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TMI Blog2020 (5) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... ment framed by Deputy Commissioner of Income Tax, Circle10(2), Kolkata is invalid and void, and hence we quash the assessment order u/s 143(3) dated 28.03.2015. Since we have quashed the assessment order and cross objections raised by the assessee are allowed on the legal issue therefore we do not adjudicate the Revenue s appeal on merits. - Decided in favour of assessee. - ITA No.1346/Kol /2016, C.O. No. 36/Kol/2019 - - - Dated:- 18-3-2020 - SHRI S.S.GODARA AND DR. A.L.SAINI, JJ. Appellant by :Shri Ram Bilash Meena, CIT DR Respondent by :Shri Somnath Ghosh, Advocate ORDER Dr. A. L. Saini, J. The captioned appeal filed by the Revenue and the cross objection filed by the assessee , pertaining to assessment year 2012-13, are directed against the common order passed by the Commissioner of Income Tax (Appeal)-4, Kolkata, in appeal no. 469/CIT(A)-4/Circle-10(2)/Kol/15-16, which in turn arise out of an assessment order passed by the Assessing Officer u/s143(3) of the Income Tax Act, 1961 (in short the Act ) dated 28/03/2015. 2. The grounds of appeal raised by the revenue are as follows: 1. Whether on the facts and in the circumstances of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to proceed on the assessment proceedings is invalid for want of jurisdiction as the pre-conditions for initiation of the proceedings as stipulated therein are not fulfilled in the circumstances of the case. 4. First, we shall deal with cross objections raised by the assessee. 5. The cross objection filed by the assessee are barred by limitation by 600 days. The assessee filed a petition for condonation of delay requesting the Bench to condone the delay. The reasons given in the petition are as follows: 3. That your appellant had filed the instant appeal disputing the said appellate order. However, no intimation of filing such appeal was received by your respondent at that time. It was only when the appeal was posted for hearing on 01/01/2018, the respondent was appraised of such appeal is pending against it. 4. That your respondent submits that the ground raised in the instant cross objection is a legal ground which harps the jurisdiction of the Ld. Deputy Commissioner of Income Tax, Circle-10(2), Kolkata in framing the assessment order u/s 143(3) of the Act. It was the bonafide belief of your respondent that issue can be raised by virtue of Rule 27 of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jected. The ld. D.R. for the revenue also drew our attention to the last page of the assessment order which is reproduced below : Therefore, ld. D.R. argued that although notice u/s 143(2) was issued by Income Tax Officer, Ward-5(2), Kolkata, who does not have jurisdiction to issue notice u/s 143(2) of the Act, but the assessment u/s 143(3) was framed by the correct and appropriate authority i.e. Deputy Commissioner of Income Tax, Circle-10(2), Kolkata. Hence ld. D.R. stated before the Bench that assessment u/s 143(3) was framed by the correct and appropriate authority i.e. DCIT, Circle-10(2), Kolkata, who has proper jurisdiction over the assessee therefore assessment order framed u/s 143(3) should not be rejected. 7. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials available on record. The ld. D.R. submits before us that assessee has raised first time, the jurisdictional issue which was not there before the lower authorities therefore it should not be ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der s. 201(1A) was never meant to be mandatory by the legislature. 1.2 The second point that has been raised is that the officer who had passed the order had no jurisdiction and as such the order passed is a nullity and cannot be enforced so far as the asst. y₹ 1983-84, 1984-85, 1986-87 and 1987-88 are concerned. So far as the assessment year 1985-86 is concerned, the same was passed without giving opportunity and, therefore, cannot be sustained on account of infraction of the principles of audi alteram partem when such order visits the assessee with penal/civil consequences. The points opposed : 2. Mr. Agarwal, on the other hand, contended that the provisions relating to ss. 234A, 234B and 234C fixing liability to pay interest are dependent on and have to be interpreted in the context in which such interest is chargeable. According to him, these are simple defaults on the part of the assessee and the interest that is chargeable in effect is coercive measure to compel the assessee to adhere to the time schedule. The question of payment of interest would arise in all these cases only when the assessment is complete and it is found that any amount of tax becomes payabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Points replied : In reply, Dr. Pal referred to the decision in National Thermal Power Corpn. Ltd. vs. CIT (1999) 157 CTR (SC) 249 : (1998) 229 ITR 383 (SC) in order to contend that a point of law can be agitated even at the appellate stage though not raised earlier if it involves question of law arising from the facts found by the authorities. He also sought to distinguish the decisions cited by Mr. Agarwal. Points of law : If can be raised in appeal for the first time : After having heard the learned counsel for the parties, admittedly, it appears that this point of jurisdiction was taken before the learned Tribunal for the first time. At the same time, it is also apparent from the records that for the purpose of deciding the question, no amount of facts need be gone into. It can be decided on the basis of the facts already found by the authority concerned and the question is a pure question of law relating to jurisdiction, which goes to the root of the jurisdiction exercised. In case an order is passed without jurisdiction, the same is a nullity. Jurisdiction can never be conferred by agreement or by default or acquiescence, as was held by the apex Court in National Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO (tax deducted at source), Ward-21(1) All matters relating to all the sections in Chapter XVII-B except s. 195 and also relating to s. 221 of the IT Act, 1961, for the assessment deemed to be in default in respect of the tax under sub-s. (1) of s. 201 of the said Act, in respect of all the assessees who are or would come under the jurisdiction of CIT, West Bengal-I (excepting mofussil districts under his jurisdiction) and West Bengal-VII, Calcutta. 6.2 It appears that the subject jurisdiction was created under s. 120. Sec. 120, sub-s. (1) prescribes that the Board may confer such jurisdiction to such officer as it may deem fit. It may also delegate the power under s. 120(1) to some other officers in terms of sub-s. (2) thereof by reason whereof the officer so authorised can confer jurisdiction which has since been done in the present case. Once a particular jurisdiction is created, the same must be prospective and cannot be retrospective and it has to be interpreted having regard to the manner in which it has been sought to be created. From the said creation, it appears that all matters relating to all sections in Chapter XVII-B, except s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 8th May, 1989. Therefore, this decision does not help Mr. Agarwal in his submission. 6.5 He further relied on the decision in CIT vs. Eastern Development Corpn. (1982) 135 ITR 516 (Cal). In this case, it was held that the amendment would not take away the jurisdiction in respect of proceedings pending before the officer and since it did not provide for transfer of such proceedings to the officer on whom the jurisdiction was created. On the same principle, this decision also does not help Mr. Agarwal to support his contention. He then relied on CIT vs. DhadiSahu (1992) 108 CTR (SC) 444 : (1993) 199 ITR 610 (SC). In this case, it was held that by reason of amendment, the jurisdiction of the officer before whom the proceeding was pending did not cease to lose jurisdiction since the said officer was within his jurisdiction when the proceeding was initiated. Therefore, this decision also does not help us in the context with which we are dealing. Mr. Agarwal then relied upon Lt. Col. Paramjit Singh vs. CIT (1996) 135 CTR (P H) 8 : (1996) 220 ITR 446 (P H). This is also a case where the proceeding was initiated by the officer when it had jurisdiction and it would continue to have the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1.2011. As per the instruction the notice was to be issued by the ITO but the notice was issued by the ACIT. Therefore in view of above the notice issued by the ACIT is invalid and consequently the assessment framed by the ITO becomes void. Now the issue before us arises so as to whether the notice issued by the ACIT u/s. 143(2) of the Act is without jurisdiction in terms of the aforesaid instruction. In this connection we consider it fit to incorporate the relevant portion of Instruction No. 1/2011 dated 31.1.2004 of the CBDT Circular in respect of issuance of notice to non-corporate assesses which reads as under :- 'INSTRUCTION NO. 1/2011 [F.No. 187/12/2010-IT(A-I)] , DATED 31-12011 Reference have been received by the Board from a large number of taxpayers, especially from mofussil areas, that the existing monetary limits for assigning cases to ITOs and DCs/ACs is causing hardship o the taxpayers, as it results in transfer of their cases to a DC/AC who is located in a different station, which increases their cost of compliance. The Board had considered the matter and is of the opinion that the existing limits need to be revised to remove the abovementioned hardship. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra) has considered section 119 of the Act by stating that Section 119 of the Act, empowers the Central Board of Direct Taxes to issue orders, instructions or directions for the proper administration of the Act or for such other purposes specified in sub-section (2) of the section. Hon'ble High Court further held that such an order, instruction or direction cannot override the provisions of the Act. Direction by issuing instructions to the officers for the process of selection of cases for scrutiny for returns for a particular financial year and allowing time of three months for completion of the same cannot be considered to override or detract from the provisions of the Act. It only directs that the above exercise should be completed within three months of the date of filing of return by the assessee, which amounts to an assurance to the assessee that the return filed by him can be scrutinized by the Assessing Officer within three months of filing of the return. The Hon'ble High Court, dismissing the appeal held that Instruction No. 9 of 2004 dated September 20, 2004, was applicable in the present case, in view of the specific stipulation in the circular that for return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction No. 9/2004 dated 20.09.2004, the process of selection of cases for scrutiny for returns filed up to 31.03.2004, in the present case assessee filed its return of income on 01.12.2003 must be completed by 15.10.2004. The factual position as noted by CIT (A) in his appellate order that notice u/s. 143(2) is dated 10.10.2004, is not supported by Ld. Sr. DR at the time of hearing rather assessee contested that this finding of fact is erroneous and actual case was selected by issuing notice as on 18.10.2004. Even the basis of recording this fact is only from the assessment order wherein it is mentioned that notice u/s. 143(2) is dated 10.10.2004 and the same was served on the assessee on 19.10.2004 fixing the date of hearing on 16.12.2004. When going through the order sheet entry, which is taken by assessee from the assessment records clearly reveals that factually notice u/s. 143(2) was first time issued on 18.10.2004 and not on 10.10.2004. This fact has not been contested by Ld. Sr. DR. Respectfully following the decision of Hon'ble Chhatisgarh High Court in the case of Sunita Finlease Ltd. (supra), we quash the issuance of notice u/s. 143(2) of the Act and subsequent assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly upto ₹ 15 lacs ; and the ITO doesn't have the jurisdiction to conduct assessment if it is above ₹ 15 lakhs. Above ₹ 15 lacs income declared by a non- corporate person i.e. like assessee, the pecuniary jurisdiction lies before AC/DC. In this case, admittedly, the assessee an individual (non corporate person) who undisputedly declared income of ₹ 50,28,040/- in his return of income cannot be assessed by the ITO as per the CBDT circular (supra). From a perusal of the assessment order, it reveals that the statutory notice u/s. 143(2) of the Act was issued by the then ITO, Ward-1, Haldia on 06.09.2013 and the same was served on the assessee on 19.09.2013 as noted by the AO. The AO noted that since the returned income is more than ₹ 15 lacs the case was transferred from the ITO, Ward-1, Haldia to ACIT, Circle-27 and the same was received by the office of the ACIT, Circle-27, Haldia on 24.09.2014 and immediately ACIT issued notice u/s. 142(1) of the Act on the same day. From the aforesaid facts the following facts emerged: i) The assessee had filed return of income declaring ₹ 50,28,040/-. The ITO issued notice under section 143(2) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e adjudicated because it is only academic. Therefore, the additional ground raised by the assessee is allowed. From the above-mentioned precedents, it is abundantly clear that notice u/s 143(2) of the Act is a sine qua non for an assessment to be framed u/s 143(3) of the Act, which must be issued by the jurisdictional Assessing Officer. The CBDT has issued instruction no. 01/2011 wherein the CBDT has declared the monetary limits for assigning the cases for the purpose of scrutiny u/s 143(3) of the Act by the Income Tax Officer, Deputy Commissioner and Assistant Commissioner. As per CBDT instruction no. 01/2011 the scrutiny notice u/s 143(2) must be issued by the Deputy Commissioner or Assistant Commissioner, but in the assessee s case the scrutiny notice u/s 143(2) was issued by Income Tax Officer, Ward-5(2), Kolkata therefore the assessment framed by Deputy Commissioner of Income Tax, Circle10(2), Kolkata is invalid and void, and hence we quash the assessment order u/s 143(3) dated 28.03.2015. Since we have quashed the assessment order and cross objections raised by the assessee are allowed on the legal issue therefore we do not adjudicate the Revenue s appeal on merits. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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