2019 (6) TMI 1478 - AT - Income Tax

Condonation of delay - delay of 668 days - Advice of CA cause delay - HELD THAT - CA appeared on behalf of the assessee foundation before the Ld. Pr. CIT, Shillong and after opposing the impugned order, Shri Deepak Bhattarai, CA has advised the assessee prefer an appeal against the commissioner appeal and, therefore, the assessee foundation did not prefer an appeal before the Tribunal. When the assessee foundation received a second opinion from a Sr. counsel that appeal should be preferred and that too on a jurisdictional issue the assessee foundation promptly as filed this appeal and we note that the delay caused not because the assessee was negligent or did not intentionally filed the appeal. The mistake on the part of the AR cannot come in the way of substantial justice and, therefore, taking note of the affidavit of Shri Deepak Bhattarai, CA. We condoned the delay and proceed to hear the appeal on merits. Revision u/s 263 - jurisdiction of the Commissioner of Income Tax (Exemption), Kolkata OR Shillong - exemption u/s 11 denied - HELD THAT - Notification no. 2754 dated 02.10.2015 by the CBDT has come into force with effect from 15.09.2014, the cases of the assessee being in the category specified in column 5 (registered u/s 12A of the Act) functioning from the State of Meghalaya will come under the jurisdiction of the Commissioner of Income Tax (Exemption), Kolkata. We note that this fact has been acknowledged also later by the office of the Pr. Commissioner of Income Tax, Shillong vide letter dated 12.02.2019 wherein they have replied to the counsel of the assessee, Shri Inder Mohan Singh, Advocate that the jurisdiction of assessee i.e. M/s. CMJ Foundation lies with the CIT(Exemption), Kolkata and they have forwarded all the documents / folders of M/s. CMJ Foundation to the office of the CIT(Exemption), Kolkata. Thus it is clear that the notice issued by the Pr. CIT, Shillong dated 26.02.2015 itself was without jurisdiction. Therefore, we find force in the appeal and additional grounds raised aforesaid. We note that w.e.f. 15.09.2014 the Pr. CIT, Shillong did not enjoy jurisdiction in the case of assessee foundation when he issued notice i.e. on 26.02.2015 and the impugned order passed u/s 263 is without jurisdiction. Since the usurpation of revisional jurisdiction u/s 263 by Pr. CIT Shillong against the assessee was without jurisdiction, the order is null in the eyes of law and the additional ground challenging the jurisdiction of the Pr. CIT, Shillong goes to the root of the impugned order and therefore, is null in the eyes of law. Therefore, the assessee succeeds on the legal issue raised before us.- Decided in favour of assessee.

Summary

Issues:
1. Condonation of delay in filing appeal due to jurisdictional issues.
2. Jurisdiction of the Pr. CIT, Shillong to pass order u/s 263.
3. Interpretation of notification S.O. 2754 dated 22.10.2014 by CBDT.
4. Impact of jurisdictional issues on the validity of the impugned order u/s 263.

Analysis:

Issue 1: Condonation of Delay
The appeal was filed by the Assessee Foundation against the order of Pr. CIT– Shillong under section 263, with a delay of 668 days. The delay was attributed to the advice given by the previous CA, which led the foundation to believe that an appeal should not be filed. However, upon seeking a second opinion from a senior counsel, it was advised to file an appeal on jurisdictional grounds. The Tribunal noted that the delay was not intentional and condoned it to proceed with hearing the appeal on merits.

Issue 2: Jurisdiction of the Pr. CIT, Shillong
The main grievance of the assessee was against the jurisdiction of the Pr. CIT, Shillong to pass the order under section 263. The additional grounds of appeal challenged the jurisdiction of the Pr. CIT based on a notification issued by CBDT. The Tribunal analyzed the notification S.O. 2754 dated 22.10.2014, which specified that cases of persons claiming exemption under certain sections fall under the administrative jurisdiction of CIT (Exemption) Kolkata. It was observed that the Pr. CIT, Shillong did not have jurisdiction over the assessee's case, as acknowledged in a letter from the office of the Pr. Commissioner of Income Tax, Shillong. Therefore, the impugned order passed under section 263 was deemed null and void due to lack of jurisdiction.

Issue 3: Interpretation of CBDT Notification
The Tribunal interpreted the CBDT notification to establish that cases of entities registered under section 12A of the Income Tax Act, falling within specified categories, were to be under the jurisdiction of CIT (Exemption) Kolkata from a certain date. This interpretation formed the basis for determining the lack of jurisdiction of the Pr. CIT, Shillong in passing the impugned order under section 263.

Issue 4: Impact on Impugned Order
Due to the lack of jurisdiction of the Pr. CIT, Shillong, the impugned order passed under section 263 was considered null in the eyes of the law. The additional grounds challenging the jurisdiction of the Pr. CIT were deemed crucial and went to the root of the matter. As a result, the appeal of the assessee was allowed based on the legal issue of jurisdiction, rendering other grounds raised on merits as academic in nature.

In conclusion, the Tribunal allowed the appeal of the assessee due to the lack of jurisdiction of the Pr. CIT, Shillong in passing the order under section 263, as per the CBDT notification and subsequent acknowledgments by the tax authorities.