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2005 DIGILAW 225 (PNJ)

Subhash Chander v. Commissioner Of Income-tax

2005-02-08

G.S.SINGHVI, VINEY MITTAL

body2005
Judgment G.S.Singhvi, J. 1. In this appeal filed under Section 260A of the Income-tax Act, 1961 (for short, "the Act"), the appellant has prayed for determination of the following question of law : "Whether under the facts and circumstances of the case, the Tribunal is justified in setting aside the assessment order with a direction also to decide the issue of jurisdiction under Section 124 and to pass an order in accordance with law which question the said Assessing Officer has already decided in this order dated March 13, 1995, and thus the Tribunal should have decided the issue of jurisdiction itself ?" 2. The appellant is engaged in the trading of foodgrains. For the assessment year 1992-93, the appellant filed the return on March 1, 1993, declaring a loss of Rs. 15,700. The same was processed under Section 143(1)(a) of the Act. Later on, the case was selected for scrutiny. On September 22, 1994, the appellant applied for transfer of the case to the Assistant Commissioner of Income-tax, 4(3)-cum-New Assessees Circle, Drum-shape Building, New Delhi. By an order dated January 20, 1995, the Assessing Officer rejected the appellants plea by observing that he had the jurisdiction to decide the matter. He also called upon the appellant to furnish certain clarification, etc., in the context of notice issued under Section 143(3) of the Act. By an order dated March 13, 1995, the Assessing Officer finalised the assessment at an income of Rs. 53,16,730. The appeal filed by the appellant was disposed of by the Commissioner of Income-tax (Appeals), Rohtak, vide his order dated October 10, 1995. 3. Dissatisfied with the orders of the Assessing Officer and the Commissioner of Income-tax (Appeals), the appellant filed further appeal before the Income-tax Appellate Tribunal, Chandigarh Bench "A" (for short, "the Tribunal"). By an order dated May 31, 2002, the Tribunal disposed of the appeal by remanding the case to the Assessing Officer to record a finding on the issue of jurisdiction. Paragraph 7 of that order, reads as under : "The other question relating to territorial jurisdiction was important. If the Assessing Officer did not have territorial jurisdiction then his order is bad in law. So this question goes into the root of the matter. The learned Departmental Representative submitted that the above question was also not material as the Assessing Officer had the jurisdiction to make assessment. We are unable to agree. If the Assessing Officer did not have territorial jurisdiction then his order is bad in law. So this question goes into the root of the matter. The learned Departmental Representative submitted that the above question was also not material as the Assessing Officer had the jurisdiction to make assessment. We are unable to agree. When a question of jurisdiction is raised, it has to be resolved in accordance with law and a proper finding has to be recorded. The Revenue authorities are to take into account the provisions of Section 124 of the Income-tax Act. The above question was also examined by the Income-tax Appellate Tribunal (C) Bench of Delhi in the case of Amulya General Trading and Agencies Ltd. v. Asst. CIT [1995] 55 ITD 233. Accordingly, on this point, we set aside the assessment and ask the Assessing Officer to record a finding in accordance with law after hearing the assessee. Therefore, the assessment is set aside on this point." 4. We have heard learned counsel for the parties and perused the record. In our opinion, the Tribunal committed a serious error by remanding the case to the Assessing Officer for deciding the issue of jurisdiction afresh. A perusal of the order dated May 31, 2002, passed by the Tribunal shows that it had treated the issue of jurisdiction raised by the assessee as an important issue and set aside the order of assessment with a direction to the Assessing Officer to record a finding on the issue of jurisdiction. While doing so, the Tribunal overlooked the fact that the Assessing Officer had already decided the issue of jurisdiction vide his order dated January 20, 1995, and again vide order dated March 13, 1995. This is clearly borne out from paragraph 7 of the last mentioned order, which is reproduced below : "Besides, it may not also be out of place to mention that proper jurisdiction in this case vests with the undersigned in this context, attention is also drawn to the provisions of Section 124(3)(b) of the Income-tax Act, 1961. According to this section, no person is entitled to call in question the jurisdiction of an Assessing Officer after the expiry of time allowed by the notice under Sub-section (1) of Section 142 of the Income-tax Act. According to this section, no person is entitled to call in question the jurisdiction of an Assessing Officer after the expiry of time allowed by the notice under Sub-section (1) of Section 142 of the Income-tax Act. As already stated supra, notice under Section 142(1) was issued in this case on February 25, 1993, requiring the assessee to file the return by March 15, 1993. However, the return was filed on March 1, 1993, in pursuance of the above notice and so at the most, the jurisdiction could have been called into question up to March 15, 1993. After March 15, 1993, absolutely, the assessee is not at all entitled to call into question the issue of jurisdiction. From the above, it is abundantly clear that the correct jurisdiction vests with the undersigned and as the main object of transfer was only to defeat enquiries, the assessees plea of transfer of pending assessment to Delhi is rejected for the time being." 5. Learned counsel for the respondent fairly states that in the face of the finding recorded by the Assessing Officer on the issue of jurisdiction, the Tribunal should have itself adjudicated on the issue and should not have remanded the case to the Assessing Officer for fresh decision on the same issue. 6. In view of the above, the appeal is allowed. Order dated May 31, 2002, passed by the Tribunal is set aside and the case is remanded to it for fresh adjudication of the appeal filed by the assessee. 7. The parties are directed to appear before the Tribunal on March 7, 2005.