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TMI Blog1996 (5) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... e proceedings. The CIT(A) has conveniently ignored the judicial pronouncements in this behalf brought to his notice in writing. 3. That the CIT(A) has failed to appreciate that even if an AOP in the name and style of Sehgal Oil General Mills were treated to be in existence, the Assessing Officer who exercised jurisdiction only over the cases specifically assigned to him, could have no jurisdiction over such an AOP when no such case had been assigned to him. 4. That the CIT(A) has also not cared to appreciate that even if the alleged AOP was held to be in existence, how the name and the accounting period were determined by Assessing Officer. 5. That the CIT(A)'s observations that the action of the sons of late Shri D.D. Sehgal in jointly applying for succession certificate brought into existence an AOP is not only factually incorrect but without any basis. 6. That the CIT(A) has failed to appreciate that the proceedings initiated under section 147 were illegal and unwarranted and as such the assessment framed thereunder were void ab initio. 7. That the CIT(A) has wrongly upheld the assessment framed under section 144 when in response to notice issued to the firm, complia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idends were received along with the interest on deposits held in the name of Shri D.D. Sehgal in the Private Limited Co. M/s. Leader Valves Pvt. Ltd. Shri D.D. Sehgal expired on 11-4-1982 and it is the claim of the assessed, that no business whatsoever was done thereafter and the firm stood dissolved on the expiry of Shri D.D. Sehgal by operation of law. The Assessing Officer, however, issued notices under section 147(a) for the assessment years 1983-84 and 1984-85 by recording the following reasons : --- " The assessee-firm has been assessed for the assessment year 1979-80 at an income of Rs. 4,66,220 on 27-3-1982. The assessee-firm has neither filed return of income for the assessment years 1983-84 and 1984-85 under section 139(1) nor notice under section 139(2) has been issued to the assessee firm. Considering the source of income of earlier years, I am of the opinion that the assessee-firm must have earned taxable income during assessment years 1983-84 and 1984-85. Therefore, I have reasons to believe that the income chargeable to tax for the assessment years 1983-84 and 1984-85 has escaped assessment within the meaning of section 147 of the Income-tax Act, 1961. Issue notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As per the assessment order, the dividend accrued for the assessment year 1983-84 on the shares held in the name of Shri D.D. Sehgal with M/s. Leader Valves Pvt. Ltd. was Rs. 3,54,420. Besides that the assessee earned interest of Rs. 28,990 on the deposits lying with the said company in the name of Shri D.D. Sehgal. Similarly for the assessment year 1984-85 the dividend due was Rs. 1,77,210 together with interest income of Rs. 30,759. For the assessment year 1987-88, the dividend due was Rs. 1,77,210 and interest income was of Rs. 41,903. 4. The assessee appealed to the learned CIT(A) and challenged the action of the Assessing Officer in assuming jurisdiction and raising assessment in the name of M/s. Sehgal Oil General Mills, Mandi Road, Jalandhar AOP on the ground that no such AOP was in existence. It was argued before the learned first appellate authority that specific cases are assigned to the Assessing Officer, Central Circle and the present Assessing Officer had jurisdiction only in the case of the firm styled as M/s. Sehgal Oil General Mills, Mandi Road, Jalandhar. No case of an AOP was ever assigned to the Assessing Officer and, in fact, the AOP is non-existent and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ud, Advocate, the learned representative of the assessee, submitted that the learned CIT(A) has failed to appreciate that even if the AOP in the name and style of M/s. Sehgal Oil General Mills were treated to be in existence the Assessing Officer who exercise jurisdiction only over the cases specifically assigned to him could have no jurisdiction over such an AOP when no such case had been specifically assigned to him, the Assessing Officer being an Officer of Central Circle, Jalandhar. Accordingly, it was submitted that the departmental authorities were not justified in framing the assessments in the case of the assessee as the proceedings initiated under section 147 for the assessment years 1983-84 and 1984-85 were illegal and unwarranted and as such the assessments thereon were void ab initio. It was submitted that the CIT(A) has wrongly referred to sub-sections (3) and (3A) of section 176, which deals with discontinuance of business whereas in the present case the firm M/s. Sehgal Oil General Mills had ceased to exist altogether by operation of law on 11-4-1982 when Shri D.D. Sehgal, one of the partners expired. It was pleaded that even for arguments sake if it is assumed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntarily combine together for a certain purpose. Hence volition on the part of the members of the association is an essential ingredient. It is true that even a minor can join an " association of persons " if his lawful guardian gives his consent. In the case of receiving dividends from shares, where there is no question of any management, it is difficult to draw an inference that two or more shareholders function as an " association of persons " from the mere fact that they jointly own one or more shares, and jointly receive the dividends declared. Those circumstances do not by themselves go to show that they acted as an " association of persons. " The authorities relied upon by the learned CIT(A) in its order for the assessment year 1983-84 are distinguishable on facts whereas the facts of the case of G. Murugesan Bros. are similar to the facts of the case in dispute. The Hon'ble Karnataka High Court also in the case of Abdul Sattar M. Mokashi has held that the status of an assessee cannot be changed on re-assessment by the Assessing Officer. Similar is the view of the Hon'ble Kerala High Court in the case of P. N. Sasikumar. The decision of the Tribunal in the case of Venkata ..... X X X X Extracts X X X X X X X X Extracts X X X X
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