Income Tax - Jurisdiction of AO
IF you are transferred from Dimapur in Nagaland to New Delhi mid-year, who is your Assessing Officer for Income Tax assessment? As long as you pay your tax and file your returns, it really does not matter, but this was a question before the Delhi High Court in a case decided last week.
The assessee was an IAS Officer of Nagaland cadre, who was compulsorily retired in January, 1993. During the period 1971-72 to 1978-79, he had filed income tax returns at Dimapur, Nagaland as he was posted and working there. In July 1978, he was posted to Delhi on deputation in the Ministry of Home Affairs, a position which he continued to hold till 1984. Income tax returns for the assessment years 1980-81 to 1983-84 were filed at Delhi with the Income Tax Officer, Salary Circle.
As per the assessee, return for the assessment year 1984-85 was filed by him at Dimapur, Nagaland on or about 8th August, 1985. The return was not taken up for scrutiny assessment but was processed on 31st March, 1987 under Section 143(1) of the Act.
The assessee was subjected to search by the Central Bureau of Investigation on 27th March, 1987. It is the case of the Revenue that the assessee had acquired 18 commercial properties in Delhi, 370 acres agricultural land in and around Delhi and had substantial unaccounted/undisclosed deposits in form of Fixed Deposit Receipts . These assets/properties were in names of the assessee and his family members.
In 1993, the CIT (Appeals) passed an order holding that the orders passed by some AOs were not valid as they were beyond jurisdiction. Against this order, both Revenue and the Assessee went in appeal to the Tribunal. The Tribunal after nine years allowed the appeal of the assessee. Now, the Revenue is before the High Court. The High Court ruled in favour of the assessee and directed the Tribunal to decide the issues on merit without going into the question of jurisdiction.
The assessment is pending for the last nearly twenty years - all for want of clarity on jurisdiction!