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I.T.As. Nos. 821/Lb, 822/LB and 823/LB of 1984‑85, decided on 9th December, 1984.

‑‑‑S. 5‑‑Assessment‑‑Territorial jurisdiction‑‑Assessee having neither place of business nor residence in area of jurisdiction of Income‑tax Officer who completed assessment‑‑Order of assessment passed by said Income‑tax Officer, held, without jurisdiction and annulled.

‑‑‑S. 5(3), (4) & (5)‑‑Assessment‑‑Jurisdiction‑‑Subsection (5) of S.5 of Ordinance, held, has to be read alongwith subsections (3) and (4) of that section

‑‑‑Ss. 5(3), 5(4) & 5(5)‑‑Assessment Territorial-jurisdiction‑‑Contention that question in regard to territorial jurisdiction, as mentioned in S.5(4) of Ordinance, could only be raised by assessee before Commissioner, Regional Commissioner and Central Board of Revenue, and that too before filing return, held, good only where he wanted to raise question of jurisdiction before said authority‑‑Such bar was however, not applicable when assessee raised that question in appeal before an Appellate Authority.

‑‑Ss. 5(3), 5(4) 1 5(5)‑‑Assessment‑‑Territorial jurisdiction‑‑Where jurisdictions of Income‑tax Officer are changed every now and then it would, held, be difficult for an ordinary assessee to know as to whether a particular Income‑tax Officer had in fact jurisdiction to issue notice to assessee to file a return.

M.R. Ahmad Dar for Appellant.

M. Arshad Pervez AC/DR for Respondent.

Date of hearing: 5th November, 1984.

These are three appeals filed by an individual deriving income from grinding of chillies and relate to the assessment years 1981‑82, 1982‑83 and 1983‑84. The learned counsel for the assessee has raised a preliminary legal objection in regard to the jurisdiction of the Assessing Officer to complete the assessment. It was submitted that the assessee's business as well as residential address is I----------D-------G-------L-----It was further submitted that all the notices were issued to the assessee on that address. This fact fiat, been confirmed by the learned D.R. from the record (although the learned D.R. pointed out that some of the earlier notices had also been issued at the address of A -----M-----L-----but they were received back unserved). The learned counsel stated that the jurisdiction to assess the assessee vested with the Income‑tax Officer C-----P-----but the assessment has been completed by the Income‑tax Officer C-----R-----who had no such jurisdiction. He referred to notification of the Commissioner of Income‑tax bearing No. K: 160(1)81‑82/372/J, dated 4‑8‑19132 which was effective from 5‑8‑1982. According to this notification the contention of the learned counsel for the assessee is correct. When the case was last heard in regard to the stay application, the learned D.R. was directed to get information from the concerned Income‑tax Officer on this point. He has received the report and has read it out he has stated that another notification was issued by the Commissioner of Income‑tax bearing No. K (160)(1)/83‑84/ 137/J, dated 31‑7‑1983 which has amended the earlier notification in regard to the jurisdiction. It may be stated that' by another notification No. K 160(1)/83‑84/138/J, dated 31‑7‑1983 the Commissioner of Income‑tax created a new' Circle‑R. The jurisdiction of that Circle was L-----B-----and A-----M-----all lanes and streets connected therewith. Thus, it is obvious, that the Income‑tax Officer Circle R had no, jurisdiction to assess the assessee as she neither had a business place in A-----M-----nor her residence. This fact, as stated above, is also obvious from the notice issued to the assessee. It was also brought tot my notice by the learned D.R.) that the assessee was being assessed in Circle‑P earlier but the Income‑tax Officer Circle‑P transferred her case to Circle‑R alongwith other cases on 16‑8‑1983. The learned Departmental Representative has however, taken shelter under section 5(5) of the Income‑tax Ordinance which i5 reproduced below:‑‑

"No person shall be entitled to call in question the jurisdiction of an Income‑tax Officer after tie has made the return of total Income or, where tie has nut made such return, after the tune allowed by any notice served on him for making such return has expired."

Relying on this section, it was submitted that the assessee having filed a return, she cannot question the jurisdiction of the Income‑tax Officer.

2. The contention of the learned Departmental Representative has no force. Subsection (5) has to be read along with subsection (3) and (4). Subsection (3) provides the area of jurisdiction of an Income‑taxi Officer. Subsection (4) lays down that where a question arises as to whether an Income‑tax Officer has jurisdiction to assess a person or not, the question has to be referred to the Commissioner, where the question relates to the jurisdiction of different Commissioners that the question is to be decided by the Regional Commissioner and if two Regional Commissioners do not agree then by the C.B.R. It is in this context that subsection (5) has to be read. It only means that question in regard to the territorial jurisdiction as has been mentioned in subsection (4), could only be raised by the assessee before the Commissioner, Regional Commissioner or C.B.R., as the case may be only before filing the return. This bar on the assessee is, therefore, only where he wanted to raise question of jurisdiction before the Commissioner, Regional Commissioner or C.B.R. This bar cannot b said to be applicable when the assessee raises this question in appeal before an Appellate Authority Obviously if an Assessing Officer has no jurisdiction to make an assessment, such jurisdiction cannot be conferred by the assessee merely by filing a return nor the Appellate' Authority can be debarred from determining as to whether the Income‑tax Officer had jurisdiction to make an assessment or not. If another) interpretation is made that would lead to chaos. In that case any Income‑tax Officer would assess any assessee whether falling under his jurisdiction or not. An ordinary assessee would not normally know as to whether the Income‑tax Officer who had issued the notice had the jurisdiction In his case or not. Where the jurisdiction of the Income‑‑tax Officers are changed every now and then it is very difficult for an ordinary assessee to know as to whether that particular Income‑tax Officer had in fact jurisdiction to issue notice to the assessee to file a return. It has been brought to my notice that the notification issued on 31‑7‑1983 referred to above had not been even reported. Thus, the assessee, even if he wanted to know had no means to know before filing the return that the Income‑tax Officer, Circle R had in fact jurisdiction to issue notice to her or not.

3. Since the Income‑Tax Officer Circle R had admittedly no jurisdiction to make an assessment, therefore, his order is without jurisdiction and, therefore, annulled.

M.Y.H. Appeals accepted.

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