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2019 (12) TMI 438 - AT - Income TaxJurisdiction of AO - Selection of case for scrutiny - Validity of assessment and challenging the notice issued u/s 143(2) - Jurisdiction as transferred u/s 127 of Act before CIT-Central Circle-Thane - HELD THAT - In accordance with said transfer order, the DCIT-CC- Thane initiated assessment proceedings for AY 2008-09. However, subsequently ITO Ward-2, Panvel initiated assessment proceedings for AY 2009-10 before obtaining an order u/s 127 of the Act decentralizing the change of the assessee. Delhi High Court in the case of Valvoline Cuminus Ltd vs DCIT 2008 (5) TMI 20 - HIGH COURT OF DELHI to submit that once the proper officer exercised the jurisdiction, the subsequent notice by an officer not so authorized is invalid. We are of the view that notice issued under section 143(2) of the Act is without jurisdiction. As regards to the one argument of the DR that the returned filed by the assessee was with ITO Ward-2, Panvel is of no consequence because under e-filing system for filing of return, the automatic return will go to the territorial ITO of the assessee and not to the proper jurisdiction where the case is transferred under section 127. Hence, this argument will not stand. This issue of the assessee s appeal is allowed. Once, the issue on jurisdiction is decided in favour of assessee and notice under section 143(2) is quashed, consequential assessment will not stand. Hence, we quash the assessment order and allow the appeal of the assessee. Notice issued u/s 143(2) as without jurisdiction and void ab-initio - HELD THAT - An order under section 127(2) of the Act was passed on 09/05/2011 by office of Commissioner of Income Tax-(Central), Pune Transferring jurisdiction of the appellant s case from DCIT, CC-1, Thane to ITO ward 2, Panvel, whereas the ITO ward 2, Panvel had issued notice u/s 143(2) much earlier on 20.08.2010 and 27.09.2010 i.e. even before the transfer order is passed. Therefore, said notices were without jurisdiction. Further, it was pointed out that at the same point of time, assessee received notice under section 143(2) of the Act from the Central Circle, Thane for AY 2008-09. The notice for AY 2008-09 were issued in accordance with jurisdiction vested due to centralization of the assessee s case. This tantamount to concurrent jurisdiction which is impressible under law. Thus, the notice for AY 2009-10 were invalid. We noted the facts that on a combined reading of notice and order under section 127 of the Act it is clear that ACIT, Panvel acquired jurisdiction over assessee w.e.f. 20.05.2011, therefore, notices under section 143(2) issued by ITO, Panvel were invalid, leading to the impugned order becoming null void. On the issue of applicability of section 124(3) similar are the arguments as in AY 2009-10, which we have decided in favour of the assessee above. Hence, this assessment is also bad in law and declared as null and void.
Issues Involved:
1. Validity of the assessment and jurisdiction of the notice issued under section 143(2) of the Income-tax Act, 1961. Issue-wise Detailed Analysis: 1. Validity of Assessment and Jurisdiction of Notice under Section 143(2) for AY 2009-10: The primary issue was the validity of the assessment and the jurisdiction of the notice issued under section 143(2) of the Income-tax Act, 1961. The assessee filed an e-return of income on 26.08.2009, and during the assessment proceedings, the Assessing Officer (AO) issued notices under section 143(2) on 20.08.2010 and 27.09.2010. The assessee objected, claiming that the jurisdiction lay with the ACIT, DCIT Central Circle, Thane, following a search by the Income Tax Department. The AO rejected the objection based on Section 292BB and Section 124(3) of the Act, stating that the objection was raised beyond the one-month period. The CIT(A) upheld the AO's decision, stating the objection was time-barred under section 124(3). The Tribunal noted that the jurisdiction over the assessee lay with Central Circle, Thane, at the time of issuing the notice under section 143(2). An order under section 127(2) transferring jurisdiction to ITO Ward-2, Panvel, was passed on 09.05.2011, while the notices were issued earlier. Hence, the notices were without jurisdiction and invalid, rendering the assessment order null and void. 2. Validity of Assessment and Jurisdiction of Notice under Section 143(2) for AY 2010-11: For AY 2010-11, the facts were slightly different. The assessee filed the return on 29.09.2010, and the case was selected for scrutiny under the CASS system. The ITO, Ward-2, Panvel, issued a notice under section 143(2) on 24.08.2011. The case was later transferred to ACIT Panvel Circle, which issued notices under sections 143(2) and 142(1) on 17.01.2012, after the expiry of the time limit for issuing the notice under section 143(2). The assessee's objection regarding jurisdiction was dismissed by the AO and CIT(A) as time-barred under section 124(3). The Tribunal noted that the ACIT Panvel acquired jurisdiction over the assessee from 20.05.2011, as per the order under section 127. Thus, the original notice under section 143(2) issued by ITO Ward-2, Panvel, was without jurisdiction, and the notice issued by ACIT was time-barred. Therefore, the assessment order was null and void. Conclusion: The Tribunal concluded that the notices under section 143(2) issued by ITO, Panvel, were invalid for both AY 2009-10 and AY 2010-11 due to lack of jurisdiction, rendering the assessment orders null and void. Consequently, the appeals of the assessee were allowed, and the assessments were quashed. Order Pronounced: The order was pronounced in the open court on 23.09.2019.
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