2020 (3) TMI 418 - AT - Income Tax

Scrutiny assessment u/s 143(3) - issuance of the statutory notice u/s 143(2) - Change in address - addition u/s 68 - The assessee submitted that he changed his address and the new address was mentioned in the return of income filed for subsequent years. The assessee also submitted that he filed Form No.18 with Registrar of Companies, regarding change of address. No separate intimation was given to the Assessing Officer by the assessee regarding change of address. HELD THAT - The Court held that mere mentioning of the new address on subsequent return without specifically intimating the AO with respect to change of address and without getting the PAN database changed, is not enough and sufficient. The court found that the assessee claimed to have filed a letter for change of address but such letter was never produced before any of the authorities. As held that on the facts of the case, the notice issued on the address available on the PAN data base was proper and valid service of notice u/s 143(2) - The court held that the change of address in the database of PAN is must, in case of change of the name of the company and/ or any change in the registered office of the corporate office of the assessee and the same has to be intimated to the Registrar of Companies in the prescribed format i.e., Form 18 and after completing the said requirement, the assessee is required to approach the Department with the copy of the said document and then the assessee is required to make an application for change of address in the departmental database of the PAN. In the present case the assessee has failed to do so. This judgment is on the issue of service of notice. It is not an issue as to whether the Assessing Officer has jurisdiction over the assessee. As already stated, it is not a case of notice being issued by a non-jurisdictional Assessing Officer. Issue in the case before the Hon'ble Supreme Court was not with regard to the jurisdiction of the officer in issuing the notice but was with regard to the service of notice on the proper address. The said judgement therefore does not help the department on this issue of jurisdiction now before us. Jurisdiction has to be conferred u/s 120 of the Act. Any act by an authority without jurisdiction is ab-initio void. In view of the above discussion, as the Assessing Officer who had jurisdiction over the assessee i.e., ITO Ward 8(3), Kolkata had not issued the notice to the assessee u/s 143(2) of the Act as mandatorily required under the Act, the assessment framed u/s 143(3) is bad in law as held by the Hon ble Supreme Court in the case of ACIT Anr. Vs. Hotel Blue Moon 2010 (2) TMI 1 - SUPREME COURT . Hence we quash the same.

Summary

Issues Involved:
1. Validity of the assessment due to non-issuance of notice under Section 143(2) by the jurisdictional Assessing Officer.
2. Merits of the addition made under Section 68 of the Income Tax Act.

Issue-wise Detailed Analysis:

1. Validity of the Assessment Due to Non-Issuance of Notice Under Section 143(2) by the Jurisdictional Assessing Officer:

The primary issue in this case was whether the assessment was valid given that the notice under Section 143(2) was issued by an officer who did not have jurisdiction over the assessee. The assessee argued that the jurisdiction lay with ITO, Ward-8(3), Kolkata, but the notice was issued by ITO, Ward-33(1), Kolkata. This was not contested by the Revenue.

The tribunal examined the jurisdictional provisions under Sections 120 and 124 of the Income Tax Act. It was noted that jurisdiction is conferred by the Central Board of Direct Taxes (CBDT) and that only the officer vested with jurisdiction can issue notices. The tribunal found that the assessee’s address had not changed and that the jurisdiction always lay with ITO, Ward-8(3), Kolkata. The issuance of the notice by ITO, Ward-33(1), Kolkata, was therefore invalid as this officer did not have jurisdiction over the assessee.

The tribunal emphasized that jurisdiction cannot be conferred by default or agreement and that actions by an officer without jurisdiction are void ab initio. Several case laws were cited to support this view, including decisions from the Calcutta High Court and other benches of the ITAT, which consistently held that assessments made without proper jurisdiction are null and void.

The tribunal concluded that the assessment was invalid due to the non-issuance of the statutory notice under Section 143(2) by the jurisdictional officer, ITO, Ward-8(3), Kolkata. Consequently, the assessment was quashed.

2. Merits of the Addition Made Under Section 68 of the Income Tax Act:

Since the tribunal quashed the assessment on jurisdictional grounds, it did not delve into the merits of the addition made under Section 68 of the Income Tax Act, which pertained to the share capital and share premium received by the company. The tribunal deemed it unnecessary to address the merits as it would be an academic exercise given the quashing of the assessment.

Conclusion:

The appeal of the assessee was allowed, and the assessment was quashed due to the non-issuance of the statutory notice under Section 143(2) by the jurisdictional Assessing Officer. The tribunal did not address the merits of the case due to the invalidity of the assessment.