2022 (10) TMI 1250 - HC - Income Tax

Validity of assessment order passed - lack of territorial jurisdiction - The appeal is admitted on the following substantial questions of law i) Whether the ITAT has erred in law in quashing the Assessment Order passed by the AO by holding that it suffered from lack of territorial jurisdiction and thereby allowing the assessee s appeal without considering the fact that as on the date of passing Assessment Order, the Pan was with the ITO, Wd.9(1), Kolkata from 12/12/2002 to 31/05/2018 ? ii) Whether the plea of territorial jurisdiction raised at the time of hearing before the Tribunal, can be entertained at all after the lapse of time limit specified in Section 124(3) and in view of Section 292BB of the Income Tax Act, 1961 ? The appellant shall file requisite number of informal paper books prepared out of Court including therein all relevant papers and documents within ten weeks from date by serving advance copy on the respondent. Since the respondent is not represented by its learned Advocate, let notice of this appeal be served on the respondent. Settlement of index and all other formalities are dispensed with. List the appeal after twelve weeks.

Summary

Issues involved:
1. Territorial jurisdiction of the Assessing Officer in quashing the Assessment Order.
2. Entertaining plea of territorial jurisdiction after the lapse of time limit specified in the Income Tax Act.

Analysis:
1. The High Court admitted the appeal based on substantial questions of law. The first issue revolves around the ITAT's decision to quash the Assessment Order due to lack of territorial jurisdiction. The Court questioned whether the ITAT erred in allowing the assessee's appeal without considering that the PAN was with a specific ITO in Kolkata during the relevant period. The key concern was whether the Assessment Order was valid despite the territorial jurisdiction issue raised by the ITAT.

2. The second issue raised in the appeal pertains to the plea of territorial jurisdiction brought before the Tribunal. The Court deliberated on whether such a plea could be entertained after the expiration of the time limit specified in Section 124(3) of the Income Tax Act, 1961, and in light of Section 292BB. The focus was on the procedural aspect of entertaining jurisdictional challenges post the specified time limit, emphasizing the legal framework's applicability in such scenarios.

The Court directed the appellant to submit informal paper books containing all relevant documents within a specified timeframe. Notice of the appeal was ordered to be served on the respondent, who was not represented by counsel. Formalities were dispensed with, and the appeal was scheduled for listing after twelve weeks. Additionally, a stay application was closed, and an affidavit of service was recorded in the Court. The judgment highlighted the importance of territorial jurisdiction and procedural compliance in income tax matters, setting the stage for a detailed examination of these critical legal aspects in the forthcoming proceedings.