1. The impugned order of the learned AAC, Gwalior Range, Gwalior, which is dated 30-7-1981 and has been made in his appeal No. GA 134 of 1979-80 reads as under: The jurisdiction over this appeal lies with the Commissioner of Income-tax (Appeals), Indore as the assessed income for the assessment year 1977-78 works out at Rs. 1,24,580. The penalty proceedings pertained to this assessment year. Therefore, the appeal is dismissed in limine.
2. Facts briefly stated as a background to the above order are that assessment, for the assessment year 1977-78 in the case of the appellant-assessee, was completed on 28-3-1978 and an addition of Rs. 6,000 was made as income from undisclosed sources since there was a search and seizure operation by the revenue on the residential and business premises of the assessee and Rs. 6,000 is claimed to have been found during the search in the residential premises of the assessee which amount, according to the revenue, was not accounted for in the books of account maintained by the assessee. This amount was subjected to levy of penalty under Section 271(1)(c) of the Income-tax Act, 1961 ('the Act'), and penalty imposed at Rs. 7,000.
3. We have since heard the learned authorised representatives of the parties at length. We have perused carefully the penalty order made by the ITO, 'A' Ward, Gwalior, which is dated 11-2-1980 and the photostat copy of the statutory Form No. 7 under statutory rule 15 of the Income-tax Rules, 1962, which document is a notice of demand issued under Section 156 of the Act.
4. In the impugned order, the learned AAC has observed that the jurisdiction over the appeal filed by the assessee lies with the Commissioner (Appeals), Indore, since the assessed income for the assessment year under appeal in the case of the assessee stood at Rs. 1,24,580. The learned AAC also observed that since the appeal pertained to penalty proceedings relating to the very assessment year mentioned as above, the appeal, as such, stood dismissed in limine.
5. At the outset, we like to say that if the jurisdiction over the appeal of the assessee lay with the Commissioner (Appeals) as has been observed by the learned AAC the appeal could not have been dismissed since there being inherent lack of jurisdiction with the learned AAC, the exercise of jurisdiction by him in dismissing the appeal was not warranted in law. The order, as such, becomes a non est, a nullity and void ab initio because the authority who made the order lacked jurisdiction.
6. Since the learned AAC was of the opinion that the jurisdiction over the assessee's appeal lay with the Commissioner (Appeals), Indore, the proper courses left with him were: (i) to return the appeal to the assessee with the endorsement thereon that the learned AAC had no jurisdiction over the said appeal since the AAC was not a proper forum on the facts and in the circumstances of the assessee's case, and/or (ii) to send the appeal to authority having proper jurisdiction over the assessee's appeal which in this case is said to be the Commissioner (Appeals), Indore for being decided in accordance with the law. In either case, the assessee would have been before the Commissioner (Appeals), Indore, and since the learned Commissioner (Appeals), Indore, would have registered the appeal afresh, it would have been for the assessee to apply for condonation of delay. However, we find that the learned AAC did not adopt any of the above two courses.
7. That apart, statutory Form No. 7 which is a notice of demand and is dated 11-2-1980 and has been served on the assessee by the ITO, 'A' Ward, Gwalior, along with penalty order made under Section 271(1)(c) speaks of the fact that the ITO has 'advised' the assessee that in case the assessee wants to file the appeal, it should be preferred before the AAC of Income-tax, Gwalior Range, Gwalior. The words 'Gwalior Range, Gwalior' are in the same ink and have been added in the notice of demand with the same pen as the ink and pen with which the date (11-2-1980) the place (Gwalior) have been written in the notice of demand. In this view of the matter also the filing of appeal by the assessee is at the 'advice' of the ITO, who made the penalty order, hence, there was no justification with the learned AAC to have dismissed the appeal in limine.
8. It has been held by the Hon'ble Andhra Pradesh High Court (AIR 1961 AP 327 at page 328) that where the Court has no jurisdiction over a subject-matter, a judgment given by it will be a determination coram non judice and it would be a futile proceeding for the judge to go on with an investigation which would have no jural effect. Again, the same Hon'ble High Court in (AIR 1966 AP 334 at page 336) has held that where the Court comes to the corclusion that the suit should have been instituted in another Court, the only thing that it can do is to return the plaint for presentation to that Court and not to dismiss the suit.
9. Respectfully following the ratio laid down by the Hon'ble Andhra Pradesh High Court in the above two reported cases, on the facts and in the circumstances of the case, with which we are presently seized of, we do hold that the impugned order of the learned AAC is non est since it suffers from inherent lack of jurisdiction.
10. The impugned order, as such, stands set aside but in the peculiar circumstances of the case, the appeal is restored to the file of the Commissioner (Appeals), Indore, who is said to be the proper appellate authority qua the subject-matter of appeal before us. The learned Commissioner (Appeals) will naturally register the appeal as a fresh one but since the assessee has preferred the appeal before the learned AAC on 11-3-1980 and within the prescribed period of limitation under the provisions of the Act and since the assessee has been prosecuting the said appeal, in good faith, bonafidely and on the 'advice' of the ITO as per statutory Form No. 7 notice of demand and since no mala fides are attributable on the part of the assessee, the appeal before the Com missioner (Appeals) shall be taken to have been filed in time because the delay qua this appeal being registered in the office of the Commissioner (Appeals), Indore, stands condoned in view of the facts narrated above. The learned Commissioner (Appeals) will decide the appeal on merits, in accordance with the law, of course, after giving a reasonable opportunity of being heard to the assessee as also to the ITO.11. The net result is that the appeal by the assessee succeeds and stands allowed.