Punjab-Haryana High Court
Lt. Col. Paramjit Singh vs Commissioner Of Income-Tax And Anr. on 13 March, 1996
Equivalent citations: [1996]220ITR446(P&H)
JUDGMENT
1. The petitioner retired as a Lieutenant Colonel from the Army on August 31, 1990. At the time of retirement, he was posted at Pune in the State of Maharashtra. For the assessment year 1988-89 corresponding to the accounting year 1987-88, when the petitioner was stationed at Pune, the petitioner filed a return of his income with the Income-tax Officer, GHQ Ward 4(3), Pune, and a copy of the same is annexure P-1 with the writ petition. The assessment for the year in question was completed by the Income-tax Officer, Pune, under Section 143(1) of the Income-tax Act, 1961 (for short, "the Act"), on the returned income. The order of assessment dated March 30, 1989, (annexure P-3 with the writ petition), was communicated to the petitioner and a copy thereof was also sent to the Army authorities at Pune for debiting the sum of Rs. 2,771 to the account of the petitioner which was found payable in terms of the assessment order. It is not in dispute before us that this amount has since been debited/ paid by the petitioner.
2. After his retirement from the Army, the petitioner shifted to Jalandhar in the State of Punjab and settled there. It appears that on the basis of some complaints received from the father of the son-in-law of the petitioner, the Income-tax Officer, Jalandhar, respondent No. 2, issued a notice dated March 13, 1995, to the petitioner under Section 148 of the Act informing the latter that the former had reason to believe that the income of the petitioner for the assessment year 1988-89 had escaped assessment within the meaning of Section 147 of the Act and, therefore, the petitioner was required to file a return of his income for the said assessment year within 30 days from the date of service of the notice. The petitioner filed the same return of income which he had filed before the Income-tax Officer, Pune, with a note thereon that the assessment proceedings for the relevant assessment year had already been completed by the Income-tax Officer, Pune, and that the tax found payable by the petitioner had been paid. It was also submitted that the notice issued by the respondent was time barred and that he had no jurisdiction to proceed in the matter. It was also stated that the proceedings had been initiated at the instance of the father of the son-in-law only with a view to harass the petitioner. The petitioner stated before us that there were some matrimonial disputes between his daughter and her husband and it was on account of those disputes that the father of the son-in-law had filed a complaint with the income-tax authorities on account of which they were harassing the petitioner. The aforesaid notice issued under Section 148 of the Act has been impugned by the petitioner in the present petition filed under Article 226 of the Constitution, inter alia, on the ground that the Income-tax Officer, Jalandhar, who has initiated the reassessment proceedings has no jurisdiction in the matter. It is also alleged in the petition that the proceedings have been initiated by the income-tax authorities only to harass the petitioner at the instance of the father of his son-in-law.
3. While issuing notice of motion, this court stayed further proceedings before the Income-tax Officer, Jalandhar (respondent 2). In the written statement filed on behalf of the respondents, a preliminary objection has been taken to the effect that the petition is directed against the notice issued under Section 148 of the Act and since no adverse order has yet been passed against the petitioner, the petition is premature and the same deserves to be dismissed. Mr. R.P. Sawhney, appearing on behalf of the respondents, also submitted during the course of arguments that the petitioner should be directed to raise all the pleas before the Income-tax Officer. It is also pleaded in the written statement that the Income-tax Officer, Jalandhar, has the jurisdiction to deal with the matter and that the jurisdiction of the Income-tax Officer, Pune, ceased on the retirement of the petitioner on August 31, 1990. It is further stated that since the petitioner is doing some travel trade business at Jalandhar, he falls within the jurisdiction of respondent No. 2.
4. We have heard counsel for. the parties and in the normal course we would have accepted the preliminary objection raised by the Department and directed the petitioner to raise all the pleas before the Income-tax Officer, but keeping in view the fact that the present is a case where there is a total lack of jurisdiction in respondent No. 2, we are interfering in the matter. There is no gainsaying the fact that the petitioner was posted at Pune when he was in the service of the Army and for the assessment year in question he filed his return of income with the Income-tax Officer there and the same stands assessed. The proceedings had been completed and the tax found payable had been deposited/accounted for. Thereafter, if the assessment proceedings are to be reopened or if the income for the relevant assessment year is to be reassessed, it is the Income-tax Officer who assessed the same in the first instance alone has the jurisdiction to proceed in the matter under Section 147 read with Section 148 of the Act unless the case has been transferred by a competent authority to another Assessing Officer under Section 127 of the Act and in that event the latter will have jurisdiction to proceed. Section 127 of the Act which is relevant for our purpose is reproduced hereunder for facility of reference :
"127. Power to transfer cases.--(1) The Director-General or Chief 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) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Director-General or Chief Commissioner or Commissioner,--
(a) where the Directors-General or Chief Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Director-General or Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred 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, pass the order ;
(b) where the Directors-General or Chief Commissioners or Commissioners aforesaid are not in agreement, the order transferring, the case may, similarly, be passed by the Board or any such Director-General or Chief Commissioner or Commissioner as the Board, may by notification in the Official Gazette, authorise in this behalf.
(3) Nothing in Sub-section (1) or Sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent 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 reissue 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."
5. Under the aforesaid provision, the Director-General or Chief Commissioner or Commissioner can transfer any case at any stage of the proceedings from one Assessing Officer subordinate to him to another. If both the Assessing Officers are not subordinate to the same Director-General or Chief Commissioner or Commissioner, then the transfer can be made on the respective Directors-General or Chief Commissioners or Commissioners agreeing and in the event of disagreement, by the Board or any such Director-General or Chief Commissioner or Commissioner authorised by it. The section expressly provides that on such a transfer it is not necessary to reissue any notice when the same has already been issued by the Assessing Officer from whom the case is transferred and the Assessing Officer to whom the case is transferred is entitled to proceed from the stage at which he receives the case from his predecessor. It is also provided that wherever it is possible to do so, the assessee shall be given a reasonable opportunity of being heard before an order of transfer is passed and that the competent authority will record his reasons for the transfer. The Explanation to Section 127, makes it clear that once an order of transfer is made under the section, all pending proceedings for different years are transferred and the Assessing Officer to whom the case is transferred would be in a position to continue all the pending proceedings and to institute further proceedings against the assessee in respect of any year, past or future, and even to reopen the assessment for an earlier year which stood completed at the date of the transfer. It is clear that in the absence of any transfer order no Assessing Officer other than the one who initiated the proceedings or completed the assessment shall have jurisdiction to continue with the proceedings or even to reopen a concluded assessment. It is common ground between the parties that the file of the petitioner pertaining to the assessment year 1988-89 has not been transferred from the jurisdiction of the Assessing Officer, Pune, to the Income-tax Officer, Jalandhar (respondent No. 2 herein). As a matter of fact, no order of transfer has been passed by the competent authority under Section 127 of the Act for any assessment year and, therefore, the proceedings for reassessment initiated by respondent No. 2, are wholly without jurisdiction. We have, therefore, no hesitation in quashing the impugned notice dated March 13, 1995 (annexure P-4 with the writ petition), issued by respondent No. 2 under Section 148 of the Act.
6. It was also contended on behalf of the petitioner that respondent No. 2 did not have sufficient material before him for reopening the assessment proceedings and that it was a mala fide exercise of the power since it was being exercised at the behest of the father of the petitioner's son-in-law. Since we have held that the Income-tax Officer, Jalandhar, has no jurisdiction to reopen the concluded assessment of the petitioner for the assessment year 1988-89, we are not examining these contentions of learned counsel for the petitioner.
7. In the result, the writ petition is allowed and the proceedings for reassessment initiated by respondent No. 2 under Section 148 of the Act set aside with costs which are assessed at Rs. 1,000.