SANWARMAL AGARWAL; SHYAMSUNDAR Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE legality and validity of transferring the file of the assessee under Section 127 of the Income-tax Act, 1961, is the subject-matter of both the writ petitions.

(2.) THE material facts leading to the filing of both the cases are given below. THE petitioners are assessees under the Income-tax Act who were served with notices dated May 13, 1992, proposing the transfer of the petitioners' cases from the jurisdiction of the Income-tax Officer, Tinsukia (Ward-I), to respondent No. 1 under Section 127 of the Income-tax Act, 1961 (for short "the Act"). THE petitioners submitted their reply indicating about the inconvenience that would ensue on such transfer. According to the petitioners, neither sanction thereafter was taken by the respondents, nor the respondents responded to the show-cause reply of the petitioners. Subsequently, the Assistant Commissioner, respondent No. 1, issued notices on the petitioners from time to time under Section 142 of the Act for submitting their return and production of accounts. THE very assumption of jurisdiction of respondent No. 1 is, therefore, assailed in these petitions. THE respondents filed their affidavits-in-opposition and submitted that in exercise of power under Section 120 of the Act the Assistant Commissioner of Income-tax (Investigation Circle), Dibrugarh, had been vested with the power and jurisdiction over all "search and seizure" cases of Dibrugarh District of the State of Assam, the Districts of Lohit, Tirap, East Siang, West Siang, and Dibong Valley of Arunachal Pradesh. THE case of the petitioner is, being a case of search and seizure, the jurisdiction over such cases automatically vested in the Assistant Commissioner of Income-tax (Investigation Circle) with effect from April 8, 1992, vide Notification No. 2 of 1992-93, dated April 8, 1992. On the strength of the notification aforementioned, respondent No. 1 assumed jurisdiction on the subject-matter. Consequently, the Income-tax Officer (Ward-I), Tinsukia, ceased to exercise jurisdiction since April 8, 1992. Accordingly, the returns submitted by the petitioners-assessees were transferred to respondent No. 1. As regards the notice bearing No. E-18 of 1991/TSK/B & S/Pt. II, dated March 13, 1992, the respondents stated that the said notice was initially issued accepting the case of the petitioner for transfer to the jurisdiction of respondent No. 1, but subsequently when it was discovered that the case was already covered by the notification dated April 8, 1992, no further order was thereafter passed under Section 127 of the Act. THE respondent also asserted that in view of the aforesaid notification dated April 8, 1992, there was no necessity for issuance of individual notices to each and every person of the category of those who came under search and seizure. According to the respondents, the cases were lawfully transferred to the Assistant Commissioner in question and, therefore, there was no illegality in assumption of jurisdiction.

(3.) CHAPTER XIII of the Income-tax Act relates to the appointment and control of income-tax authorities, jurisdiction, respective power of officers and disclosure of information of respective assessees. Sections 116 to 119 contain the provisions relating to income-tax authorities and Sections 120 to 129 of the Act relate to provisions of jurisdiction. The relevant provisions of Sections 120 and 127 of the Act are quoted below ;