TMI Blog1996 (8) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... -2-1987 which was set aside by the CIT(A) on 25-11-1987. The present assessment order under appeal is made under section 144/251 in compliance with the direction of the CIT(A). The Assessing Officer in his order has mentioned that the original assessment was set aside with a direction to re-do the assessment after considering the assessee's claim that it had filed a return in Kanpur where the assessment had already been completed. According to him, the CIT(A) upheld the jurisdiction of the ITO, Calcutta over the case and the ITO, Kanpur had intimated that the assessments for the assessment years 1985-86, 1986-87 and 1987-88 had already been set aside by the CIT, Kanpur. It has also been mentioned by the ITO in his order that the assessment records at Kanpur had already been received on transfer as the ITO, Calcutta has proper jurisdiction over the case. He has also pointed out that although the assessee had made a petition to the Company Law Board for transfer of its registered office from Calcutta to Kanpur, its request does not appear to have been granted. On the basis of these observations and findings he assumed the jurisdiction and issued notices under section 143(2) at three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. 6. The assessee being further aggrieved by the order of the CIT(A) has preferred this appeal to the Tribunal. The learned counsel for the assessee Sri H.N. Kundu filed two paper books, viz., paper book No. 1 containing 25 pages and paper book No. 2 containing 28 pages. It is noticed that the documents mentioned at Sl. Nos. 7 to 10 in the second paper book are certified by the assessee to be fresh documents to which the learned deptt. representative Sri Satya Prakash objected. The learned D.R. contended that the documents at Sl. Nos. 7 to 10 of the second paper book are fresh documents and, therefore, they are not to be admitted. After hearing both the parties and after considering all the facts and circumstances of the case the objection of the learned D.R. is sustained. 7. The learned counsel for the assessee Sri H.N. Kundu submitted that the assessment has been finalised by the Assessing Officer, Co. Cir. II, Calcutta is without any jurisdiction as the assessee has already shifted its office and business from Calcutta to Kanpur. He invited our attention to the assessee's letter dated 18-8-1984 addressed to the ITO, A-Ward, Comp. Dist. III, Calcutta a copy of which is pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alcutta. He also strongly supported the order of the CIT(A) who has upheld the jurisdiction of the Assessing Officer, Calcutta. According to him, he has rightly done and rightly decided so. He further argued that since the CIT(A), Kanpur has set aside the assessment orders for the assessment years 1985-86, 1986-87 and 1987-88, this means and proves that the ITO, Kanpur did not have jurisdiction over the case. In order to support his arguments and contentions, Sri Satya Parkash relied on the following decisions :--- (i) CIT v. Shivkumar Agrawal [1990] 186 ITR 734 (Ori.); (ii) Mahalliram Ramniranjan Das v. CIT [1985] 156 ITR 885/[1986] 29 Taxman 44 (Pat.). 9. We have carefully considered the rival contentions, the relevant facts and material placed on the record and have also gone through and perused all the decisions on which reliance is placed by both the parties. We find that the Assessing Officer has completely ignored the directions of the CIT(A) to consider that the ITO, Kanpur has already finalised the assessment at Kanpur. He has also completely ignored the assessee's letter dated 18-8-1984 and has not acted upon it as per the provisions of law. An apparent contradictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee's letter dated 18-8-1984 and the assessment under section 143(3) was completed by the ITO, Kanpur on 29-3-1985. Another assessment was also completed under section 144 on 13-2-1987 by the ITO, Calcutta but the CIT(A), Calcutta set aside the original assessment order on 25-11-1987 with a direction to the Assessing Officer to consider the fact that the assessment had already been completed by the ITO, Kanpur on 29-3-1985. The assessment under section 144/251 was reframed by the Assessing Officer, Calcutta on 20-3-1990 and the CIT(A), Calcutta on firmed the same vide his order dated 14-8-1991 which is appealed against and which is under our consideration in this appeal. 12. Thus, it is noticed that there are two assessments made by the department in the case of this assessee for the same assessment year, ie., one by the ITO, Kanpur and the other by the ITO, Calcutta. It is this assessment order under section 143(3)/251 confirmed by the CIT(A), Calcutta which is under consideration in this appeal before us. 13. Turning to the ground of appeal Nos. 1 2 we find that the main grievance or main objection of the assessee is that the assessment made is a nullity in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) where he has made no such return, after the expiry of the time allowed by the notice under sub-section (2) or section 139 or under section 148 for the making of the return. (6) Subject to the provisions of sub-section (5) where an assessee calls in question the jurisdiction of an Income-tax Officer, then, the Income-tax Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub-section (4) before assessment is made. (7) Notwithstanding anything contained in this section or in section 130A, every Income-tax Officer shall have all the powers conferred by or under this Act on an Income-tax Officer in respect of any income accruing or arising or received within the area for which he is appointed. " The assessee has filed return with ITO, A-Ward, Co. Dist. III, Calcutta under section 139(1) on 31-7-1984, as it is evident from original assessment order dated 13-2-1987 and the assessee has also filed its objection vide letter dated 18-8-1984 addressing the same to the ITO, A-Ward, Co. Dist. III, Calcutta on 18-8-1984. This letter is received by the ITO under seal and signature on 18-8-1984 as it is evident from the copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24(5). There is no material or evidence to show that the Assessing Officer has considered the objection on merit and being not satisfied with the correctness of the claim, has rejected the objection or referred the matter for determination under sub-section (4) of section 124 to the Commissioner or Commissioners before making the assessment as laid down in sub-section (6) of section 124. It is now crystal clear that neither the Assessing Officer has outrightly rejected the objection filed by the assessee nor has referred the matter to the Commissioner or Commissioners but has proceeded to complete the assessment under section 144/251 at his sweet will and in violation of all the provisions of law envisaged and legal procedure laid down in section 124. In our opinion, therefore, such assessment completed without rejecting the objection of the assessee and without referring the matter to the Commissioner or Commissioners is without jurisdiction and, therefore, is null and void. Our view is duly supported by Allahabad High Court decision in the case of Dinanath Hemraj v. CIT [1927] ILR 49 All. 616. 16. The assessee's contention is that the Assessing Officer has completely ignored th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 532 also it is presumed that the ITO, Calcutta has treated the return of income filed with him as withdrawn by the assessee and, therefore, the ITO is deprived of the jurisdiction over this case. In other words, the assessment made by the Assessing Officer, Calcutta on the basis of that return of income treated to have been withdrawn and transferred to ITO, Kanpur is without jurisdiction and is illegal. Once the return of income is withdrawn by the assessee and is treated by the department to have been withdrawn it becomes non est in the eyes of law and any assessment made on such return being non est is bound to be null and void. 17. It is also seen that after filing the objection on 18-8-1984 and getting no response or intimation from the ITO, Calcutta the assessee has filed the return of income with ITO, Co. Cir., A-Ward, Kanpur on 16-3-1985 and the assessment is completed under section 143(3) on 29-3-1985. Although the assessment for this assessment year was completed on 29-3-1985 at Kanpur, the ITO, Calcutta also completed another assessment under section 144 on 13-2-1987 and when it was set aside by the CIT(A), Calcutta on 25-11-1987, it was refrained under section 144/251 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer, Calcutta that the assessee has not filed second appeal against the first appellate order and, therefore, has accepted the jurisdiction of the ITO, Calcutta. We notice that while setting aside the original assessment order the CIT(A) has directed the Assessing Officer, Calcutta to reframe the assessment after considering the claim of the assessee that it had filed its return in Kanpur where the assessment had already been completed. In our opinion, therefore, since the whole assessment was set aside by the CIT(A) and as the most fatal objection of the assessee about the completion of the assessment at Kanpur was under consideration of the department at Calcutta, it was neither prudent nor necessary on the part of the assessee to file a second appeal without exhausting all the remedies available at the level of the authorities below. The Assessing Officer, Calcutta could have dropped the proceedings for this assessment year or could have moved the CIT, Kanpur to cancel the assessment made at Kanpur under section 263. Either of the two actions could have solved the problem and could have served the legal purpose. The third alternative was also open to the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Mahalliram Ramniranjan Das the assessee was regularly assessed to tax as a regular assessee while the present assessee is a new assessee. In that case subsequently the CIT directed that those having hotel business should be assessed by a different ITO. In the present case there is no such direction of the CIT. In that case as the assessee derived income only partly from hotel business filed objection to transferee ITO who did not refer the same to the CIT whereas in the instant case the assessee objected on the basis of shifting of place of business and requested for the withdrawal of the returns. Thus, the distinction is evident that in that case the objection was on the ground that the assessee derives only partly income from hotel while in the instant case it was on the basis of territorial jurisdiction and carrying on of the principal business at Kanpur. Then that case was not a case of total lack of jurisdiction while the instant case was a case of total lack of jurisdiction. In the instant case, therefore, in our opinion, in view of total lack of jurisdiction and double assessments at two places, the irregularity deliberately committed by the Assessing Officer, Cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24. On the facts and in the circumstances of the case, in our opinion, the assessment in this case does not fall within the scope of section 124(7) as well as the assessment is declared invalid as it was made without following the procedure laid down in sub-sections (1) to (6) of section 124 of the Act. In the case of Kanjimal Sons v. CIT [1982] 138 ITR 391/[1983] 12 Taxman 34, the Delhi High Court has held at page 417 as under :--- " In our opinion, therefore, the provisions of sub-section (7) of section 124 cannot be availed of to support the assessment. It seems to us, therefore, that once it is held that the assessment is invalid for being made without following the procedure outlined under sub-sections (1) to (6) the provisions of sub-section (7) will be of no avail to sustain the validity of an assessment which includes income from beyond the territorial jurisdiction of the ITO who made it. " In this way we come to the conclusion that the assessment made by the Assessing Officer, Calcutta is a clear case of violation of the principles of natural justice and, hence, the assessment is null and voild. Since the proceedings are nullity in law and they come to an end, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
