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2022 (11) TMI 1107 - AT - Income TaxValidity of assessment framed by ITO - Assessment framed u/s 144 - as argued order has been passed in violation of instruction of CBDT by the ACIT, Circle-1(1), Jalpaiguri which is not a metro city and therefore the same may kindly be quashed - HELD THAT - Undisputed facts are that the assessee is a non corporate assessee and has declared total income of Rs. 10.02,340/- during the year. We observe that the notice u/s 143(2) of the Act was issued by ITO, Ward-1(1), Jalpaiguri to the assesse whereas the assessment was framed by the Assistant Commissioner of Income Tax, circle-1(1), Jalpaiguri. Instruction No. 1/2011 in the case of non-corporate assessee in non-metro cities, the ITR filed upto Rs. 15 lacs has to be assessed by ITO and therefore in the instant case the assessment is framed in violation of above instruction by the Board. The case of the assessee is squarely covered in the case of Hirak Sarkar 2021 (8) TMI 700 - ITAT KOLKATA - Thus we quash the assessment order passed on the ground of lack of jurisdiction. Accordingly the appeal of the assessee is allowed.
Issues Involved:
1. Timeliness of the appeal filing. 2. Validity of the assessment framed under Section 144 of the Income Tax Act. 3. Jurisdiction of the assessing officer. Detailed Analysis: 1. Timeliness of the Appeal Filing: The appeal was initially noted as time-barred by the Registry. However, referencing the Hon'ble Supreme Court's decision in Miscellaneous Application No. 665 of 2021 in SMW(C) No. 3 of 2020, it was determined that the period of filing appeals during the COVID-19 pandemic should be excluded for counting the limitation period. Consequently, the appeal was treated as filed within the limitation period. 2. Validity of the Assessment Framed Under Section 144: The assessee challenged the assessment framed under Section 144 of the Income Tax Act, arguing that it was "void, ultra vires, and nullity in the eyes of law." The assessee's return of income was filed on 25.03.2017, showing a total income of Rs. 10,02,340/-. The case was selected for limited scrutiny, and a notice under Section 143(2) was issued by the Income Tax Officer (ITO), Ward-1(1), Jalpaiguri. However, the assessment was framed by the Assistant Commissioner of Income Tax (ACIT), Circle-1, Jalpaiguri. The assessee contended that this violated the Central Board of Direct Taxes (CBDT) circular 1/2011, which specified that non-corporate assessees with income up to Rs. 15 Lacs should be assessed by ITOs, and those with income above Rs. 15 Lacs by AC/DCs. The assessee cited previous decisions, including Hirak Sarkar vs. ACIT and Sanat Kumar Sahana vs. ACIT, to support the argument for quashing the assessment. 3. Jurisdiction of the Assessing Officer: The Department Representative (D.R.) argued that the procedural error should be examined by the Assessing Officer (AO) and referenced Section 292BB of the Act, which precludes the assessee from raising such issues at this stage if they were not raised during the assessment or appellate proceedings. The D.R. suggested that the issue might be a procedural defect curable by the authorities. Upon reviewing the submissions and records, it was undisputed that the assessee, a non-corporate entity, declared an income of Rs. 10,02,340/-. The notice under Section 143(2) was issued by the ITO, but the assessment was framed by the ACIT. The Tribunal referred to CBDT Instruction No. 1/2011, which mandated that non-corporate assessees in non-metro cities with income up to Rs. 15 Lacs should be assessed by ITOs. The Tribunal found that the assessment was framed in violation of this instruction. The Tribunal cited Section 120 of the Income Tax Act, which allows the Board to issue directions for the exercise of powers and performance of functions by income-tax authorities based on territorial area, persons or classes of persons, incomes or classes of income, and cases or classes of cases. The Tribunal also referenced Section 127, which grants the power to transfer cases between officers of the rank of Commissioner or above, noting that no document was provided to show that the case was transferred by a competent authority. The Tribunal further cited several decisions, including Hillman Hosiery Mills Pvt. Ltd. vs. DCIT and Krishnendu Chowdhury vs. ITO, which supported the principle that assessments made by officers without proper jurisdiction are invalid. The Tribunal concluded that the assessment framed by the ACIT was invalid due to the lack of jurisdiction and the failure to issue a notice under Section 143(2) by the officer having jurisdiction. Conclusion: The Tribunal quashed the assessment order on the grounds of lack of jurisdiction and procedural irregularities, allowing the appeal of the assessee. The decision underscored the importance of adhering to jurisdictional mandates and procedural requirements as specified by the CBDT and the Income Tax Act.
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