2024 (2) TMI 633 - AT - Income Tax

Validity of reopening of assessment - jurisdiction of AO over the assessee for framing of assessment - jurisdiction over the assessee vested with ITO or ACIT-3(1), Raipur - HELD THAT - The multi-facet issues pertaining to the assumption of jurisdiction by an A.O. in light of the pecuniary/monetary limits contemplated in CBDT Instruction No.1/2011 r.w. CBDT Instruction No.6/2011 remains the same as had been looked into at length by the SMC of the ITAT, Raipur, in assessee s own case for the immediately succeeding year, i.e. A.Y,.2010-11, 2023 (10) TMI 1360 - ITAT RAIPUR as held we are unable to comprehend on what basis the case of the assessee de-hors any order as per the mandate of Section 127 of the Act was initially transferred by the ITO, Ward-1(2), Raipur on 05/02/2014 to the DCIT, Circle-1(1), Raipur. At this stage, it would be relevant to observe that as per sub-section (3) of Section 127 of the Act, even in case there is a transfer of any case from any A.O or AOs (whether with or without concurrent jurisdiction) to any other A.O or AOs (whether with or without concurrent jurisdiction), the requirement of passing an order of transfer under the aforesaid statutory provision is required and the same cannot be dispensed with. We may further observe that the order of transfer of the assessee s case by the ITO-Ward 1(2), Raipur to DCIT-Circle 1(1), Raipur on 05.02.104 was much prior to Notifications No. 1/2014-15, dated 15.11.2014 and Notification No. 1/2014-15, dated 15.11.2014, based on which jurisdiction over the case of the assessee was vested with the DCIT/ACIT- 3(1), Raipur, as brought to our notice by the A.O. As the assessment in the case of the assessee had been framed by the ACIT, Circle-3(1), Raipur, who in light of the CBDT Instruction No.1/2011 (supra) r.w. CBDT Instruction No.6/2011 was not vested with any jurisdiction for framing of assessment in the case of the assessee who had declared Nil income; therefore, the order so passed by him cannot be sustained and is liable to be struck down on the said count itself. Thus, the Ground of Appeal No.1 raised by the assessee is allowed in terms of my aforesaid observations. Thus the assessment framed by the A.O u/s. 147 r.w.s. 143(3) dated 28.10.2016 is quashed for want of valid assumption of jurisdiction. Decided in favour of assessee.

Summary

Issues Involved:
1. Jurisdiction of the Assessing Officer (A.O.)
2. Applicability of Section 153C vs. Section 147/148.
3. Addition under Section 69 of the Income Tax Act, 1961.
4. Violation of principles of natural justice.

Summary:

1. Jurisdiction of the Assessing Officer (A.O.):
The appellant contended that the assessment order passed under Section 147 r.w.s. 143(3) by the ACIT-3(1), Raipur was illegal and void ab initio as the jurisdiction vested with the ITO, not the ACIT-3(1), Raipur. The appellant relied on CBDT Instruction No.1/2011 and Instruction No.6/2011, which specified that cases with income up to Rs. 15 lakhs should be handled by the ITOs. The Tribunal noted that the CBDT Instructions were binding and found that the ACIT-3(1), Raipur had wrongly assumed jurisdiction. The Tribunal quashed the assessment order for want of valid assumption of jurisdiction, referencing similar cases such as Durga Manikanta Traders Vs. ITO and judgments from various High Courts and the Supreme Court.

2. Applicability of Section 153C vs. Section 147/148:
The appellant argued that the assessment should have been framed under Section 153C, which overrides Sections 147 and 148. The Tribunal, however, did not address this issue in detail as it quashed the assessment on jurisdictional grounds.

3. Addition under Section 69 of the Income Tax Act, 1961:
The ACIT-3(1), Raipur made an addition of Rs. 29.25 lakhs under Section 69 based on cash transactions found in incriminating documents during search and seizure operations. The Tribunal did not delve into the merits of this addition due to the quashing of the assessment order on jurisdictional grounds.

4. Violation of principles of natural justice:
The appellant claimed that the CIT (Appeals) passed an ex-parte order without providing sufficient opportunity to be heard, thus violating the principles of natural justice. The Tribunal did not address this issue as it quashed the assessment on jurisdictional grounds.

Conclusion:
The Tribunal quashed the assessment order passed under Section 147 r.w.s. 143(3) by the ACIT-3(1), Raipur for want of valid assumption of jurisdiction, following the CBDT Instructions and relevant judicial precedents. The appeal was allowed on jurisdictional grounds, leaving other issues open.