2022 (12) TMI 1557 - AT - Income Tax

Validity of scrutiny assessment - sustainability of the order passed by the A.O u/s. 143(3) without issuing a notice u/s. 143(2) - validity of the jurisdiction assumed by the A.O i.e. ITO Ward-1(1) Raipur for issuing notice u/s. 143(2) and validity of the assessment framed u/s 143(3) dated 18.03.2015 by the ITO Ward-2(1) Raipur HELD THAT - No infirmity can be attributed to the notice u/s. 143(2) of the Act dated 08.08.2013 that was issued by the ITO Ward-1(1) Raipur. In case the jurisdiction over the assessee s case was vested with the ITO Ward-1(2) Raipur then as per the mandate of Section 124(3) of the Act the assessee having filed his return of income u/s. 139(1) of the Act on 17.09.2012 was obligated to have called in question within a period of one month the validity of the jurisdiction that was assumed by the aforesaid A.O which we find that he had failed to do. Considering the fact that the ITO Ward 1(1) Raipur who had validly issued notice u/s. 143(2) dated 08.08.2013 to the assessee we are of the view that pursuant to the restructuring and reallocation of the territorial jurisdictions of the AO s vide the CBDT Notification No. 1/2014-15 dated 15.11.2014 the automatic transfer of the territorial jurisdiction over the case of the assessee from the ITO Ward-1(1) Raipur to ITO Ward-2(1) Raipur could also not be faulted. We say so for the reason that now when the ITO Ward-1(1) Raipur pursuant to the residential address that was provided by the assessee in his PAN database was validly vested with the territorial jurisdiction over his case therefore the subsequent transfer of the territorial jurisdiction over the said residential area to ITO Ward-2(1) could by no means be called in question by the assessee. We thus are of the considered view that as the territorial jurisdiction over the case of the assessee stood transferred to ITO Ward-2(1) Raipur therefore the latter in exercise of his jurisdiction had validly framed the assessment vide his order passed u/s. 143(3) dated 18.03.2015. We thus on the basis of our aforesaid deliberations are unable to concur with the claim of the assessee that the A.O i.e. ITO Ward-1(1) Raipur had wrongly assumed jurisdiction and issued notice u/s. 143(2) dated 08.08.2013. Also we find no substance in the claim of the Ld. AR that the ITO Ward-2(1) Raipur had exceeded his jurisdiction and framed the assessment in the case of the assessee vide his order passed u/s. 143(3) dated 18.03.2015. Accordingly finding no substance in the additional ground of appeal raised by the assessee before us we dismiss the same in terms of our aforesaid observations.

2023 (7) TMI 1426 - AT

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the assessment order passed under Section 143(3) of the Income-tax Act, 1961, dated 18.03.2015, is invalid due to the alleged non-issuance of a notice under Section 143(2) by the jurisdictional Assessing Officer (A.O).
Whether the jurisdiction assumed by the A.O for issuing the notice under Section 143(2) and framing the assessment was valid.
Whether the restructuring and reallocation of territorial jurisdictions affected the validity of the assessment order.

ISSUE-WISE DETAILED ANALYSIS

1. Validity of the Assessment Order under Section 143(3) Due to Alleged Non-Issuance of Notice under Section 143(2)

Relevant Legal Framework and Precedents: The issuance of a notice under Section 143(2) is mandatory for framing an assessment under Section 143(3). The assessee cited precedents from the Supreme Court in ACIT & Anr. Vs. Hotel Blue Moon and CIT vs. Laxman Das Khandelwal to support the argument that the absence of such notice invalidates the assessment.
Court's Interpretation and Reasoning: The Tribunal examined whether a valid notice under Section 143(2) was issued. It was noted that the A.O had indeed issued a notice on 08.08.2013, which was served on 21.08.2013, and further notices were issued on 25.08.2014 and 12.12.2014. The Tribunal relied on the Supreme Court's judgment in Pr. CIT Vs. I-Ven Interactive Limited, which held that the address in the PAN database is crucial for determining the validity of the notice.
Key Evidence and Findings: The Tribunal found that the notice dated 08.08.2013 was issued to the address provided in the PAN database, which was the residential address of the assessee at that time. The Tribunal concluded that the notice was validly issued by the A.O who had jurisdiction over the residential address.
Application of Law to Facts: The Tribunal applied the principle that the address in the PAN database determines jurisdiction. Since the notice was issued to the address in the PAN database, the Tribunal held that the notice was valid.
Treatment of Competing Arguments: The Tribunal rejected the assessee's argument that the business address should determine jurisdiction, emphasizing that the PAN database address was the relevant factor.
Conclusions: The Tribunal concluded that the assessment order was valid as the notice under Section 143(2) was correctly issued to the address in the PAN database.

2. Jurisdiction Assumed by the A.O for Issuing Notice and Framing Assessment

Relevant Legal Framework and Precedents: Jurisdiction is determined by the address in the PAN database. The Tribunal referred to Section 124(3) of the Act, which requires the assessee to challenge jurisdiction within one month of filing the return.
Court's Interpretation and Reasoning: The Tribunal found that the jurisdiction was validly assumed by the A.O based on the residential address in the PAN database. The restructuring of territorial jurisdictions did not affect the validity of the notice or the assessment.
Key Evidence and Findings: The Tribunal noted that the assessee's PAN database listed the residential address, and the notice was issued accordingly. The Tribunal also noted that the assessee did not challenge jurisdiction within the stipulated period.
Application of Law to Facts: The Tribunal applied the law by confirming that the jurisdiction was correctly determined based on the PAN database address, and the subsequent restructuring did not invalidate the assessment.
Treatment of Competing Arguments: The Tribunal dismissed the argument that the business address should determine jurisdiction, reiterating the importance of the PAN database address.
Conclusions: The Tribunal upheld the jurisdiction assumed by the A.O and the validity of the assessment order.

SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "We, thus, are of the considered view that as the notice u/s. 143(2), dated 08.08.2013 was validly issued by the ITO, Ward1(1), Raipur who at the relevant point of time was vested with the jurisdiction over the case of the assessee on the basis of his residential address that was available in his PAN database, therefore, no infirmity in the assumption of jurisdiction by him for issuing notice u/s 143(2), dated 08.08.2013 therein emerges."
Core Principles Established: The address in the PAN database is crucial for determining jurisdiction. The issuance of a notice under Section 143(2) to this address is mandatory for the validity of an assessment under Section 143(3).
Final Determinations on Each Issue: The Tribunal dismissed the additional ground of appeal regarding the invalidity of the assessment order and upheld the jurisdiction assumed by the A.O. The appeal was dismissed, affirming the validity of the assessment order.

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