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TMI Blog2018 (6) TMI 1733X X X X Extracts X X X X X X X X Extracts X X X X ..... is in fact the same as that of any other ITO at Jalandhar or Kapurthala. Once, therefore, there is a valid assumption of jurisdiction to frame the assessment u/s. 143(3), by service of a valid notice u/s. 143(2) in time, the proceedings are to be taken to their logical conclusion. The assessment by the ITO, Ward IV-(1), Jalandhar, with whom the assessee filed his return, and who received the assessee s return from ITO, Ward II(3) Jalandhar on 21.07.2011, cannot therefore be faulted with. In fact, no further objection was raised by the assessee, with he rather participating in the assessment proceedings. How, then, could he challenge the jurisdiction of the ITO, Ward IV(1) Jalandhar with whom he has in fact filed his return for the year, as his AO, in the appellate proceedings. The issue of notices u/ss. 142(1) and 143(2) by ITO, Ward IV(1) Jalandhar on 21.07.2011 is again in consonance with the law which contemplates issue of such notices on change of incumbency or succession in jurisdiction. The same is only an administrative mechanism to accord with the principles of natural justice, with section 129 even granting the assessee the right to insist on being reheard in the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, service of which in time is again not in dispute. The assessee objected to the jurisdiction of the ITO, Ward II(3), Jalandhar for the first time on 21.01.2011, i.e., upon receipt of the communication dated 12.01.2011 there-from seeking certain details, making a reference to the notice dated 21.09.2010 (PB pgs. 3, 4). The ITO (Ward II (3), Jalandhar) transferred the assessee s return to ITO, Ward IV(2), Jalandhar (falling, again, in Range IV, Jalandhar) on 20.12.2011 (PB Pg. 5). The AO (ITO, Ward IV(1), Jalandhar), while disposing the assessee s objection to his jurisdiction to assess, holds the same as not maintainable as the jurisdiction as per the assessee s Permanent Account Number (PAN) was lying with ITO, Ward II(3), Jalandhar, so that the issue of notice u/s. 143(2) by him was valid. Similarly, the ld. CIT(A) observes that the return being selected for being subject to the verification procedure under the Act, issue of notice u/s. 143(2) on the basis of address furnished by the applicant in his PAN record, i.e., by the AO having jurisdiction with reference to the said address, is valid (refer para 2/page 2 and paras 4.2 to 4.4 of the assessment and the impugned order respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, and which clearly specifies the Income-Tax Authorities, including the Income Tax Officer, vested with the relevant jurisdiction by virtue of directions or orders issued u/s. 120(1) or s. 120(2) or any other provision of the Act. The ITO, Ward II(3), Jalandhar was not vested with the jurisdiction to assess the assessee, i.e., on the basis of territorial area, either as per the business or residential address. The issue of notice/s u/s. 143(2) by him is, thus, non est and the assessment u/s. 143(3) pursuant thereto, void ab initio. 4.2 We may at this stage advert to the law in the matter, i.e., as explained by the higher courts of law. The expression Assessing Officer in section 2(7A) is not confined to the Assessing Officer making the regular assessment but includes all the authorities mentioned in this clause. The Assessing Officer (AO) is the authority who initiates the assessment. He receives returns from the assessees within his jurisdiction and makes assessments under Chapter XIV of the Act. An appeal against an assessment by him and against several of his other orders and decisions lies to the Commissioner of Income Tax (Appeals) (section 246/246A). Of course, only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated in his PAN record as well as the return of income, at the relevant time (15.09.2010), there is no question of the notice u/s. 143(2) issued by him being invalid on the ground of jurisdiction. Else, perhaps, it may not be so in-as-much as there can clearly be no assumption of jurisdiction on the basis of acquiescence. Before proceeding further, it would be relevant to examine the scheme of the Act in relation to jurisdiction of the Income Tax Authorities. The heading of Chapter XIII of the Act is Income-Tax Authorities . The said Chapter has been divided into four parts: A, B, C D. Part B bears the title Jurisdiction . Sections 120 to 130A fall in this part. The material section for our purposes is section 124, which reads as under: 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 withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 124 provides that, subject to the provisions of sub-s. (3), where an assessee calls in question the jurisdiction of an AO, then the AO, if not satisfied with the correctness of the claim, shall refer the matter for determination under sub-s. (2) before the assessment is made. Sub-s. (2) of s. 124 states that where a question arises with regard to the jurisdiction of AO , the question shall be determined by the Director General or the Chief CIT or the CIT. Sub-s. (3) provides that no person shall be entitled to call in question the jurisdiction of an AO unless the said objection is raised by him before the expiry of one month from the date on which he is served with a notice, inter alia, u/s. 143(2), or the completion of assessment, whichever is earlier. And where no return is filed, within the time allowed by the specified notices for filing the return of income, or the time allowed to show cause why the assessment should not be completed to the best of his judgment by the AO, whichever is earlier. Case Law A Synopsis We may next examine the case law in the matter. Unlike the 1922 Act which referred to the place of assessment , section 124 refers to the jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that having regard to an order of transfer of the case or an order allocating work to different AOs, another AO in the same area has jurisdiction over the assessee s case, or on the ground that having regard to the assessee s place of business or residence, the AO of another area has jurisdiction over his case under sub-s(1) (Sohani Devi Jain vs. ITO [1977] 109 ITR 130 (140,150) (Gau)(FB)). Unlike this section, s.64(3) of the 1922 Act applied only when a question arose as to whether the assessment should be made at one place or another, and not when the question was as to which of two AOs functioning at the same place as ITO, Ward II(3), Jalandhar and ITO, Ward IV(1), Jalandhar, in the present case, should make the assessment (Baldev Singh vs. CIT [1960] 40 ITR 605, 610 (SC); Tarak Nath Bagchi vs. CIT [1946] 14 ITR 319 (Cal); Re Bisheshwar Nath Co. [1942] 10 ITR 103 (All)). If the question as to jurisdiction has been raised in time before the AO and has been decided against the assessee by the Director General or the Commissioner or by the Board, the assessee cannot raise the objection again in an appeal before the CIT(A), for s.246 does not provide for an appeal on the que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee has admittedly been served another notice u/s. 143(2) (dated 21.09.2010 and against which objection in fact stands raised) by that date. We proceed further assuming that this would not materially alter the issue in-as-much as the same stands also issued by ITO, Ward II(3), Jalandhar. The assessee impugns the said notice on the ground of the competency of the Assessing Officer [ITO, Ward-II(3), Jalandhar] in issuing the same and, thus, frame the assessment. We observe a complete unanimity of judicial opinion in the matter, even as apparent from the several case law, delivered in different fact-situations, by different High Courts across the country, as noted above (para 4.2 of this order). It is not, it may be noted, the inherent competence or the power of the authority acting as the Assessing Officer, i.e., ITO, Ward II(3), Jalandhar to issue the notice u/s. 143(2) or make an assessment, but on account of he being assigned the jurisdiction over areas in which the assessee s address purportedly does not fall, i.e., his territorial jurisdiction, that is under challenge; the inherent competence for issuing the notice or framing an assessment being the same as that of (say) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. 143(2) (dated 21.09.2010) is of no consequence. The assessee s case thus gets ousted at the threshold. Further, a perusal of the legal position, without prejudice, reveals that the assessee s objection, to be valid and maintainable, had to be, in view of section 124(3), made before the end of one month of the service of the notice u/s. 143(2), which is admittedly by 30.09.2010, i.e., by 31.10.2010, at the latest. The said objection was however raised before the AO only on 21.01.2011. The law in the matter, upon an overview of the case law on the subject, was found to be wellsettled. There is, as a perusal of the several decisions afore-referred reveal, no vested right of the assessee for being assessed by a particular officer, or at a particular place, so that the assessee s objection is not even contemplated by law where there is a transfer of jurisdiction u/s. 127 from one officer to another in the same city. The issue of jurisdiction, as per the scheme of the Act, is to obtain such objection, if any, from the assessee at the earliest point in time, and to resolve the same through the administrative channel, keeping it outside the purview of the appellate or reference proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranting the assessee the right to insist on being reheard in the matter, i.e., to the extent already heard by the previous officer/s. Given the facts afore-noted and the clear position of law, we do not consider it relevant to restore the matter to the file of the AO for resolving the assessee s objection dated 21.01.2011 through recourse to the administrative process; the said objection being not maintainable in law, i.e., both on facts and in law. In fact, even where maintainable, the question that would arise is if the tribunal could issue such a direction, given the law that the issue of non addressing the assessee s objection, or not doing so to the satisfaction of the assessee, is beyond the pale of the appellate proceedings; the same, as explained by the higher courts, including the apex court, being relegated under the Act to the administrative side. That is, the same does not give rise to an appealable issue. It is this that led us to state that the proper recourse perhaps may be move the Hon ble High Court under writ jurisdiction. Two, in any case, and without prejudice, there is no question of the assessment being annulled or declared void ab inito; the inherent compe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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