TMI Blog2000 (4) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... r the appropriate provisions of the same and deposited to the authority under section 200 and filed appropriate returns under section 206 of the Income-tax Act read with rule 37 of the Rules framed there under. The petitioners contended from the prescribed form, it will appear how much is paid and how much is deducted under section 194C(4) of the Income-tax Act. By a letter dated June 29, 1999, the petitioners duly filed Form No. 26C for the financial year 1998-99 relevant to the assessment year 1999-2000 along with the details of amounts deducted and paid in respect of the companies or non-companies as also the amount deducted under section 194C(4) of the Income-tax Act as required by the said form. Since, according to the petitioners, there is no column under the prescribed form as to how much is deducted in cases of advertising and how much is deducted in cases of other than advertising the petitioners have also made annexures with the form showing the person who is the advertiser and the person who is not the advertiser as required by the form. The petitioner-company is a regular income-tax assessee under the Income-tax Act, 1961. The petitioners were previously being ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs that the prescribed person in the case of every office of Government, the principal officer in the case of a company. According to the petitioner under section 200 of the Income-tax Act, tax deducted at source under various provisions of Chapter XVII-B of the Act is required to be deposited with the Government account. Section 206 of the Act requires the person who has deducted the tax and paid the tax to file annual returns in the forms prescribed under rule 37 of the Income-tax Rules. Rule 36A of the Income-tax Rules provides that the prescribed income-tax authority would be the Assessing Officer as designated by the Chief Commissioner or Commissioner of Income-tax within whose area of jurisdiction the office of the person responsible for deducting tax under Chapter XVII-B is situated. According to the petitioners respondent No. 1 authority is required to be delivered to the return in the prescribed form and has no competence or jurisdiction to do anything else under the Income-tax Act read with the Income-tax Rules. The Assessing Officer is the joint Commissioner, Special Range, Calcutta. However, it is an admitted position that no hearing, however, has taken place in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act for the purpose of making further enquiry which is being done prior to the assessment made under. Chapter XIII of the Income-tax Act. Therefore, the action on the part of the authority concerned being respondent No. 1 is mechanical without application of mind mala fide and/or arbitrary and/or capricious and/or perverse. Therefore, such notice is to be declared as invalid. On the other hand, the respondent contended before this court that under section 2(7A) of the Income-tax Act "Assessing Officer" means the Assistant Commissioner or (Assistant Director) or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provisions of this Act, the Deputy Commissioner (or Deputy Director) who is directed under clause (b) of sub-section (4) of that section to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Act. The moot point of the respondent before this court is that the definition clause in respect of giving meaning to "Assessing Officer" is very wide. Power of delegation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person responsible for deducting tax under Chapter XVII-B is situated. My interpretation in respect of rule 36A is that one jurisdiction is meant for the jurisdiction wherein the assessee has its office whereas the other is the jurisdiction of the Assessing Officer that means where he sits or his area of jurisdiction which means herein a jurisdiction of tax deducted at source not the jurisdiction of the office of petitioner No. 1-company. Chapter XVII-B giving a heading of deduction at source and thereunder heading of the reference of section 194C, i.e., payment to contractors and sub-contractors as well as other sections under such Chapter relevant for tax deduction or no deduction, issuance of certificate, etc. So far as the other power as available under section 206 of the Income-tax Act is concerned, the same is meant for the persons deducting tax to furnish prescribed returns. No doubt, such power is meant for an officer who was empowered by the Chief Commissioner or Commissioner of Income-tax to make an assessment on the basis of the return, but I do not find from rule 36A as to why it will not be applicable to call a person for making an enquiry or investigation in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ittedly, therefore, it is pending before the Assessing Officer as per the petitioner, i.e., joint Commissioner of Income-tax, Special Range-4. Similarly, verification of the annual return being Form No. 26C for the financial year 1998-99 as submitted on June 29, 1999, is asked for in compliance with the relevant provisions presumably for the purpose of section 206 read with rule 36A. Therefore, it is apparent that in respect of one financial year good, bad indifferent parallel proceedings are pending before the two officers. It appears from section 116 of the Income-tax Act that the post of the Deputy Commissioner of Income-tax which is now replaced by the post of the joint Commissioner of Income-tax is superior to the post of an Assistant Commissioner. It also appears from the notification dated September 15, 1999, that a post of the Assistant Commissioner, i.e., respondent No. 1 herein, was created in respect of the tax deducted at source under the joint Commissioner of Income-tax, Range-21, Calcutta. It further appears from the notification that under section 120(1) of the Income-tax Act, 1961, and all other powers enabling the Chief Commissioner of Income-tax and in partial m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax which has now been replaced by joint Commissioner holding superior post than the Assistant Commissioner of Income-tax who is working under different joint Commissioner can he be directed to encroach in the field of another joint Commissioner ? This court is not on the point that the subject-matter of the tax deducted at source in respect of one assessee can or cannot be taken into account by different Assessing Officers but at the same time power should not be vested without considering the hierarchy. For an example, when the joint Commissioner is Assessing Officer of the petitioner-company, if the tax deducted at source part is separated then, of course, the officer/s of such rank should only be deputed as the Assessing Officer but not below the rank otherwise it will definitely be construed as encroachment in the field of work of a superior officer. Moreover the notification does not at all restrict the power of the Assistant Commissioner up to the level of enquiry alone but amplifies vast power of assessment. Therefore, neither the notification is to be construed as appropriate nor the action taken by the Assistant Commissioner can be construed as restricted up to the exte ..... 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