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TMI Blog2011 (1) TMI 1123X X X X Extracts X X X X X X X X Extracts X X X X ..... 001. Both the appeals relate to the assessment year 1974-75 and arise out of the same order which was passed by the Commissioner of Income-tax (Appeals). Shorn of unnecessary details, the relevant facts of the purposes of disposal of these two appeals may be noticed in brief:- The respondent, the assessee was carrying on the business of manufacturing woollen textiles and leather goods. It had two woollen units popularly known as Cawnpore Woollen Mills (Lal Imli) and another unit popularly known as Dhariwal situate in Guradaspur, Punjab. The assessee filed its return of income for the assessment year 1974-75 which was processed by the Assessing Officer, namely, Income-tax Officer, Central Circle-I, Kanpur who completed the assessment under section 143(3)/144B of the Income-tax Act on September 7, 1977 after making certain additions and disallowances to the returned income. The assessee being aggrieved by the assessment order carried the matter in appeal before the Commissioner of Income-tax (Appeals) II, Kanpur. During the course of the hearing of the appeal, an additional ground, viz., that the assessing authority had no jurisdiction to pass the assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 961 as they stood on the date of the assessment, i.e., September 7, 1977, the Income-tax Appellate Tribunal was correct in law in holding that the order of the Assessing Officer after the transfer of the case from him whether the authority could not be treated to be a valid order because the Assessing Officer ceased to have jurisdiction over the case?" In the connected Income-tax Appeal No. 21 of 2001, the appeal has been admitted on the following substantial questions of law:- "1. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in coming to the conclusion that the order of the Assessing Officer was invalid for want of jurisdiction? 2. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in setting aside the order of the Commissioner of Income-tax (Appeals) and in holding that it was not required to adjudicate the grounds of appeal in the Department's appeal on the merits? 3. Whether on the facts and in the circumstances of the case and in view of the provisions of section 124(5)(a) of the Income-tax Act, 1961 as they stood on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... file to an Assessing Officer is administrative in nature and while hearing an appeal, it is not open to an appellate authority to examine the question of jurisdiction of the assessing authority. Reliance was placed by him on certain decisions already referred to above. The Tribunal took a different view of the matter on the ground that there is nothing on record to show as to when the transfer order was communicated to the assessee. According to it, there is nothing on record to show that it was communicated on that very date, i.e., July 1, 1977 or just thereafter. If the order of transfer was not communicated to the assessee on July 1, 1977, then there was no occasion for it to raise the objections about jurisdiction before the Income-tax Officer during assessment proceedings. According to it, the assessee rightly raised the plea of jurisdiction in the appeal against the assessment order, at the first available opportunity. We have given careful consideration to the entire matter. Before proceeding further it is apt to examine the scheme of the Income-tax Act (the Act) in relation to the jurisdiction of the income-tax authorities, in particular. The heading of Chap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A survey of the above provisions of the Act highlights the following situations. After creating the various income-tax authorities, the Act does not prescribe their respective jurisdiction or functions. Any case can be dealt with by any income-tax authority with the possible exception of the Board. Accordingly, the various income-tax authorities are of co-ordinate jurisdiction. What function or functions, which authority or officer, shall perform is left to be decided either by the Board or by the Commissioner. On what principles the Board and the Commissioner will allocate the functions is not indicated in the Act. The principle is, however, apparent from the nature of the enactment. The Act has been enacted with a view to collect revenue. Income-tax is the main source of revenue for the State. It is through revenue that the machinery of the State is run. It is desirable that the tax should be collected as early as possible. Collection of tax is preceded by assessment thereof. It is consequently desirable that the assessment proceedings should be completed expeditiously but expeditious disposal of an assessment does not mean that the assessee may be put to unwarranted harassment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the first appellate authority in its order. It has not come on record, not disclosed by the assessee at least, even before the first appellate authority in the additional memo of appeal as to when he got the knowledge of the transfer order dated July 1, 1977. The observation of the Tribunal that it is admitted that the order of transfer order is effective from July 1, 1977 is therefore, uncalled for. It has misdirected itself. The Tribunal has proceeded on a wrong footing that in the absence of date of communication of the order to the assessee, the assessee could raise the plea of jurisdiction in appeal as it is the first opportunity. The burden was upon the assessee to state specifically when.the order of the transfer was received by it, which it failed to discharge. The order of the Tribunal is, therefore, also bad as it proceeds on assumptions and presumptions. The date of actual communication of the transfer order was within the special knowledge of the assessee and it was its duty to disclose the same. There is another aspect as yet. In such matters, it is an acknowledged legal position that unless a prejudice is caused to a party by wrong or irregular e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction when the assessment proceedings commenced and a draft assessment order was submitted to the Inspecting Assistant Commissioner. Subsequent change in the jurisdiction if any unless brought to the notice of the authority concerned, will not in any manner vitiate the assessment order in the absence of any objection with regard to lack of jurisdiction by the assessee. It is a case where both the Assessing Officer and the assessee proceeded as if there is no transfer order transferring jurisdiction. There is one more flaw in the order of the Tribunal. The Tribunal at the most should have remitted the matter back to the Inspecting Assistant Commissioner for completing the assessment. It was not justified in annulling the assessment order. In view of above discussions, we answer all the aforesaid questions in negative, i.e, against the assessee and in favour of the Department and hold that the assessment order made by the Assessing Officer is valid in the eyes of law and this could not have been set aside by the Tribunal notwithstanding the transfer order dated July 1, 1977. The appeals are allowed. The matter is restored back to the Tribunal to decide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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