TMI Blog2017 (7) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Officer. If the submission of the Revenue on the above account is to be accepted, then an order which is without jurisdiction could be bestowed with jurisdiction by passing an order of transfer with retrospective effect. Section 127 of the Act does not validate notices/orders issued without jurisdiction, even if they are transferred to a new Officer by an Order under Section 127 of the Act. Substantial question of law is answered in the negative i.e. in favour of the respondent/assessee and against the appellant/revenue. - Income Tax Appeal No. 127 of 2006 - - - Dated:- 11-7-2017 - M. S. Sanklecha And Manish Pitale, JJ. Mr. Anand Parchure, Sr. Cl. with Mr.A.J.Bhoot, Adv. for the Appellant Mr. C.J.Thakar and Mr.S.C.Thakar, Advocate for the Respondent JUDGMENT ( Per M. S. Sanklecha, J. ) 1. This appeal challenges the Order dt.17.2.2006 passed by the Income Tax Appellate Tribunal (the Tribunal). The impugned order relates to Block Assessment Years 1989-90 to 1999-2000. 2. This appeal was admitted on 6.10.2009 on the following substantial questions of law : Whether in the facts and circumstances of the case and in law the filing of return in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 12.8.2000 issued notices u/ss. 142(1) and 143(2) of the Act. The respondent/assessee participated in the proceedings and consequent thereto, an order dated 28.2.2001 of assessment came to be passed u/s.143(3) r/w. Section 158BC of the Act by the Deputy Commissioner of Income Tax, Nagpur. The above order dated 28.2.2001 of assessment determined the undisclosed income at ₹ 27.56 Crores. 8. Being aggrieved by the Order dated 28.2.2001 of the Deputy Commissioner of Income Tax, Nagpur, the respondent/assessee filed an appeal to the Commissioner of Income Tax (Appeals) [CIT(A)]. By an Order dated 14.3.2002, the CIT (A) partly allowed the respondent/assessee's appeal in effect reducing the undisclosed income by directing the Deputy Commissioner of Income Tax to rework the undisclosed income, thus, reducing the tax payable thereon. 9. Being aggrieved by order dt.14.3.2002 of the CIT(A), both the appellant/revenue as well as the respondent/assessee filed the appeals to the Tribunal. Before the Tribunal, the respondent/assessee raised an additional ground viz. that the Assessment Order dt.28.2.2001 passed u/s.143(3) r/w. 158BC of the Act by the Deputy Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdiction over any area, within the limits of such area, he shall have jurisdiction - (a) in respect of any person carrying on a 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. 2. ......... 3 No person shall be entitled to call in question the jurisdiction of an Assessing Officer - (a) where he has made a return (under subsection (1) of section 115 WD or) under subsection (1) of section 139, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 142 or (sub-section (2) of section 115WE or) sub-section (2) of section 143 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 115WD or sub-section (1) of section 142 or under sub-section (1) of section 115 WH or under section 148 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m to furnish within such time not being less than fifteen days; (ii) in respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days but not more than forty-five days, as may be specified in the notice a return in the prescribed form and verified in the same manner as a return under clause (ii) of sub-section (1) of section 142, setting forth his total income including the undisclosed income for the block period : Provided that no notice under section 148 is required to be issued for the purpose of proceeding under this Chapter : Provided further that a person who has furnished a return under this clause shall not be entitled to file a revised return;) (b) .... (c) .... (d) .... (emphasis supplied) 12. Mr.Anand Parchure, learned Senior Counsel for the appellant/assessee in support of the appeal submits as follows : (a) In view of Section 124(3) of the Act, the respondent/assessee is statutorily barred from objecting to the jurisdiction of the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. 14. It is undisputed position that the respondent/assessee was being assessed at Rajnandgaon (M.P.). It was as a consequence of search upon the Motwani group at Nagpur that a search was carried on upon the Respondent/Asseessee. In view of the above, the Commissioner of Income Tax, Raipur for facilitating detailed and coordinated investigation, passed an order on 6.7.1999, under Section 127 of the Act transferring the respondent/assessee's case from Rajnangaon to Nagpur. However, the Order dated 6.7.1999 of the Commissioner of Income Tax, Nagpur was quashed and set aside on 17.9.1999 by the Hon'ble M.P. High Court. The notice u/s.158BC of the Act was issued on 22.9.1999 i.e. after the order of transfer dated 6.7.1999, u/s.127 of the Act was quashed and set aside. Thus, it ceased to exist. Consequently, on 22.9.1999, when the Deputy Commissioner of Income Tax, Nagpur ceased to have jurisdiction to assess the Respondent/Assessee as there was no order of transfer of the respondent/assessee's case to Nagpur. In terms of Section 2(7A) of the Act, the Assessing Officer means 'an Officer of the Income Tax vested with jurisdiction either by virtue of Section 120 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn is filed under Section 139(1) of the Act and within one month of service of notice under Section 142(1)/143(2) of the Act. In this case, admittedly, the return has been filed in response to a notice under Section 158BC of the Act, though it may be verified in the same manner as a return under Section 142(1)(i) of the Act as provided in Section 158BC(b) of the Act. However, it is still a return filed in response to notice under Section 158BC of the Act and not a return in response to notice under Section 142(1)(i) of the Act. The assessment consequent to notice issued under Section 158 BC of the Act (Chapter XIV-B of the Act) is carried out in the manner prescribed/laid down in Section 158 BC of the Act. Further Section 158 BC of the Act provides that provisions of Section 142 and 143 (2) and (3) of the Act shall so far as may be, apply. Therefore, these sections do not apply in its entirety, but only to the extent applicable. Further the requirement in Section 124(3)(a) of the Act of raising objection within one month of completion of Assessment is to be read in the context of the earlier part i.e. objection within one month of the notice under Sections 142 and 143 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of irregular exercise of jurisdiction and not of lack of jurisdiction. The decision of the Delhi High Court in Venad Properties v. CIT, 340 ITR 463 relied upon by the Appellant/Revenue is a case of non-service of notice before passing of an order by an Officer having inherent jurisdiction. Therefore, it is a case of irregular exercise of jurisdiction and not absence of jurisdiction to issue notice. Therefore, it will have no application. 19. It is a settled position in law that mere participation in proceedings or acquiescence will not confer jurisdiction. The Apex Court in Kanwar Singh Saini (supra) made observations, which are apposite to the issue at hand and which read as under : 22.There can be no dispute regarding the settled legal proposition that conferment of jurisdiction is a legislative function and it can neither be conferred with the consent of the parties nor by a superior court, and if the court passes order/decree having no jurisdiction over the matter, it would amount to a nullity as the matter goes to the roots of the cause. Such an issue can be raised at any belated stage of the proceedings including in appeal or execution. The finding of a court or trib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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