TMI Blog2007 (9) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... 01 passed u/s 120 by the CCIT, Lucknow. Clearly on 29-3-2004 jurisdiction over the assessee vested with Addl. CIT, Lucknow. There cannot be situation where two Assessing Officers would have simultaneous jurisdiction over the assessee, one being Addl. CIT, Lucknow and other being ACIT, Lucknow, unless concurrent jurisdiction is specifically given to them by the CCIT. There is no such claim of the revenue that concurrent jurisdiction was given to two officers in respect to the assessee. Therefore, ACIT, Lucknow did not have jurisdiction over the assessee on 29-3-2004 and clearly the notice u/s 148(1) was issued by the Assessing Officer having no jurisdiction over the assessee. Hon'ble Kerala High Court in P.A. Ahammed v. Chief CIT [ 2005 (10) TMI 49 - KERALA HIGH COURT] held that at any given point of time only one Assessing Officer can have regular jurisdiction over an assessee for assessment under the scheme of the Act. Therefore, when a transfer is effected, the entire file old, pending and the returns to be filed will get transferred to the officer to whom the file is transferred by the CCIT. The use of word case means the entire proceeding under the Act which are trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecific in section 124(3). Secondly, Principles of Estoppel are not applicable to income-tax proceedings. What may be acceptable or held in one year or in one proceeding cannot be in general held to be applicable to other proceedings. It is held in Anant Mills Ltd.'s case [ 1992 (9) TMI 27 - GUJARAT HIGH COURT] that estoppel is not applicable to successive assessments. In any case, estoppel cannot be made applicable to assumption of jurisdiction . It has to be specifically provided in the statute. We, therefore, do not find any force in the arguments in this regard submitted by the learned D.R. The same are, therefore, rejected. So far as the merit of the case is concerned, in our considered view they are merely academic as reassessment is cancelled as having been initiated without jurisdiction. As a result, we hold that the issuance of notice u/s 148(1) by ACIT, Lucknow was without jurisdiction and, therefore, invalid. The assessment framed on that basis by Addl. CIT, Lucknow will also be invalid and, therefore, is cancelled. The appeal of the assessee is, therefore, allowed. In the result, the appeal of the assessee is allowed. - Member(s) : D. C. AGRAWAL., DR. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that as required by Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd v. Income-tax Officer 259 ITR 19, the Assessing Officer before proceeding with assessment, failed to pass a speaking order to the objections raised by the appellant against the reopening of the assessment vide its letter dated 19-8-2004, 15-8-2004 and 21-2-2005. (6) On the facts and circumstances of the case and in law, the CIT(A) should have deleted the addition of Rs. 22,00,000 under section 68 to the appellant's income of assessment year 1997-98,. being the 'advance' received by the appellant from M/s. Skymoon Plantation Finance Ltd. against the booking of the office space in its building. New Janpath Complex, Ashok Marg, Lucknow which was under construction at the relevant time. (7) Without prejudice to all the above grounds of appeal, and in view of the Supreme Court order in the case of Mangalore Ganesh Beedi Works v. CIT 273 ITR 57 and in several other cases, the appellate order, dated 23-11-2005 passed by the CIT(A) in the appellant's case for assessment year 1997-98 needs to be cancelled and he/she must be directed to pass afresh order as the said order has been passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was filed with ACIT, Range-4, Lucknow. In the meantime, the registered office of the assessee was shifted from above address to 6th Floor, New Janpath Complex, 9A, Ashok Marg, Lucknow with effect from 22-11-2001. For the purpose of shifting the registered office, the assessee followed the due process of law as provided under the Companies Act, i.e., it passed a resolution in the meeting of the Board of Directors, gave due intimation to the Registrar of Companies and also put advertisement in the newspaper regarding change of address. It is claimed by the assessee that it intimated the income-tax authorities accordingly. Relevant documents were filed before CIT(A) as well as before us. The CCIT, Lucknow meanwhile passed an order under section 120 effective from 1-8-2001 revising the territorial jurisdiction of the Assessing Officer. As per the new order of jurisdiction, the jurisdiction over the corporate assessees having their registered office at Ashok Marg/Hazaratganj, Lucknow are vested with Addl. CIT, Range-I, Lucknow. The assessee filed its returns of income for assessment years 2002-03, 2003-04 and 2004-05 with the Addl. CIT, Range-I, Lucknow. These returns were duly accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: "The assessee raised the issue of jurisdiction and contended that the jurisdiction over its case does not lies with ACIT, Range-IV, Lucknow. After considering the objection of the assessee the case was transferred to Income-tax Officer-1(1), Lucknow, who is having the jurisdiction over the said case." 6. Thereafter, the Assessing Officer-1(1) continued the proceedings and finally framed the assessment by making addition of Rs. 22,00,000 being alleged cash credits in the books of the assessee in the name of M/s. Skymoon Plantation and Finance Ltd. which were allegedly advanced to the assessee for booking of office space in New Janpath Building which was to be constructed. The alleged credit was given to the assessee in the financial year 1996-97 relevant to assessment year 1997-98. In fact total amount found credited in the books of the assessee in the name of M/s. Skymoon Plantation and Finance Ltd. amounted to Rs. 49,00,000. Out of this, Rs. 8,00,000 were claimed to have been received in assessment year 1996-97 and Rs. 19,00,000 was claimed to have been received in the assessment year 1998-99. 7. On merit of the case, the Assessing Officer-1 (1) required the assessee to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he had reproduced the contention of the assessee which are contained in paras 2 to 10 of her order. In para 11, she has reproduced response from the Assessing Officer on the contention of the assessee. Thereafter she has passed one line order as under: "There is merit in Assessing Officer's contention and this ground is dismissed." Since she has upheld Assessing Officer's contention on the issue of jurisdiction, it is pertinent to refer what he has commented on assessee's objection to jurisdiction: "During the assessment proceedings of assessment year 2001-02 which was heard during the period 24-10-2002 to 3-3-2004 and order of which was passed on 23-3-2004, assessee never challenged the jurisdiction under section 124(3)(a). Hence during the assessment proceedings the jurisdiction was vested with the ACIT Range-IV, Lucknow and, therefore, on date of issue of notice under section 148 the then Assessing Officer had a jurisdiction to issue the notice. Assessee during the proceedings submitted all his replies in the letter head bearing new address i.e., "New Janpath, Hazratganj" and also filed returns for assessment years 2002-03 and 2003-04 during the period with Addl. CIT, Rang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced by her in para 34. In para 35, she has given her findings on merits as under: "35. After due consideration of all facts and the catena of legal decisions relied upon by both the Assessing Officer and the appellant, it is observed that the appellant has failed to prove that the transaction is a clear cut case of proven cash credit or of an advance given for property purchase. In appeal also the appellant was specifically requested to file details of agreements, stamp duty, registration, other documents to authenticate its stand but no such papers were filed. This is undoubtedly the appellant's own money routed through M/s. Skymoon Plantation Finance Ltd. and has been. rightly added under section 68 of the Income-tax Act. In his order and reports, the Assessing Officer has distinguished the cases relied upon by the appellant from the facts of the appellant's case. Reliance is also placed on the cases relied on by the Assessing Officer. This ground is dismissed." 12. In brief, the contention of the Assessing Officer, which have been upheld by ld. CIT(A) while confirming the addition of Rs. 22 lakhs are as under: "(i) Out of 14 credit entries in books, 11 credit entries ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in financial year 1996-97 to M/s. M.I. Builders Pvt. Ltd. out of its deposits of Rs. 32,74,500 which comes to more than 90 per cent of total public deposits. (4) Company did not have any rented or owned office space, as company had not paid any rent as per P L a/c and also not had any fixed assets in the form of building etc. as total assets of the company is in form of furniture and fixture of Rs. 3,083,20 only. (5) Company is not paying any interest to its depositors." 14. Before us, authorised representative for the assessee raised the legal grounds which are reproduced in the grounds of appeal above. 15. Before us the ld. A.R. of the assessee raised several arguments. The first argument of ld. A.R. of the assessee was that notice under section 147/148 could not have been issued by an officer who did not have jurisdiction over the case at the point of time when that notice was issued. If such a notice issued then it would be invalid and ab initio void and assessment made on that basis would be a nullity. He relied on following judgments for this proposition: (i) Lt. Col. Paramjit Singh v. CIT [1996] 220 ITR 446 (Punj. Har.), (ii) Naginimara Veneer Saw Mill (P.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, the ld. AR. of the assessee relied on following authorities: (i) GKN Driveshafts (India) Ltd.'s case, (ii) Fisher Xomox Sanmar Ltd. v. Asstt. CIT [2004] 271 ITR 393 (Mad.), (iii) Tolins Rubbers v. Asstt. CIT [2004] 270 ITR 280 (Ker.), (iv) Gehna v. Union of India [2004] 267 ITR 782 (Raj.) and (v) K.S. Suresh v. Dy. CIT [2005] 279 ITR 61 (Mad.). 19. On merit of the case, the ld. AR. of the assessee submitted that the sum of Rs. 22 lakhs was received as deposit by the assessee from Skymoon Plantation Finance Ltd. (SP FL). It is a company duly registered under the Companies Act. It has its own identity. Money was paid by account-payee cheques. It was also explained to the Assessing Officer that SP FL received the money from its depositors for the purpose of plantation but in order to purchase office space money was deposited with the assessee-company. Thus, identity, creditworthiness and genuineness of the transaction have been proved. The assessee has no control or even any onus to prove as to how SP FL brought money into its books. The source of source or origin of origin is not required to be established by the assessee. For this proposition, ld. A.R. of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies assessee did not produce the books of account of SP FL so that Assessing Officer could know the creditworthiness of SP FL. The learned D.R. referred to the order of the ld. CIT(A) wherein comments of the Assessing Officer on the remand report are reproduced and which suggests that assessee has borrowed money from SP FL as and when there was deficiency for its cash balance. SP FL have collected funds from the so-called depositors for the purpose of plantation but no plantation as such has taken place. Without examination of the books of SP FL it is not possible to know how the funds had developed in the books of SP FL and also to find out whether deposits in the books of the creditor were genuine and, hence, credit in the books of the assessee are also genuine. Without showing the books of SP FL it is not possible to come to the conclusion that the creditworthiness of the creditor is established. The learned D.R. supported the orders of the Assessing Officer and the ld. CIT(A) submitting that assessee and the creditor SP FL have not cooperated with the Assessing Officer and he was constrained to pass an order under section 144. 22. In rejoinder ld. A.R. of the assessee submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction is specifically given to them by the CCIT. There is no such claim of the revenue that concurrent jurisdiction was given to two officers in respect to the assessee. Therefore, ACIT, Range-IV, Lucknow did not have jurisdiction over the assessee on 29-3-2004 and clearly the notice under section 148(1) was issued by the Assessing Officer having no jurisdiction over the assessee. Hon'ble Kerala High Court in P.A. Ahammed v. Chief CIT [2006] 282 ITR 334 held that at any given point of time only one Assessing Officer can have regular jurisdiction over an assessee for assessment under the scheme of the Act. Therefore, when a transfer is effected, the entire file old, pending and the returns to be filed will get transferred to the officer to whom the file is transferred by the CCIT. The use of word "case" means the entire proceeding under the Act which are transferred to the new officer and the old officer ceases to have jurisdiction. The officer to whom the files are transferred only can make the assessment. 24. The Hon'ble Allahabad High Court in CIT v. Metal Goods Mfg. Co. (P.) Ltd. [1992] 197 ITR 230 held that a court or a Tribunal deciding the matter must possess the jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der under section 120 operates not only against the assessee but also against the Assessing Officer holding jurisdiction at the time of passing of the order under section 120. To continue with the proceedings after passing of the order under section 120 by the same old officer would be without jurisdiction and hence would be bad in law. Learned D.R. submits that section 124(3) protects assessments so framed if the assessee does not object within a month of initiation of such proceeding. In our considered view, this validation of proceeding by virtue of section 124(3) is specific from proceeding to proceeding and section 124(3) cannot correct or create a jurisdiction in respect of other proceedings if the Assessing Officer otherwise does not have jurisdiction. In other words, the failure to object by the assessee within a month of the initiation of proceedings validates only that proceeding and assessment made thereafter if so provided under section 124(3) and does not validate any other proceedings if undertaken by the same Assessing Officer having otherwise no jurisdiction over the assessee. In this regard it would be pertinent to refer to section 124(3): "(3) No person shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee does not object within a month). Clause (b) is applicable only in respect of those assessees who have not filed any return under section 139 for the relevant assessment year. Since the assessee had in fact filed a return under section 139 for the assessment year 1997-98 the protection to the proceeding initiated under section 148(1) in the case of this assessee will not be available to the revenue by virtue of clause (b). But such protection will also not be available (on failure to protest within one month of the proceedings) under clause (a) as that is not applicable to a proceeding initiated under section 148(1). Thus, in the present case, it would be immaterial whether assessee has objected within one month of the issuance of notice under section 148 or not. Notwithstanding as the assessee has protested within one month of the issuance of notice under section 148(1) then right course to the Assessing Officer was to refer the matter to the Chief Commissioner as provided under sub-section (2). In any case, invoking of section 124(2) would arise if there was any chance of validation of proceedings by virtue of section 124(3) which in our view is not available to the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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