V DHIVAKARAN Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Appellant Assessee has filed this appeal under section 260-A of the Income Tax Act against the order of the Income Tax appellate Tribunal, Chennai, C Bench in IT (SS) No. 187/mds/1998 dated 26. 02. 2001 and the appeal was admitted in terms of the following substantial questions of law: 1. Is the assessment, along with the order of the Income tax Appellate Tribunal, liable to be set aside as illegal because no notice under Section 158. BC was issued after an order of transfer by notification dated 13. 4. 1998 of the Commissioner of Income Tax, Trichy which itself took effect only from 16. 4. 1998? 2. Is the order of assessment dated 3. 12. 1998 barred by limitation, especially when the Income Tax Appellate Tribunal had not found the mandatory period of limitation saved by anything stated in sub-section (2) of section 158. BE of the Income Tax Act? 3. Should the Income Tax Appellate Tribunal ought to have held that the earlier order dated 30. 9. 1996 under Section 127 of the Act was illegal and void, and not merely irregular, especially when it was patently wrong, non-speaking and in violation of rules of natural justice being open to collateral attack so that the Revenue itself abandoned the said proceedings, and there was nothing to save anything done thereunde r ?

(2.) IN respect of Question No. 3, the counsel appearing for the Appellant submitted that he is not pressing the same. The facts lead to the remaining two questions of law are as under: (i ) The premises of the appellant was raided under Section 132 of the Act on 02. 04. 1996 and cash, jewellery , documentation etc. came to be seized. The Assessing Officer issued a notice under Section 158-BC of the Act on 06. 12. 1996 and the Appellant Assessee on 14. 12. 1996, received the notice. The Appellant Assessee, however, did not filed any return, in response to the said notice. The Assessing Officer proceeded to frame the assessment and in this process, issued Questionnaire on various dates, which were not responded. The Commissioner of INcome Tax, Tamil Nadu V, by his notification in C. No. 2040 (4) /96-97 dated 09. 09. 1996 issued a notice to the appellant Assessee proposing to transfer the cases under Section 127 of the income Tax Act to the Assistant Commissioner of INcome Tax, Central Circle ii (6), Madras, while seeking the objections on or before 20. 09. 1996. Acknowledging the notice which was served on 19. 09. 1996, the Appellant Assessee by letter dated 25. 09. 1996 objected to the transfer on grounds of hardship. By proceeding dated 30. 09. 1996, the Commissioner of INcome Tax, Tamil Nadu V, Chennai, notified the transfer of the Appellants case to the Assistant Commissioner of INcome Tax, Central Circle II (6), Madras. On 06. 12. 1996, a notice under Section 158-BC of the INcome Tax Act was issued by the Assistant Commissioner of INcome Tax, Central Circle II (6), to the appellant, calling upon the Appellant to file the returns. (ii) The Appellant filed W. P. No. 4782/97 before this Court, challenging the order of transfer dated 30. 09. 1996 on which, notice was ordered on 07. 04. 1997, but no interim order was passed. On 02. 09. 1997, the learned Single Judge of this Court, granted interim stay of further proceedings in pursuant to the order of transfer of the appellant Assessee Case in W. M. P. No. 8001 of 1997. The High Court made the interim stay granted on 02. 09. 1997 absolute on

(3.) IN respect of first question regarding no notice under section 158. BC was issued after an order of transfer notification dated 13. 04. 1998 of C. I.T. , Trichy which took effect from 16. 04. 1998, the Section 127 (4) is very relevant and the same reads as follows:- "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". The above section makes it clear that even where a case is transferred from one officer to another in the middle of the proceeding, it is not necessary to reissue a notice to the assessee. IN the instant case, the case already stands transferred to the Assessing Officer at Chennai and he had issued a notice under Section 158. BC of the Act. He had been reconferred with the powers under Section 127 and therefore, the claim of the appellant assessee that fresh notice should have been issued after the notification of 16. 04. 1998 is frivolous and hence rejected.