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TMI Blog2021 (4) TMI 1006X X X X Extracts X X X X X X X X Extracts X X X X ..... common, for the sake of convenience, they are heard together and disposed off by way of this common order. First we take up the assessee's appeal for the Assessment Year 2012-13 in ITA No. 2129/Kol/2019 2. The assessee is a private limited company engaged in the business of investments in shares & securities during the financial year 2010-11, corresponding Assessment Year 2011-12. During the Financial Year ended on 31st March, 2011 (Assessment Year 2011-12) the company has not earned any exempt income. During the course of scrutiny assessment proceedings, to a query from the Assessing Officer, the assessee submitted that the investment is unquoted equity shares are not divided yielding one but are held to earn appreciation in their value. The appreciation in unquoted equity shares is taxable under the Income Tax Act. The company has not borrowed any fund. Thus the question of interest on borrowings attributable to such investments does not arise. The Assessing Officer without assigning any reason, refused to accept the explanation of the assessee. The submission given by the assessee stated the rationale of its offer, based on facts and legal aspects. The Assessing Officer reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment order was passed without service of any valid notice u/s 143(2) of the IT Act 1961 and therefore the assessment order passed is bad in law and should be quashed. 3. That in the facts and circumstances of the case, the assessment order u/s 143(3) of the IT Act 1961 was without jurisdiction and bad in law and thus the entire assessment order be quashed and or cancelled." 4.2. On the additional grounds, the ld. Counsel for the assessee submitted that the assessee is challenging the jurisdiction of the Assessing Officer to issue notice u/s 143(2) of the Act and alternatively, the jurisdiction of the Assessing Officer, who has completed the assessment u/s. 143(3) of the Act. He submitted that the jurisdictional issues go to the root of the matter and as no facts need be enquired into, the legal grounds may be admitted by the ITAT. For this proposition, he relied on the judgment of the Hon'ble Supreme Court in the case of NTPC vs. CIT reported as 229 ITR 383.(SC) 5.1. The ld. D/R, could not controvert these submissions of the assessee. Hence, we admit these additional grounds of appeal. 6. The ld. Counsel for the assessee, Shri Miraj D. Shah, submitted that the notice u/s 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er on 31/07/2015, the DCIT, Circle-11(1), Kolkata, had issued notice u/s 142(1) of the Act to the assessee. The DCIT, Circle-11(1), Kolkata, completed assessment u/s 143(3) of the Act on 14/03/2016. The issue is whether an assessment order passed by DCIT, Circle-11(1), Kolkata, is valid as admittedly, he did not issue a notice u/s 143(2) of the Act, to the assessee. This issue is no more res-integra. This Bench of the Tribunal in the case of Soma Roy vs. ACIT in ITA No. 462/Kol/2019; Assessment Year 2015-16, order dt. 8th January, 2020, under identical circumstances, held as under:- "5. After hearing rival contentions, I admit this additional ground as it is a legal ground, raising a jurisdictional issue and does not require any investigation into the facts. The ld. Counsel for the assessee submitted that as per Board Instruction No. 1/2011 [F. No. 187/12/2010-IT(A-I)], dt. 31/01/2011, the jurisdiction of the assessee is with the Assistant Commissioner of Income Tax, Circle-1, Durgapur, as the assessee is a non-corporate assessee and the income returned is above ₹ 15,00,000/- and whereas, the statutory notice u/s 143(2) of the Act, was issued on 29/09/2016, by the Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 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 Act on 06.09.2013. ii) The ITO, Ward-1, Haldia taking note that the income returned was above ₹ 15 lacs transferred the case to ACIT, Circl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is allowed. 9.1. This Bench of the Tribunal in the case of Krishnendu Chowdhury vs. ITO reported in [2017] 78 taxmann.com 89 (Kolkata-Trib.) held as follows:- "Return of income of assessee was ₹ 12 lakhs - As per CBDT instruction, jurisdiction for scrutiny assessment vested in Income-tax Officer and notice under section 143(2) must be issued by Income-tax Officer, Ward-I, Haldia and none other - But, notice was issued by Asstt. Commissioner, Circle Haldia much after CBDT's instruction and knowing fully well that he had no jurisdiction over assessee - Whether, therefore, notice issued by Asstt. Commissioner was invalid and consequently assessment framed by Income- tax Officers becomes void since issue of notice under section 143(2) was not done by Income-tax Officers as specified in CBDT instruction No. 1/2011." 9.2. The Hon'ble High Court of Calcutta in the case of West Bengal State Electricity Board vs. Deputy Commissioner of Income Tax, Special Range - I, reported in [2005] 278 ITR 218 (Cal.) has held as follows:- "Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Assessment years 1983-84 to 1987-88 - Whether a question of law arising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to apply, the notice must have emanated from the department. It is only the infirmities in the manner of service of notice that the Section seeks to cure. The Section is not intended to cure complete absence of notice itself." 10. Respectfully following the propositions of law laid down in all these case- law and applying the same to the facts of the case, we hold that the assessment order is bad in law for the reason that the Assessing Officer having jurisdiction over the assessee, has not issued a notice u/s 143(2) of the Act as required by the statute. Notice issue by the officer having no jurisdiction of the assessee is null and void. When a notice is issued by an officer having no jurisdiction, Section 292BB of the Act, does not comes into play. Coming to the argument of the ld. D/R that objection u/s 124(3) of the Act has to be taken by the assessee on rectifying notice u/s 143(2) of the Act from a non-jurisdictional assessing officer, I am of the view that I need not adjudicate this issue, as I have held that non-issual of statutory notice/s 143(2) of the Act by the jurisdictional Assessing Officer makes the assessment bad in law. Under these circumstances, we allow this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 292BB of the Act be noticed in its entirety: "292BB Notice deemed to be valid in certain circumstances - Where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was- (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee had raised such objection before the completion of such assessment or reassessment." 12. Even if the provision does not carry a non-obstante clause, since Section 292BB is a provision of general application, it would be applicable in all situations; but only in so far as it proclaims to operate. Section 292BB of the Act, read in the context of several provisions of the Act which mandatorily require notices to be issued in divers situ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner. According to Mr. Mahabir Singh, learned Senior Advocate, since the Respondent had participated in the proceedings, the provisions of Section 292BB would be a complete answer. On the other hand, Mr. Ankit Vijaywargia, learned Advocate, appearing for the Respondent submitted that the notice under Section 143(2) of the Act was never issued which was evident from the orders passed on record as well as the stand taken by the Appellant in the memo of appeal. It was further submitted that issuance of notice under Section 143(2) of the Act being prerequisite, in the absence of such notice, the entire proceedings would be invalid. 8. The law on the point as regards applicability of the requirement of notice under Section 143(2) of the Act is quite clear from the decision in Hotel Blue Moon's case (supra). The issue that however needs to be considered is the impact of Section 292BB of the Act." 14. Applying the propositions of law laid down in the above case-law to the facts of the case on hand, we have to necessarily hold that the passing of assessment order u/s 143(3) of the Act, withou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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