HIGH COURT OF PUNJAB AND HARYANA

Subhash Chander

v.

Commissioner of Income-tax, Rohtak

M. M. Kumar and Rakesh Kumar Jain, JJ.

IT Appeal No. 129 of 2007

December 7, 2007

Section 124 of the Income-tax Act, 1961 - Assessing Officer - Jurisdiction of - Assessment year 1992-93 - Whether in terms of section 124(3)(b), jurisdiction of an Assessing Officer cannot be called in question by an assessee after expiry of one month from date of which he was served with a notice under section 142(1) or after completion of assessment, which was to be earlier - Held, yes

FACTS

A notice under section 142 was issued to the assessee on 25-2-1993 requiring him to file the return of income by 15-3-1993 requiring him to file the return of income by 15-3-1993. The return was filed on 1-3-1993, declaring loss of certain sum. The return was processed and the Assessing Officer completed the assessment vide his order 13-3-1995, determining the income of the assessee as against the returned loss. The assessee challenged the jurisdiction of the Assessing Officer before the Commissioner (Appeals). The Commissioner (Appeals) opined that it did not require any adjudication. On further appeal, the Tribunal held that the Assessing Officer was having valid jurisdiction over the assessee’s case and that the assessee had at no point of time questioned the jurisdiction of the Assessing Officer in the course of assessment proceedings; in terms of section 124, the assessment order made by the Assessing Officer was not without jurisdiction and he gave valid reasons for not acceding to the request of the assessee to transfer the case records to the Assessing Officer, Delhi.

In appeal, the assessee contended that the question with regard to jurisdiction should have been determined by the Director General or the Chief Commissioner or the Commissioner not by the Tribunal or the Commissioner (Appeals).

HELD

A perusal of sub-section (3)(b) of section 124 shows that the jurisdiction of an Assessing Officer cannot be called in question by an assessee after the expiry of one month from the date of which he was served with a notice under sub-section (1) of section 142 or after completion of assessment, which was to be earlier. It is further evident that sub-section (4) of section 124 has been made subject to the provisions of sub-section (3) in case an assessee has questioned the jurisdiction of an Assessing Officer. It is only in those jurisdiction that the Assessing Officer is to refer the matter for determination to the Director General or the Chief Commissioner or the Commissioner as per the provisions of section 124(2). It is, thus, evident that before the expiry of the period of one month from the date of service of notice under sub-section (1) of section 142, no right to question the jurisdiction of an Assessing Officer would survive. [Para 6]

In the instant case, notice under section 142(1) was issued to the assessee on 25-2-l993 and the return was to be filed on or before 15-3-1993, which, in fact, had been filed on 1-3-1993. No objection to the jurisdiction till 6-9-1994 was raised when the assessee requested for transfer of the case to Delhi. Therefore, it was not possible to conclude that the Assessing Officer was under obligation to refer the question of jurisdiction to the Director General or Chief Commissioner as per the provisions of section 124(2) read with section 124(4) as was contended by assessee. [Para 7]

It would not make any difference even if at one stage accounts for assessment year 1992-93 were transferred to New Delhi, which were returned to the Assessing Officer, Sirsa, because there was no effective transfer of record. Moreover, the substantial business in the financial year 1992-93 was transacted at Sirsa. The argument that the record at one stage was transferred and, therefore, the assessment order passed by the Assessing Officer at Sirsa was bad could not be accepted and there was no hesitation to reject such an argument. [Para 8]

In view of above, the Tribunal was justified that the assessment order made by the Assessing Officer was not without jurisdiction. Therefore, the appeal was to be dismissed. [Para 10]