High Court Of Allahabad
Commissioner Of Wealth Tax vs. Ravi Malhotra
Section 124(3); WT 11
Asst. Year 1978-79
R.K. Agrawal & Vikram Nath, JJ.
WT Ref. No. 18 of 1987
11th December, 2006
Counsel Appeared : Shambhu Chopra, for the Revenue
JUDGMENT
BY THE COURT :
The Tribunal, Delhi Bench “D”, New Delhi, has referred the following question of law under s. 27(1) of the WT Act, 1957, for the opinion of this Court : “Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the assessment made by the WTO at Agra was to be annulled on the ground that he had no legal jurisdiction over the matter as there was no valid transfer of the case ?”
The reference relates to the asst. yr. 1978-79. Briefly stated the facts giving rise to the present reference are that the assessee-opposite party had filed a return of wealth disclosing net wealth of Rs. 1,60,500 on 5th March, 1982. The proceedings for assessment were taken by the WTO, D-Ward, Circle-I, Agra, by issuing notice under sub-s. (2) of s. 16 of the Act. Pursuant to the notice the respondent-assessee along with Sri S.P. Kapoor attended the proceedings from time to time. After discussion the net wealth was assessed at Rs. 7,03,419 vide order dt. 28th Feb., 1983. Feeling aggrieved the assessee-opposite party preferred an appeal before the AAC, Range-I, Agra. Before the Appellate Commissioner the plea regarding the jurisdiction of the WTO was raised on the ground that he was an existing assessee at Delhi and the assessing authority at Delhi had the jurisdiction to pass valid order for assessment under s. 8 of the Act and the WTO at Agra could not have assumed the jurisdiction without taking recourse to the prescribed procedure under the Act. The assessment framed by the WTO, Agra, was a nullity. The Appellate Commissioner relying upon a decision of the apex Court in the case of Ajantha Industries vs. CBDT 1976 CTR (SC) 79 : (1976) 102 ITR 281 (SC), upheld the objection and declared the assessment made by the WTO, Agra, as null and void. The Revenue feeling aggrieved by the order of the Appellate Commissioner preferred an appeal before the Tribunal, Delhi Bench “D”, New Delhi, The Tribunal upheld the order on the basis of its earlier order in the earlier asst. yr. 1977-78.
4. We have heard Sri Shambhu Chopra, learned standing counsel for the Revenue and have perused the orders passed by the WTO as also the Appellate Commissioner, Agra. At the outset it may be stated that the Tribunal in its order has simply followed its order for the earlier asst. yr. 1977-78 wherein the following observation was made :
“6. If the order of the WTO, Agra, goes by itself it does not show that the assessee had come and taken objection to his jurisdiction to make the assessment. So on the face of it, there is nothing illegal therein. However, we agree with the conclusion of the CWT, the assessee was not given a reasonable opportunity of being heard. Then the automatic result of this opportunity of being heard would be that the assessee’s objection filed in this behalf would have to be considered. As soon as one were to consider that one would certainly come to the conclusion that the WTO at Agra had improperly assumed jurisdiction in the matter. The proper course for the CWT in these circumstances was to quash the order of the WTO and direct him to give an opportunity of being heard to the assessee. Ultimately, the WTO would come to the conclusion that the file had not been properly transferred to him. So he would have either to get regular orders of transfer passed in the matter, alternatively, the proper course for him was to return the file to the WTO at New Delhi for such action as the latter thought fit. Therefore, without going into other technicalities of the matter and to save from unnecessary harassment and inconvenience to the parties, we are of the opinion that the same should be done now. Accordingly, we modify the order of the CWT to the extent that while the assessment in question shall stand annulled, the WTO at Agra is further directed to return the file to the WTO, Delhi, where the return was originally filed, for further proceedings according to law. Both the appeal and the cross-objection are partly allowed for statistical purpose as above.
Thus the assessment was annulled with certain directions. Both the parties have accepted before us that the facts in this year continue to be the same and it is the same circumstances which have been considered by the AAC. In view of this, we uphold the order of the AAC annulling the assessment with similar directions as given in the asst. yr. 1977-78.”
5. We find that in the present case the assessee had filed the return voluntarily. He had also appeared before the WTO along with his representative and from the perusal of the earlier order it does not appear that any objection regarding the jurisdiction of the WTO was taken by him. Under s. 11 of the Act the provisions of s. 124 of the IT Act, 1961, have been applied with certain modification specified therein. The modification is only to the extent of sub-s. (3) of s. 124 of the IT Act, 1961. Reference to the provisions of the IT Act is to be construed as references to the corresponding provisions of the WT Act and sub-s. (2) of s. 124 shall stand omitted insofar as it relates to the WTO. Under s. 124 of the IT Act, the jurisdiction of the AO has been defined. Sub-s. (3) puts a bar on the assessee or any person to call in question the jurisdiction of the AO beyond a certain period. For ready reference sub-s. (3) of s. 124 of the IT Act is reproduced as below : “(3) No person shall be entitled to call in question the jurisdiction of an AO— (a) where he has made a return under sub-s. (1) of s. 115WD or under sub-s. (1) of s. 139, after the expiry of one month from the date on which he was served with a notice under sub-s. (1) of s. 142 or sub- s. (2) of s. 115WE or sub-s. (2) of s. 143 or after the completion of the assessment, whichever is earlier; (b) where he has made no such return, after the expiry of the time allowed by the notice under sub-s. (1) of s. 142 or under s. 148 for the making of the return or by the notice under the first proviso to s. 144 to show cause why the assessment should not be completed to the best of the judgment of the AO, whichever is earlier.”
From a reading of the aforesaid provisions we find that the assessee or the person cannot question the jurisdiction of the assessing authority beyond one month after service of the copies of the notice or after the completion of the assessment whichever is earlier. Apparently in the present case the return was filed voluntarily. Notice under s. 16(2) of the Act was also served and up till the stage of assessment no objection whatsoever was taken by the assessee relating to the jurisdiction of the WTO, Agra. In this view of the matter it would be presumed that the assessee opposite party has acquiesced in the jurisdiction of the WTO, and, therefore, he could not be permitted to raise such objection subsequently. The view of the Tribunal in the circumstances cannot be said to be correct.
In view of the aforesaid discussion we answer the question referred to us in the negative, i.e., in favour of the Revenue and against the assessee. There shall be no order as to costs.
[Citation : 292 ITR 171]
