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TMI Blog2022 (9) TMI 1177X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee's case was neither intimated to the assessee by the concerned AO nor the Ld. CIT(A) has passed any order as required u/s. 127 of the Act by giving an opportunity of being heard to the assessee after recording the reasons. Therefore, the contention of the assessee is that the order passed u/s. 143(3) is bad in law, void-ab-initio and it is not a valid assessment order. We hold that the notice issued by ITO, Ward 2(3), Visakhapatnam is without jurisdiction and non-est in law and void-ab-initio. The assessment order passed by ITO, Ward-1(2), Visakhapatnam u/s. 143(3) of the Act dated 28.03.2014 was without issuance of mandatory statutory notice u/s. 143(2) of the Act by the AO. Hence the grounds raised by the assessee are allowed. - I.T.A. No. 602/Viz/2019 - - - Dated:- 28-7-2022 - SHRI DUVVURU RL REDDY , HON BLE JUDICIAL MEMBER And SHRI S BALAKRISHNAN , HON BLE ACCOUNTANT MEMBER For the Appellant : G. V. N. Hari , AR For the Respondents : S. P. G. Mudaliar , DR ORDER Per Shri Duvvuru RL Reddy , Judicial Member : This appeal is filed by assessee against the order of the Commissioner of Income Tax (Appeals) [in short, CIT(A) ]-2, Guntur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the assessee are legal in nature, we admit the additional grounds for adjudication. 4. Brief facts of the case are that the assessee has filed her return of income for the A.Y. 2011-12 on 23.03.2013 declaring income of Rs. 1,77,478/-. The case was selected for scrutiny under CASS, accordingly, notices u/s. 143(2) and 142(1) of Income Tax Act, 1961 (in short 'Act') were issued on 19.12.2013 and served on the assessee, calling for books of accounts, bills and vouchers and other information. On verification, the Assessing Officer(AO) observed that the assessee has deposited in ING Vysya Bank an amount of Rs. 55,00,000/- on various dates. The assessee submitted that she has raised loans of Rs. 1,00,000/- during the F.Y. 2005-06, Rs. 12 lakhs during F.Y. 2006-07 from M/s. Mirpuri Finance and Rs. 42 lakhs during F.Y. 2009-10 from M/s. MKA Associates. These funds were given in cash during November, 2009 and January, 2010 to Sri P. Janardhan Reddy, Nellore for purchase of site to construct a building for school. However, since the transaction was not materialized, Sri P. Janardhan Reddy has paid back in cash to the assessee during February 2011 and the same was deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was transferred to ITO, Ward-1(4), Visakhapatnam and further transferred to the jurisdictional AO, ITO, Ward-1(2) on 16.12.2013. The Ld. DR submitted that though the AO who had passed the assessment order i.e. ITO, Ward-1(2), Visakhapatnam has not issued any notice, but since the erstwhile AO had issued notice and served on the assessee, the notice is valid, though he was not having any jurisdiction over the assessee. He further argued that the assessment order passed by the ITO, Ward-1(2), Visakhapatnam u/s. 143(3) is valid order and the Ld. CIT(A) has also considered all the aspects and passed the order, therefore, the order passed by the lower authorities to be confirmed. 10. We have heard both the parties and perused the material placed on record. The issue before us is whether the non-issuance of notice u/s. 143(2) of the Act, by the Assessing Officer having jurisdiction over the assessee makes the assessment bad in law. It is an undisputed fact that the notice u/s. 143(2) was issued by the ITO, Ward-2(3) on 27.09.2013 and the same was served on the assessee on 30.09.2013. The case was received by ITO, Ward-1(2), being the jurisdictional officer on 16.12.2013, on transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame 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 Acton 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd-8(3), Kolkata. There is no dispute that it was only the ITO, Ward-8(3), Kolkata, who had and continued to have the jurisdiction over the assessee company. The PAN card also has the same address for all these years. There is no change in address of the assessee company. 7.1. It is also not in dispute that the notice u/s. 143(2) of the Act dt. 06/08/2013 was issued by the ITO Ward-33(1), Kolkata. The assessee does not fall under the jurisdiction of this officer. A perusal of the order sheet entries demonstrate that, after issuance of notice u/s. 143(2) of the Act on 06/08/2013, the ITO, Ward- 33(1), Kolkata, transferred the file to ITO, Ward-8(3), Kolkata on 03/02/2014. Thereafter, ITO, Ward-8(3), Kolkata, issued notice u/s. 143(1) on 10/10/2014 and completed the assessment u/s. 143(3) of the Act on 30/03/2015. The ITO Ward-8(3), Kolkata, who had the jurisdiction over the assessee, did not issue notice u/s. 143(2) of the Act to the assessee. The issue before us is whether the non-issual of notice u/s. 143(2) of the Act, by the Assessing Officer having jurisdiction over the assessee makes the assessment bad in law. 8. We have heard rival contentions. On careful consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 cases or classes of cases, shall be exercised or performed by an Additional Commissioner or an Additional Director or a Joint Commissioner or a Joint Director, and, where any order is made under this clause, references in any other provision of this Act, or in any rule made there under to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint Commissioner or Joint Director by whom the powers and functions are to be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the Joint Commissioner shall not apply. (5) The directions and orders referred to in sub-sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, require two or more Assessing Officers (whether or not of the same class) to exercise and perform, concurrently, the powers and functions in respect of any area or persons or classes of persons or incomes or classes of income or cases or classes of cases; a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Commissioner of Income tax -Kolkata III. 8.5. The Authorities under the Income Tax, after the jurisdiction is conferred in them by virtue of notification u/s. 120(1) and 120(2) of the Act, have to perform their functions as per sec. 124 of the Act. Section 124 of the Act, reads as under: 124. (1) Where by virtue of any direction or order issued under subsection (1) or sub-section (2) of section 120, the Assessing Officer has been vested with jurisdiction over any area, within the limits of such area, he shall have jurisdiction- (a) in respect of any person carrying on a business or profession, if the place at which he carries on his business or profession is situate within the area, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situate within the area, and (b) in respect of any other person residing within the area. (2) Where a question arises under this section as to whether an Assessing Officer has jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (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 powers conferred by or under this Act on an Assessing Officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under subsection (1) or subsection (2) of section 120.. 8.6. The clear and unambiguous words used in section 124(1) of the Act, are that the Assessing Officer should be vested with the Jurisdiction by virtue of an order, notification or directions issued u/s. 120(1) or u/s. 120(2) of the Act. Therefore, only the Officer who has been vested with the jurisdiction conferred u/s. 120(1) and 120(2) of the Act can act as Assessing Officer and issue notice under sec. 143(2) of the Act, since he shall have jurisdiction are the words as has been used in sec. 124(1) of the Act. 8.7. Even though the Assessing Officer have been vested with the Jurisdiction u/s. 124(1) of the Act, by the Board, yet the assessee may dispute such jurisdiction vested u/s. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TO 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 jurisdiction. There is no dispute over that. However there is no direction or order or notification u/s 120(1) or 120(2) of the Act, conferring concurrent jurisdiction to the ITO Ward 33(1) along with ITO Ward 8(3) u/s 120(1) or u/s 120(2) of the Act, which is the condition mentioned in section 120(4) and 120(5) of the Act. 8.12. The Ld. DR for the purpose of his submission also read out para 19 of the decision of ITAT in the case of Rungata Irrigation in ITA No. 1224/K/2019 dated 6.9.2019. The said decisions is in favour of the assessee. The Ld. CIT(DR) has relied on para 19 which is in fact in favour the assessee. The Tribunal has fully analyzed the entire provisions of section 120, 124 and 127 of the Act, in para 13, 14, 15, 17, 18, 21 of the order with regard to the issue of vesting of jurisdiction and transfer etc and held that the issue of notice by non-jurisdictional AO was bad in law and without jurisdiction. 8.13. The Ld. DR argued that the assessee did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ACIT-39 lost jurisdiction over the assessee pursuant to the said CBOT Notification 2002 Since there was a fundamental error, the Appellate Tribunal dismissed the appeal as incompetent since the order of the Assessing Officer who had no jurisdiction to undertake the assessment qua the assessee could never have been found to be legal or resurrected. 8.16. While deciding the issue in the case of Mahalchand Motilal Kothari Co., (supra) the ITAT relied on the Judgement of Calcutta High Court in the case of West Bengal State Electricity Board 278 ITR 218. In that case the Hon'ble Calcutta High Court held that jurisdiction cannot be conferred by default or by agreement and the decision without jurisdiction is a nullity. The Hon'ble High Court also relied on a number of Judgements while arriving at such a conclusion. 8.17. The Hon'ble Allahabad High Court in the case of V.P. Electronics Corporation Ltd. in ITA No. 79 of 2015 dated 1.3.2017 has also taken similar view wherein the provisions of sec. 124(3) were also referred to. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 66 ITR 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 shall have no concern with the appeal. S. Commercial Enterprises vs. State of Orissa 81 sales tax cases page 84 Annulment of assessment is permissible where the taxing authority had no jurisdiction to assessee. 6. Sain Baba Mohansing 90 ITR page 197 Proceedings taken by an authority who lacked jurisdiction is ab initio void. 7. Rajeevkumar Donerria v. Asst. Commissioner of Income Tax 94 ITD page 344 Only the assessing officer who at the relevant time of filing of the appeal has the jurisdiction can file the appeal. An appeal filed by an officer who has no jurisdiction to file the appeal is non est. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dress 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 the said requirement, the assessee is required to approach the Department with the copy of the said document and then the assessee is required to make an application for change of address in the departmental database of the PAN. In the present case the assessee has failed to do so. This judgment is on the issue of service of notice. It is not an issue as to whether the Assessing Officer has jurisdiction over the assessee. As already stated, it is not a case of notice being issued by a non-jurisdictional Assessing Officer. It is therefore clear that the issue in the case before the Hon'ble Supreme Court was not with r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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