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TMI Blog2007 (1) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... circular as there was no change in respect of the subject controversy. However, in 1999 the Central Government issued a further circular by which the IDS officials were also empowered to make queries from the employer under section 131 which was usually the power of the Assessing Officer. Such power was not expressly given by the Central Government prior to 1999. In the early part of 1990s the IDS officials after receipt of Form No. 24 from the appellant raised several queries which were replied to by the appellant. However, the officials were not satisfied with the explanations and went on making further queries on the subject issue which gave rise to the present litigation. The appellant filed the instant writ petition in 1996 challenging the authority and propriety of the tax deducted at source officials to make such queries which was otherwise entrusted to the Assessing Officers. It was the case of the appellant before the learned single judge (CESC Ltd. v. ITO [2005] 272 ITR 513 (Cal)) that the power so enjoyed by the Assessing Officers under section 131 was not given to the IDS officials and as such the queries made by the IDS officials were without jurisdiction. This c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r at Kanpur had no jurisdiction under section 131. Secondly, it was contended that, in any event, assuming there was jurisdiction, the notices issued and the orders passed were wholly beyond the scope of section 131 as also not in compliance with the requirements thereof. The High Court negatived both contentions. Aggrieved thereby, the appellants are before this court. Though learned counsel for the appellants canvassed for considerable time the issue of jurisdiction, after having perused the different notices and orders under challenge, we are of the view that the appellants are entitled to succeed on the second point. The issue of jurisdiction, therefore, need not be gone into in depth and decided in this appeal as it is unnecessary. Though learned counsel appearing for the Revenue also had a number of arguments to address on the issue of jurisdiction, in the facts and circumstances of the case, we feel that the issue of jurisdiction need not be decided and can be kept open to be decided in any other more appropriate case as the appellants are, in any case, entitled to succeed on the second point, even if we assume that the Assessing Officer in Kanpur had jurisdiction to iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer, Ward 3(9) TDS, Kanpur, shall be free to exercise his powers under section 206 read with section 131 only for the purpose of discharging his functions under section 206 of the Act and subject to the restrictions and conditions prescribed in section 131 and also subject to the documents and other books of account being relevant to his functions required to be discharged under section 206 of the Act. It is preferable that the Central Board of Direct Taxes or the Central Government lays down clear guidelines indicating the functions, procedure and the manner in which the prescribed authority under section 206 shall exercise powers under section 131. We make it clear that we have not decided the issue of jurisdiction of the prescribed authority under section 206 to exercise powers under section 131. The contention of the appellants as to his lack of jurisdiction is kept open to be decided in any appropriate proceedings, if necessary." The learned single judge considered both the Division Bench decisions as well as the apex court decision in the case of Peerless General. The learned judge held that both the Division Bench decisions were not applicable in the instant cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the apex court only remanded the matter back to the appropriate forum keeping the issue open. Before we decide on the subject controversy let us have a little recapitulation of the relevant provisions of the Act. Under section 2(7A) "Assessing Officer" means an appropriate official having 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 said Act and he is empowered to exercise or perform all or any of the powers and functions conferred on or assigned to him under the said Act. Under section 131 of the Act, the Assessing Officer shall have the same power as vested in a court of law under the Code of Civil Procedure while trying a suit. Under section 131 the Assessing Officer is entitled to have discovery and inspection, enforcing attendance of any person or compelling any person to produce books of account and other documents as also issuance of commissions. If we look into the 1999 circular we would find that this power was extended to the IDS official as would appear from page 5 of the said circular which made it clear that such notification would take effect from the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfy himself and making of such queries is not irrelevant. However, in the absence of an appropriate authority being given under the statute he is not entitled to do so. The Government felt such difficulty and the 1999 circular is a result of such rethinking. We fully appreciate the difficulty of the TDS official prior to 1999 as felt by the learned single judge. However, in the absence of appropriate authority being given to those officials, we are of the view that making of such query in the absence of authority is without jurisdiction. The TDS official could have passed on the infirmities in the return as found out by him to the respective Assessing Officers of the concerned employer and/or the employees as the case may be and the concerned Assessing Officers could have taken up the issue at the appropriate level at the appropriate time. This might complicate the issue. However, such complication cannot be avoided in the absence of an express authority being given to the TDS official. In the result the appeal succeeds. The judgment and order under appeal is set aside. The requisition made by the IDS official dated September 9, 1996, as challenged in the writ petition is qu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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