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2021 (9) TMI 841 - AT - Income TaxValidity of assessment - no valid notice u/s. 143(2) - Jurisdiction of AO to issue notice - intimation of change in address - issue of notice u/s. 143(2) of the Act by ITO, Ward 1(1) the case was transferred to ITO, Ward- 3(1), Kanpur - HELD THAT - Undisputed fact that the notice u/s. 143(2) of the Act was issued by ITO, Ward-1(1) which fact is apparent from the copy of assessment order itself wherein the AO has noted this fact. This is also an admitted fact that after issue of notice u/s. 143(2) of the Act by ITO, Ward 1(1) the case was transferred to ITO, Ward- 3(1), Kanpur on 09.09.2014 and notice u/s. 142(1) of the Act along with questioner was issued to the assessee on 10.10.2014 by the ITO of Ward 3(5). It is also not disputed that ITO 3(1) or 3(5) did not issue fresh notice u/s. 143(2) of the Act. From the copies of returns for AYs. 2010-11 and 2013-14 it is observed that the assessee has been filing its return of income from address of 7/186A-1, Swaroop Nagar, Kanpur and the jurisdiction mentioned on the I.T. return is Ward 3(1). The assessee vide application dated 17.11.2012 requested the Income Tax PAN Services Unit to change his address from Swaroop Nagar, Kanpur to Tilak Nagar and it was accepted also and was conveyed to the assessee by the Income Tax Service Unit and copy of such application and its acceptance. On this acceptance letter the date of change is not mentioned however the fact remains that assessee had filed application for change of address on 17.11.2012 and Form No. 26AS generated by Income Tax Department also contains the new address which means that the department had taken note of the new address and the new address also falls within the jurisdiction of Assessing Officer Ward- 3(1). Therefore, the notice u/s. 143(2) of the Act should have been issued by the AO having jurisdiction over the assessee which has not been done and similarly the orders should have been passed by the same AO who had issued notice u/s. 143(2) - Decided in favour of assessee.
Issues Involved:
1. Jurisdictional Issue regarding the issuance of notice under Section 143(2) of the Income Tax Act, 1961. 2. Validity of the assessment order passed by an Assessing Officer who did not issue the initial notice under Section 143(2). Issue-wise Detailed Analysis: 1. Jurisdictional Issue regarding the issuance of notice under Section 143(2) of the Income Tax Act, 1961: The primary contention raised by the appellant was that the notice under Section 143(2) was issued by the Income Tax Officer (ITO), Ward-1(1), Kanpur, whereas the assessment order was passed by ITO, Ward-3(5), who did not have the jurisdiction over the case. The appellant argued that the notice should have been issued by the jurisdictional Assessing Officer, which in this case was ITO, Ward-3(1), as per the appellant's address on record. The appellant supported this argument by referring to the copies of income tax returns and other documents, including an application to the Income Tax PAN Services Unit confirming the change of address to an area under the jurisdiction of ITO, Ward-3(1). The respondent, represented by the Departmental Representative (DR), countered by stating that the PAN data record showed that the PAN was initially with ITO-1(1) and was transferred to ITO-3(5) on 05/12/2014. Thus, the notice was rightly issued by ITO-1(1) and the subsequent assessment order by ITO-3(5) was in continuation of the initial notice. The tribunal found that it was undisputed that the notice under Section 143(2) was issued by ITO-1(1) and the case was later transferred to ITO-3(1) and subsequently to ITO-3(5). However, no fresh notice under Section 143(2) was issued by ITO-3(1) or ITO-3(5). The tribunal observed that the appellant had been filing returns from an address under the jurisdiction of ITO-3(1) and had applied for a change of address to another area still under the jurisdiction of ITO-3(1). Therefore, the initial notice under Section 143(2) should have been issued by the jurisdictional Assessing Officer, ITO-3(1), and not by ITO-1(1). 2. Validity of the assessment order passed by an Assessing Officer who did not issue the initial notice under Section 143(2): The tribunal referred to the case of Bajrang Bali Industries, where under similar circumstances, it was held that the assessment order passed by an officer who did not issue the initial notice under Section 143(2) was invalid. The tribunal also cited the Allahabad High Court's decision in the case of Mohd. Rizwan, which emphasized that a notice issued by an authority without jurisdiction cannot be validated by subsequent participation of the assessee before the transferee Assessing Officer. The court held that if the initial notice under Section 148 was issued by an officer without jurisdiction, the entire reassessment proceedings would be vitiated, and Section 292BB would not cure the defect of jurisdiction. The tribunal concluded that since the notice under Section 143(2) was issued by ITO-1(1), who did not have jurisdiction, and no fresh notice was issued by the subsequent jurisdictional officers (ITO-3(1) or ITO-3(5)), the assessment order was invalid. Therefore, the tribunal allowed Ground Nos. 1 and 2 raised by the appellant, rendering the rest of the grounds on merits of the case infructuous. Conclusion: The appeal was partly allowed, with the tribunal annulling the assessment order on the grounds of jurisdictional invalidity of the notice under Section 143(2). The tribunal emphasized the importance of jurisdictional authority in issuing statutory notices and upheld the principle that jurisdictional defects cannot be cured by subsequent participation of the assessee.
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