2010 (4) TMI 796 - AT - Income Tax

Power of jurisdiction - Order of CBDT u/s 120 - Held that - the question of jurisdiction can neither be waived nor compromised and has to be precisely decided - Central Board of Direct Taxes Notification No. 285 of 2006 dated October 10 2006 was in operation and was not withdrawn and even if the Assessing Officer has concurrent jurisdiction this notification would not permit the Assessing Officer at Coimbatore to make assessment under section 143(3) as is evident from the above extracted portion of this notification. In our opinion the assessment orders made by the Assessing Officer in all these cases are ultra vires and beyond the permission granted by the Central Board of Direct Taxes which is binding on him.

Summary

Issues:
- Jurisdiction of Assessing Officer at Coimbatore under section 143(3)
- Validity of notice under section 143(2)

Jurisdiction of Assessing Officer at Coimbatore under section 143(3):
The judgment involves a bunch of seven appeals filed by the assessee against the common order of the Commissioner of Income-tax (Appeals). The facts of the case reveal that a search under section 132 of the Income-tax Act, 1961 was conducted, leading to unaccounted investments and excess stock being found. The notice under section 153A(a) read with section 153C was issued, and the assessee filed returns of income for various assessment years. The assessments were completed with additions made, prompting the appeals. The central issue raised was the jurisdiction of the Assessing Officer at Coimbatore to pass assessment orders under section 143(3) in light of Circular No. 285 of 2006. The Tribunal found that the Circular restricted the Assessing Officer's powers to issuance of intimation and refund only, rendering the assessment orders made by the Coimbatore Officer ultra vires and beyond the permission granted by the Central Board of Direct Taxes. The Tribunal ruled that the assessment orders lacked jurisdiction and quashed them, emphasizing the importance of adhering to the Circular's guidelines.

Validity of notice under section 143(2):
Another crucial issue addressed in the judgment was the validity of the notice under section 143(2) issued by the Assessing Officer at Coimbatore. It was contended that no such notice was ever issued or served on the assessee. Upon examination of the records, it was found that neither the issuance nor the service of notices under section 143(2) was established. The Tribunal disagreed with the Departmental representative's claim that notices were issued, as no proof of issuance or service was found in the original files. Consequently, the Tribunal held that the Assessing Officer at Coimbatore lacked valid jurisdiction due to the absence of proper notice under section 143(2). As a result, the assessment orders made by the Coimbatore Officer were deemed ultra vires and quashed. The Tribunal granted the liberty to the Assessing Officer with valid jurisdiction to take further necessary action if permitted by law, specifically concerning limitation.

In conclusion, the judgment by the Appellate Tribunal ITAT, Chennai delves into the critical issues of jurisdiction of the Assessing Officer at Coimbatore under section 143(3) and the validity of notice under section 143(2). The Tribunal found that the assessment orders made by the Coimbatore Officer were without jurisdiction as they exceeded the scope permitted by the Circular and lacked proper notice issuance. As a result, the assessment orders were quashed, emphasizing the importance of adhering to legal guidelines and procedural requirements in tax assessments.