9911796707
TMI Blog1987 (1) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been allowed as deduction in computing the net income of the assessee. 3. The assessee was under the jurisdiction of the ITO, A-Ward, Guntur. For the assessment year under appeal the following facts are relevant: "Date Event 31-3-1981 Date on which order under section 143(3) read with section 144B of the Income-tax Act, 1961 (draft assessment) was made by Income-tax Officer, A-Ward, Guntur. 5-5-1981 Date on which the draft assessment order was served on the assessee. 9-5-1981 Date on which objections were filed against the draft assessment order. 30-9-1981 Date on which the file of the assessee was transfered from Income-tax Officer, A-Ward, Guntur, to Income-tax Officer, Special Investigation Circle, Guntur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving concurrent jurisdiction over the assessee with the ITO, Special Investigation Circle. The assessee's preliminary objection is that such a course of actions is not open to the IAC (Assessment), unless the jurisdiction of the IAC Range-I, Hyderabad, was taken away or removed by an appropriate order under section 123(1). 4. Another objection of the assessee is that there was no notification under section 125A of the Act conferring jurisdiction on the IAC (Assessment) concurrent with that of the ITO, Special Investigation Circle, with effect from 30-9-1981. 5. In the first appeal, the Commissioner (Appeals) held that the order under section 127(1) clearly mentioned that the IAC (Assessment) will have concurrent jurisdiction along with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IAC Range-I, under section 144B(1), it was the latter who was in seisin of the matter. It was his responsibility to give directions to the ITO under section 144B(4). At that point of time, if at all the Commissioner wanted to effect a transfer of file, he ought to have passed an order under section 123(1) transferring the file from one IAC to another IAC. This he did not do. Instead, he sought to transfer the file from the ITO, A-Ward, to the ITO, Special Investigation Circle under section 127(1). This he is not entitled to do as the matter was pending before the IAC, Range-I. Even if the file had been transferred under section 127(1) it will have prospective application only and not retrospective application, because no case was pending be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place. In the circumstances, no order need be passed under section 123(1). 9. Having regard to rival submissions and the materials on record, we uphold the order of the IAC (Assessment). There is no dispute that the ITO, A-Ward, proposed a draft assessment order which was served on the assessee; within the time prescribed under section 144B the said draft order together with the objections thereto was forwarded to the IAC, Range-I, under section 144B(4). Thus, the matter was pending before the IAC, Range-I, for issuance of directions under section 144B (4). At this stage of the proceedings, the Commissioner, by virtue of the impugned order under section 127(1), transferred the case of the assessee from the file of the ITO, A-Ward, to that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he procedure laid down in part of the ITO to follow the procedure laid down in section 144B. The Tribunal reversed his order and directed the ITO to make fresh assessment after complying with section 144B. The High Court upheld the order of the Tribunal holding that section 144B contained only procedure for completing the assessment and it cannot have the effect of invalidating the assessment when not complied with. In H. H. Maharaja Raja Pawer Dewas v. CIT [1982] 138 ITR 518, the Madhya Pradesh High Court held as follows: "Besides the argument, that the assessment order was totally invalid or non est on account of non-compliance with the procedure laid down under section 144B of the Act, is not correct. There was no jurisdictional error e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the dated of such order or direction in respect of any year." [Explanation to section 127] Thus, 'case' would cover not only the past, the present, but also the future proceedings under the Act. Therefore, we uphold the contention of the revenue that the Commissioner had jurisdiction to transfer the case when the matter was pending before the IAC, Range-I. 12. Shri Swamy relied on the decision of the Calcutta High Court in Ashoke Glass Works' case. That was a case concerning the jurisdiction of the IAC and the ITO in regard to penalty proce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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