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TMI Blog1985 (7) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... at Rs. 30,000 before the ITO Special Survey Circle I, Ludhiana who had the proper jurisdiction at the relevant time. It appears that a search was conducted at the business premises of M/s K. P. Paul Hosiery Textiles and its allied concerns and the residences of partners in September, 1978. Immediately thereafter, jurisdiction over the cases of this group including that of the assessee was transferred from the various assessing officers to the ITO Central Circle V, Ludhiana. Unfortunately, the ITO Spl. Survey Circle I Ludhiana did not transfer the recorders of the assessee to the ITO Central Circle V, Ludhiana after the above order of transfer and took steps to complete the assessment of the assessee and finally made an ex-parte assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout jurisdiction. It was also urged that both the conditions to invoke jurisdiction under s. 147(b) were missing. It was also urged that an assessee could not be penalised for the default of the Department. The assessee had filed the return originally and no additional information whatsoever was available with the ITO and therefore, the assumption of jurisdiction under s. 147(b) was ab initio void. The above submissions did not find favour with the ITO. He held that jurisdiction under s. 147(b) had properly been assumed. In this connection he relied on the decision of the Hon'ble Gujarat High Court in the case of Harishchandra Singhji Dansinhji vs. Suraj Bhan, ITO (1974) 95 ITR 350 (Guj). The AAC has upheld the jurisdiction of the ITO unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 34(1)(a) is pari materia with s. 147(a)/148 of the IT Act, 1961. At the time of issuing the notice, the ITO had no legal jurisdiction over the case of the assessee. However, in response to the notice issued by the ITO, Ajmer the assessee filed returns of total income. Pending those referred, before the ITO, Ajmer the ITO, Central Circle IV, Delhi who had competent jurisdiction over the case of the assessee issued fresh notices under s. 34 for those very years. The assessee company did not submit any returns but wrote to the ITO, Central Circle IV, Delhi, saying that it had already submitted its returns to the Officer at Ajmer and hence it could not called upon to file fresh returns. The Officer rejected the objection and made the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and he also completed the assessment expert` after the jurisdiction no longer vested with him. The AAC rightly cancelled the assessment made by the ITO, Survey Circle I, Ludhiana as he had no jurisdiction to make the assessment. Once the assessment was annulled by the AAC on 29th Dec., 1978, the stage of return was restored. It is to be seen whether on 29th Dec., 1978 assessment could be made by the ITO of competent jurisdiction on return filed on 29th Aug. 1975 for the asst. yr. 1975-76. Under s. 153(1)(a)(iii) no order of assessment shall be made under s. 143(3) or s. 144 at any time after the expiry of two years from the end of the assessment year in which the income was first assessable, where which assessment year is an assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to what is the effect of such a return on which no assessment has been made vis-a-vis proceeding under s. 147. Exactly similar case came up for consideration before their Lordships of the Allahabad High Court in the case of Mohd. Shekoor Mohd Bashir vs. CIT (1969) 72 ITR 545 (All). In this case, ZB carried on business with his sons S and B. ZB gifted the business to his sons in 1942 and died in 1948. For the asst. yr. 1943-44 onwards S and B filed returns showing that the business was carried on by them individually. The ITO did not act on those returns but assessed the business in the hands of an AOP which included the sons and grandsons of ZB. In appeals for the asst. yrs. 1945-46 to 1956-57, the AAC on 31st Oct., 1957 set aside the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s undisputed of and the ITO is precluded by the bar of limitation from making the assessment on the basis of that return. Their Lordships further observed that in every case whenever the ITO seeks to invoke jurisdiction under s. 34(1), he must ask himself the question whether it is open to him to bring the income to assessment by exercising his power under s. 23 (of the Indian IT Act, 1922) which is equivalent to s. 143 of the IT Act, 1961. If he cannot, either because the assessment order under s. 23 has bear made and is therefore, final, so far as he is concerned or, although no assessment order has been made, he is precluded from making an assessment because of the bar of limitation, income which was liable to assessment must be said to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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