INCOME TAX ACT, 1961

Income tax authorities- Jurisdiction of AO-Change in place of business

The jurisdiction over assessee was with Asstt. CIT, Lucknow. Assessee filed the returns of income from assessment years 1989-90 to 2000-01 with said Asstt. CIT. Due to reorganization and re-structuring in the Department and jurisdiction over the corporate assessees having their registered office in Nishatganj area was transferred to Asstt. Commissioner, Range-4, Lucknow. The return for assessment year 2001-02 was filed in said Range. The registered office of the assessee was shifted to Ashok Marg, Lucknow. The assessee followed the due process of law as provided under the Companies Act and also intimated the income-tax authorities. Chief CIT passed order under section 120 revising the territorial jurisdiction of AO. As per said order, the jurisdiction over the corporate assessees having their registered offices at Ashok Marg/ Hazaratganj, Lucknow was vested with Addl. Commissioner, Range-I. The assessee filed its returns of income for assessment years 2002-03, 2003-04 and 2004-05 in that Range. These returns were duly accepted and processed by the Addl. Commissioner, Range-1. The assessee received a notice under section 148 for the assessment year 1997-98 from the Asstt. Commissioner, Range-4, Lucknow calling upon it to file return of income for the assessment year 1997-98. The address given therein was that of Ashok Marg. The assessee challenged the jurisdiction of AO, as from 1-8-2001, the jurisdiction over the assessee vested in the Addl. Commissioner, Range-1 and requested AO to withdraw/drop the notice under section 148 and transfer the file to the Addl. CIT, Range-1. The assessee had written to CIT about the approach of AO. The Asstt. CIT, Range-4 transferred the file to ITO, under the jurisdiction of Addl. CIT, Range-1, and thereafter fresh notice under section 142(1) was issued to the assessee by the ITO in continuation of the proceedings initiated by AO. The assessee submitted that the continuation of the proceedings were illegal as the notice itself was devoid of proper jurisdiction and ab initio void and that AO Range-4 impliedly conceded to the objection raised by the assessee and transferred the file to ITO. However, AO continued the proceedings and finally framed the assessment by making addition being alleged cash credits in the books of the assessee in the financial year 1996-97 in the name of a finance company which allegedly advanced certain amount to the assessee for booking of office space which was to be constructed. In fact total amount found credited in the books of the assessee in the name of said company. Out of this a certain part of sum was claimed to had been received in the assessment year 1996-97 and balance was claimed to had been received in the assessment year 1998-99. AO required the assessee to produce the persons along with the documentary evidence which could support the identity, capacity and genuineness of the money found credited in the books of the assessee. Managing Director (MD) of the finance company appeared before AO and stated in his statement that he had financed to the assessee during the assessment year 1997-98 for booking of office space. But, he failed to produce the books of account as required by AO. Since the books of account and other evidence were not produced, AO informed that the money paid by said company belonged to the assessee and remained unexplained. He,treated impugned amount as assessees deemed income under section 68. CIT(A) upheld the findings of AO both in respect of jurisdiction and merits of the case. Held: As regards assessees objection that notice under section 148 was issued without following due process of law, it was found that for issuing notice under section 148 reasons were recorded, they were communicated to the assessee, it had objected to them and AO dealt with them in accordance with law as reflected in the order of CIT(A). Even the approval was granted by CIT as required under law and there was no material to suggest that there was no application of mind by CIT(A). As regards the issue of jurisdiction, the Asstt. CIT, Range-IV did not have jurisdiction over the assessee when the notice under section 148(1) was issued by him as jurisdiction had been transferred to the Additional CIT, Range-1. order passed under section 120 by the Chief CIT, Lucknow. Clearly on 29-3-2004 jurisdiction vested with Addl. Commissioner, Range-1. There could not be a situation where two AOs would have simultaneous jurisdiction over the assessee, one being Addl. CIT, Range-1 and other being Asstt. CIT, Range-IV, unless concurrent jurisdiction was specifically given to them by the Chief CIT. There was no such claim of the revenue that concurrent jurisdiction was given to two officers. Therefore, the Asstt. CIT, Range-IV, did not have jurisdiction over the assessee on 29-3-2004 and clearly the notice under section 148(1) was issued by AO having no jurisdiction over the assessee. [Para 23]