M.M. Kumar, J. - (1.) IN this appeal, filed under Section 260A of the Income Tax Act, 1961 (for Brevity the Act'), the appellant -assessee has challenged order dated 13 -10 - 2006 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A', Chandigarh (for brevity, 'the Tribunal'), in ITA No. 111/Chd/1996, in respect of assessment year 1992 -93. It has been claimed that the following substantial questions of law would arise for determination of this Court: (a) Whether on the true and correct interpretation of provisions of Section 124 of the Income Tax Act, 1961, the Tribunal is justified in upholding the action of assumption of jurisdiction with the assessing officer whereas the same vests with the Director General or Chief Commissioner or Commissioner respectively ? (b) Whether the order of the Tribunal is against the object of the provisions of the Income Tax Act, 1961, read with beneficial and reasonable rulesof interpretation in fiscal statute ? (c) Whether the order of the Tribunal is perverse justifying the action of the assessing officer by obliterating the administrative decision making process prescribed under Section 124 of the Income Tax Act, 1961 ?
(2.) BRIEF facts of the case are that the appellant -assessee, who is a businessman in Sirsa (Haryana), was subjected to a survey under Section 133A of the Act, which was conducted at his business premises on 3 -2 -1992. During the course of survey a cash book for the period 1 -4 -1991 to 1 -4 -1992 (D -l), ledgers (D -2 and D -3) and loose papers (D -4) were found. When those documents were: compared with the regular books of accounts, it emerged that the appellant -assessee had been making investments, advancing loans and incurring expenditure, which were not found recorded in the regular books of accounts. Accordingly, a notice under Section 142(1) of the Act was issued to the appellant -assessee on 25 -2 -1993 requiring him to file the return of income by 15 -3 -1993. The return was filed on 1 -3 -1993, declaring loss of Rs. 15,700. The return was processed under Section 143(1)(a) of the Act, vide intimation dated 29 -3 -1993. It is appropriate to mention that no objection with regard to jurisdiction of the assessing officer was raised. Later on, the case of the appellant -assessee was selected for scrutiny after obtaining prior approval of the Deputy Commissioner. After issuance of notices to the appellant -assessee from time to time, the assessing officer completed the assessment vide his order dated 13 -3 -1995, determining the income of the appellant -assessee at Rs. 53,16,730 as against the returned loss of Rs. 15,700. On appeal before the Commissioner (Appeals), one of the grounds raised was that the order of assessment, dated 13 -3 -1995, passed by the assessing officer was liable to be set aside because it was without jurisdiction. The Commissioner (Appeals) set aside the assessment order and directed the assessing officer to make fresh assessment after affording an opportunity of being heard to the appellant -assessee. In respect of the legal ground concerning jurisdiction raised by the appellant -assessee, the Commissioner (Appeals) opined that it did not require any adjudication. The appellant -assessee went in appeal before the Tribunal challenging the order of the Commissioner (Appeals). The argument that the order passed by the assessing officer, Sirsa, was without jurisdiction, has been rejected by the Tribunal by placing reliance on Section 124(3) of the Act. The view of the Tribunal is discernible from paras 11 and 12, which read as under: 11. Though in para 7 of the assessment order the assessing officer has observed that the assessee has not called in question the jurisdiction of the assessing officer within the period of 30 days of the receipt of notice under Section 142(1), the assessee had pointed out to note No. 4 appended to the statement of income attached to the return. The assessing officer has not made any mention of the note in the return of income. In fact, in para 6 of the assessment order, the assessing officer has pointed out that assessee had made the request for transfer of the case to Delhi only on 6 -9 -1994. In our considered view, the controversy as to whether the note No. 4 appended to the statement of income was available with the assessing officer or not is purely of academic interest insofar as even on the basis of the contents of the note it cannot be said that the assessee had questioned the jurisdiction of the assessing officer to assess him for assessment year 1992 -93. 12. Taking the totality of facts and circumstances of the case into consideration and the material on record as also the provisions of Section 124, we are of the considered view that the assessment order made by the assessing officer was not without jurisdiction. The assessee neither before the assessing officer nor before any of the appellate authorities has established that the assessing officer did not have jurisdiction to assess the assessee's case for assessment year 1992 -93. The assessee was carrying on the business at Sirsa not only in the previous year relevant to assessment year under appeal but also at the time of filing of the return of income in response to notice under Section 142(1). We are of the considered view 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. We would also like to point out that the assessing officer has given valid reasons for not acceding to the request of the assessee to transfer the case records to the assessing officer at Delhi. We have also elsewhere mentioned in this order that at one point of time the: assessing officer had transferred the assessment records to the assessing officer at New Delhi but the same were returned to the assessing officer at Sirsa as no person was found to exist at the address given by the assessee. This is without prejudice to our finding that assessee had never questioned the jurisdiction of the assessing officer to make the assessment for assessment year 1992 -93. The ground of appeal relating to the validity of assessment is accordingly dismissed. Mr. Pankaj Jain, learned Counsel for the appellant -assessee has vehemently argued that under Section 124(4) of the Act the assessee had called in question the jurisdiction of the assessing officer and on that basis the question with regard to jurisdiction should have been determined by the Director General or the Chief Commissioner or the Commissioner. According to the learned Counsel the Tribunal or the Commissioner (Appeals) were not competent to decide the question relating to jurisdiction. His further argument is that it is not a case where the area of assessment had already been changed by transferring the case of the appellant -assessee to the new assessee circle, namely, Assistant Commissioner -4(3) -cum -New Assessee's Circle, Drum -shape Building, New Delhi. He has maintained that merely because the file was returned back to the department at Sirsa, would not constitute a ground for assuming jurisdiction once again.
(3.) MR . Yogesh Putney, learned Counsel for the respondent -Revenue has submitted that this is not a case falling under Sub -section (4) read with Sub -section (2) of Section 124 of the Act. He has maintained that the case falls within the scope of Sub -section (3)(b) of Section 124 of the Act. He has, thus, submitted that the aforementioned provisions apply to a case where no return has been filed after the expiry of the time allowed by the notice under Section 142(1) or Section 148 of the Act. Learned Counsel has maintained that once in response to notice under Section 142(1), dated 25 -2 -1993, return was filed on 1 -3 -1993 before the due date i.e. 15 -3 -1993, then as per provisions of Sub -section (3)(b) of Section 124 of the Act, the assessee was not entitled to call in question the jurisdiction of the assessing officer, especially when it is not disputed that the assessee was carrying on his business in Shop No. 62, Nai Mandi, Sirsa.;