TaxTMI 
TaxTMI 
2017 (7) TMI 695
X X X X Extracts X X X X
X X X X Extracts X X X X
....nsequence, a search was also carried out on respondent/assessee during the period from 2.2.1999 to 6.2.1999. At that time, the respondent/assessee was being assessed at Rajnandgaon (M.P.). 4. On 6.7.1999, the Commissioner of Income Tax, Raipur, in exercise of powers under Section 127 of the Act, transferred the Appellant's assessment proceedings (case) from I.T.O., Rajnandgaon to the Deputy Commissioner of Income Tax, Nagpur. The respondent/assessee challenged the order dated 6.7.1999 passed under Section 127 of the Act by the Commissioner of Income Tax, Raipur before the Hon'ble Madhya Pradesh High Court. On 17.9.1999, the Hon'ble Madhya Pradesh High Court quashed and set aside the order dt.6.7.1999 passed u/s.127 by the Commissioner of Income Tax, Raipur. However, the Court by its Order, dated 17.9.1999 directed the Commissioner to hear the respondent/assessee and pass a reasoned order in support of the transfer of the case. 5. On 22.9.1999, the Deputy Commissioner of Income Tax, Nagpur issued a show cause notice under Section 158BC of the Act calling upon the appellant to file its return of income. In response to the above notice, the appellant on 5.5.2000 did ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....99 by the Commissioner of Income Tax, Raipur, which had been quashed by the Order dated 17.9.1999 of Hon'ble Madhya Pradesh High Court. The Tribunal allowed raising of additional ground as it concerned the issue of jurisdiction, being a pure question of law. Thereafter, the impugned order upheld the objection of the respondent/assessee negating the stand of the Appellant/Revenue that the issue of jurisdiction cannot be urged by the Respondent/Assessee in view of Section 124 (3) of the Act. This by holding that the same would not apply as the respondent/assessee has not filed his return of income u/s.139(1) or in response to notice u/s.142(1) or 142(3) of the Act, but in response to notice u/s.158BC of the Act. Besides holding that on 22.9.1999 when the notice under Section 158BC of the Act was issued, the Deputy Commissioner of Income Tax, Nagpur was not having jurisdiction, the Tribunal allowed the respondent/assessee's appeal. Being aggrieved, the Revenue is in appeal before us. 11. Before considering the rival submissions, it would be useful to reproduce the provisions of the Act which would have a bearing in answering the question formulated for our consideration : ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1.6.2016 the Finance Act, 2016 is inserted the following sub-clause (c) : (c) where an action has been taken under section 132 or section 132A, after expiry of one month from the date on which he was served with a notice under sub-section (1) of section 153A or subsection (2) of section 153C or after the completion of the assessment, whichever is earlier. Section 127 of the Income Tax Act, 1961 : Power to transfer cases. (1) The (Principal Director General or) Director General or (Principal Chief Commissioner or) Chief Commissioner or (Principal Commissioner or) Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. (2) ......... (3) ......... (4) ......... Explanation - In section 120 and this section, the word "case, in relation to any person whose name is specified in any order or direc....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... this objection, it amounts to waiver. The respondent/assessee cannot now challenge the jurisdiction of the Deputy Commissioner of Income Tax, Nagpur; and (c ) In any view, the Deputy Commissioner of Income Tax, Nagpur was vested with jurisdiction to complete the assessment of undisclosed income under Section 158BC of the Act by the subsequent Order dated 18.1.2000 of Commissioner of Income Tax, Raipur which has retrospectively revived his earlier Order dated 6.7.1999. Consequently, the Deputy Commissioner of Income Tax, Nagpur is the Assessing officer in terms of the Act at the time when the notice was issued to the respondent/assessee and no fault can be found with the same. 13. On the other hand, Mr.Thakar, learned Counsel appearing for the respondent/assessee while supporting the impugned order, submits as under : (a ) Section 124 (3) of the Act would have no application as, at the relevant time and even now, as it does not deal with the notices issued u/s.158 BC of the Act. Even the amendment carried out by Finance Act, 2016 only seeks to bring within its ambit any notices issued u/s.153A and 153C of the Act and not notices issued under Section 158BC of the Act. Thus,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssuing notice on 22.9.1999, under Section 158 BC of the Act. But, as the Order dt.6.7.1999 under Section 127 of the Act by the Commissioner of Income Tax, Raipur was set aside before issuing of notice, the Deputy Commissioner of Income Tax, Nagpur ceased to be the Respondent/Assessee's Assessing Officer. In the result, the notice dated 22.9.1999 issued u/s.158BC of the Act was issued by the Deputy Commissioner of Income Tax, who was not the Assessing Officer of the respondent/assessee. It is the Assessing Officer alone who has to serve notice upon the assessee calling upon him to furnish a return in terms of Section 158BC of the Act. This notice the Deputy Commissioner of Income Tax could not issue as, on 22.9.1999, he was not the Assessing Officer. As a consequence, the notice being without jurisdiction, all the proceedings subsequent thereto are without authority of law. 15. In fact, as the Apex Court held in A.C.I.T. vs. Hotel Blue Moon, (2010) 321 I.T.R. 362 (SC) that the issue of notice under Section 158 BC of the Act, consequent to search is mandatory, as it is the very foundation for jurisdiction. Therefore, the notice u/s.158 BC of the Act has necessarily to be issue....
X X X X Extracts X X X X
X X X X Extracts X X X X
....which was issued as late as 12.8.2000. In the above view, it is clear that the bar of Section 124(3) of the Act would not prohibit the respondent/assessee from calling in question the jurisdiction of the Deputy Commissioner of Income Tax, Nagpur in passing the Assessment Order beyond the period provided therein. It needs to be pointed out that amendment by Finance Act, 2016 which is w.e.f. 1.6.2016 brings within ambit of Section 124(3) of the Act cases when notice is issued consequent to search u/s.153(A) or 153(C) of the Act preventing/prohibition an assessee from raising the issue of jurisdiction. It does not include notices issued u/s.158 BC of the Act. This further supports the view that time bar u/s.124(3) of the Act to question the jurisdiction of the Income Tax Officer would not apply to the cases where return has been filed consequent to notice u/s.158 BC of the Act. 18. It was next submitted that even absent statutory provision, the respondent/assessee is barred from raising the issue of jurisdiction after having participated in the proceedings before the Deputy Commissioner of Income Tax, Nagpur on principle of waiver of its right to question his jurisdiction. A waiver....
X X X X Extracts X X X X
X X X X Extracts X X X X
....td. v. Navrang Studios, Sardar Hasan Siddiqui v. STAT, A.R. Antulay v. R.S. Nayak, Union of India v. Deoki Nandan Aggarwal, Karnal Improvement Trust v. Parkash Wanti, U.P. Rajkiya Nirman Nigam Ltd. v. Indure (P) Ltd., State of Gujarat v. Rajesh Kumar Chimanlal Barot, Kesar Singh v. Sadhu, Kondiba Dagadu Kadam v. Savitribai Sopan Gujar and CCE v. Flock (India) (P) Ltd.) " 20. It was lastly submitted that, by virtue of the subsequent Order dated 18.1.2000 passed by the Commissioner of Income Tax, Raipur, the earlier order dt.6.7.1999 passed u/s.127 of the Act by him stands revived. Consequently, all the proceedings taken between 6.7.1999 till the Order dated 18.1.2000 by the Deputy Commissioner of Income Tax, Nagpur become regular and he will retrospectively enjoy the status of the Assessing Officer even on 22.9.1999, when he issued the notice u/s.158 BC of the Act. 21. Transfer of proceedings u/s.127 of the Act cannot be retrospective so as to confer jurisdiction on a person who does not have it. Section 127 of the Act does not empower the Authorities under the Act to confer jurisdiction on a person who does not have jurisdiction with retrospective effect. In fact, the explana....