th June, 1987 was issued by ITO, Dimapur. The respondent, however, claims that he had filed return for the assessment year 1986-87 on 30th July, 1986 with ITO, Dimapur. We notice that in the assessment order dated 28th March, 1990, passed by the AO, Delhi, it is recorded that the respondent assessee had not filed any proof of filing of return at Dimapur for the assessment year 1986-87. Notice under Section 148 issued by the ITO, Dimapur on 26th June, 1987 was on record (see assessment order dated 28th March, 1990 relating to assessment year 1986-87 in ITA No. 257/2002). 13. In respect of assessment year 1987-88, the respondent assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted, the procedure for transfer of assessment records of an assessee on change of his residence for the convenience of the assessee but the instruction by itself cannot and did not result or cause transfer of jurisdiction. (vi) The respondent was reverted to Nagaland in 1984 and instruction No. 1739 of the CBDT was issued on 19th December, 1986. The search was conducted only on 19th March, 1987 at which date the respondent was residing within the jurisdiction of ITO, Dimapur. Thus, AO, Delhi should have transferred the records to ITO, Dimapur in terms of instruction No. 1731 dated 19th December, 1986 and not vice versa. (vii) Upon receipt of notice under Section 142(1), the respondent had objected to the jurisdiction of the AO, Delhi. The respondent assessee denied receipt of notice under Section 148 of the Act issued by AO, Delhi for the three assessment years. The respondent had correctly objected to the assumption of jurisdiction by the AO, Delhi within the statutory time limit fixed/stipulated under Section 124 of the Act. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer of jurisdiction by the competent authority under Section 127 of the Act. It was further held: "7. Ld. Counsel for the assessee has further invited our attention to the order dated 14.8.1995 passed by the CIT, N.E.R., Shillong u/s 127(2)(a) of the IT Act transferring the jurisdiction over the assessee from ITO Ward Dimapur to ITO Ward 20(3), New Delhi. Admittedly, till 14.8.95 no order for transferring the jurisdiction over the assessee was ever passed by any competent authority u/s 127(2)(a) of the IT Act. 8. On careful perusal of these documents, we find that till 14th August, 1995, the jurisdiction over the assessee as per Section 124(1) lies with the ITO, Ward Dimapur with whom the return of income were regularly filed by the assessee. But the impugned assessment orders for the AY 85-86 to AY 87-88 were passed by the ACIT Inv. Circle 8(1), New Delhi on 27.3.90 and 28.3.90. The appeals against these assessment orders were filed before the CIT(A) who had decided these appeals by a single consolidated 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 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt assessee preferred appeals against three assessment orders dated 1st March, 1995 passed by ITO, Dimapur before the CIT (Appeals), New Delhi. These appeals were allowed by the CIT (Appeals) vide order dated 27th March, 1997 recording as under: "2. I have considered the facts and circumstances of the case. The records of the assessee do not indicate that the assessee was given adequate opportunity to explain these investments. Further, it was also enjoined upon the assessing officer to make independent enquiries about these investments from the assessee's relatives. I, therefore, hold that the assessee has not been granted proper opportunity of being heard. The assessment is, therefore, set aside and the assessing officer is, therefore, directed to frame the assessment denovo in accordance with law after giving a fair and reasonable opportunity to the assessee." 20. It is noticeable that the aforesaid order does not refer to the merits or jurisdiction of the assessing officer 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that the first assessments had been annulled. There could not have been a further or fresh assessment. He did not notice or refer to the position that the ITO, Dimapur had passed the assessments order in the second round or the order of the CIT (Appeals), Delhi dated 29th February, 2000. 25. Against the order of CIT (Appeals) dated 27th March, 1990, relating to second round, assessee preferred appeals which stand allowed by the order dated 13th May, 2002. Tribunal in this order relied upon their earlier order dated 19th March, 2002 in the first round. Order dated 13th May, 2002 of the tribunal has been made subject matter of appeals of Revenue being ITA Nos.314/02, 315/02 and 316/02. 26. Similarly appeals relating to the fourth round against the order of CIT (Appeals) dated 28th February, 2002 have been dismissed by the tribunal vide order dated 21st February, 2006. The said order also relies upon the order of the tribunal dated 19th March, 2002, annulling 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 he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n issued under sub-section (1).] (2) The directions of the Board under sub-section (1) may authorise any other income-tax authority to issue orders in writing for the exercise of the powers and performance of the functions by all or any of the other income-tax authorities who are subordinate to it. (3) In issuing the directions or orders referred to in sub-sections (1) and (2), the Board or other income-tax authority authorised by it may have regard to any one or more of the following criteria, namely :- (a) territorial area; (b) persons or classes of persons; (c) incomes or classes of income; and (d) cases or classes of cases. (4) Without prejudice to the provisions of sub-sections (1) and (2), the Board may, by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein,- (a) authorise any Director General or Director to perform such functions of any 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions of the Board. The explanation elucidates that the power can be exercised by an authority higher in rank. Sub-section (2) states that the Board may issue orders in writing under sub-section (1) for exercise of powers and performance of functions by income-tax authorities. Sub-section (3) postulates that the Board while issuing directions or issuing orders can have regard to the four-fold criteria, namely, territorial area; persons or classes of person; incomes or classes of income; and cases or classes of cases. The aforesaid criteria is very broad and by the orders referred to sub-sections (1) and (2), the Board can authorize any income-tax authority to perform function based upon territorial area, type/class of person(s), income or case(s). Sub-section (4) confers power on the Board to pass general or special order as may be desired without prejudice to sub-section (1) and (2). Sub-section (5) is 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 stipulate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... areas within the jurisdiction of different Commissioners, by the Commissioners concerned or if they are not in agreement, by the Board. (5) No person shall be entitled to call in question the jurisdiction of an Income Tax Officer - (a) after the expiry of one month from the date on which he has made a return under sub-section (1) of section 139 or after the completion of the assessment, whichever is earlier; (b) where he has made no such return, after the expiry of the time allowed by the notice under sub-section (2) of section 139 or under section 148 for the making of the return. (6) Subject to the provisions of sub-section (5), where an assessee calls in question the jurisdiction of an Income Tax Officer, then, the Income Tax Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub-section (4) before assessment is made. (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 Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub-section (2) before the assessment is made. (5) Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer shall have all the powers conferred by or under this Act on an Assessing Officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under sub-section (1) or sub-section (2) of section 120." 34. On analyzing the new Section 124, it is viewed that as per sub-section (1), Assessing Officer has jurisdiction in respect of persons carrying on business or profession where such business or profession was being carried out or situated within the area or where 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) s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deviation should be avoided. It is also clear that question of jurisdiction cannot be made subject matter of appeal, as the issue has to be decided on the administrative side by the Commissioner/Commissioners/ Board. Appeal can, however, be filed questioning the action of the Assessing Officer in not following the procedure mentioned/stipulated in Section 124. In Wallace Brothers & Co. Ltd. v. CIT [1945] 13 ITR 39, Federal Court had held that the objection to place of assessment could not be raised in an appeal against the assessment under the Income Tax Act, 1922. This view was affirmed by the Supreme Court in RaiBahadur Seth Teomal Vs. The Commissioner of Income Tax,[1959] 36 ITR 9(SC) holding that the objection as to the place of objection under the 1922 Act could not be made a subject or issue before the appellate forums including the Tribunal and reference 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 st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee contended that the assessments should be cancelled but the department contended that even if there had been a violation of s. 25A of the Act the proper order to be passed was either to direct the ITO to give effect to Section 25A or to set aside the assessments with a direction to the ITO to pass fresh orders of assessment. The Tribunal came to the conclusion that the assessments were in clear violation of the procedure prescribed for that purpose in s. 25A and cancelled the same. The Tribunal added : "We do not consider it necessary to direct first assessments. It would be open to the ITO to do so if the law otherwise so permits." The Supreme Court held that this was not the right procedure to be adopted. It observed as follows (p.460) : "The Tribunal was, Therefore, right in holding that the assessments in question were liable to be set aside 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and to hold "that the AAC could not have rendered an assessment which was illegal into a legal assessment by putting the clock back, so to speak, and enabling the Commissioner to decide the question of jurisdiction." In the view of the Tribunal, "for the exercise of the Commissioner's jurisdiction, the sands had clearly run not". It is for this reason that the Tribunal also said that the department could not rely upon Jajodia's case [1971]79ITR505(SC) to uphold the validity of a direction of the redoing of the assessment." However, in the facts of the said case, the Division Bench refrained from expressing their final conclusion on the question raised, though they were inclined to accept the former view that the assessment would not be a nullity, as the order of the Tribunal in the said case had attained finality and there was no 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 592-95). 36. In Budhia Swain and Ors.Vs. GopinathDev and Ors.(1999) 4 SCC 396, it was highlighted that distinction exists and was well recognized between lack of jurisdiction and mere error in exercise of jurisdiction. Lack of jurisdiction strikes at the very root of the action/act and want of jurisdiction might vitiate proceedings rendering the orders passed and exercise thereof, a nullity. But a mere error in exercise of jurisdiction would not vitiate the legality and validity of the proceedings and the said order was valid unless set aside in the manner known to law by laying a challenge, subject to law of limitation. The following portion of HiraLalPatni vs. Kali Nath, AIR 1962 SC 199 was quoted: "... The validity of a decree can be challenged in execution proceedings only on the ground that the court which passed the decree was 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther. Since the assessee does not suffer any inconvenience or prejudice if a case is transferred locally, no such opportunity has been prescribed. From these provisions it is obvious that the Board and the Commissioner will exercise the power of allocation of functions to various authorities or officers in the exigency of tax collection with due regard to the convenience of the assessee. In other words, the allocation is a measure of administrative convenience. 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. Being an enactment aimed at collecting revenue, the Legislature did not intend collection of revenue to be bogged down on account of technical plea of jurisdiction. It has, therefore, 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssession. The said error is an irregularity which could be corrected by remitting the matter. Powers of annulment and power to set aside and remit the case, have to be exercised keeping in mind the distinction between lack of jurisdiction and irregularity in exercise of authority/jurisdiction. The latter can be rectified and should be rectified as early as possible. Annulment of assessment would mean that the entire assessment proceedings would become ab initio void and the consequences were different from merely setting aside. 40. We will now like to refer to the decisions quoted by the Tribunal in the impugned order to hold that the assessments should be annulled. The citations given in the orders of the Tribunal unfortunately are incomplete except for two, namely; Raza Textiles Ltd. vs. Income Tax Officer, Rampur (1973) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y lacks jurisdiction when the subject matter was not at all amenable to its jurisdiction and in such cases acquiescence was immaterial because agreement or consent cannot confer jurisdiction. Lack of jurisdiction could be of various varieties, including lack of authority under law but distinction between inherent lack of jurisdiction and irregular exercise or assumption of jurisdiction should be kept in mind. The reference was made to the following observations in Central Potteries versus State of Maharashtra, AIR 1966 SC 932 wherein with reference to C.P. and Bazar Sales Tax Act, 1947 and jurisdiction of taxing authorities to make assessment, when the assessee voluntarily filed a return, it was observed:- "7. In this connection it should be remembered that there is a fundamental distinction between want of jurisdiction 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 liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter jurisdiction and inherent lack of jurisdiction in the absence of subject matter jurisdiction. 44. We will now like to deal with and refer to the decisions relied upon by the counsel for the respondent before us. Decision of the Kerala High Court in P.A. Ahammed versus Chief Commissioner of Income Tax, (2006) 282 ITR 334 (Kerala) relates to challenge made to an order under Section 127 of the Act. It was observed that two Assessing Officers cannot retain concurrent jurisdiction over the same assessee and when an order of transfer under Section 127 was affected, old and pending cases were also transferred. The said decision has no application to the facts of the present case, except to the extent that an order under Section 127 dated 14.08.1995 was passed and was never challenged by the respondent-assessee. Similar 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. It was accordingly held that upon transfer the Revenue authorities at Delhi had necessary power and were competent to issue notice under Section 148 of the Act. The aforesaid decision does not deal with the question relating to annulment or setting aside of the assessment. Reference has not been made to Section 124 of the Act and the Revenue had not pleaded that at best the assessment could have been set aside and not annulled. The aforesaid decision is not, therefore, directly dealing with the issue and question raised before us, i.e., the effect of not following the procedure prescribed under Section 124 and whether this would result in annulment or setting aside. 45. In Smriti Kedia versus Union of India and Others, (2011) 339 ITR 37 (Calcutta), a single Judge of the said High Court struck down the notice 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven when there was violation in pursing the procedure outlined in sub-section 4, despite challenge made by the assessee. However, sub section (7) to Section 124 would come into play and an order of assessment under the said sub-section could be sustained only in very limited class of cases; i.e. when an assessee has income accruing, arising or received only and within a particular area and does not have income anywhere else. 48. This brings us to the Section 127 of the Act. Pre-Amendment Section 127: "127. Power to transfer cases.--(1) The Commissioner 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 of the following officers subordinate to him, namely:-- (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 tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings, and shall not render necessary the reissue of any notice already issued by the Income-tax Officer or Income-tax Officers from whom the case is transferred. Explanation.--In this section and in sections 121, 123, 124 and 125, the word "case", in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year." Post- Amendment Section 127 reads: "127. Power to transfer cases.--(1) The Director General or Chief Commissioner or Commissioner 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 subor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the said Section. It can also relate to future assessments. We are for convenience considering post amendment provisions. Transfer need not be to an assessing officer having jurisdiction under Section 124(1) of the Act. The procedure which has to be adopted/followed for transfer has been stipulated. Opportunity of hearing where it is possible is stipulated under sub-section (1) and it also mandates recording of reasons for transfer of case from one Assessing Officer to another, whether or not having concurrent jurisdiction. This transfer can be made by Director- General/Chief Commissioner or Commissioner. In case the Assessing Officers are not subordinate to the same Director General/Chief Commissioner or Commissioner, sub-section (2) comes into play and this requires 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 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was any doubt, the petitioners could have moved under Section 124(2) for determining the question of jurisdiction which the petitioners have not done. The proceedings finalised at Amritsar after the petitioners had ceased to have their business/profession at Amritsar would be without jurisdiction. However, this observation would not obviously apply to such proceedings which have been taken without any objection as to the jurisdiction by either side and permitted to achieve a finality." It was further observed: "If a case falls under Section 124(4) then the question of jurisdiction can be resolved only in the manner outlined in that section and it cannot be challenged before or decided by the appellate authorities. If the assessment can be supported 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26th February, 1993. ITO Dimapur, thereupon issued notice dated 26th June, 1987 under Section 148 of the Act for the assessment year 1985-86. This finding has not been reversed or commented upon by the tribunal. (6) There is a dispute whether any return of income was filed by the assessee at Dimapur for assessment year 1986-87. The assessee claims that return of income was filed for the assessment year 1986-87 on 30th July, 1986 with ITO, Dimapur but there is no proof or evidence. Notice under Section 148 was issued by ITO, Dimapur on 26th June, 1987. (7) For the assessment year 1987-88, the respondent had filed return with ITO, Dimapur on 27th April, 1988 but defect memo dated 6th July, 1988 was issued. However, no order was passed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quential. (12) Sections 120, 124 and 127 of the Act underwent amendments with effect from 1st April, 1988. The said provisions being procedural in nature, the amendments would apply to the pending proceedings. Notices under Section 148 of the Act by the appellant i.e., A.O, Delhi were issued prior to 1st April, 1988 and therefore, earlier provisions would apply with reference to proceedings upto 31st March, 1988 and accordingly, limitation period for challenging of assessment etc. would be applicable. However, the assessment orders were passed post 1.4.1988. CIT (Appeals) has observed that in absence of proof of service of notices under Section 148, date of notice under Section 142(1) was relevant. Notices under Section 142(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 Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income has been filed by the assessee for the assessment year 1986-87. In respect of assessment year 1987-88, return of income was filed by the assessee with ITO, Dimapur but defective notice was issued. (16) Assessing Officer, Delhi was wrong in assuming that as returns for the assessment years 1980-81 to 1983-84 were filed in Delhi, he would alone continued or had exclusive jurisdiction for assessment year 1985-86 onwards as well. ITO, Dimapur wrongly accepted the said plea/contention and had erroneously understood the legal provisions. They had concurrent jurisdictions, if the respondent assessee had residence in Delhi. The said stance and stand of the Revenue is contrary to their own stand in the case 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mapur and consequent to the order under Section 127, the first appeal was decided by CIT(Appeals) at Delhi. In view of the decision in ITA Nos. 256/02, 257/02 and 255/02 relating to the first round, the order of the tribunal dated 13.05.2002 cannot be sustained. (iii) In view of the answers to the substantial questions of law mentioned above relating to the first and the second round, the substantial question of law in the fourth round i.e. ITA Nos. 1577/2006, 1578/2006 and 1580/2006 has to be answered in favour of the Revenue and against the respondent-assessee but subject to the observations made above. 53. In light of the aforesaid discussions, ITA Nos. 314/02, 315/02, 316/02, 1577/06, 1578/06 and 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 & 18/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer in Delhi and the address as disclosed in the wealth tax assessment order was F-5, N.D.S.E. Part II, New Delhi. (3) The respondent assessee filed an appeal but did not question the jurisdiction of the Assessing Officer. Commissioner (Appeals) by order dated 27th January, 1999 passed an order of remand on the ground that question of ownership of 18 flats assessed as wealth of the assessee was to be examined and was a subject matter of the income tax proceedings. These flats as per the assessee belonged to assessee's relatives. Assessment order was accordingly set aside for de novo assessment in accordance law with the direction that the question of ownership of the assets could 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 acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons. However, he granted exemption/relief in respect of value of trees on agricultural land which were held to be exempt. He further directed that liabilities on account of wealth tax and income tax should be allowed as per laws. The assessee did not challenge and question the jurisdiction of Assessing Officer at Delhi. WTA 14/2006(A.Y. 1988-89) 1) Notice under Section 17 of the WT Act was issued and return of wealth declaring wealth of Rs.1,38,400/- was filed on 18th October, 1993. By assessment order dated 17th March, 1997, assessment was framed at a taxable wealth of Rs.53,34,100/-. The assessee did not question jurisdiction of the Assessing Officer in 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. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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