High Court Of Punjab & Haryana
Smt. Jaswinder Kaur Kooner vs. CIT
Section 127
Asst. Year 1993-94
Adarsh Kumar Goel & Rajesh Bindal, JJ.
IT Appeal No. 96 of 2005
23rd November, 2006
Counsel Appeared :
O.P. Goyal with Ms. Mamta Bhatti, for the Appellant : Dr. N.L. Sharda, for the Respondent
JUDGMENT
By the court :
This appeal has been preferred by the assessee against the order dt. 26th Aug., 2004, passed by the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (for short, “the Tribunal”), in ITA No. 287/Asr/2001, for the asst. yr. 1993-94, proposing the following substantial questions of law :
“(i) Whether the compliance of s. 127 of the IT Act, 1961 has been made in the present case ?
(ii) Who would have the jurisdiction to decide the case of the appellant and whether the provisions of s. 127 in all its facets have been complied with ?”
The AO made an addition of Rs. 2,44,243 rejecting the plea of the assessee that investment in construction of the house was out of agricultural income and not unexplained income. The CIT(A) partly allowed the appeal but upheld the addition of Rs. 1 lakh. On further appeal, the Tribunal remanded the matter to the AO. The assessee had also raised a plea that the order of transfer of jurisdiction under s. 127 of the IT Act, 1961 (for short, “the Act”) being void, reassessment proceedings were void on that ground. The Tribunal followed its earlier order dt. 30th June, 2004 in the case of the assessee (ITA Nos. 80 and 81 of 2000). In the said order, the Tribunal observed that the assessee had the knowledge of the order and did not challenge the same at the relevant forum and that the same could not be set aside in assessment proceedings by the AO or the CIT(A). Only question which arises for consideration is whether the assessee could be allowed to challenge an order of transfer under s. 127 of the Act in the assessment proceedings. Scope of assessment proceedings under the Act is confined to determining the income of the assessee and liability to tax. The officer to whom jurisdiction is transferred and who derives jurisdiction from such an order, cannot question the validity of such an order. If the assessee is aggrieved by an order of transfer, the remedy of the assessee is to challenge such an order in independent proceedings either before the higher administrative authorities as per the Act or in any independent proceedings by way of writ petition or otherwise. If no such challenge is made at the initial stage, the issue cannot be raised in appeal against the assessment order.
In Pannalal Binjraj & Anr. vs. Union of India & Ors. (1957) 31 ITR 565 (SC), the Hon’ble Supreme Court observed while upholding the power of transfer that inconvenience to the assessee or likelihood of misuse of provision could not be a ground to declare the said provision to be void but if there was abuse of the power, appropriate remedy could be taken. The relevant observations are :
“It follows, therefore, that s. 5(7A) of the Act is not violative of Art. 14 of the Constitution and also does not impose any unreasonable restriction on the fundamental right to carry on trade or business enshrined in Art. 19(1)(g) of the Constitution. If there is any abuse of power it can be remedied by appropriate action either under Art. 226 or under Art. 32 of the Constitution and what can be struck down is not the provision contained in s. 5(7A) of the Act but the order passed thereunder which may be mala fide or violative of these fundamental rights. This challenge of the vires of s. 5(7A) of the Act, therefore, fails.”
7. In Ajantha Industries & Ors. vs. CBDT & Ors. 1976 CTR (SC) 79 : AIR 1976 SC 437, it was observed by the Hon’ble Supreme Court : “
16. Mr. Sharma also drew our attention to a decision of this Court in S. Narayanappa & Ors. vs. CIT (1967) 63 ITR 219 (SC) : AIR 1967 SC 523, where this Court was dealing with s. 34 of the old Act. It is clear that there is no requirement in any of the provisions of the Act or any section laying down as a condition for the initiation of the proceedings that the reasons which induced the CIT to accord sanction to proceed under s. 34 must also be communicated to the assessee. The ITO need not communicate to the assessee the reasons which led him to initiate the proceedings under s.
34. The case under s. 34 is clearly distinguishable from that of a transfer order under s. 127(1) of the Act. When an order under s. 34 is made the aggrieved assessee can agitate the matter in appeal against the assessment order, but an assessee against whom an order of transfer is made has no such remedy under the Act to question the order of transfer. Besides, the aggrieved assessee on receipt of the notice under s. 34 may even satisfy the ITO that there were no reasons for reopening the assessment. Such an opportunity is not available to an assessee under s. 127(1) of the Act. The above decision is, therefore, clearly distinguishable.” The assessee having not raised the objection as to jurisdiction at the appropriate time before the AO, cannot be permitted to take up the issue in appeal. In view of the above, no substantial question of law arises. The appeal is dismissed.
[Citation : 291 ITR 80]
