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TMI Blog2014 (12) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... any other Assessing Officers or Assessing Officers both being subordinate to him - the Commissioner has jurisdiction to transfer cases only within his jurisdiction whereas the power of the board is wider and it can transfer the cases from one jurisdiction of one Commissioner to another - The exercise of the power by the Commissioner does not exhaust the power of the transfer by the Board and the Board has independent power u/s 127 of the Act to transfer cases. Circular cannot mitigate against the power u/s 127 of the Act - on the basis of request received from the range head namely, Joint Commissioner Income Tax Circle-II, three cases including the petitioner's case, were transferred for effective and timely completion of scrutiny assessment proceedings, to make equitable distribution of workload – the respondent has completed earlier assessment proceedings of the petitioner for the AY 2009-10, in which certain directions has been given by the CIT(A)-I regarding recomputing derivative laws - there is no inconvenience caused to the assessee. Whether the instruction issued with regard to the pecuniary jurisdiction issued by the Board from time to time is as sacrosanct and cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r an individual filed his returns on 03.06.2011, disclosing taxable income of ₹ 42,87,244/- before the second respondent. It is stated that in terms of the instructions issued under Section 120 of the Income Tax Act (Act), with regard to the territorial area, persons or class of persons, income or classes of income, cases or class of cases, the second respondent is the proper Officer to scrutinize the returns filed by the petitioner. It is stated that the Central Board of Direct Taxes(CBDT) issued instructions dated 31.01.2011, under Section 119 of the Act and directed that income of non-corporate persons with declared income of above ₹ 15,00,000/- shall be taken up and assessed only by an Officer of the rank of Assistant Commissioner or Deputy Commissioner. Income declared below ₹ 15,00,000/- in mofussil area may be dealt by the Income Tax Officer like the first respondent. This instruction was modified by instruction dated 08.04.2011, which provide an upward revision of another ₹ 5,00,000/- for equitable distribution. The pecuniary limits have been revised from time to time and it is submitted that the instructions are to be strictly followed. 4. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent to resolve the jurisdiction issue and an application was submitted to the third respondent stating that the summons issued by the first respondent is without jurisdiction and the case has to be dealt with by the second respondent and requested for transfer of the files to the second respondent. The third respondent on 04.03.2013, communicated the copy of the proceedings dated 21.01.2013, which is impugned in this Writ Petition. This was followed by a notice dated 27.02.2013, issued by the first respondent stating that if the petitioner does not submit himself to the jurisdiction of the first respondent in the case will be decided apart from invoking penal provisions. These proceedings namely 31.01.2013 and 27.02.13 are also impugned in these Writ Petitions. 6. Mr.C.Natarajan, learned Senior counsel appearing for the petitioner submitted that the petitioner filed returns before the second respondent and the returns were being processed at that stage by virtue of the impugned proceedings, the first respondent has been directed to take up the matter and aggrieved by the action, the petitioner has approached this Court. It is submitted that three factors are to be taken int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act has to be given weightage or not, since the instruction issued to subordinate authorities and all other persons employed in the execution of the Act, shall observe and follow such orders and instructions. It was argued that the first respondent does not have territorial jurisdiction because of allocation of work/ward as per the annexure in the official website of the department and this has been pointed out in paragraph 13 of the rejoinder affidavit filed by the petitioner to the counter affidavit of the respondent. It is submitted that the first respondent is Income Tax Officer Ward No.1(4) whereas the location of the properties, residence and source of income of the petitioner are situated in Income Tax Officer Ward No.1(3), Erode outside the jurisdiction of the first respondent. Therefore, it is stated that the transfer of the case to the first respondent is contrary to law. In the light of the above submissions, prayer has been made to set aside the impugned orders and restore the petitioner's files to the second respondent for assessment. 9. Mr.T.Pramod Kumar Chopda, learned Standing counsel appearing for the Department submitted that two issues arise in the insta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e first respondent is the Income Tax Officer Ward No.1(4) and by referring to the information available in the official website of the department, it is submitted that the first respondent has no territorial jurisdiction over the petitioner/assessee. 11. By way of reply to this submission, the learned Standing counsel submitted that the jurisdiction of the Deputy Commissioner of Income Tax, Circle-I, Erode, the territorial areas assigned are ITO Ward No.1(1) to (4) and the range code is 65. The first respondent is the ITO Ward No.1(4) and the range code for his jurisdiction is 65. Therefore, the assessment is within the same Ward and there is no prejudice caused to the petitioner. 12. Heard the learned counsels appearing on either side and perused the materials placed on record. Two questions fall for consideration:- (i) whether by virtue of the circular issued by the Board, dated 31.01.2011, fixing monetary limit for the officers to deal with the cases would oust the jurisdiction of the third respondent from exercising his power to transfer the assessment file of the petitioner from the second respondent to the first respondent in exercise of his power under Section 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 of the Act, it is seen that the said provision empowers the Board to issue orders, instructions and directions to other Income Tax Authorities for the proper administration of the Act and such authorities shall observe and follow such orders, instructions and directions of the Board. Proviso under Section 119(1) states that no such orders, instructions or directions shall be issued to direct the Income Tax Officer to make a particular assessment or to dispose of a particular case in a particular manner or to interfere with the discretion of the Commissioner (Appeals) in exercise of his appellate functions. Therefore, there is a distinction between an order issued by the Board, an instruction given by the Board and a direction issued by the Board to the Income Tax Authorities and none of this can interfere with the right of the Income Tax Authority, while making an assessment proceedings or by the Commissioner (Appeals) while exercising appellate functions. 16. Admittedly, the proceedings dated 31.01.2011/08.04.2011 are instructions and are not orders or circulars. An instruction issued, cannot obliterate or deny the powers of the Director General or the Chief Commissioner or t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the provision of the Section 31(3)(1A) of the Kerala Act is similar to the provision of Section 119(1) of the Income Tax Act, inasmuch as both the Sections have used the expression for the proper administration of the Act. After taking note of the decision in the case of Union of India vs. Azadi Bachao Andolan reported in (2004) 10 SCC 1, held that these circular is binding on the officers administrating in the law working under the Board of Revenue and it is not open for them to say that the circular is not binding on them. Firstly, it has to be pointed out that the decision refers to a circular under the Kerala Sales Tax Act and the decision has been rendered by drawing an analogy with Section 119 of the Income Tax Act owing to its similarity. However, the decision does not refer to Section 127 of the Act, which provision was invoked while passing the impugned order of transfer of the file. Further, as pointed out that the proceedings dated 31.01.2011, appears to be an instruction and not in the nature of the circular or order. Hence, the decision is distinguishable on facts. 19. As regards the decision in the case of State of Tamil Nadu vs. India Cements Limited (supra), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 127 of the Act by virtue of the instruction issued under Section 119 of the Act, would virtually stand negatived. This is not the intention of the legislation nor the scope of the instruction issued and infact, the view taken by this Court is in consonance with the observations made by the Hon'ble Supreme Court in the case of Catholic Syrian Bank Limited vs. Commissioner of Income Tax (supra). 21. The Hon'ble Division Bench of this Court in the case of CIT vs. G.Chandra (supra) was considering the effect of circular dated 27.03.2000, issued by the CBDT, prescribing monetary limit for filing appeals before the High Court. On facts, the Revenue was unable to point out to the Court that the case of the assessee falls within the exception provided in the circular. In any event, in the said decision, the power exercisable by the Commissioner under Section 127 of the Act, vis-a-vis, the instruction issued by the Board under Section 119 of the Act. did not arise for consideration and therefore, the decision does not render support to the facts of the present case. 22. In decision in the case of Kiran Singh vs. Chaman, Paswan Ors., reported in AIR 1954 SC 340, has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... four wards in DCIT circle No.1 is 65. Hence, this contention raised by the petitioner does not merit acceptance. 24. In the case of UCO Bank vs. CIT, (supra), the Hon'ble Supreme Court pointed out that CBDT under Section 119 of the Act has power, inter alia, to tone down the rigour of the law and ensure a fair enforcement of its provisions, by issuing circulars in exercise of its statutory powers under Section 119 of the Act, which are binding on the authorities in the administration of the Act. Further, it was pointed out that under Section 119(2)(a), the circulars as contemplated therein cannot be adverse to the assessee. The power is given for the purpose of just, proper and efficient management of the work of assessment and in public interest. It is a beneficial power given to the Board for proper administration of fiscal law so that undue hardship may not be caused to the assessee and the fiscal laws may be correctly applied. Further, it was pointed out that such circulars are not meant for contradicting or nullifying any provision of the statute and they are meant for ensuring proper administration of the statute. 25. Having seen the effect of a circular or a dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kload is equitably distributed amongs the Assessing Officer. Therefore, the monetary limit fixed in the instruction dated 31.01.2011, was not a rigid limit. This is manifest from the subsequent instruction dated 08.04.2011, which has given discretion to the Chief Commissioner and Director General to adjust the limits. The underlining object of the instructions is equitable distribution of work. It is seen that the amended instruction dated 08.04.2011 itself, came to be issued, as Chief Commissioners have expressed the view that the limits fixed in the instruction dated 31.01.2011, if strictly enforced would lead to unequal distribution of workload between Assistant Commissioner and Income Tax Officers. Therefore, the Board re-considered the matter. The impugned order of transfer of the file of the petitioner to the first respondent states that the impugned proceedings has been passed for administrative convenience and apart from the petitioner's case, two other cases have also been transferred. The purpose for such transfer has been elucidated in the counter affidavit. Furthermore, there is no malafide alleged as against the first respondent, though a faint plea was raised at t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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