K K LOOMBA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) MRS . Uma Loomba, the petitioner, in CWP No. 3710 of 1997 is the wife of Dr. K.K. Loomba, the petitioner, in CWP No. 2983 of 1997. These writ petitions have been filed by them seeking quashing of an order under S. 124(2) of the INCOME TAX ACT, 1961, passed by the CIT, Delhi -VII, and also seeking quashing of the notices under S. 148 of the Act issued by the Asstt. CIT, Investigation Circle 11(1), New Delhi, for the asst. yrs. 1987 -88 to 1992 -93. The relevant facts in both the petitioners are common and are briefly stated hereinafter.

(2.) DR . K.K. Loomba is an individual, a doctor by profession. He was deriving income from Loomba Clinical Laboratories, Amritsar, as a sole proprietor since 1974 and was also a partner in New Bhandari Hospital, Amritsar, up to May 1984. With effect from May, 1984, he retired from the partnership and started his independent practice as doctor at Amritsar. He claims to have filed returns for the asst. yrs. 1980 -81 to 1992 -93 with the ITO, Amritsar. In July, 1984, during the asst. year 1985 -86, he started his profession at 17, West Patel Nagar, New Delhi, in rented premises. However, he continued to file his return of income at Amritsar. No return of income has been filed for the asst. year 1993 -94 onwards. Mrs. Uma Loomba is an individual having tuition income at Amritsar since the asst. year 1982 -83. With effect from 4th July, 1984, relevant to the asst. year 1985 -86, she started her independent proprietary business at Delhi under the name and style of Loomba Clinic Laboratory and Genetic Centre. According to her, returns of income for the years 1982 -83 to 1992 -93 have been filed with the ITO, Amritsar. No return of income has been filed for the asst. year 1993 -94 onwards. On 18th July, 1989, and 8th Feb., 1990, search and seizure operations within the meaning of s. 132(1) of the Act were carried out by the DI (Investigation) Delhi, upon both the petitioners. Based on such search and seizure operations, the Asstt. CIT, Investigation Circle 11(1), New Delhi, issued notices under S. 148 of the Act in February, 1993, for the asst. yrs. 1988 -89 to 1990 -91 to both the petitioners. Notice under S. 148, dt. 22nd March, 1994, for the asst. yrs. 1985 -86 to 1987 -88 and dt. 31st March, 1995, for the asst. year 1992 -93 were also issued to the petitioners. The petitioners filed their returns under protest and also objected to the jurisdiction of the Asstt. CIT, respondent No. 2. The Asstt. CIT, Delhi, finalised the assessments for the years 1987 -88 to 1992 -93. The petitioners preferred appeals. The appeals have been allowed by the CIT(A) on 20th Dec., 1995, for the asst. yrs. 1988 -89 and 1989 -90 and on 15th March, 1995, for the asst. year 1991 -92 and assessments remanded to the AO with a direction to afford the petitioners opportunity of hearing on the question of jurisdiction. The following excerpts from the order dt. 21st March, 1997, passed by the CIT, Delhi, under S. 124 (2) of the Act in respect of both the petitioners are relevant and are therefore, extracted and reproduced hereunder :

(3.) ON behalf of the respondents the stand taken is that the jurisdiction is to be decided by reference to ss. 120 and 124 of the Act. Each year's case is a separate case. The assessee must file the return by finding out the jurisdiction of the AO by reference to these provisions on the date of filing of the return. On the same principles would be determined the jurisdiction to initiate any proceedings under the Act against an assessee. Merely because an assessee was assessed by an AO having jurisdiction in earlier years he would not continue to exercise jurisdiction over the assessee though he has lost the same by reference to ss. 120 to 124 of the Act. If jurisdiction (called -natural jurisdiction), changes between the years by reference to ss. 120 and 124 of the Act, no order under S. 127 is called for.