2004 (4) TMI 64

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....other associates. Consequent to the search proceeding under section 132 of the Income-tax Act, it was proposed to transfer the case to the Income-tax (Inv.) Circle, Calicut, to facilitate effective and co-ordinate investigation. The Chief Commissioner of Income-tax, Bangalore, Karnataka, in exercise of the powers under section 127(2) of the Income-tax Act transferred the case of the assessee to the jurisdiction of the Assistant Commissioner of Income-tax, Investigation Circle-I, Calicut, Kerala, vide proceedings dated February 28, 1996. The Assessing Officer issued a notice under section 158BC to file a return setting forth the total income including undisclosed income for the block period. The assessee filed a writ petition in the High Court of Karnataka challenging the order passed by the Chief Commissioner of Income-tax, Bangalore, contending that the show cause notice issued by the Chief Commissioner of Income-tax did not contain the entire reasons which prompted him to pass the impugned order. The High Court rejected the plea of the assessee and dismissed the writ petition on August 8, 1996. Against that judgment, Writ Appeals Nos. 8551 and 8552 were filed and the appeals w....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s. Counsel also submitted that the word "case" in relation to an assessee means all proceedings under the Act which were pending on the date of the order. Counsel submitted that the Income-tax Officer, Mercara, could not have taken action for the block assessment in view of the provisions of section 158BC of the Act and so the case had to be transferred to the Assistant Commissioner of Income-tax who has got power to effect such transfer. The Tribunal found no illegality in the order passed by the Chief Commissioner transferring the case to the Assistant Commissioner of Income-tax, Calicut. After considering the contentions of both sides, the Tribunal remanded the matter back to the Assessing Officer to consider the entire issue afresh and make proper assessment in accordance with law. Aggrieved by this order, this appeal has been preferred. Identical legal question has also been raised in another writ petition and hence we posted both the cases together. Counsel on either side explained to us the meaning and scope of block assessment and the reasons for the introduction of Chapter XIV-B which deals with special procedure for assessment of search cases. Section 158BB shows how u....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ransferred the file to the Assistant Commissioner, Calicut. Counsel for the Revenue submitted that the expression "case" used in the Explanation has to be given a wider meaning and would take in block assessment as well, which includes a number of years. Placing reliance on section 127, counsel submitted that the word "any" has to be given a wider meaning which would take in assessment which would include block assessment as well. Counsel further submitted that in view of section 127, the provision relating to assessment and being a machinery provision, the court should give interpretation which makes the provision workable. Counsel also referred to the decision in [1963] 48 ITR 4. Counsel also submitted that the stand taken by the Revenue in the Supreme Court would not preclude the court from giving a correct interpretation of the provisions. Counsel made reference to the decision of the Supreme Court in Salem Co-operative Central Bank Ltd. v. CIT [1993] 201 ITR 697 We may incidentally refer to the provision and the Explanation to section 127. "127. (1) The Director General or Chief Commissioner or Commissioner may, after giving the assessee a reasonable opportunity of being....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....mpleted 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." Section 127 confers powers on the Director or Chief Commissioner of Income-tax to transfer any case from one or more Assessing Officers subordinate to him to any other Assessing Officer, 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. Section 127, therefore, confers power to transfer cases. Section 120, on the other hand, deals with jurisdiction of income-tax authorities, which says that the income-tax authorities shall exercise all or any of the powers and perform all 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. Section 124 deals with jurisdiction of Assessing Officers, which says where by virtue of any direction or order issued under sub-section (1) or sub-section (2) of section 1....