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TMI Blog2021 (1) TMI 1001X X X X Extracts X X X X X X X X Extracts X X X X ..... dent Indian living in USA. Assuming wrong jurisdiction by issuing notice u/s 143 (2) by a non-jurisdictional AO and then framing the assessment by jurisdictional AO is an illegality which is not curable under the law and makes the entire assessment proceedings void ab initio. As per instructions issued by the Central Board of Direct Taxes (CBDT), ITO, International Taxation, Ward 2(2)(2) have the jurisdiction u/s 143 (2) and not the ITO, Ward 52 (5). When notice issued by non-jurisdictional ITO, Ward 52 (5) being quasi-judicial authority and assessment framed by jurisdictional ITO, Ward 2(2)(2) is not a mere regularity curable u/s 292BB of the Act because issuance of notice u/s 143 (2) is a foundational step to initiate and complete the assessment proceedings, so when foundation is missing subsequent assessment framed in this case is not sustainable in the eyes of law being void ab initio, hence liable to be quashed. - Decided in favour of assessee. - ITA No.87/Del./2020, ITA No.94/Del./2020 - - - Dated:- 22-1-2021 - Shri N.K. Billaiya, Accountant Member And Shri Kuldip Singh, Judicial Member For the Assessee : Shri V.K. Bindal, Advocate, Shri Sanjiv Bindal, Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the advice of her counsel whereas factually no such gain arose to her since no 'transfer' of asset took place; and also by ignoring the judgment of the Hon'ble Apex Court in Pr.CIT Vs. Lalitaben Govindbhai Patel (2019) 103 taxman.com 10, placed on his record in this regard. Thus, capital gain so computed must be deleted. 3. The CIT (Appeals) otherwise also erred in law and on facts in rejecting the valuation of land as on 1st April, 1981 obtained by the appellant from a government approved registered valuer and decreasing it without referring the matter to DVO, the competent authority, which is mandatory; and also without affording an opportunity to the appellant to rebut the same. Thus, the addition for capital gain so made without any authority of law must be deleted. 4. The CIT (Appeals) erred in law and on facts in recomputing the additions made for Long Term and Short Term Capital Gains at ₹ 54,04,128/- and ₹ 58,45,500/- respectively in AY 2016-17, while ignoring that the only consideration for 'transfer of development rights' of the property received by the appellant from the builder was ₹ 25 lakhs and that too in the period rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his enquiry and investigation beyond the reason for selecting the case for scrutiny on defined issues, as mentioned in the notices u/s 143(2) of the Act and in the impugned assessment order, ii) without obtaining mandatory prior permission of the Pr.CIT for expanding the scope as per the notice issued u/s 142( 1) of the Act in accordance with the directions of the CBDT, is void ab-initio, bad in law and needs to be quashed. 2. The impugned assessment order is bad in law and void ab-initio because the first two notices u/s 143(2) of the Act issued within the prescribed limitation period were only by the non-jurisdictional assessing officers when correct jurisdiction over the case of the assessee (an old NRI lady above 80 years) being Non-Resident under the provisions of the Act and filing returns as NRI for the last number of years was with the AO (International Taxation), New Delhi. Though the assessment has finally been completed by the appropriate AO, but he never issued any notice u/s 143(2) neither within statutory period nor even later, which makes the assessment order bad in law. Thus, the assessment order must be quashed. 8. Ld. DR for the Revenue opposed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1961 Limited Scrutiny (Computer Aided Scrutiny Selection) Sir/Madam/M/s., This is for your kind information that the return of income for Assessment Year 2016-17 filed vide ack. No. 183080090310516 on 31/05/2016 has been selected for Scrutiny. Following issue(s) have been identified for examination: 1. Whether deduction from capital gains has been claimed correctly. 2. In view of the above, I would like to give you an opportunity to produce any evidence/ information which you feel is necessary in support of the said return of income on or before 09.08.2017 at 12:30 PM. 3. The above mentioned evidence/ information is to be furnished online electronically in E-Proceeding facility through your account in e-filing website of Income-tax Department. Further proceedings shall also be conducted electronically(*). A brief note on salient features of E-Proceeding is enclosed. 4. In case you do not wish to produce any evidence/information, as mentioned in para 2, you are requested to intimate the same electronically on or before 09/08/2017. 5. Specific questionnaires/requisition of information or documents would be sent subsequently, if req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the instructions, assessment has to be completed by the jurisdictional ITO only. When notice under section 143 (2) was issued by the non-jurisdictional ITO and assessment was framed by the jurisdictional ITO, the assessment order framed in this case is void ab initio and bad in law. 15. Hon ble Supreme Court in case of Sardar Baldev Singh vs. CIT (1960) 40 ITR 605 (SC) while deciding the identical issue held as under :- A pari materia provision, i.e., section 34 under old Indian Income Tax Act, 1922 (hereinafter referred to as Act, 1922 ) was considered and it was held that A.O. having power to issue notice should be a particular A.O. having jurisdiction over Assessee at the time of issue of requisite notice. If notice issued by any other A.O. or notice is bad for any reason, than such like assessment would be illegal. 16. Hon ble High Court of Punjab Haryana in case of Lt. Col. Paramjit Singh vs. CIT (1996) 220 ITR 446 (Punjab) held that, a notice for reassessment can be issued only by AO who had concluded the proceedings. 17. Hon ble Supreme Court in case of State of Gujarat vs. Rajesh Kumar Chimanlal Barot Anr. AIR 1996 SC 2664 held that, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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