TaxTMI 
TaxTMI 
1985 (7) TMI 146
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....ng that of the assessee was transferred from the various assessing officers to the ITO Central Circle V, Ludhiana. Unfortunately, the ITO Spl. Survey Circle I Ludhiana did not transfer the recorders of the assessee to the ITO Central Circle V, Ludhiana after the above order of transfer and took steps to complete the assessment of the assessee and finally made an ex-parte assessment under s. 144 on 15th Feb. 1978. The assessee went in appeal before the AAC challenging the jurisdiction of the ITO Spl. Survey Circle I, Ludhiana framing the assessment. The AAC held that the ITO Spl. Survey Circle I. Ludhiana at the time of making the assessment had no jurisdictions over the assessee. He, therefore, annulled the assessment order of the ITO Survey Circle I, Ludhiana on 29th Dec. 1978 with no directions for de novo assessment. On receipt of the order of the AAC the ITO Central Circle V, Ludhiana with whom the jurisdiction legally vested, issued notice under s. 148 r/w s. 147(b) on 16th March 1979 asking the assessee to file the return of her total income as her income had escaped assessment within the meaning of s. 147(b) of the Act. The assessee did not file any return in compliance to t....
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....49 : (1973) 91 ITR 550 (SC) confirming the decision of the Rajasthan High Court in CIT vs. Industrial Trust Ltd. (1969) 74 ITR 385 (Raj). 5. We have carefully considered the rival submissions. The ratio of the decision of the Hon'ble Supreme Court in the case of Industrial Trust Ltd. vs. CIT, in our opinion, is not applicable to the facts of this case. In the case before the Hon'ble Supreme Court, the ITO, Ajmer had issued notice under s. 35(1)(a) of the Indian IT Act,. 1922 for the asst yrs. 1946-47, 1947-48 and 1948-49. Sec. 34(1)(a) is pari materia with s. 147(a)/148 of the IT Act, 1961. At the time of issuing the notice, the ITO had no legal jurisdiction over the case of the assessee. However, in response to the notice issued by the ITO, Ajmer the assessee filed returns of total income. Pending those referred, before the ITO, Ajmer the ITO, Central Circle IV, Delhi who had competent jurisdiction over the case of the assessee issued fresh notices under s. 34 for those very years. The assessee company did not submit any returns but wrote to the ITO, Central Circle IV, Delhi, saying that it had already submitted its returns to the Officer at Ajmer and hence it could not called ....
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...., the assessment year involved is 1975-76. In view of the above provisions contained in s. 153, assessment on the return filed on 29th Aug., 1975 could be completed upto 31st March, 1978. In other words, no assessment could be made on the return after assessment order was annulled by the AAC of the ITO Central Circle V, Ludhiana, having competent jurisdiction. 6. An important question, therefore, airside that when the return of income was originally filed with the ITO of competent jurisdiction and the jurisdiction was later transferred to another ITO, what would be the position of such a return on which assessment order was passed by the ITO who later ceased to have jurisdiction over that case and such assessment was annulled by the AAC. In our opinion, it could not be said that the return was invalid. The return was filed on 29th Aug. 1975 and at that time it was filed with the ITO having competent jurisdiction. The return was, therefore, valid. By the supervening events of transfer of jurisdiction from the said ITO to another ITO, the return would not become invalid. No valid assessment could be made on that return because of in-action for whatsoever reasons, on the part of th....
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....iable to tax in the hands of another person. The return filed by the assessee remains undisputed of and the ITO is precluded by the bar of limitation from making the assessment on the basis of that return. Their Lordships further observed that in every case whenever the ITO seeks to invoke jurisdiction under s. 34(1), he must ask himself the question whether it is open to him to bring the income to assessment by exercising his power under s. 23 (of the Indian IT Act, 1922) which is equivalent to s. 143 of the IT Act, 1961. If he cannot, either because the assessment order under s. 23 has bear made and is therefore, final, so far as he is concerned or, although no assessment order has been made, he is precluded from making an assessment because of the bar of limitation, income which was liable to assessment must be said to have escaped assessment. It is, therefore, a case where the ITO having competent jurisdiction allowed the return filed by the assessee to lapse by the bar of limitation which resulted in escapement of income. The provisions of s. 147, in our opinion, are, therefore, available even in cases where the escapement of income is because of in-action on the part of the I....