1987 (1) TMI 178

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.... "Date                            Event 31-3-1981       Date on which order under section 143(3) read with                 section 144B of the Income-tax Act, 1961 (draft                 assessment) was made by Income-tax Officer,                 A-Ward, Guntur. 5-5-1981        Date on which the draft assessment order was served                 on the assessee.  9-5-1981        Date on which objections were filed against the draft                 assessment order. 30-9-1981       Date on which t....

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....t. No notification under section 123(1) of the Act was made in the case of the assessee. Notwithstanding the objections of the assessee, the assesse was completed by the IAC (Assessment) who was the regular IAC, Vijayawada, holding additional charge of the IAC (Assessment) having concurrent jurisdiction over the assessee with the ITO, Special Investigation Circle. The assessee's preliminary objection is that such a course of actions is not open to the IAC (Assessment), unless the jurisdiction of the IAC Range-I, Hyderabad, was taken away or removed by an appropriate order under section 123(1). 4. Another objection of the assessee is that there was no notification under section 125A of the Act conferring jurisdiction on the IAC (Assessment) concurrent with that of the ITO, Special Investigation Circle, with effect from 30-9-1981. 5. In the first appeal, the Commissioner (Appeals) held that the order under section 127(1) clearly mentioned that the IAC (Assessment) will have concurrent jurisdiction along with the ITO, Special Investigation Circle, with effect from 30-9-1981. Secondly, he held that any objection regarding jurisdiction should have been raised before the assessing ....

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....equent clothing of the IAC (Assessment) with jurisdiction will equally fail and, therefore, the order passed by him is void ab initio and a non est in the eye of law. He relied on the decision of the Calcutta High Court in ITO v. Ashoke Glass Works [1980] 125 ITR 491. 8. Shri C. V. Padmanabhan, the learned senior departmental representative, submitted that the question of jurisdiction was raised by the assessee only before the Commissioner (Appeals). In fact, as the jurisdiction of the IAC (Assessment) depended upon the jurisdiction of the ITO, Special Investigation Circle, the challenge to jurisdiction should have been raised within the time limit prescribed under section 124(5). Therefore, the plea of the assessee should not be entertained. He further submitted that when the ITO, Special Investigation Circle, had concurrent jurisdiction with the IAC (Assessment), the transfer of file from one ITO, viz., ITO, A-Ward, to another ITO, viz., ITO, Special Investigation Circle, was valid in terms of section 127(1) and there was not need to give any opportunity to the assessee for such transfer especially when all such officers are situated in the same city, locality or place. In the....

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....assessment after complying with section 144B. The High Court upheld the order of the Tribunal holding that section 144B contained only procedure for completing the assessment and it cannot have the effect of invalidating the assessment when not complied with. In H. H. Maharaja Raja Pawer Dewas v. CIT [1982] 138 ITR 518, the Madhya Pradesh High Court held as follows: "Besides the argument, that the assessment order was totally invalid or non est on account of non-compliance with the procedure laid down under section 144B of the Act, is not correct. There was no jurisdictional error even though the procedure under section 144B of the Act was not complied with the scheme of section 144B of the Act 'clearly envisages that the jurisdictional to pass an order even when there is a variance of rupees one lakh and more between the income returned and the income assessed, is with the ITO, though section 144B provides for a machinery for the service of a draft order on the assessee and a consultation with a superior officer. This is only a procedural matter not involving jurisdiction and therefore, if there is a non-compliance or an irregular compliance with this provision, it is only a pr....