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TMI Blog2012 (9) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 - SHRI RAJPAL YADAV, SHRI A.N. PAHUJA, JJ. Assessee by Shri T.N. Chopra, AR Revenue by Shri Satpal Singh, DR ORDER A.N. Pahuja:- This appeal filed on 21.09.2011 by the Revenue against an order dated 29.07.2011 of the ld. CIT(A)-XIII, New Delhi, raises the following grounds:- 1 "On the facts and in the circumstances of the case and in law, the CIT(A) has erred in declaring the notice u/s 148 dated 31.03.2008 issued by Income-tax Officer, Ward-2, Gurgaon as beyond jurisdiction and void ab- initio. 2. The appellant craves leave to add, alter or amend any ground of the appeal raised above at the time of hearing." 2. Facts, in brief, as per relevant orders are that return declaring income of Rs.37,440/- filed on 22.10.2002 by the assessee, was processed u/s 143(1) of the Income-tax Act, 1961[hereinafter referred to as the 'Act']. Subsequently, on information received from DIT (Inv.), New Delhi that the assessee received accommodation entries from M/s Weal Iron Steel Co. Pvt. Ltd. Melode Electronics P. Ltd. and M/s Winsome Port Folio Pvt. Ltd. between 21.11.2001 to 1.12.2001, Income-tax Officer Ward-2, Gurgaon, after recording reasons in writing that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... folder, the AO.'s remand report as well as the assessment record. In order to appreciate the legal issues involved, the facts as borne out from the record need to be clearly stated as under:- i). Proceedings u/s 148 for the AY.2002-03 have been initiated by the ITO, Ward-2, Gurgaon on 31/3/2008 after recording reasons for the reopening u/s 148. The proceedings have been initiated after recording a finding that the appellant having Bank Account bearing Gurgaon address has apparently not filed its return for A Y.2002-03 with ITO, Ward-2, Gurgaon. The procedure u/s 151 (1) has been followed as the approval of the Addl. CIT Range, Faridabad dated 28.3.2008 is on record. Notice u/s 148 dated 28.3.2008 subsequently corrected to 31.3.2008 signed by the ITO Ward-2, Gurgaon in the case of the appellant has been issued. ii). The notice u/s 148 dated 31.3.2008 remained uncomplied with. Subsequently on 25.8.2008 the ITO, Ward-2, Gurgaon issued a notice u/s 142(1) requiring the appellant to file the return of income for the AY.2002-03 in response to the notice u/s 148 dated 31.3.2008. It was served by the Inspector on 18.9.2008 on a different address. On 18.9.2008 a letter was filed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than the Assessing Officer u/s 2(7 A) can be treated as valid by virtue of section 124 (3)(b) of the IT Act? Section 2(7 A) of the IT Act defines 'Assessing Officer' as follows: "Assessing Officer" means the Assistant Commissioner or Deputy Commissioner or Assistant Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section(1) or sub-section (2) of section 120 or any other provision of this Act, and the Additional Commissioner or Additional Director or Joint Commissioner of Joint Director who is directed under clauses (b) of sub-section (4) of that section to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Act." Thus as per section 2(7 A) of the Act, an Assessing Officer is one who is vested with the relevant jurisdiction by virtue of the direction or order u/s 120(1) or section 120 (2) of the IT Act or one who is directed u/s 120(4)(b) to exercise or perform all or any of the power and functions conferred on or assigned to an Assessing Officer under the Act. 6.2 In the present case, the registered address of the appellant co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be invoked and applied in a case, it has to be demonstrated from record that the notice as stipulated u/s 124(3)(b) has been served on the assessee. As per appellant the said notice has not been served on it. The assessment records also do not contain evidence of service of the notice u/s 148 dated 31.03.2008. Therefore the limitation for raising the jurisdiction issue within 30 days i.e. time given to file the return u/s 148 does not apply. Furthermore on learning of proceedings initiated by the ITO, Ward 2, Gurgaon, the appellant has informed of the correct jurisdiction at Delhi, which has been accepted by the Gurgaon officer as he has not taken recourse to section 124(2). On the contrary objection raised by the appellant has been accepted by Gurgaon officer. Therefore on these two grounds itself section 124(3)(b) would not apply. (2). Jurisdiction of an Assessing Officer is either in relation to a territorial area, persons or classes of persons, incomes or classes of incomes or cases or classes of cases or specific jurisdiction assigned u/s 127 of the IT Act. As on 31.3.2008, under section 120 read with section 124(1) of the IT Act, the jurisdiction of the appellant was alread ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not disputed the appellant's claim of jurisdiction being exercised over its case by ITO, Ward 11 (4), Delhi. 6.7 Before concluding the issue relating to validity of notice u/s 148 dated 31.03.2008 it would be appropriate to consider whether the provisions of section 292BB brought on the statute by the Finance Act 2008 w.e.f. 1.4.2008 can be invoked in the instant case or not. In view of the appellant's objection before the completion of assessment to the non service of notice u/s 148, the section will not apply in the instant case as stated in the proviso to the section. The Hon'ble ITAT 'F' Bench Delhi in its order in ITA no. 970/2010 dated 14.09.10 in the case of M/s Naseman Farms Pvt. Ltd. has held that section 292BB does not apply to notices which have been issued without jurisdiction. It observed that "the jurisdictional defect of the notice having been issued by an Assessing Officer not having jurisdiction over the assessee, as such is not a mere irregularity but an incurable illegality. To reiterate, herein, the factum of issuance of the notice by a non-jurisdictional Assessing Officer is an admitted fact. This defect is incapable of being cured by seeking recourse to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 139. Sub section (2) provides that the AO shall, before issuing any notice under this section, record his reasons for doing so. It is the assessing officer ,who has jurisdiction over the assessee and records reasons, who can issue notice u/s 148 of the Act. It is well settled that consent cannot confer jurisdiction upon the AO nor waiver by the assessee[CIT v. Ramsukh Motilal [1955] 27 ITR 54( Bom.) 5.1 In the instant case, indisputably ITO Ward-11(4),New Delhi had jurisdiction over the assessee company and the assessee is filing return in that ward regularly. The ITO Ward-2,Gurgaon,who did not have jurisdiction over the assessee, issued a notice u/s 148 of the Act on the basis of information from DIT(Investigation) that the assessee was in receipt of accommodation entries. As soon as the assessee informed him that jurisdiction over his case was vested with ITO Ward-11(4),New Delhi, records were transferred to New Delhi. Thereafter, the said ITO proceeded to complete the assessment without even recording reasons to believe stipulated in section 147 or issuing any notice u/s 148 of the Act. As mentioned by the AO in his remand report, the ITO Ward 11(4),New Delhi never issued ..... X X X X Extracts X X X X X X X X Extracts X X X X
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