9911796707
TMI Blog2021 (5) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The assessee carried the matter in appeal. The first appellate authority passed an ex-parte order and confirmed the order of the AO. 3. Aggrieved, the assessee is in appeal before us. 4. The ld. Counsel for the assessee submitted that the ld. CIT(A) was wrong in stating that none appeared on behalf of the assessee before him in response of notices. He drew the attention of the Bench to page-2 of the paper book filed by the assessee, which contained photocopy of the order sheet entry of the ld. CIT(A). In this copy of the order sheet entry it is recorded that on 03.04.2019 Mr. S.S. Lohia, FCA, A/R had filed written submissions and the case was heard. He argued that the ld. CIT(A) has not considered these written submissions and other papers on record and has dismissed the case of the assessee only on the ground that written submissions were not filed and that nobody appeared, both of which are factually wrong. He submitted that the AO in this case made the addition on the ground that share holder of the assessee company did not respond to notices issued u/s 131 of the Act. He submitted that these notices were not served and that the assessee is ready to produce all the share h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relied on the following case laws: i) Hillman Hosiery Mills Pvt. Ltd., Kolkata vs. D.C.I.T.,Circle-11(1), Kolkata in ITA 2634/KOL/2019 dated 12.01.2021. ii) K.A.Wires Ltd., Kolkata vs. I.T.O.,Ward-8(3), Kolkata in ITA 1149/KOL/2019 dated 22.01.2020. 4.6. He submitted that this jurisdictional issue has to be adjudicated and in case he fails on the issue of jurisdiction that, then the assessment be restored to file of the AO for fresh adjudication in accordance with law on the ground of violation of principles of natural justice. 5. The ld. Sr. D/R Mr. Praveen Kishor opposed the contention of the assessee and submitted that the PAN of the assessee was in the jurisdiction of ITO, Ward-4(3), Kolkata, as per the address of the assessee and database of the Department and hence, ITO, Ward-4(3), Kolkata had issued a notice u/s 143(2) of the Act to the assessee. He submits that once the assessee has pointed out that ITO, Ward-4(3), Kolkata does not have jurisdiction, the case was transferred to the AO having jurisdiction and ultimately ITO, Ward-5(3), Kolkata passed the assessment order u/s 143(3) of the Act. He submitted that in such cases it cannot be said that notice u/s 143(2) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Kindly refer to the above. A notice U/s 143(2) of the Income Tax Act, 1961 dated 12/08/2013 was served on for Asst year 2012-13. In this regard and as per our information you do not hold the charge and jurisdiction over our case. As per our understanding I.T.O. Ward 5(3) holds jurisdiction over this case. In view of the above, we submit that notice issued and proceeding undertaken by you in our case is not valid as per law and you are requested to kindly do the needful in this regards. Kindly note that compliance to your notice is without prejudice to our right to challenge the validity of the proceeding including the issue of jurisdiction or limitation. Accordingly, the provisions of section 292BB or any other provisions will not validate the proceeding." (Emphasis ours) 8.1. Admittedly, no notice u/s 143(2) of the Act was issued to the assessee by ITO, Ward-5(3), Kolkata. This fact is admitted by the ITO, Ward-5(1), Kolkata in his letter addressed to the Pr. CIT-2, Kolkata in F. No. I.T.O./W-5(1)/KOL/2020-21/165 dated 17.03.2021. We extract part of this for ready reference: "However from the Notice U/s. 143(2) dated 12/08/2013 attached with your above letter, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T, Circle-1 (1), Durgapur, who had the jurisdiction over the assessee, but he had not issued the notice u/s 143(2) of the Act, within the statutory period prescribed under the Act. Thus, he submits that the assessment is bad in law. 5.1. On merits, he rebutted the findings of the lower authorities. The ld. Counsel for the assessee relied on certain case-law, which I would be referring to as and when necessary. 6. The ld. D/R, on the other hand, submitted that the concurrent jurisdiction vests with the ITO as well as the ACIT and hence the assessment cannot be annulled simply because the statutory notice u/s 143(2) of the Act, was issued by the ITO and the assessment was completed by the ACIT. He further submitted that the assessee did not object to the issue of notice before the jurisdictional Assessing Officer and even otherwise, Section 292BB of the Act, comes into play and the assessment cannot be annulled. On merits, he relied on the orders of the lower authorities. 7. I have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, I hold as fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is dated 31.01.2011 and the assessee has filed the return of income on 29.03.2013 declaring total income of Rs. 50,28,040/-. As per the CBDT Instruction the monetary limits in respect to an assessee who is an individual which falls under the category of 'non corporate returns' the ITO's increased monetary limit was upto Rs. 15 lacs; and if the returned income is above Rs. 15 lacs it was the AC/DC. So, since the returned income by assessee an individual is above Rs. 15 lakh, then the jurisdiction to assess the assessee lies only by AC/DC and not ITO. So, therefore, only the AC/DC had the jurisdiction to assess the assessee. It is settled law that serving of notice u/s. 143(2) of the Act is a sine qua non for an assessment to be made u/s. 143(3) of the Act. In this case, notice u/s. 143(2) of the Act was issued on 06.09.2013 by ITO, Ward-1, Haldia when he did not have the pecuniary jurisdiction to assume jurisdiction and issue notice. Admittedly, when the ITO realized that he did not had the pecuniary jurisdiction to issue notice he duly transferred the file to the ACIT, Circle-27, Haldia on 24.09. 2014 when the ACIT issued statutory notice which was beyond the time lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not dependent on date of accrual of cause of action but on date when it is initiated - Held, yes - Whether once a particular jurisdiction is created, same must be prospective and cannot be retrospective and it has to be interpreted having regard to manner in which it has been sought to be created - Held, yes - Assessee" 9.3. The Hon'ble Supreme Court in the case of CIT vs. Laxman Das Khandelwal [2019] 108 taxmann.com 183 (SC), held as follows:- "7. A closer look at Section 292BB shows that if the assessee has participated in the proceedings it shall be deemed that any notice which is required to be served upon was duly served and the assessee would be precluded from taking any objections 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. 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice u/s 143(2) of the Act, is bad in law. If it is held that the ITO Ward-3(3), Kolkata, has jurisdiction over the assessee, then the assessment order passed by the DCIT, Circle-11(1), Kolkata, would become bad in law as it would be an order passed by an officer who has no jurisdiction. Looking at it either way, we find that the assessment is bad in law." (Emphasis ours) 8.4. This Bench of the Tribunal in the case of K.A.Wires Ltd. (supra) held as follows: "6. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:- 7. The address of the assessee as given in the return of income and as given in the PAN Card, has not undergone any change for the previous assessment years, this year and for the subsequent assessment years. A perusal of the copy of return of income field by the assessee for the Assessment Year 2010-11, 2011-12, 2012-13 & 2013-14, demonstrate that it was filed with the same address, before the ITO, Ward-8(3), Kolkata. There is no dispute that it was only the ITO, Ward-8(3), Kolkata, who had and continue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bordinate to it. (3) In issuing the directions or orders referred to in sub-sections (1) and (2), the Board or other income-tax authority authorised by it may have regard to anyone or more of the following criteria, namely:- (a) territorial area; (b) persons or classes of persons; (c) incomes or classes of income; and (d) cases or classes of cases. (4) Without prejudice to the provisions of sub-sections (1) and (2), the Board may, by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein, - (a) authorise any 1[Principal Director General or] Director General or 14[Principal Director or] Director to perform such functions of any other income-tax authority as may be assigned to him by the Board; (b) empower the 1 [Principal Director General or] Director General or 14[Principal Chief Commissioner or] Chief Commissioner or 14[Principal Commissioner or] Commissioner to issue orders in writing that the powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in respect of any specified area or persons or classes of persons or incomes or classes of income or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g regard to the territorial area, class of person, income or class of the cases. The CBDT under sec. 120(5) of the Act, can also confer jurisdiction on two or more Assessing Officers (concurrent jurisdiction). The CBDT can also by notification confer powers on the authorities for the purpose of assessment as may be notified in the notification. This shows that concurrent jurisdiction can be exercised only when CBDT confers such jurisdiction u/s 120(4) and 120(5) of the Act. 8.3. In accordance with the powers conferred u/s. 120 (1) and 120(2) of the Act, the CBDT issued notification on no. 191/2002(F.No.187/9/2002-ITA-1 dated 30.7.2002) whereby the CBDT conferred the jurisdiction by specifying the Designation of the specific Income Tax Authorities, its Head Quarters, Territorial Area, Persons or classes of persons and cases or class of cases. 8.4. As per the above referred notification, the assessee's being a company, the case fell under the jurisdiction of Commissioner of Income Tax, Kolkata-III, Kolkata vide serial no. 205 of the notification. The jurisdiction of the assessee fell with the Assessing Officer being ITO ward 8(3), Kolkata, who was under the charge of Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the expiry of the time allowed by the notice under sub-section (2) of section 115WD or sub-section (1) of section 142 or under sub-section (1) of section 115WH or under section 148 for the making of the return or by the notice under the first proviso to section 115WF or under the first proviso to section 144 to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier. (c) where an action has been taken under section 132 or section 132A, after the expiry of one month from the date on which he was served with a notice under subsection (1) of section 153A or sub-section (2) of section 153C or after the completion of the assessment, whichever is earlier. (4) Subject to the provisions of sub-section (3), where an assessee calls in question the jurisdiction of an Assessing Officer, then the Assessing Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub-section (2) before the assessment is made. (5) Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer shall have all the po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T's notification, such mistake cannot confer the jurisdiction on such an Assessing Officer. Jurisdiction can be conferred only by notification u/ s 120(1) and 120(2) of the Act only. 8.10. The Ld DR submitted that there was transfer order of the assessee's case for the assessment year in question, from ITO Ward 33(1) to ITO Ward 8(3). There can be a valid transfer order from ITO Ward 33(1) only if he was vested with the jurisdiction over the assessee. As he was never vested with the jurisdiction either by the notification of the CBDT or by any order of the Commissioner of Income tax earlier to the issue of notice u/ s 143(2) of the Act, he could not have validly transferred the case to ITO, Ward-8(3), Kolkata. The file/case was restored to its jurisdictional area. When the said ITO Ward 33(1) was not having valid jurisdiction at the time of issue of notice u/ s 143(2) of the Act, then the notice is bad in law. The transfer of the folder from ITO Ward 33(1) to ITO Ward 8(3) in fact establishes that the revenue realised that the ITO Ward 33(1) had no jurisdiction. 8.11. The Ld DR also raised the issue that u/s 120(4) and 124(5) of the Act, there can be concurrent jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issal of the appeal of the Department by the Tribunal on the aforesaid ground of jurisdiction, the Revenue filed an appeal before the Hon'ble High Court but the same was dismissed. The Revenue thereafter came up with condonation petition and a filed fresh appeal before the ITAT but the same was also dismissed in ITA No. 1768 and 1769/Kol/2006, B-Bench on 15.9.2014. The Revenue filed an appeal before the Hon'ble High Court which was dismissed with the following observations: "The appeal carried by theACIT-39 to the Appellate Tribunal was dismissed as not competent. The order of the Appellate Tribunal was challenged by the Revenue in this Court. This Court did not interfere with the order of the Tribunal and the matter rested there without this Court's order being challenged by the Revenue before the Supreme Court. In the present case, the matter pertains to the same assessment year when the ITO-44 has preferred an appeal where the initial assessment was not done by the ITO-44 but such assessment 'was conducted by the ACIT-39 at a point of time when AC1T-39 lost jurisdiction over the assessee pursuant to the said CBOT Notification 2002 Since there was a fundamenta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been taken a number of other cases some of which are under:- 1. A.L. Ahuja v/s. DCIT SOT (2003) page 475 at page 480 If at the time of issue of notice u/s. 158BC the Assessing Officer had no jurisdiction the assessment is illegal. 2. Income Tax officer vs. Sarkar & Co. 1954 AIR 613 Calcutta. If at the time of filing, of the appeal the ITO had no seisin over he assessee's case and case is transferred by the Commissioner of Income Tax from ITO Ward-III(2) to some other Officer, on the date of filing of the Appeal, the ITO Ward III(2) cannot file the Appeal and the appeal of the department rightly dismissed by the ITAT. 3. Ram Krishna Ramnath vs. Commissioner of Income Tax AIR 1932 Page 65 Nagpur When by notification dated 28th March, 1923 the powers conferred on the ITO should be exercised by the ACIT the Notice issued by the ITO was illegal 4. CIT West Bengal and another vs. Anil Kumar Roy Choudhury and another reported in 66ITR page 367 The decision of the Calcutta High Court in Sarkar & Co. 1954 AIR 613 Calcutta was approved and held that if the case is transferred by the commissioner or The board then the income tax officer from whom the file is transferred sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his address and the new address was mentioned in the return of income filed for subsequent years. The assessee also submitted that he filed Form No.18 with Registrar of Companies, regarding change of address. No separate intimation was given to the Assessing Officer by the assessee regarding change of address. The Court held that mere mentioning of the new address on subsequent return without specifically intimating the Assessing Officer with respect to change of address and without getting the PAN database changed, is not enough and sufficient. The court found that the assessee claimed to have filed a letter for change of address but such letter was never produced before any of the authorities. It was held that on the facts of the case, the notice issued on the address available on the PAN data base was proper and valid service of notice u/s 143(2) of the Act. The court held that the change of address in the database of PAN is must, in case of change of the name of the company and/ or any change in the registered office of the corporate office of the assessee and the same has to be intimated to the Registrar of Companies in the prescribed format i.e., Form 18 and after completing ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
