2019 (12) TMI 985 - AT - Income Tax

Assessment u/s.144 - whether the assessment order is barred by limitation u/s.153(1)(b) - HELD THAT - Plain reading of the provisions of Sec.153(1)(b) it is evident that the said provisions applies only to AY 1988-89 or any earlier Assessment year and cannot be applied for AY 2008-09 as contented by the learned counsel for the Assessee. The assessment order was passed in the present case on 30.12.2011 and is well within the period of limitation as contemplated by the provisions of Sec.153(1)(a). AO rightly assumed jurisdiction and was well within his power to frame the assessment u/s.143(3) of the Act. We therefore find no merit in the argument advanced on behalf of the Assessee. Without an order of transfer u/s.127 of the Act having been passed by the Commissioner of Income Tax, the case of the Assessee for AY 2009-10 could not have been transferred from ITO, Ward-2, Shimoga to ITO, Ward- 3,Davangere - Admittedly, in the present case the Assessee on his own filed return of income before the ITO, Ward-3, Davangere, even though as per the PAN the jurisdiction was with ITO, Ward-2, Shivamogga. When ITO, Ward-2, Shivamogga issued notice u/s.143(2) of the Act dated 25.8.2010, the Assessee submitted that ITO, Ward-3, Davangere had jurisdiction over the Assessee. Thereafter the Assessee in reply to the notices u/s.142(1) of the Act took a plea that notice u/s.143(2) of the Act ought to have been issued by ITO, Ward-3, Davangere and since the notice u/s.143(2) of the Act dated 25.8.2010 was issued by the ITO, Ward-2, Shimoga, the ITO, Ward-3, Davangere cannot frame an assessment u/s.143(3) of the Act. It is for the first time in his letter dated 3.12.2011 that the Assessee took a stand that there has to be an order u/s.127 of the Act for transfer of jurisdiction from ITO, Ward-2, Shivamogga to ITO, Ward-3, Davangere. Assessment was getting time barred on 31.12.2011. The Assessee thus acquiesced to the action of the AO at Davangere in framing assessment for AY 2009-10. The Assessee never took a stand that the AO at Davangere had no jurisdiction. The Assessee cannot be allowed to blow hot and cold at the same breath. I am of the view that the AO at Davangere had jurisdiction and he validly assumed jurisdiction and was well within his powers to pass the order of assessment. We find no merits in the argument advanced by the Assessee. On merits of the addition made by the AO, no arguments were advanced by the learned counsel for the Assessee except stating that the presumptive income declared by the Assessee as per sec.44AF of the Act ought to have been accepted. AO has given reasons for his conclusions in determining the total income of the Assessee and there is no rebuttal of those conclusions drawn by the AO. Therefore confirm the action of the AO in framing the order of assessment as he did in the present case. - Decided against assessee.

Issues Involved:
1. Jurisdiction of the Assessing Officer (AO).
2. Validity of notices issued under Sections 143(2) and 142(1) of the Income Tax Act.
3. Limitation period for passing the assessment order under Section 153(1)(b) of the Act.
4. Requirement of an order under Section 127 for transfer of jurisdiction.
5. Merits of the additions made by the AO under Section 144 of the Act.

Detailed Analysis:

1. Jurisdiction of the Assessing Officer (AO):
The Assessee contended that the ITO, Ward-2, Shimoga, did not have jurisdiction to issue notices since the return was filed with ITO, Ward-3, Davangere. The Tribunal observed that the PAN of the Assessee was with ITO, Ward-2, Shimoga, and therefore, the notice issued under Section 143(2) by ITO, Ward-2, Shimoga, was valid. The Assessee's failure to get the address in the PAN changed meant that ITO, Ward-2, Shimoga, rightly exercised jurisdiction. The Tribunal upheld that ITO, Ward-3, Davangere, assumed rightful jurisdiction after the case was transferred.

2. Validity of Notices Issued under Sections 143(2) and 142(1):
The Assessee argued that the notice under Section 143(2) issued by ITO, Ward-2, Shimoga, was invalid. The Tribunal rejected this argument, stating that the notice was valid as the PAN was with ITO, Ward-2, Shimoga. The Tribunal also noted that the Assessee did not comply with the notices and failed to provide the necessary details, leading to the assessment under Section 144.

3. Limitation Period for Passing the Assessment Order under Section 153(1)(b):
The Assessee claimed that the assessment order was barred by limitation under Section 153(1)(b). The Tribunal clarified that Section 153(1)(b) applies only to assessment years commencing on or before April 1, 1988. Since the assessment year in question was 2009-10, the Tribunal held that the assessment order passed on December 30, 2011, was within the period of limitation as per Section 153(1)(a).

4. Requirement of an Order under Section 127 for Transfer of Jurisdiction:
The Assessee argued that without an order under Section 127, the transfer of jurisdiction from ITO, Ward-2, Shimoga, to ITO, Ward-3, Davangere, was invalid. The Tribunal distinguished the Assessee's case from the cited decision of the ITAT Delhi Bench, noting that the Assessee himself filed the return with ITO, Ward-3, Davangere. The Tribunal concluded that the Assessee acquiesced to the jurisdiction of ITO, Ward-3, Davangere, and cannot challenge it now.

5. Merits of the Additions Made by the AO under Section 144:
The Assessee did not provide specific arguments against the additions made by the AO. The Tribunal found that the AO provided reasons for the additions and the Assessee failed to rebut those conclusions. The Tribunal upheld the AO's action in determining the total income and confirmed the additions made.

Conclusion:
The Tribunal dismissed the Assessee's appeal, finding no merit in the arguments regarding jurisdiction, validity of notices, limitation period, requirement of an order under Section 127, and the merits of the additions. The order of the CIT(A) was upheld, and the appeal was pronounced dismissed on December 20, 2019.

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