TMI Blog2020 (2) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of jurisdiction concurrently upon two officers if the situation and circumstances so warrant the same, such as if the assessee in question has business interests or assets as well as income arising there from spread over various parts of the country, Concurrent jurisdiction is, no doubt, a principle enshrined as part of the procedure for finalizing assessments, the thumb rule being that the same income not be assessed twice. However, if at all such jurisdiction were to vest concurrently by way of transfer to the respondent officer as well, it was incumbent upon the officials to have followed the methodology set out in terms of Section 127 for change of jurisdiction by way of a determination by a superior officer. The provisions of sub-section (5) that vest concurrent jurisdiction in more than one officer, will have to be seen and read with Section 124(4) only and do not constitute a standalone provision. In fact, it is only to decide the appropriate officer for exercise of concurrent jurisdiction vested in 124(5), that sub-section (4) provides for a reference of the matter to a superior officer by an Assessing Officer In the present case, though the petitioner/assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails needed to file a return as called for. By letter dated 09.10.2015, the respondent/Deputy Commissioner of Income Tax, International Taxation, Madurai called for the total numbers of days when the petitioner was resident in India during financial year 2007-08. She also called for a photocopy of the petitioners passport to evidence the aforesaid. In conclusion, she states that if it were found that the petitioner had been an NRI, jurisdiction to assess him would stand transferred to the Officer, International Taxation, Bangalore, whereas if he had been resident in India, jurisdiction would stand transferred to Shimoga. The communication is extracted in full below: GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT O/o The Dy Commissioner of Income-tax, International Taxation, Madurai 2 V P Rathinasamy Nadar Road CR BLDG, Babikulam, Madurai Tamilnadu-625002 Phone: 044 28333255 PAN: ADGPH6621R / 2015-16 09.10.2015 To Shri. Abdul Azez No.2/749 Maruthupandiyar Street Thasildar Nagar Madurai-625 020 Sir, Sub: Tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsistently being assessed. 8.Vide communication dated 17.12.2016, the petitioner set forth his objections to the proposals for assessment, stating that though he was resident in Madurai at the time when he sought allotment of PAN number, his business interests were located at Shimoga and thus he had been a regular assessee at Shimoga only. He referred to the provisions of Section 124 of the Act, according to which, the assessing officer within whose jurisdiction an assessee would fall, would be one within whose jurisdiction the principal place of business of an assessee is situated. Since his principal place of business was at Shimoga, he reiterated that he fell within the jurisdiction of the officer at Shimoga only. He also pointed out that if at all his assessment were to be shifted to the file of any other officer it should be done as per the procedure set out under Section 127 of the Act, after affording opportunity to him. In conclusion he objected to the proceedings for reassessment initiated by the officer at Madurai, as being ab initio void . 9.On 08.01.2016, the respondent, acknowledging the petitioners objections, notes from the record that the petitioner has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Conferred on, or, as the case may be, assigned to such authorities by or under this Act in accordance with such directions as the Board may issue for the exercise of the powers and performance of the functions by all or any of those authorities. (2) The directions of the Board under sub- section (1) may authorise any other income- tax authority to issue orders in writing for the exercise of the powers and performance of the functions by all or any of the other income- tax authorities who are subordinate to it. (3) In issuing the directions or orders referred to in sub- sections (1) and (2), the Board or other income- tax authority authorised by it may have regard to any one or more of the following criteria, namely:- (a) territorial area; (b) persons or classes of persons; (c) incomes or classes of income; and (d) cases or classes of cases. (4) Without prejudice to the provisions of sub- sections (1) and (2), the Board may, by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein,- (a) authorise any Director General or Director to perform such functions of any other i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The scope and extent of the exercise of such jurisdiction by an assessing authority, once vested, is set out in terms of Section 124 of the Act, extracted below: Jurisdiction of Assessing Officers: 124. (1) Where by virtue of any direction or order issued under sub-section (1) or sub-section (2) of section 120, the Assessing Officer has been vested with jurisdiction 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) Where a question arises under this section as to whether an Assessing Officer has jurisdiction to assess any person, the question shall be determined by the Principal Director General or Director General or the Principal Chief Commissioner or Chief Commissioner or the Principal Commissioner or Commissioner; or where the question is o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er this Act on an Assessing Officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under sub-section (1) or sub-section (2) of section 120. 14.If at all the senior Officers of the Department of the rank of the Principal Director General/Director General or Principal Chief Commissioner/Chief Commissioner or Principal Commissioner/Commissioner were of the view that that a change in jurisdiction was called for by transfer of file from one assessing officer to another, either concurrently or exclusively, the Act prescribes the methodology for such change/transfer in terms of Section 127 of the Act, extracted below: Power to transfer cases 127. (1) The Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 120 and this section, the word case , in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year. 15.On a combined reading of Sections 120, 124 and 127 the following positions emerge (i) jurisdiction vests in an officer in terms of Section 120 of the Act (ii)Sections 120(2) and (3) state that the Central Board of Direct Taxes ( Board ) will vest authority in an officer for the purpose of assessment or the Board may, in writing, authorise any Income Tax authority to issue an order in writing authorizing any other authority to perform the functions of assessment. (iii) Section 124(1) states that where, by virtue of any direction or order issued under Section 120(1) or sub-section 2 of the Act, the assessing authority had been vested with jurisdiction over any area, he shall, within the limits of such area have jurisdiction b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income Tax Officer, Shimoga to the Deputy Commissioner of Income Tax, International Taxation, Madurai, has been produced before me. 19. Instead, the learned Standing Counsel produces a Notification in F.No. Addl CIT, Rg,CBE/IT/CBE/1/2014-15, dated 15.11.2014, reading as follows: GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT Office of the Additional Commissioner of Income-tax (International Taxation), Coimbatore. F.No. Addl CIT, Rg,CBE/IT/CBE/1/2014-15 Dated 15.11.2014 NOTIFICATION NO.1/Additional CIT (INTL.TAXN.) Coimbatore/2014-15 In exercise of the powers conferred by the Central Board of Direct Taxes under sub-section (1) and (2) of Section 120 of the Income-tax Act, 1961 Notification Order in S.O. No.2813(E) in Notification No. 56/2014/F.No.187/30/2014 (ITA.I) dated 3rd November, 2014 and Consequent order of the Commissioner of Income tax, International Taxation, Chennai vide Notification No.1/CIY (INTL.TAXN.)/2014-15 dated 15.11.2014 and in supersession of earlier Notifications, I, Additional Commissioner of Income Tax (International Taxation), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of such persons mentioned in (b) All functions and powers of Assessing officer under the Income tax Act 1961 relating to Tax Deduction at Source under section 194E, 195, 196A, 196B, 196C, 196D, 197 and 201 of the Income Tax Act, 1961, on payments made to nonresidents and foreign companies in respect of persons mentioned in items (b) to (e) of This notification shall come to effect from 15th November 2014. S.RAVICHANDRAN Additional Commissioner of Income tax International Taxation Coimbatore. Thus according to the respondent, jurisdiction has been validly assumed by her. 21. She also relies on the decision of the Allahabad High Court in CR Foods (India) (P.) Ltd. v. Income-tax Officer-4(1), Agra, specifically paragraph Nos.25 and 26 extracted below: 25.Sub-section (5) of Section 124 provides that, notwithstanding anything contained in the Section or in any direction or order issued under Section 120 every Assessing Officer shall have all the powers conferred by or under this Act on an Assessing Officer in respect of income accruing or arising or received within the area, if any over which he has been vested with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xmann.com169), wherein also the Division Bench, while considering the provisions of Section 120, 124 and 127 recognised the flexibility and choice available with both the officials of the department as well as by the assessee in the matter of initiation and finalization of assessment proceedings. At paragraph 13, the Bench in SS.Ahluwalia (supra) states as follows: (13)The provisions indicate that Sections120, 124 and 127 of the Act recognizes flexibility and choice, both with the assessee and the authorities i.e. the Assessing Office before whom return of income could be filed and assessment could be made. The Assessing Officer within whose area an assessee was carrying on business, resided or otherwise income had accrued or arisen ( in the last case, subject to the limitation noticed above) has jurisdiction. Similarly, the Assessing Officer also has authority due to class of income or nature and type of business. The Act, therefore, recognized multiple or concurrent jurisdictions. Provisions of Section124 ensure and prevent two assessments by different assessing officers, having or enforcing concurrent jurisdiction. There cannot be and the Act does not envisage two asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiple assessments by different assessing officers, or assessment of part or portion of an income [see Kanjimal Sons Vs. Commissioner of Income Tax, New Delhi, (1982) 138 ITR 391 (Del)]. Thus, it is necessary that the Assessing Officers having concurrent jurisdiction ensure that only one of them proceeds and adjudicate. This is the purport and objective behind sub-section (2) to Section 124 of the Act. 26. The Delhi High Court has concluded that the objections raised by Abishek Jain cannot be equated with lack of subject matter of jurisdiction and relates only to place of assessment. They thus reject the challenge to the assumption of jurisdiction on the ground that the principle of concurrent jurisdiction would save the initiation of proceeding by officer at Noida. 27. The material facts in Abishek Jains case and the matter before me are that the petitioner in that case was seen not to have raised any effective or timely objection to the assumption of jurisdiction by the assessing officer at Noida. Moreover, the petitioner therein appears to have been harping only on the violation of the principles of natural justice. In any event and very relevantly, there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een escapement of income for AY 2011-2012, were issued only to the old address. 32. The assessee challenged the re-assessment proceedings on the ground that the notice had been sent to her old address and was thus invalid particularly, when she had specifically disclosed the change of address to the Department. The challenge was accepted by the Court holding in conclusion that the narrative of facts and behavior of the Assessing Officer was disturbing, to say the least. The proceedings had been initiated by the Officer mechanically and on the basis of the address supplied by the Bank without noting that the address supplied by the Bank was incorrect and without verifying the correct address and all other details including E-mail ID that were available in the database of the Income Tax Department. The proceedings for re-assessment were quashed. 33. In Prashant Chandra (supra) the Allahabad High Court considered the case of an assessee who had filed returns of income at Lucknow till AY 2011-2012. From AY 2012-2013 the petitioner filed returns in New Delhi since he has shifted his principal place of business there. On receipt of the notices from the Assessing Officer at Lu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer at Shimoga based on the status of the petitioner in the relevant financial year. The lack of clarity on the part of the department as to who the proper officer would be to assume jurisdiction, is obvious and glaring. 37. The petitioner in rejoinder to the counter has set out the periods of his entry and exit into and out of India, as follows: 1. 01.01.2015 to 12.01.2015-Los Angeles (US)-12 days 01.01.2015 exit from Dubai and entered US 2. 12.01.2015 to 22.01.2015 Dubai 10 days 12.01.2015 exit from US and entered Dubai 3. 22.01.2015 to 08.02.2015 Mozambique 17 days 22.01.2015 exit Dubai and entered Mozambique 4. 08.02.2015 to 15.02.2015 Dubai 7 days 08.02.2015 exit Mozambique and entered Dubai 5. 15.02.2015 to 27.02.2015 India 12 days 15.02.2015 exit from Dubai and entered India 6. 27.02.2015 to 11.03.2015 Dubai 12 days 27.02.2015 exit from India and entered Dubai 7. 11.03.2015 to 26.04.2015 Mozambique 46 days 11.03.2015 exit from Dubai and entered Mozambique 8. 26.04.2015 to 01.05.2015 Dubai 5 days 26.04.2015 exit Mozambique and entered Dubai 9. 01.05. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.2015, was still uncertain as to the proper officer to assume jurisdiction, the provisions of Section 124(3) cannot be resorted to by the Department. 42. In the present case the petitioner has, no doubt obtained a PAN from the Assessing Officer at Madurai, wherein the address of the assessee is stated to be in Madurai. However, no assessments have been completed by the officials at Madurai, till date. For AY 2012-2013 to 2015-2016 the petitioner has filed returns of income electronically, stipulating his jurisdictional officer as the Income tax officer, Shimoga, Karnataka. These returns of income have been processed and intimations issued by the CPC wherein the address of the petitioner is stated to be Shimoga. 43.The appropriate officer to assess the petitioner is thus the officer at Shimoga. No doubt, the provisions of Section 124(5) provide for the vesting of jurisdiction concurrently upon two officers if the situation and circumstances so warrant the same, such as if the assessee in question has business interests or assets as well as income arising there from spread over various parts of the country, Concurrent jurisdiction is, no doubt, a principle enshrined as par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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