TMI Blog2006 (4) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... on 143(3), issued a notice under section 143(2) on 29-8-2002. Thereafter, notices under sections 143(2) and 142(1) along with questionnaire were issued on 24-9-2002. The notice issued was attended to by the ld. counsel and the accountant of the assessee prior to 3-12-2002. Only part information was furnished. However, on 3-12-2002, the ld. counsel sought adjournment. This request was allowed and the case was refixed for 5-12-2002. None attended the proceedings. The Assessing Officer issued a letter dated 10-12-2002 informing the assessee that the required information had not been furnished and the books of account have also not been produced. Since the assessment was time barring, the Assessing Officer requested the assessee to comply with the information. However, the assessee informed the Assessing Officer that an application to CIT, Jalandhar-I for transfer of the case to Assessing Officer in the jurisdiction of CIT, Jalandhar-II has been filed. However, this petition was rejected by the CIT, Jalandhar-I. Thereafter, the assessee informed that an application has been filed with the Chief Commissioner of Income-tax (in short "the CCIT"), Ludhiana, for transferring the case to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ast para of the impugned order: "I have carefully considered the submissions of the appellant. The objection was raised against jurisdiction of CIT-I, Jalandhar, whereas as gathered subsequent assessments were completed under the charge of CIT-I and even though in last years there was no scrutiny assessment yet the jurisdiction vested with AC Range-I, under CIT-I as informed by appellant. Coming to year under consideration no objection was taken by appellant under section 124(3) of Income-tax Act after filing the return and objection was raised on issue of jurisdiction after inspector from office of CIT-II, Jalandhar visited the premises of appellant to get status report vis-a-vis returns of income. The appellant then raised the objection which was rejected by CIT-I and Assessing Officer was bound by the said order. The matter was even referred to CCIT, Ludhiana but due to time barring matter involved, the request was rejected. Thus Assessing Officer's order in view of above-mentioned decision of higher authorities cannot be said to be without jurisdiction and more so when the record for subsequent years remained within jurisdiction of CIT-I, thus, the objections/ ground of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same could be vested in him by the assessee by filing return with him. It is a matter to be determined in accordance with law. 5. The ld. DR, Sh. H.S. Lall, on the other hand heavily relied on the orders of the authorities below. He submitted that C.B.D.T. vide S.O. 732(E), Notification No. 228 of 2001, dated 3-7-2001 issued under section 120(1)/(2) of the Income-tax Act. Reported in (2001) 169 CTR (St.) 93 had specified the powers and functions of various Commissioners of Income-tax of the country in respect of cases falling in their territorial jurisdiction as specified therein. He submitted that the assessee had filed the return of income mentioning therein the address at Nakodar Road, Jalandhar. He submitted that as per order of the CIT, Jalandhar-I, the jurisdiction over the cases falling in the territorial area on both sides of Nakodar Road in east and west starting from Balmiki Chowk to the Municipal Limit vested with the Assessing Officer, who completed the assessment in the present case. He further stated that even the assessee's application for transfer of case to CIT-II, Jalandhar was rejected by CIT-I, Jalandhar. The assessee then moved an application before CCIT, Lu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was raised before the Assessing Officer. While the assessment proceedings were in progress, the assessee for the first time wrote to the Assessing Officer vide his letter dated 4-12-2002 that the correct jurisdiction over the case vested with CIT-II, Jalandhar and, therefore, a request for transfer was made to CIT-I, Jalandhar. The CIT-I, Jalandhar, rejected such request vide his letter dated 2-1-2003 on the ground that as per address given by the assessee itself in the return of income filed, the jurisdiction over the case vested in the charge of CIT-I, Jalandhar. The assessee has never denied that as per address given in the return filed, the jurisdiction over the case vested with Assessing Officer in the charge of CIT, Jalandhar-I. The assessee claimed jurisdiction only on the ground that when Inspector of the Department visited the place, he informed that jurisdiction falls in the charge of CIT, Jalandhar II. This statement is not supported by any other evidence. Subsequently, the assessee moved a petition before CCIT, Ludhiana on 9-1-2003 requesting for transfer of the case. In response to such request the CCIT asked the assessee vide his office letter dated 21-1-2003 to clari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all or any of the other income tax authorities, who are subordinate to it. It is also provided that the Board or any other Income-tax Authority authorised by it may having regard to any one or more of the following criteria assign jurisdiction, namely:- (a) territorial area; (b) person or classes of persons; (c) income or classes of income; and (d) cases or classes of cases. It is also provided that the Board may authorize the Director General or Chief Commissioner or Commissioner to issue orders in writing that the powers and functions conferred on, or, as the case may be, assigned to the Assessing Officer. Section 2(7A) of the Act defines the "Assessing 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 provision of this Act and the Joint Commissioner or Joint Director. The combined reading of aforesaid provisions of the Income-tax Act reveal that the Income-tax Authorities exercise jurisdiction and powers as are assigned to them either by the Board or by the Chief Commissioner of Income-tax or the Commissioner of Income-tax. They exercise their powers and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only if the Assessing Officer is not satisfied with the correctness of the claim. Be that as it may, the authorities to whom this matter was referred to by the assessee rejected such request as is clear from the letter of CIT-I, Jalandhar dated 2-1-2003 and subsequently by CCIT, Ludhiana as intimated vide his office letter dated 11-2-2003. Once the matter is decided by the CIT, Jalandhar-I and Chief Commissioner of Income-tax, Ludhiana, the assessee cannot raise this issue before the Tribunal. Thus, the jurisdiction over the case vested with the Assessing Officer who completed the assessment in this case and there is no merit in the submission of the assessee that the same was without jurisdiction. 6.3 Further, the issue relating to allocation of functions to Income-tax Authorities is procedural in character and, therefore, the defect of procedure does not invalidate the assessment. The Machinery for resolving such dispute is the administrative Machinery and not the Courts. The courts have limited role to decide whether the Assessing Officer correctly assumed the jurisdiction as per notification issued by the Administrative authorities assigning the jurisdiction. Now for example, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am of the opinion that no fault could be found with the Assessing Officer in assuming jurisdiction and completing the assessment. The ld. CIT(A) was justified in upholding such action. However, the discussion in the matter would be incomplete without referring to certain judgments which the assessee has relied upon. These are mentioned hereunder: (i) Madhavnagar Cotton Mills Ltd. In this case territorial jurisdiction over the cases was changed by a Notification. Even after the Notification was issued, the ITO, who had jurisdiction earlier, initiated reassessment proceedings under section 34 of the old Act (section 148 of the present Act) and completed the reassessment. Since the power of the Assessing Officer was taken away by notification, the Hon'ble High Court held that such assessment completed by the Assessing Officer was without jurisdiction. These are not the facts of the present case as the power of the Assessing Officer who completed the assessment was not taken away by issue of any notification. Therefore, the ratio of this decision is not applicable to the facts of the present case. (ii) West Bengal State Electricity Board. In this case, the Calcutta High Court held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompleted the assessment without making a reference to the authority specified under sub-section (2) of section 124 of the Act. On these facts, the ITAT, Delhi held that, only authorities specified under sub-section (2) of section 124 are empowered to go into the question of territorial jurisdiction of Assessing Officer. It was held that the Assessing Officer was not empowered and competent to decide such matter. These are not the facts of the present case. Even when the question of jurisdiction was raised before the Assessing Officer, the same was referred and decided by the authorities specified under sub-section (2) of section 124, i.e., CIT-I, Jalandhar and CCIT, Ludhiana. Therefore, ratio of this decision is also not applicable to the facts of the present case. (v) Prix Small Savings Investment (P.) Ltd. In this case, the assessee had registered office at Siliguri. Unknowingly, the assessee filed its return for the assessment year 1984-85 at Calcutta. However, the returns for the subsequent two assessment years were filed with Assessing Officer at Siliguri. The assessments for those two assessment years were completed by the ITO, Siliguri with whom returns for these two ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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