TaxTMI 
TaxTMI 
2014 (3) TMI 624
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere filed at Delhi with the Income Tax Officer, Salary Circle. 2. As per the respondent assessee, return for the assessment year 1984-85 was filed by the respondent at Dimapur, Nagaland on or about 8th August, 1985. The return was not taken up for scrutiny assessment but was processed on 31st March, 1987 under Section 143(1) of the Act. 3. The respondent assessee was subjected to search by the Central Bureau of Investigation on 27th March, 1987. It is the case of the Revenue that the assessee had acquired 18 commercial properties in Delhi, 370 acres agricultural land in and around Delhi and had substantial unaccounted/undisclosed deposits in form of Fixed Deposit Receipts. These assets/properties were in names of the respondent and his family members. 4. The Assessing Officer at Delhi i.e. Assistant Commissioner of Income Tax (Investigation), Circle 8(1) (hereinafter referred to as the AO, Delhi) issued notice under Section 148 of the Act dated 26th June, 1987 in respect of assessment years 1984-85, 1985-86, 1986-87 and 1987-88. Commissioner of Income Tax, Delhi by order dated 10th November, 1987 transferred the case of the respondent assessee from Income Tax Officer, Sala....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hich notice dated 27th September, 1990 was issued by the AO, Delhi were stayed till further orders. The prayers made in the writ petition read as under: "In the premises aforesaid, it is prayed that your Lordships may graciously be pleased to issue Rule, call for the records directing the Respondents to show cause as to why an appropriate Writ shall not be issued declaring the impugned Orders dated 15.03.1990 and dated 20.09.1990 (Annexure - A and B) and any orders passed by the Respondent No. 5 under given assessment jurisdiction and as illegal, unconstitutional and void ab initio and/or why a Writ in the nature of Mandamus/Certiorari/Prohibition and/or any other appropriate Writ shall not be issued quashing the aforesaid impugned Orders dated 15.03.1990 and 20.09.1990 and any orders passed by the Respondent No. 5 under given assessment jurisdiction and prohibiting the Respondent No. 5 from proceeding further in the matter or exercising any jurisdiction in the matter of Income Tax not vested in him in respect of the Petitioner and on cause or causes being shown and upon hearing the parties, be pleased to make the Rule absolute and/or pass any other Order or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ear 1985-86, the respondent had filed return of income with ITO, Dimapur on 8th August, 1985. The return was, however, defective as no TDS certificate was enclosed and defect memo dated 31st March, 1987 was issued. As per Section 139(9) of the Act, defects were required to be removed by 30th April, 1987. The same were not removed and as per respondent, he had written a letter on 18th April, 1988. The ITO, Dimapur thereupon issued notice dated 26th June, 1987 under Section 148 of the Act for the assessment year 1985-86. 12. In respect of assessment year 1986-87, there is a dispute. As per the Revenue, no return was filed by the respondent before the ITO, Dimapur and notice under Section 148 of the Act dated 26th June, 1987 was issued by ITO, Dimapur. The respondent, however, claims that he had filed return for the assessment year 1986-87 on 30th July, 1986 with ITO, Dimapur. We notice that in the assessment order dated 28th March, 1990, passed by the AO, Delhi, it is recorded that the respondent assessee had not filed any proof of filing of return at Dimapur for the assessment year 1986-87. Notice under Section 148 issued by the ITO, Dimapur on 26th June, 1987 was on record (see ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....O, Delhi, but ITO Dimapur was wrong and had erred in transferring records to the AO, Delhi without an order under Section 127 of the Act. (v) Instruction No. 1739 of the CBDT dated 19th December, 1986 stipulated, the procedure for transfer of assessment records of an assessee on change of his residence for the convenience of the assessee but the instruction by itself cannot and did not result or cause transfer of jurisdiction. (vi) The respondent was reverted to Nagaland in 1984 and instruction No. 1739 of the CBDT was issued on 19th December, 1986. The search was conducted only on 19th March, 1987 at which date the respondent was residing within the jurisdiction of ITO, Dimapur. Thus, AO, Delhi should have transferred the records to ITO, Dimapur in terms of instruction No. 1731 dated 19th December, 1986 and not vice versa. (vii) Upon receipt of notice under Section 142(1), the respondent had objected to the jurisdiction of the AO, Delhi. The respondent assessee denied receipt of notice under Section 148 of the Act issued by AO, Delhi for the three assessment years. The respondent had correctly objected to the assumption of jurisdiction by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssumption of jurisdiction by the AO, Delhi upon issue of notice under Section 142(1) of the Act. (iii) The respondent had successfully challenged transfer of assessment records to Delhi before the Gauhati High Court and succeeded vide judgment dated 15th July, 1993. (iv) There was no specific order of transfer of jurisdiction by the competent authority under Section 127 of the Act. It was further held: "7. Ld. Counsel for the assessee has further invited our attention to the order dated 14.8.1995 passed by the CIT, N.E.R., Shillong u/s 127(2)(a) of the IT Act transferring the jurisdiction over the assessee from ITO Ward Dimapur to ITO Ward 20(3), New Delhi. Admittedly, till 14.8.95 no order for transferring the jurisdiction over the assessee was ever passed by any competent authority u/s 127(2)(a) of the IT Act. 8. On careful perusal of these documents, we find that till 14th August, 1995, the jurisdiction over the assessee as per Section 124(1) lies with the ITO, Ward Dimapur with whom the return of income were regularly filed by the assessee. But the impugned assessment orders for the AY 85-86 to AY 87-88 were passed by the ACIT Inv. C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction 127(2)(a) of the Act was passed by Commissioner NER, Shillong transferring "the case" from ITO Ward Dimapur to ITO Ward 20(3), New Delhi. Reason given for transfer was administrative convenience and it was stated that the transfer order would take effect from 21st August, 1995. This order was accepted by the respondent assessee and has not been challenged. 19. In view of the order under Section 127(2)(a) of the Act, the respondent assessee preferred appeals against three assessment orders dated 1st March, 1995 passed by ITO, Dimapur before the CIT (Appeals), New Delhi. These appeals were allowed by the CIT (Appeals) vide order dated 27th March, 1997 recording as under: "2. I have considered the facts and circumstances of the case. The records of the assessee do not indicate that the assessee was given adequate opportunity to explain these investments. Further, it was also enjoined upon the assessing officer to make independent enquiries about these investments from the assessee's relatives. I, therefore, hold that the assessee has not been granted proper opportunity of being heard. The assessment is, therefore, set aside and the assessing officer is, therefore, di....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) dated 29th February, 2000, in the fourth round, DCIT, Circle-2 passed assessment orders dated 23rd March, 2001 assessing the income at Rs. 41,19,344/- Rs. 86,97,227/- and Rs. 67,79,390/- for the assessments years 1985-86, 1986-87 and 1987-88 respectively. The respondent assessee there upon preferred appeals and succeeded before the CIT (Appeals) vide order dated 28th February, 2003. The CIT (Appeals) relied upon order of the tribunal in the first round dated 19th March, 2002 and held that the first assessments had been annulled. There could not have been a further or fresh assessment. He did not notice or refer to the position that the ITO, Dimapur had passed the assessments order in the second round or the order of the CIT (Appeals), Delhi dated 29th February, 2000. 25. Against the order of CIT (Appeals) dated 27th March, 1990, relating to second round, assessee preferred appeals which stand allowed by the order dated 13th May, 2002. Tribunal in this order relied upon their earlier order dated 19th March, 2002 in the first round. Order dated 13th May, 2002 of the tribunal has been made subject matter of appeals of Revenue being ITA Nos. 314/02, 315/02 and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ll or any of the functions 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. [Explanation.-For the removal of doubts, it is hereby declared that any income-tax authority, being an authority higher in rank, may, if so directed by the Board, exercise the powers and perform the functions of the income-tax authority lower in rank and any such direction issued by the Board shall be deemed to be a direction issued under sub-section (1).] (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 o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....his section, or in section 124, the Board may, by notification in the Official Gazette, direct that for the purpose of furnishing of the return of income or the doing of any other act or thing under this Act or any rule made thereunder by any person or class of persons, the income-tax authority exercising and performing the powers and functions in relation to the said person or class of persons shall be such authority as may be specified in the notification.]" 32. Sub-Section (1) to Section 120 post- amendment stipulates that Income Tax authorities shall exercise any of the powers and perform all or any functions conferred on, or assigned to any authority by or under the Act as per directions of the Board. The explanation elucidates that the power can be exercised by an authority higher in rank. Sub-section (2) states that the Board may issue orders in writing under sub-section (1) for exercise of powers and performance of functions by income-tax authorities. Sub-section (3) postulates that the Board while issuing directions or issuing orders can have regard to the four-fold criteria, namely, territorial area; persons or classes of person; incomes or classes of income; and cases....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o be performed. (3) Within the limits of the area assigned to him, the Income Tax Officer 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. (4) Where a question arises under this section as to whether an Income Tax Officer has jurisdiction to assess any person, the question shall be determined by the Commissioner; or where the question is one relating to areas within the jurisdiction of different Commissioners, by the Commissioners concerned or if they are not in agreement, by the Board. (5) No person shall be entitled to call in question the jurisdiction of an Income Tax Officer - (a) after the expiry of one month from the date on which he has made a return under sub-section (1) of section 139 or after the completion of the assessment, whichever is earlier; (b) where he ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e on which he was served with a notice under sub-section (1) of section 142 or [sub-section (2) of section 115WE or sub-section (2) of section 143 or after the completion of the assessment, whichever is earlier; (b) where he has made no such return, after the expiry of the time allowed by the notice under sub-section (2) of section 115WD or sub-section (1) of section 142 or under sub-section (1) of section 115WH or under section 148 for the making of the return or by the notice under the first proviso to section 115WF or under the first proviso to section 144 to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier. (4) Subject to the provisions of sub-section (3), where an assessee calls in question the jurisdiction of an Assessing Officer, then the Assessing Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub-section (2) before the assessment is made. (5) Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer shall have all the powers conferred by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or determination as per sub-section (2) of Section 124, however, this should be done before the assessment was made. The aforesaid Section, therefore, postulates waiver of objection to assumption of jurisdiction by the Assessing Officer. Time limit for raising the objection stands stipulated. Principle of deemed waiver applies. This could only happen when the authority does not lack or suffer from inherent lack of subject matter jurisdiction. When there is inherent lack of subject matter jurisdiction, principle of waiver does not apply. The principle being simple that by consent one cannot confer jurisdiction on authority which lacks inherent subject matter jurisdiction. The provisions ensure that conflict between Assessing Officers having concurrent jurisdictions is avoid and curtailed and the assessment proceeding do not get misdirected on side issues. Such deviation should be avoided. It is also clear that question of jurisdiction cannot be made subject matter of appeal, as the issue has to be decided on the administrative side by the Commissioner/Commissioners/ Board. Appeal can, however, be filed questioning the action of the Assessing Officer in not following the procedure me....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rity. The appellate order will not also help the department in any way if eventually the CIT (or the Board) comes to the conclusion that the ITO, who completed the assessment, had no jurisdiction in the matter and it will not confer any right on any other ITO having jurisdiction to proceed against the assessee, if he is otherwise not competent to do so. It will only help the department in the event of the CIT (or the Board) coming to the conclusion that the ITO who completed the assessment had the jurisdiction so to do. The above approach to the issue derives support from the recent decision of the Supreme Court in the case of Kapurchand Shrimal v. CIT [1981] 131 ITR 451. In that case (under the 1922 Act) the ITO completed the assessments of an HUF without disposing of the claim for partition that had been made by the members of the family. Before the Tribunal, the assessee contended that the assessments should be cancelled but the department contended that even if there had been a violation of s. 25A of the Act the proper order to be passed was either to direct the ITO to give effect to Section 25A or to set aside the assessments with a direction to the ITO to pass fresh orders....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the matter from another point of view. It can be said that the issue involved is one of jurisdiction and when an assessed puts it in challenge immediately he receives a notice or files a return, it must be resolved one way or the other in the manner provided for in the statute before the ITO can assume jurisdiction to proceed further and complete an assessment. The statute requires this to be done before the assessment is made. A failure to do so will render the assessment null and void and without jurisdiction as held in Dina Nath Hemraj v. CIT [1927] 2 ITC 304 (All) which has been referred to and in no way disapproved in Teomal's case [1959]36 ITR 9(SC). Once the ITO fails to follow the statutory course prescribed before assessment, it can be said, he misses the bus and cannot be given a second chance to rectify matters. It appears that the Tribunal was inclined to accept this line of argument and to hold "that the AAC could not have rendered an assessment which was illegal into a legal assessment by putting the clock back, so to speak, and enabling the Commissioner to decide the question of jurisdiction." In the view of the Tribunal, "for the exercise of the Commissioner&#....
X X X X Extracts X X X X
X X X X Extracts X X X X
....matter of merely a process. A irregularity in procedure need not result in annulment unless the statute specifically stipulates to the contrary. The appellate authorities have right to put a clock back and direct the Income Tax Officer/Assessing Officer to follow the procedure notwithstanding the difference between mandatory and directory procedural norms. In Grindlays Bank vs. Income Tax Officer AIR 1980 656 (SC), the Supreme Court quashed the assessment order but then issued directions to make fresh assessment in the circumstances of the case. The said principle has been followed in cases of violation of principles of natural justice wherein an order of remit/remand when justified are passed. The courts have taken recourse of pragmatism and exigencies of the situation rather than legalistic approach of void and voidable (see Principle of Administrative Law, M.P. Jain and S.N. Jain, Fifth Edition, 2007 at pages 592-95). 36. In Budhia Swain and Ors. Vs. Gopinath Dev and Ors.(1999) 4 SCC 396, it was highlighted that distinction exists and was well recognized between lack of jurisdiction and mere error in exercise of jurisdiction. Lack of jurisdiction strikes at the very root of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....functions is not indicated in the Act. The principle is, however, apparent from the nature of the enactment. The Act has been enacted with a view to collect revenue. Income Tax is the main source of revenue for the State. It is through revenue that the machinery of the State is run. It is desirable that the tax should be collected as early as possible. Collection of tax is preceded by assessment thereof. It is consequently desirable that the assessment proceedings should be completed expeditiously but expeditious disposal of an assessment does not mean that the assessee may be put to unwarranted harassment or prejudice. Therefore, the Board and the Commissioner shall take into account the convenience of the assessee also. It is with this purpose in view that it has been provided in Sub-section (1) of Section 127 that, whenever possible, an opportunity of hearing may be given to the assessee while transferring a case from one place to another. Since the assessee does not suffer any inconvenience or prejudice if a case is transferred locally, no such opportunity has been prescribed. From these provisions it is obvious that the Board and the Commissioner will exercise the power of all....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d that the proceedings initiated by AO, Delhi were not in accordance with law, there is no finding and indeed the respondent did not contest the proceedings initiated by ITO, Dimapur. ITO, Dimapur had accepted that the assessment order should be passed by AO, Delhi. Even if the said opinion/belief was wrong, it would not affect the initial initiation of proceedings by ITO, Dimapur, who had passed the assessment orders in the second round. 39. A Division Bench of Bombay High Court in Commissioner of Income Tax vs. Bharatkumar Modi (2000) 246 ITR 693, referred to the well settled principle of law; setting out the difference between lack of jurisdiction and irregular exercise of authority/ jurisdiction. Proceedings are a nullity when the authority taking it, has a no power to have seisin over the case. But an order is not a nullity or in exercise of void ab intio jurisdiction, when the Assessing Officer does not confront the assessee with the material in his possession. The said error is an irregularity which could be corrected by remitting the matter. Powers of annulment and power to set aside and remit the case, have to be exercised keeping in mind the distinction between lack of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....during which the objection has to be raised. Similarly, as per Section 21 of the Code of Civil Procedure 1908, objection to the place of suing cannot be allowed to be raised in the appellate or revisional proceedings unless such objection is taken in the court of first instance at the earliest possible opportunity and in all cases where issues were settled or before settlement, unless there has been consequent failure of justice. 41. In Sitaram Rathore versus Commissioner of Income Tax, (1994) 77 Taxman 265 (MP) it was observed that Section 124 of the Act refers to jurisdiction of ITO/Assessing Officer with reference to area, classes of persons or classes of income or of such classes as the Commissioner may direct and in such cases an assessee could waive objection to irregular exercise or assumption of jurisdiction and an order thereupon would not be a nullity. However, when there was inherent lack of jurisdiction, the order passed was a nullity as the authority lacks jurisdiction when the subject matter was not at all amenable to its jurisdiction and in such cases acquiescence was immaterial because agreement or consent cannot confer jurisdiction. Lack of jurisdiction could be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re the Supreme Court, had filed eviction petition before the Rent Controller for eviction which was dismissed, but subsequently the landlord filed a suit for ejectment propounding that the building was constructed after 26th August, 1957 and therefore, the rent control legislation did not apply. The Supreme Court reversed the decision of the High Court and affirmed the view of the trial court and the first appellate court observing that neither estoppel nor res judicata could give jurisdiction when the rent controller did not have jurisdiction over the subject matter. The rent control legislation, operated in rem and mere fact that the landlord had instituted proceedings before the rent controller by mistake would not confer jurisdiction by consent on the rent controller, when the civil court possessed jurisdiction and the building was outside the realm of rent control legislation. The said decision does not apply to the facts of the present appeals as it relates to subject matter jurisdiction and inherent lack of jurisdiction in the absence of subject matter jurisdiction. 44. We will now like to deal with and refer to the decisions relied upon by the counsel for the respondent ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s not mean that one part of the assessment should be dealt with by one officer and the other part by the superior officer having concurrent jurisdiction. Either of them could have exercised the power but once a decision was taken by any one of the said authorities, the exercise must be terminated by the said authority. It was accordingly observed that the application under Section 220(6) was still pending, yet the Revenue was seeking to enforce the demand thereby putting the cart before the horse. Accordingly, appropriate directions were issued. In Commissioner of Income Tax versus Anjali Dua, (2008) 219 CTR (Delhi) 183 the High Court refused to interfere in view of the factual finding recorded by the tribunal that the assessee had shifted her residence from Ludhiana to Delhi and there was correspondence, which showed change in jurisdiction and place of assessment to Delhi, which was accepted and there was a case of transfer of records, i.e., a transfer under Section 127 of the Act. It was accordingly held that upon transfer the Revenue authorities at Delhi had necessary power and were competent to issue notice under Section 148 of the Act. The aforesaid decision does not deal with....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 15th March, 1990 and 20th September, 1990. The said letters have been noticed above. Letter dated 15th March, 1990 related to transfer of records by the ITO, Dimapur to the Assessing Officer at Delhi. Letter dated 20th September, 1990 was written by the Income Tax Officer/Assessing Officer at Dimapur for transfer of income tax return for the year 1990-91 filed before him. The second letter also stated that the jurisdiction of the case was with ACIT (Investigation) Delhi, Circle 8(1). There is no observation for finding in the said judgment relating to jurisdiction of the Assessing Officer with reference to the assessment year 1985-86, 1986-87 and 1987-88. 47. Section 124 (7) of old provisions and new Section 124(5) require clarification and elucidation. In Kanji Mal & Sons (supra), it was held that sub section (7) to Section 124 was an overriding clause that brushes away all technicalities of Section 124 (1) to (6) including sub-section (4). It protects validity of an assessment even when there was violation in pursing the procedure outlined in sub-section 4, despite challenge made by the assessee. However, sub section (7) to Section 124 would come into play and an order of as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....may make for the purpose of facilitating the performance of such functions ; (b) where any case has been transferred from any Income-tax Officer or Income-tax Officers (whether with or without concurrent jurisdiction with the Inspecting Assistant Commissioner), to two or more Income-tax Officers (with concurrent jurisdiction with the Inspecting Assistant Commissioner), the Officers (including the Inspecting Assistant Commissioner) to whom the case is so transferred shall have concurrent jurisdiction over such case and shall perform their functions in accordance with such general or special orders in writing as the Board or the Commissioner may make for the purpose of facilitating the performance of such functions, and the Income-tax Officers shall perform their functions also in accordance with such orders or directions as the Inspecting Assistant Commissioner may make under sub-section (2) of section 124 or, as the case may be, under sub-section (2) of section 125A. (2) The transfer of a case under sub-section (1) may be made at any stage of the proceedings, and shall not render necessary the reissue of any notice already issued by the Income-tax Officer or Incom....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncurrent jurisdiction) to any other Assessing officer or Assessing officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Assessing officer or Assessing officers from whom the case is transferred. Explanation.-- In 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." 49. The said provision is different from Section 124 and deals with transfer of cases both presently pending and where assessment have concluded, as is clear from the Explanation to the said Section. It can also relate to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erent authorities can be divided by reference to (i) territorial area, (ii) person or persons, (iii) income and classes of income, and (iv) cases or classes of cases. Section 124(1) has relevance to territorial jurisdiction. If area wise jurisdiction has been conferred on the Assessing Officer then a person carrying on business or profession must find out the Assessing Officer having jurisdiction over the place within which business or profession is being carried on. If the assessee be a person not carrying on a business or profession then he is subject to the jurisdiction of the Assessing Officer vested with jurisdiction over the area where he is residing. Section 127 does not speak of power to transfer jurisdiction ; it speaks of transfer of "case", as defined in the Explanation enacted to Section 127. That being the position of law, we are very clear in our mind that the petitioners having shifted their business/profession and residence--both--in July, 1984, from Amritsar to Delhi, the return could have been filed only before an Assessing Officer having jurisdiction over the area where the business/profession of the petitioners was situated. If there was any do....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent assessee. There is no finding of the tribunal, when these notices were to be served and whether the respondent assessee within one month had raised objection to the jurisdiction of the Assessing Officer at Delhi. However, objection was raised during the course of the assessment proceedings and as per the finding of the CIT (Appeals), within one month of issue of notice under Section 142(1) of the Act, but this aspect has not been discussed by the tribunal. (3) Aforesaid notices were issued to the respondent assessee at his residential address namely F-5, N.D.S.E. Part II, New Delhi, a property purchased and owned by the respondent assessee. (4) For assessment year 1984-85, the respondent assessee had filed his return with Income Tax Officer, Dimapur and proceedings initiated by the AO, Delhi were dropped but the reasons for dropping the proceedings at Delhi are not on record. (5) For the assessment year 1985-86, the respondent had filed return of income with ITO, Dimapur on 8th August, 1985 but the said return was declared null and void by the ITO, Dimapur in view of non-compliance of Section 139(9) i.e. failure to rectify the defects as per the findi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....espondent assessee had preferred appeals against the assessment orders for assessment years 1985-86, 1986-87 and 1987-88 passed by ITO, Dimapur before the CIT(Appeals) at Delhi which was allowed vide order dated 27th March, 1997 with remit to the Assessing Officer to re-examine the issue on merits after giving fair and reasonable opportunity to the respondent assessee. The assessee did not challenge and question the jurisdiction of the ITO, Dimapur or the Assessing Officer at Delhi after order dated 14th August, 1995 under Section 127 of the Act. (11) In the third round, the Assessing Officer at Delhi passed the assessment orders in view of the order under Section 127(2)(a) dated 14th August, 1995. But this order was again set aside by the CIT (Appeals) for want of fair and adequate opportunity, with the order of remand to the Assessing Officer at Delhi. The said order remained unchallenged by both the respondent assessee and the Revenue meaning thereby that they accepted the order of remit to the Assessing Officer at Delhi. However, this would not affect the challenge to the earlier order of remand in the first round and if the said order is struck down or set aside, the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (14) In view of the decision of Delhi High Court in K.K. Loomba (supra), each year is separate and distinct year and in case the assessee shifts his residence or place of business or work etc., the Assessing Officer of the place where the assessee has shifted or otherwise, will have jurisdiction and it is not necessary that an order under Section 127 of the Act should be passed. This, however, does not mean that the Assessing Officer where the returns of income were earlier filed ceases to have jurisdiction, provided the assessee has residence in his area, place of business, class, income etc. Residence can mean permanent residence as well as current or temporary residence of some permanence. There is no specific finding by the Tribunal with reference to Section 124 of the Act on the question of jurisdiction on the basis of residence, class, income etc. (15) The Assessing Officer at Delhi as well as ITO, Dimapur had issued notice under Section 148 of the Act in respect of assessment years 1985-86 and 1986-87. For the assessment year 1987-88 AO, Delhi had issued notice under Section 148 and ITO, Dimapur had taken up regular assessment proceedings. Return of income fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rs under Section 124 is not a nullity for want of jurisdiction but it results in irregularity which can be rectified by order of remit and directing the Assessing Officer to continue with the proceedings from the stage where the error had occurred. This was directed and held by the CIT (Appeals), but 9 years later reversed by the Tribunal. To this extent, the decision of the Tribunal cannot be sustained. 52. In view of the aforesaid discussion, we answer the substantial questions of law relating to the first round, i.e., ITA Nos. 256/02, 257/02 and 255/02 holding:- (i) There was failure on the part of the Assessing Officer, Delhi and ITO, Dimapur in not following the procedure prescribed under Section 124 of the Act, but this would not make the assessment in the first round a nullity. The assessment order passed should have been set aside as was directed by CIT(Appeals) and assessments remitted for a fresh decision. Question of law is accordingly answered in favour of the Revenue and against the respondent-assessee but in the aforesaid terms. (ii) ITA Nos. 314/02, 315/02 and 316/02 which relate to the second round, the substantial question of law is a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....come Tax Act, 1961 in different income tax appeals relating to assessment years 1985-86, 1986-87, 1987-88 and 1988-89 vide orders dated 13th May, 2002 and 9th August, 2002. The tribunal in the impugned order has not discussed factual matrix or details relating to wealth tax proceedings. Section 11 of the WT Act before its amendment by the Direct Tax Laws (Amendment) Act, 1987 before 31st March, 1988 stipulated that the authorities shall perform their functions in accordance with such orders as the Commissioner may make for allocation of work to be performed. With effect from 1st April, 1988, Section 11(1) of the WT Act stipulated that the provisions of Section 124 and 127 of the Act i.e. the Income Tax Act so far as it may be, shall apply subject to modifications in sub-section (2). (The said sub section is not relevant for the present decision). 57. We may now refer to the factual matrix as is apparent from the assessment orders and appellate orders relating to assessment years 1985-86 to 1988-89. WTA 13/2006 (A.Y. 1985-86) -Valuation dated 31st March, 1985 (1) A notice under Section 17 of the WT Act was issued and return of wealth tax declaring wealth of Rs.&....
X X X X Extracts X X X X
X X X X Extracts X X X X
....als) vide order dated 27th January, 1999 set aside the said assessment with direction for de novo assessment on the basis of income tax proceedings as in the last year. Respondent assessee did not challenge jurisdiction of the Assessing Officer before the Commissioner (Appeals). 3) By de novo assessment order dated 23rd March, 2001, assessment was again framed at taxable wealth of Rs. 1,19,91,400/-. Commissioner (Appeals) substantially upheld the said additions including additions made on account of 18 flats but held that that income tax and wealth tax liability should be allowed as per Wealth Tax Act. The assessee did not challenge and question jurisdiction of the Assessing Officer before the Commissioner (Appeals). WTAs 16/2006 and 18/2005 (Assessment year 1987-88) 1) Return of income was filed after issue notice under Section 17 on 18th October, 1993 declaring net wealth of Rs. 1,19,900/-. The assessee did not challenge jurisdiction of the Assessing Officer. By assessment order dated 17th March, 1997, assessment made at taxable wealth of Rs. 99,49,000/-. 2) The assessment was set aside with direction for de novo assessment for r....