2016 (5) TMI 1088 - AT - Income Tax

Validity of revision order u/s.263 - whether CIT-9 lacks jurisdiction as the assessment for assessment year 2011-12 was passed by the ITO,Ward No.VIII(1),Chennai, which falls in the jurisdiction of CIT-7 and not in CIT-9 ? - Held that - In the present case, the notification is dated 15.11.2014 and the assessment order u/s.143(3) of the Act was passed on 24.03.2014 falls in the jurisdiction of the CIT-7 and not in other jurisdiction. We are convinced with the arguments of the ld.A.R and perused the findings and submissions of ld.D.R on the issue of jurisdiction. Considering the apparent facts, we are of the opinion that the Ld.CIT- 9 passed the revision order u/s.263 of the Act without jurisdiction as per the provisions of the Act. Therefore, we are inclined to quash the revision order passed u/s.263 of the Act on the ground of lack of jurisdiction and restore the order u/s.143(3) of the Act by the AO passed on 24.03.2014. - Decided in favour of assessee.

Summary

Issues involved:
1. Jurisdictional challenge against the revision order passed by the Commissioner of Income Tax, Chennai-9 under section 263 of the Income Tax Act.
2. Validity of assessment order for the assessment year 2011-12 regarding capital gains on transfer of properties.

Detailed Analysis:
1. The appellant challenged the jurisdiction of the Commissioner of Income Tax in passing the revision order under section 263 of the Income Tax Act. The appellant argued that the order was illegal, non-est in law, and lacked jurisdiction. The Commissioner found that the assessment order for the assessment year 2011-12 was erroneous and prejudicial to the interest of the Revenue based on the transfer of properties and capital gains. The appellant contended that the jurisdictional change occurred after the assessment order was passed, and the appellant had offered capital gains in the assessment year 2012-13. The Commissioner relied on the findings of the Assessing Officer and set aside the assessment order under section 143(3) directing the levy of tax on capital gains for the assessment year 2011-12. The Tribunal found that the revision order passed lacked jurisdiction as per the provisions of the Act and quashed the order, restoring the original assessment order.

2. The brief facts of the case involved the appellant, engaged in pharmaceutical trading, disclosing income for the assessment year 2011-12. The Assessing Officer disallowed certain expenses and assessed the income. Subsequently, the Commissioner issued a show cause notice stating the assessment order was erroneous and prejudicial to the Revenue's interest based on capital gains from property transfer. The Commissioner found that the capital gains arose in the assessment year 2011-12, while the appellant had offered them in the subsequent year. The Tribunal considered the jurisdictional aspect, notification of jurisdictional change, and the timing of the assessment order in concluding that the revision order lacked jurisdiction and restored the original assessment order.

In conclusion, the Tribunal partially allowed the appeal for statistical purposes, quashing the revision order passed by the Commissioner of Income Tax, Chennai-9 under section 263 of the Income Tax Act due to lack of jurisdiction and restoring the original assessment order for the assessment year 2011-12.