Smt. Savita Garg vs Commissioner of Income Tax

Counter-affidavit filed by respondent Nos. 1, 2 and 3 be placed on record.

Learned counsel for the petitioner Sri Prashant Chandra submits that in view of the averments made in the counter-affidavit, it is clear that notice u/s 147 of the Act could not have been issued because there was no material with the assessing authority making him to form a reasonable belief as required u/s 147 to issue a notice. Besides, the other contention that the petitioner being assessed at Delhi, could not be subjected to the jurisdiction u/s 147 or 148 of the Income Tax Act by the assessing authority at Lucknow. He asserts that this information was given to the assessing officer but the assessing officer, instead of referring the matter to the Chief Commissioner for deciding the question of jurisdiction, has proceeded to make the final assessment in respect of assessment year 1996-97 and that he has also issued notice with respect to assessment year 1997-98 and intends to issue notices for other assessment years also.

Sri D.D. Chopra, appearing for the Income Tax department, in response to the aforesaid arguments, submits that the assessee, namely, the petitioner did not give any material, rather details, of his assessment being made in Delhi, though asked for, and, therefore, the assessing authority proceeded to assess the petitioner without referring the matter to the Chief Commissioner. He further says that there was sufficient ground for issuing notice u/s 147 and, therefore, notice cannot be challenged on this ground.

So far the issuance of notice u/s 147 in terms of the aforesaid provisions of the Act is concerned, we do not find any reason for adjudication on this issue in this writ petition at this stage as we intend to refer the matter to the Chief Commissioner, Income Tax for deciding the question of jurisdiction first.

In short, the admitted case between the parties, as emerged from the facts of the case, is that notice u/s 147 of the Act was issued to the petitioner and in reply thereof, the petitioner has brought before the assessing officer that she was assessed at Delhi and she has also taken advantage of Voluntary Disclosure of Income Scheme (VDIS) at Delhi.

The argument of the learned Counsel for the respondents that the petitioner did not give full details of his assessment at Delhi and, therefore, the assessing officer proceeded to assess the petitioner, would not vest the assessing authority with the jurisdiction to proceed in the matter under the provisions of the Act, particularly u/s 147, unless it has the jurisdiction to do so. It being brought to the notice of the assessing authority, though according to the respondent at a belated stage, which fact is being disputed by the petitioners counsel, the fact remains that during the course of assessment proceedings, the assessing authority was made well aware that the petitioner was assessed in Delhi and in view of Section 124(2) of the Income Tax Act, the assessing authority ought to have referred the matter to the Chief Commissioner, Income Tax for deciding the issue of jurisdiction.

The assessment order of the assessment year, 1996-97 very clearly indicates in para 5 that plea of jurisdiction of the assessing authority has been specifically taken and urged before him, which has been repelled by saying that objection regarding jurisdiction is wrong and based on irrelevant facts and that objection on the point of jurisdiction is merely an attempt to create confusion and the place of assessee falls under the territorial jurisdiction of Range-1, Lucknow any way.

The jurisdiction to assess or to issue notice u/s 147, if the assessing officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, can be derived by the Income Tax Officer/ assessing authority only in terms of the provisions of the Act itself.

The common case of the petitioner as well as the respondent is that on objection being raised by the assessee, it was essential for the assessing authority to refer the matter to the Chief Commissioner, Income Tax for deciding the issue of jurisdiction.

We, therefore, dispose of the writ petition finally with the direction that the matter regarding the jurisdiction to proceed against the petitioner under the Act at Lucknow would stand referred to the Chief Commissioner, Income Tax, where the parties would be given opportunity to place their case and till disposal of the objection by the Chief Commissioner, Income Tax, the pending appeal against the assessment order for the year 1996-97 and further proceedings with respect to notices issued for other assessment year u/s 147 shall remain in abeyance, nor any recovery shall be made in pursuance of the assessment order for the year 1996-97.

Learned counsel for the petitioner at this stage submits that in case, the question of jurisdiction is decided against the petitioner, she may be given liberty to approach the court for challenging the said order. It need not be said that if any party is aggrieved by an order passed by the Income Tax authority, he/she is at liberty to approach appropriate forum as prescribed under law, for which no specific liberty need to given.

We would like to clarify that we have not adjudicated upon the validity of the notice u/s 147 on other grounds which might have been raised in the writ petition and which have been urged before us. The question is left open and the petitioner is at liberty to challenge the same as and when the occasion arises.

With the aforesaid observations, the writ petition is disposed of finally.