9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (10) TMI 344 - AT - Income TaxValidity of notice u/s 143(2) - no notice by AO who held valid jurisdiction over the appellant s case given - transfer of jurisdiction of a case u/s 127 - curable defect - HELD THAT - contention put forth by the ld. CIT, DR that provisions of Section 124(5) being overriding in nature, the ACIT Circle 21(1), New Delhi simultaneously held concurrent jurisdiction is devoid of any merit. Such interpretation is not in accord with the extant provisions of Section 124(5) read with Section 127 of the Act. The legal proposition pre-supposes that the original notice u/s 143(2) was issued by an officer who held valid jurisdiction over the case of the assessee. We however find that although in June 2016, the jurisdiction over the assessee s case was vested in ACIT, Central Circle 1, Ranchi, he never issued notice u/s 143(2). On the contrary the notice was issued by the ACIT, Circle 21(1), Delhi who, as held earlier, ceased to have jurisdiction over the appellant s case after 08.10.2008. - in the given facts of the case, the appellant s case was not saved by the provisions of Section 124(5) as also by Section 127(4). There was no necessity for the assessee to have questioned the jurisdiction of AO at Delhi, as envisaged under sub-sec. (3) of sec. 124 of the Act since in the first place AO at Delhi legally enjoyed jurisdiction u/s. 124 of the Act over the assessee s case. In our opinion such an order is bad in law as held by the Hon ble Supreme Court in CIT V Hotel Blue Moon 2010 (2) TMI 1 - SUPREME COURT wherein has held that issue of a legally valid notice u/s. 143(2) is mandatory for usurping jurisdiction to frame scrutiny assessment u/s. 143(3) of the Act and absence of a valid notice u/s 143(2) is not a curable defect. This view was reiterated by the Hon ble Apex Court in the case of CIT Vs Laxman Das Khandelwal 2019 (8) TMI 660 - SUPREME COURT . The decision of the Hon ble Bombay High Court in the case of Fiat India Automobiles Ltd Vs Vijender Singh 2012 (11) TMI 287 - BOMBAY HIGH COURT support the legal ground canvassed by the appellant before us. We uphold the objections raised by the appellant against the validity of the impugned order u/s 143(3) for AY 2015-16. We accordingly hold that since in the present case no valid notice u/s 143(2) was issued by the AO who held jurisdiction over the case of the appellant, the consequent order passed u/s 143(3) dated 29.12.2017 was legally unsustainable and therefore is null in the eyes of law and therefore quashed. - Decided in favour of assessee.
Issues Involved:
1. Jurisdiction of the Assessing Officer (AO) to issue notice under Section 143(2). 2. Validity of the assessment order under Section 143(3) in the absence of a valid notice under Section 143(2). 3. Applicability of Section 124(5) and Section 127(4) of the Income Tax Act. 4. The effect of transfer orders under Section 127 on the jurisdiction of the AO. 5. The role of Section 292BB in curing defects in the service of notice. Issue-wise Detailed Analysis: 1. Jurisdiction of the Assessing Officer (AO) to issue notice under Section 143(2): The appellant was initially assessed by the DCIT, Circle-15(1), New Delhi. However, by an order dated 08.10.2008, the jurisdiction was transferred to the DCIT, Central Circle-1, Ranchi. For the assessment year 2015-16, the ACIT, Circle-21(1), New Delhi issued a notice under Section 143(2) on 28.07.2016. The appellant objected, arguing that the ACIT, Circle-21(1), New Delhi did not have jurisdiction over its case after the transfer order. The Tribunal held that the ACIT, Circle-21(1), New Delhi did not have concurrent jurisdiction and could not issue a valid notice under Section 143(2) after the transfer of jurisdiction to Ranchi. 2. Validity of the assessment order under Section 143(3) in the absence of a valid notice under Section 143(2): The Tribunal emphasized that the issuance of a valid notice under Section 143(2) is a prerequisite for framing an assessment under Section 143(3). Since the ACIT, Circle-21(1), New Delhi did not have jurisdiction, the notice issued by him was invalid. Consequently, the assessment order passed by the ACIT, Central Circle-3(1), Kolkata, based on the invalid notice, was also deemed null and void. 3. Applicability of Section 124(5) and Section 127(4) of the Income Tax Act: The Tribunal examined the provisions of Section 124(5) and Section 127(4). Section 124(5) allows an AO to exercise jurisdiction over income accruing within his area. However, the Tribunal clarified that this provision does not override a transfer order under Section 127. Section 127(4) allows the successor AO to continue proceedings without re-issuing notices already issued by the predecessor AO. However, this assumes that the original notice was issued by an AO with valid jurisdiction, which was not the case here. 4. The effect of transfer orders under Section 127 on the jurisdiction of the AO: The Tribunal noted that the transfer order under Section 127 dated 08.10.2008 was absolute and without reservation of concurrent jurisdiction. Hence, after this transfer, the ACIT, Circle-21(1), New Delhi was divested of jurisdiction over the appellant's case. The Tribunal held that once an AO is divested of jurisdiction by a transfer order, he cannot subsequently issue notices or take any action regarding the case. 5. The role of Section 292BB in curing defects in the service of notice: The Tribunal referred to the Supreme Court's decision in CIT Vs. Hotel Blue Moon and CIT Vs. Laxman Das Khandelwal, which held that the issuance of a notice under Section 143(2) is mandatory and not a curable defect under Section 292BB. Section 292BB can cure defects in the service of a notice but does not apply to the complete absence of a notice. Since no valid notice under Section 143(2) was issued by the AO with jurisdiction, the assessment order was invalid. Conclusion: The Tribunal concluded that the ACIT, Circle-21(1), New Delhi did not have jurisdiction to issue the notice under Section 143(2) after the transfer of the appellant's case to Ranchi. Consequently, the assessment order passed by the ACIT, Central Circle-3(1), Kolkata, based on the invalid notice, was null and void. The appeal was allowed in favor of the appellant.
|
