TMI Blog1994 (8) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... s. One of these firms was carrying on business as Liquor Contractor at Guna. The assessee being resident of Guna and his place of business being at Guna, he filed voluntary returns on 19-8-1976 before the Additional ITO at Guna, who had the jurisdiction to deal with the assessment cases of the assessee. The Commissioner for administrative convenience, and to centralise all the cases of the liquor contractors, passed an order dated 7-4-1977 to transfer the cases of the liquor contractors to the ITO, A Ward, Bhopal. The transfer order was made effective from 1-5-1977. In view of this order, the aforesaid two cases of the assessee were also to be transferred. However, the ITO, Guna, accepted the return as filed and completed the assessment under section 143(1) of the Income-tax Act, 1961 ('the Act'), on 15-3-1979, whereby the tax payable was assessed as ₹ 2,770 in the case of M.C.C. No. 186 of 1983 and ₹ 2,200 in the case of M.C.C. No. 187 of 1983. The assessee objected to this assessment, being without jurisdiction. ITO, Guna, did not reply to the assessee's objection; hence, aggrieved by the assessment orders, the assessee filed two separate appeals. The AAC, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Mandal Ginning Pressing Co. Ltd. v. CIT [1973] 90 ITR 332 . 4. Shri R.D. Jain, the learned counsel for the revenue, contended that the assessee filed a voluntary return under section 139(1) before the ITO, Guna, who had the jurisdiction to deal with the cases of assessment of the assessee because of the residence and the place of business. The returns filed by the assessee were accepted as it is. Therefore, no failure of justice is occasioned or prejudice is caused to the assessee. Besides, the Commissioner when passed the order of transfer of the case with a view to centralise all particular class of cases, the assessee did not make any prayer for transfer of his cases. Therefore, in view of section 124(5), the assessee was not entitled to call in question the jurisdiction of the ITO, Guna, as he ought to have raised the objection under clause (a ) of sub-section (5) of section 124 within a period of one month from the date on which he filed the return under sub-section (1) of section 139 or after the completion of the assessment, whichever is earlier. That not having been done and there being no inherent lack of jurisdiction, the order of the AAC was rightly set asi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business or profession, if the place at which he carries on his business or profession is situate within the area, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situate within the area, and (b) in respect of any other person residing within the area. (4) Where a question arises under this section as to whether an Income- tax Officer has jurisdiction to assess any person, the question shall be determined by the Commissioner; or where the question is one relating to areas within the jurisdiction of different Commissioners, by the Commissioners concerned or, if they are not in agreement, by the Board. (5) No person shall be entitled to call in question the jurisdiction of an Income-tax Officer- (a) after the expiry of the month from the date on which he has made a return under sub-section (1) of section 139 or after the completion of the assessment, whichever is earlier; (b) where he has made no such return, after the expiry of the time allowed by the notice under sub-section (2) of section 139 or under section 148 for the making of the return. (6) Subject to the provisions of sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l proceeds to decide a particular matter or when there is a statutory bar. Therefore, while dealing with a case where the question of jurisdiction is raised, the distinction between want of inherent jurisdiction and irregular exercise and assumption of jurisdiction should be borne in mind. 8. The Supreme Court in the case of Central Potteries ( supra), while dealing with a case under the provisions of the C.P. and Bazar Sales Tax Act, 1947, held that when the taxing authorities derive their jurisdiction to make assessment under the provisions of the Act and assessee voluntarily files the return under sections 3 and 10(1) of the Act on which the assessment has been made, it would be idle to contend that the proceedings taken on its own return are without jurisdiction and ob served in para 7 thus: 7. In this connection it should be remembered that there is a fundamental distinction between want of jurisdiction and irregular assumption of jurisdiction, and that whereas an order passed by an authority with respect to a matter over which it has no jurisdiction is a nullity and is open to collateral attack, an order passed by an authority which has jurisdiction over the matter, bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of the Supreme Court in the case of Guduthur Bros, (supra) wherein it has been held that during the course of assessment if an ITO has committed an illegality, who had the jurisdiction to continue the proceedings which were lawfully initiated, the illegality can be cured by relating it back from the stage when illegality was detected or occasioned. Therefore, in our opinion, the Tribunal has not committed any error in setting aside the order of the AAC and directing the competent ITO to proceed with the assessment afresh. 10. Though Shri Jain, the learned counsel for the revenue, relying upon the decisions cited by him, contended that as the ITO, Guna, had the jurisdiction and the assessment proceedings were under the Act, the assessment orders were not nullity, it was a procedural irregularity, the question would not have been agitated in appeal in view of the bar created under section 124(5), order directing to proceed afresh would be merely an empty formality as the voluntary returns were filed, the same assessment would follow; therefore, in the absence of prejudice or occasion in failure of justice, the cases ought not to have been remitted to ITO, Bhopal. We are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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