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TMI Blog1985 (3) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a comprehensive letter dated 8-11-1979 giving certain guidelines/instructions to the ITO for proceeding with the assessee's assessment for the year. In spite of it, the ITO did not complete the assessment finally. He only prepared a draft assessment order on 25-3-1980 and forwarded a copy of it to the assessee as laid down in section 144B(1) and on receipt of objections from the assessee forwarded the draft assessment order along with the assessee's objections to the IAC, Allahabad, under sub-section (4) of section 144B. On receipt of the directions dated 25-9-1980 from the IAC, Allahabad, the ITO has completed the assessment under sub-section (3) of section 143, read with section 144B, on 27-9-1980. 3. The assessee's submission is that the provisions of section 144B are not applicable in this case in view of sub-section (7) of section 144B thereof and, therefore, the assessment as made on 27-9-1980 by the ITO is barred by limitation, has been considered and rejected by the Commissioner (Appeals) for reasons given in paragraph Nos. 2 to 4 of his order. 4. At the time of hearing of the appeal before the Division Bench, the departmental representative relied on the order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... article ' the ' before the expression ' Inspecting Assistant Commissioner '. Moreover, on going through the provisions of section 125A(3), one is hardly left in doubt that the Legislature has contemplated jurisdiction of two IACs on an ITO in specified cases, i.e., the IAC, who has concurrent jurisdiction over an assessee along with the ITO and the IAC, who has administrative or territorial jurisdiction over the ITO. That is why the Legislature has taken particular care to make it clear by means of sub-section (3) of section 125A that even in cases where the IAC has got concurrent jurisdiction with the ITO over an assessee, the ITO shall also observe and follow any instructions as may be issued to him for his guidance by the IAC within whose jurisdiction he performs his functions, etc. Accordingly, we hold that there is nothing wrong in the conferring of concurrent jurisdiction over the assessee to the IAC, Allahabad, along with the ITO, while the IAC within whose jurisdiction the ITO performs his functions continued to be the IAC, Gorakhpur. 6. It is pertinent to mention that Shri Bharatji Agarwal, the learned counsel for the department, had contended that the authority of a no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to in sections 125 and 125A. In this context, the standing counsel relied on the Delhi High Court's decision in the case of Bishamber Nath Ram Sarup v. ITO [1980] 15 CTR (Delhi) 106 and the Bombay High Court's decision in the case of Bhagwanji Haridas v. Premji Parashotam AIR 1959 Bom. 47. Shri Sharma, the learned counsel for the assessee, on the other hand, submitted that the two decisions relied upon by the learned standing counsel are not applicable to the facts of the case and that once the concurrent jurisdiction has been conferred on the IAC, the powers of the ITO are circumscribed, who can thereafter exercise only such powers and perform only such functions under the Act as the IAC may direct. The submission, thus, is that if the IAC does not give any directions as such, it has to be presumed that in exercise of his powers under section 125A, the IAC has allowed the ITO to exercise all the powers and functions under the Act in relation to a particular case. On carefully going through the two decisions, relied upon by the learned standing counsel, we find that they are not of any help to the department. No doubt, the Bombay High Court has held that the expression ' concurrent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is desirable to mention that some time after the issue of notification dated 31-1-1977 conferring jurisdiction over the assessee on the IAC, Allahabad, the IAC, Gorakhpur, informed the ITO about the concurrent jurisdiction and directed him vide his letter dated 1-9-1979 (copy on record), inter alia, not to leave the assessee's case entirely for the IAC, Allahabad, but to continue the proceedings for the assessment keeping in touch with the IAC, Allahabad, and if necessary to visit the Allahabad and discuss the matter concerning the assessee's case with him. The ITO acknowledged the above letter of the IAC, Gorakhpur, vide his letter dated 5-9-1979. The IAC, Allahabad, thereafter issued a long letter dated 23-11-1979 to the ITO. In this letter, a copy of which was endorsed to the IAC, Gorakhpur, the IAC, Allahabad, directed the ITO to proceed to make the assessment in the assessee's case in a particular manner. This letter runs into four single space typed full size pages. The IAC, Allahabad also took care to inform the IAC, Gorakhpur, about the steps he had already taken or proposed to take in the matter. 10. It is difficult, if not impossible, to accept in the face of such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be cancelled/set aside, so that the fresh assessment according to the law can be made. 12. With a view to appreciate the rival contentions in this regard, we have carefully looked into the original copy of the draft assessment order. Its each page is initialled by the ITO. However, the last page of the order where total income is computed is not signed. Tax on the total income proposed has also not been determined. The draft order has been forwarded to the assessee with a clear indication that it is a draft assessment order. The assessee has been called upon to give its objections to the disallowances/additions, if any. Having regard to all the above facts, we are in agreement with Shri Sharma that the draft assessment order is not and cannot be treated as an assessment order passed under section 143(3), even after taking into account the enabling provisions of section 292B of the Act. Under the circumstances, it has to be held that the assessment order for the year has been passed by the ITO on 25-9-1980 and is, therefore, clearly barred by limitation. 13. Placing strong reliance on the decisions of the Calcutta High Court in the cases of Ram Kumar Sitaram v. Certificate Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith law. In both the above cases, however, the orders in question were passed in time. Legal and valid orders could be passed on those dates on which the orders which were found to suffer from certain irregularity or illegality were passed. In the present case, no order of assessment has been passed within the time limit. The above two cases, thus, do not help the department's contention. 15. As regards the two Supreme Court's decisions and the two Calcutta High Court's decisions relied upon by the learned standing counsel also the position is not very much different. The question involved in Ram Kumar Sitaram's case was about the validity of fresh certificate proceedings which were started after the earlier proceedings were filed. The question of time limit was not involved at all. In Cachar Plywood Ltd.'s case, the question was, no doubt, similar. But in that case, the assessee had challenged the transfer of its income-tax file in the High Court. During the pendency of proceedings, the ITO to whom the assessee's cases were transferred had passed the orders of assessment which were in time. These orders were quashed on the ground that the orders of transfer were invalid. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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