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TMI Blog2017 (5) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... September 14, 2011 issued by the Assistant Commissioner of Income-tax, Haldia without assuming the jurisdiction as per the Central Board of Direct Taxes Instruction No. 1 of 2011, dated January 31, 2011. As per the CBDT Instruction No. 1 of 2011 dated January 31, 2011 the 'non-corporate returns' up to Rs. 15 lakhs income for Income-tax Officers in Mofussil areas from April 1, 2011. The notice under section 143(2) of the Income-tax Act, 1961 should/must be issued by the jurisdictional Income-tax Officer. The action of the Assistant Commissioner of Income-tax Haldia for issuing the notice under section 143(2) is illegal, bad-in-law and liable to be quashed. 2. That the competent authority has not passed any transferred order under section 127 of transferring the assessee's file from the Assistant Commissioner of Income-tax, Haldia to Income-tax Officer, Ward-1, Haldia. As such, without transferred order under section 127 the Income-tax Officer, Ward-1, Haldia cannot assume the jurisdiction over the assessee. Hence, the assessment order passed under section 143(3), dated March 20, 2013 passed by the Income-tax Officer Ward-1, Haldia without jurisdiction over the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re handed over to the old counsel to file the appeal but he failed to do so. Therefore a new counsel was searched for filing the appeal to the Tribunal. Therefore the delay occurred for the reasons which were beyond the control of the assessee. Accordingly, the assessee humbly prayed before for the condonation of the delay and to adjudicate the matter on merits in the interests of justice and equity. The assessee in support of its petition seeking condonation of delay also prayed the Tribunal to take a lenient view in the matter, condone the delay and dispose of the matter based on the merits of the case and not dismiss the matter on the basis of technicalities. On the other, the learned Departmental representative has not raised any objection if the petition for the delay of condonation is considered. Hence, we condone the delay and to proceed hearing of the appeal. 5. The first issue raised by the assessee in this appeal is that the assessment framed under section 143(3) of the Act is invalid as the notice under section 143(2) of the Act was not issued by the jurisdictional Income-tax Officer. 6. At the outset, we find that the assessee has challenged the reassessment proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticular assessment or to dispose of a particular case in a particular manner. The second is with regard to interference with the discretion of the Commissioner (Appeals) in exercise of his appellate functions. Sub-section (2) of section 119 provides for the exercise of power in certain special cases and enables the CBDT, if it considers it necessary or expedient so to do for the purpose of proper and efficient management of the work of assessment and collection of revenue, to issue general or special orders in respect of any class of incomes or class of cases, setting forth directions or instructions as to the guidelines, principles or procedures to be followed by other Income-tax authorities in the discharge of their work relating to assessment or initiating proceedings for imposition of penalties. The powers of the CBDT are wide enough to enable it to grant relaxation from the provisions of several sections enumerated in clause (a). Such orders may be published in the Official Gazette in the prescribed manner, if the CBDT is of the opinion that it is so necessary. The only bar on the exercise of power is that it is not prejudicial to the assessee. In the present case, the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expedient to verify the correctness and completeness of the return then he is bound to serve a notice under this sub-section on the assessee requiring him, on a specified date, either to attend at the Assessing Officer's office or to produce or cause to be produced any evidence on which the assessee desire to rely in support of his return. The above view gets fortified by the decision of the Hon'ble Madras High Court in the case of CIT v. Gitsons Engineering Co. reported in [2015] 370 ITR 87 (Mad), wherein it is held that (headnote), "The word 'shall' employed in section 143(2) of the Income tax Act, 1961, contemplates that the Assessing Officer should issue notice to the assessee so as to ensure that the assessee has not understated income or has not computed excessive loss or has not under paid the tax in any manner. It is therefore, clear that when the Assessing Officer considers it necessary and expedient to ensure that tax is paid in accordance with law, he should call upon the assessee to produce evidence before him to ensure that the tax is paid in accordance with law. The section makes it clear that service of notice under section 143(2) of the Act within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income-tax under section 143(2) of the Act and later it was transferred to the Income-tax Officer. The transfer of the file was within the same locality. Therefore the validity of the assessment framed by the Assessing Officer cannot be challenged on the ground of non-issuance of notice by the Income-tax Officer. The learned Departmental representative also referred to the provisions of section 129 of the Act which allows the succeeding Income-tax authority to continue the proceedings from the stage at which the proceeding was left by his predecessor. The learned Departmental representative vehemently supported the order of the lower authorities. 8. We have heard the rival submissions and gone through the facts and circumstances of the case. We have also perused the assessment records. The crux of the issue in the case is that the notice under section 143(2) of the Act was not issued by the Income-tax Officer in terms of Instruction No. 1 of 2011 [F. No. 187/12/2010-IT(A-I)], dated January 31, 2011. As per the instruction the notice was to be issued by the Income-tax Officer but the notice was issued by the Assistant Commissioner of Income-tax. Therefore in view of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant case was issued by the learned Assistant Commissioner of Income-tax to initiate the assessment proceedings which was later transferred to the Income-tax Officer. However, the Income-tax Officer did not further issue any notice under section 143(2) of the Act. Therefore, the Income-tax Officer assumed the charge without issuing notice and consequently completed assessment under section 143(3) of the Act without jurisdiction. In similar facts and circumstances, the co-ordinate Bench of this Tribunal has decided the issue in favour of the assessee in the case of Ajanta Financial Services Pvt. Ltd. v. ITO in I. T. A. No. 1426/Kol/2011, dated May 21, 2012. We consider it fit to incorporate the relevant portion of the Tribunal order which is as under : "5. We find that the Hon'ble Chhattisgarh High Court in the case of Deputy CIT v. Sunita Finlease Ltd. [2011] 330 ITR 491 (Chhattisgarh) has considered the same Instruction No. 9 of 2004 dated September 20, 2004 which are applicable in the present case also and quash the selection of scrutiny and completion of assessment by holding as invalid. The Hon'ble Chhattisgarh High Court in Sunita Finlease Ltd.'s case (supra) has conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wields the power for its own advantage under the Act is given the right to forgo the advantage when required to wield it in a manner it considers just by relaxing the rigour of the law or in other permissible manners as laid down in section 119. The power is given for the purpose of just, proper and efficient management of the work of assessment and in public interest. It is a beneficial power given to the Board for proper administration of fiscal law so that undue hardship may not be caused to the assessee and the fiscal laws may be correctly applied. Hard cases which can be properly categorised as belonging to a class, can thus be given the benefit of relaxation of law by issuing circulars binding on the taxing authorities.' The facts and circumstances in the present case are that the selection of scrutiny in this case is also completed beyond the prescribed period as prescribed in Instruction No. 9 of 2004 dated September 20, 2004. The assessee's case was selected for scrutiny first time on October 18, 2004 as per copy of order sheet entry, and notice was issued fixing the hearing on October 18, 2004 itself. As per Instruction No. 9 of 2004 dated September 20, 2004 the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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