9911796707
TMI Blog2010 (9) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... le 46(1), New Delhi and as such the assessment as framed is without jurisdiction and order of the lower authorities are not sustainable under the law." 4. In this case, assessee is a senior citizen. She filed her return of income declaring taxable income at ₹ 4,41,61,942/-, out of this, ₹ 4,34,78,333/- was shown as long term capital gain arising from sale of her house at 49,Golf Links, New Delhi and salary income of ₹ 60,000/-. The AO completed the assessment u/s 144 of the Act vide order dated 22.12.2008. The assessee has taken a ground that no valid notice u/s 143(2) has been served by the AO before completing the assessment u/s 144 of the Act. The assessee has also taken a ground that the assessment framed by the AO, namely, ACIT, Circle 46(1), New Delhi is also without jurisdiction and invalid inasmuch as no jurisdiction was conferred upon him by any order passed u/s 127 of the Act or otherwise, the assessment was completed by him without issuing notice u/s 143(2) by him. 5. We have considered rival contentions of both the parties and have carefully gone through the material on record. We have deliberated upon relevant provision of law contained in that beh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice u/s 143(2) has already been sent through speed post on 17.7.2007 which is well in time.] As per telephonically discussion with you, a notice u/s 143(2) dt. 27.10.08 fixing the case for 3.11.08 has been served at the residence of the assessee i.e. S-359-A, Panchsheel Park, New Delhi. In response to this notice, assessee herself attended the assessment proceedings and filed a letter dated 3.11.08 confirming that she has filed her return in Circle 48(1) declaring an income of ₹ 4,34,78,833/-. For any other information required in connection with the assessment proceedings, the assessee has given her telephone No.9811089939. 4. Since the return of the above named assessee lies with you, I am transferring herewith relevant papers alongwith assessee's letter, AIT generated information and copy of return for necessary action at your end. Please note that the limitation to complete the assessment expires on 31.12.2008. Yours faithfully Sd/- (J.P.MEENA) ITO, Ward 31(2), New Delhi." 7. The Income-tax Officer, Ward 31(2), New Delhi also issued another letter F.No.31(2)/08-09/166 dated 17.11.2008 to the ACIT, Ward 46(1) intimating that jurisdiction over the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd assessment was then completed on 22.12.2008 by AO, Ward 46(1). 8. On perusal of the aforesaid two letters, it is clear that the assessee's case was selected for scrutiny on the basis of computer generated selection of scrutiny cases by ITO Ward 31(2) as jurisdiction of assessee's case as per details of PAN was lying with ITO, Ward 31(2), and accordingly, a notice u/s 143(2) dated 17.7.2007 fixing the case for 26.7.2007 at 3.30 PM was issued to the assessee. From the order sheet entry, it is further clear that another notice u/s 143(2) was issued on 27.10.2008 by the same AO i.e. AO Ward 31(2). In response to the notice u/s 143(2) dated 27.10.2008, assessee appeared personally and filed a letter dated 3.11.2008 stating that she had already filed her return for Asstt. Year 2006-07 with ACIT, Circle 48(1), New Delhi on 31.7.2006, and on the assessee's request, annual information report details for the period from 1.4.2005 to 31.3.2006 were given to the assessee for her explanation. Thereafter, the AO passed an order sheet entry dated 3.11.2008 wherein it has been stated that since the jurisdiction over the case is with ACIT, Ward 48(1), New Delhi, the files are to be transferred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the light of these facts, the following question now arises for our consideration: "Whether notice required u/s 143(2) has been served upon the assessee within one year from the end of the month in which the return was filed?" 9. It is not in dispute that assessee filed her income-tax return on 31.7.2006 with ACIT Ward 48(1), New Delhi. The case was selected for scrutiny as per CASS (selection of cases for scrutiny). In the order-sheet, ITO Ward 31(2) has stated that the first notice u/s 143(2) dated 17.7.2007 fixing the case for 26.7.2007 at 3.30PM has been issued by his predecessor, which is placed on file. The AO speaks about notice u/s 143(2) dt. 17.7.07, being issued by his predecessor. A copy of notice along with postal receipt of speed post are placed before us. From the notice, it is seen that the notice has been sent to the assessee at old address i.e. 49, Golf Links, New Delhi. Whether this notice has actually been served upon the assessee has not been established except by making a claim by the AO that notice u/s 143(2) has been issued by his predecessor on 17.7.2007. It is not in dispute that the house at 49, Golf Links, New Delhi has been sold by the assessee d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of CASS. Statutory notice u/s 143(2) dated 17.7.2007 has been issued to the assessee through speed post by ITO Ward 31(2), New Delhi. Afterward, the case was transferred to this charge from Ward 31(2). Therefore, the objection raised by the assessee that proceedings u/s 143(2) of the Act are time barred, void is not acceptable, as the statutory notice has been issued to the assessee well within 12 months from the date of filing the return." 10. After considering the assessee's submissions and AO's remand report, the CIT(A) decided the issue about service of notice u/s 143(2) in the following manner: "The first ground of appeal raised by the appellant is that the notice u/s 143(2) was not served within the statutory time limit prescribed under the Act. After considering the arguments putforth by the assessee as well as the comments given by the AO on this issue, I am of the view that the notice was issued by the AO well within the statutory time limit and was sent through speed post and I have no reason to believe that the notice was not served upon the assessee, I am, therefore, unable to offer any relief to the assessee on this ground." From the said AO's report, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at notice can only be served after the AO has examined the return filed by the assessee whereas it is clear that when assessee came to file the return, the notice u/s 143(2) was served upon the authorized representative by hand. Thus, it would amount to gross violation of the scheme of Section 143(2) of the Act. 12. In the present case also, the return of income was lying with ACIT, Ward 48(1), when AO, Ward 31(2) issued notice u/s 143(2) on 17.7.2007 to the assessee, and it is, thus, clear that the notice u/s 143(2) was issued without verifying and examining the return of income. From the AO's letter dated 5.11.2008 and 17.11.2008, it is clear that the return of income by that time was still lying with ACIT, Ward 48(1), which makes it clear that the return of income filed by the assessee on 31.7.2006 was not available with the AO when he issued notice u/s 143(2) on 17.7.2007 at assessee's old address at 49, Golf Links, New Delhi. Even the return of income filed by the assessee at Ward No.48(1) was not available with the ACIT, Circle 46(1) at the time of completing the assessment inasmuch as ACIT Ward 46(1) vide letter dated 25.3.2009 has written a letter to ACIT, Circle 48(1) to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by any competent authority u/s 127 of the Act. Mere because during the pendency of the assessment proceedings, it came to his knowledge that the assessee has already changed his residence even before filing the return of income of the relevant year, that by itself, is not sufficient for the AO to transfer the assessment record to another AO having then territorial jurisdiction over the assessee and ask him to proceed further to complete the assessment without assuming jurisdiction from the initial stage. That could have been done provided the assessee's case was validly transferred from AO, Ward 31(2) to ACIT, Ward 46(1) either by Chief Commissioner or Commissioner within the meaning of Section 127 of the Act. Therefore, suo moto transfer of assessment record by AO, Ward 31(2) to ACIT, Ward 46(1) is also not valid and consequently, the AO, Ward 46(1) cannot assume valid jurisdiction to complete the assessment of the assessee without first assuming jurisdiction to complete the assessment u/s 143(3) by issuing fresh notice u/s 143(2) of the Act by him. It is also not in dispute that ACIT, Ward 46(1) has never issued any notice u/s 143(2) within stipulated time of one year from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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