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TMI Blog2022 (6) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... hen such an assessment order was bad in law. See BHAGYALAXMI CONCLAVE PVT. LTD., DHANLAXMI CONCLAVE PVT. LTD., BINDHYAWASINI DEVELOPERS PVT. LTD. VERSUS DCIT, CIRCLE-13 (1) , KOLKATA [ 2021 (2) TMI 181 - ITAT KOLKATA] . Thus the assessment order passed by the Assessing Officer (DCIT) was bad in law for want of issuance of notice u/s 143(2) of the Act. Jurisdiction of Assessing Officers - assessment order passed by the DCIT, Kolkata - Since, in this case, the assessee not only mentioned in the return of income his address as Gandhidham, Gujarat but also brought the said fact into the notice of concerned authorities well in advance in response to the notice u/s 142(1) itself, stating therein that the principal place of business of the assessee was at Gandhidham and the entire operation of the assessee was carried out in the State of Gujarat only, however, neither the Commissioner acted on the aforesaid objection/application of the assessee nor did the DCIT/Assessing Officer referred the matter to the competent authority for transfer of the case to the officer of competent territorial jurisdiction. In view of the provisions of section 124 of the Act, the DCIT, Kolkata did not have any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 was without jurisdiction and bad in law and thus the entire assessment order be quashed and or cancelled." 2. A perusal of additional/legal grounds of appeal reveals that the assessee through these grounds has contested the jurisdiction of the concerned Assessing Officer/Deputy Commissioner of Income Tax (DCIT) to frame assessment order dated 25.03.2015 u/s 143(3) of the Act. The ld. counsel for the assessee has submitted that the concerned Assessing Officer did not have jurisdiction to frame the assessment firstly, on the ground that a notice u/s 143(2) was mandatorily required to be issued by the concerned Assessing Officer to assume jurisdiction to frame assessment. He in this respect has relied upon Hon'ble Supreme Court in the case of ACIT vs. M/s Hotel Blue Moon reported in 321 ITR 362(SC); secondly, the ld. counsel has submitted that even the concerned DCIT, Kolkata did not have territorial jurisdiction to pass the impugned assessment order. 3. Since assessee through the additional legal grounds is hitting at jurisdiction of the concerned Assessing Officer to frame the impugned assessment order, therefore, we deem it proper to admit the aforesaid additional legal gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assume jurisdiction to frame assessment u/s 143(3) of the Act. He, in this respect, has relied upon the decision of the Hon'ble Supreme Court in the case of ACIT vs. M/s Hotel Blue Moon (supra). The ld. counsel, therefore, has submitted that in this case the concerned DCIT did not issue any notice u/s 143(2) of the Act before proceeding to frame assessment u/s 143(3) of the Act. He has submitted that since the concerned ITO, Ward-1(1) did not have jurisdiction to issue notice u/s 143(2) of the Act as such the said notice issued by him did not have any legal sanctity. He, therefore, has submitted that the assessment framed by the DCIT, in this case, was bad in law for want of issue of notice u/s 143(2) of the Act. The ld. DR could not rebut the aforesaid legal position based on aforesaid factual aspect put by the ld. counsel for the assessee. However, she has relied upon the findings given by the Assessing Officer in the assessment order. 5. We have considered the rival contentions of ld. representatives of both the parties and gone through the records. Before proceeding further, it will be appropriate to refer to section 120 of the Act which, for the sake of ready reference, is r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered the matter and is of the opinion that the existing limits need to be revised to remove the abovementioned hardship. An increase in the monetary limits is also considered desirable in view of the increase in the scale of trade and industry since 2001, when the present income limits were introduced. It has therefore been decided to increase the monetary limits as under: Income Declared (Mofussil Income Declared areas) (Metro cities) ITOs ACs/DCs ITOs DCs/ACs Corporate returns Upto Rs. 20 lacs Above Rs. 20 lacs Upto Rs. 30 lacs Above Rs. 30 lacs Non-corporate returns Upto Rs. 15 lacs Above Rs. 15 lacs Upto Rs. 20 lacs Above Rs. 20 lacs Metro charges for the purpose of above instructions shall be Ahmedabad, Bangalore, Chennai, Delhi, Kolkata, Hyderabad, Mumbai and Pune. The above instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1-4-2011." 7. A perusal of the above provisions of law along with the CBDT Instructions would show, in this case, the competent officer to proceed with the assessment by way of issue of notice u/s 143(2) of the Act was DCIT/ACIT, whereas, the notice u/s 143(2) has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 noncorporate assessee and the income returned is above Rs.15,00,000/- and whereas, the statutory notice u/s 143(2) of the Act, was issued on 29/09/2016, by the Income Tax Officer, ward-1(1), Durgapur, who had no jurisdiction of the case. He submitted that the assessment order was passed by the ACIT, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.09.2013 as noted by the AO. The AO noted that since the returned income is more than Rs. 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 Rs.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 Rs. 15 lacs transferred the case to ACIT, Circle-27, Haldia on 24.09.2014. iii) On 24.09.2014 statutory notices for scrutiny were issued by ACIT, Circle-27, Haldia. 6. We note that the CBDT Instruction 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee - 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 out of facts found by authorities and which went to root of jurisdiction can be raised for first time before Tribunal - Held, yesWhether jurisdiction of Assessing Authority is 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 K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice 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 appeal of the assessee." 6. Respectfully following the propositions of law laid down in these orders stated above, we hold that the orders are bad in law for the reason that the assessing authority passed the order u/s 143(3) of the Act i.e. DCIT-13(1), Kolkata has not issued a notice u/s 143(2) of the Act and also for the reason that the jurisdiction of these cases lies with the ITO and not the DCIT. Hence all the orders passed by the ld. CIT(A) in these four cases are hereby quashed and the appeals of the assessees are allowed." 8. In view of above disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to whether an Assessing Officer has jurisdiction to assess any person, the question shall be determined by the [Principal Director General or] Director General or the [Principal Chief Commissioner or] Chief Commissioner or the [Principal Commissioner or] Commissioner; or where the question is one relating to areas within the jurisdiction of different [Principal Director General or] Directors General or [Principal Chief Commissioner or] Chief Commissioners or [Principal Commissioners or] Commissioners by the [Principal Director General or] Director General or the [Principal Chief Commissioners or] Chief Commissioners or the [Principal Commissioners or] Commissioners concerned or, if they are not in agreement, by the Board or by such [Principal Director General or] Director General or [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner as the Board may, by notification in the Official Gazette, specify. (3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer- (a) where he has made a return [under sub- section (1) of section 115WD or] under sub-section (1) of section 139, after the expiry of one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (4) provides that 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 to the competent authority as provided under sub-section (2), before the assessment is made. In this case, the return of income was filed by the assessee at the address of Gandhi Dham, Gujarat. The ld. counsel has also invited our attention to paper-book page 112 to show that the assessee had written letter dated 17.12.2014 to the Commissioner of Income Tax-1, Kolkata with a copy of the same to the Deputy Commissioner of Income Tax, Circle-1(1), Kolkata (Assessing Officer) to submit that the registered office of the assessee company is in the process of being shifted from Kolkata to Gandhidham, Gujarat and further that the principal place of business of the assessee was Plot No.6, Sector 10/C, GIDC Area, Gandhidham-370201. It has been further requested in the letter that the entire business operations of the assessee were being carried out in the State of Gujarat and that the principal place of business of the assessee being in Gandhidham, Gujarat, the jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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