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TMI Blog2024 (2) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... any A.O or AOs (whether with or without concurrent jurisdiction) to any other A.O or AOs (whether with or without concurrent jurisdiction), the requirement of passing an order of transfer under the aforesaid statutory provision is required and the same cannot be dispensed with. We may further observe that the order of transfer of the assessee s case by the ITO-Ward 1(2), Raipur to DCIT-Circle 1(1), Raipur on 05.02.104 was much prior to Notifications No. 1/2014-15, dated 15.11.2014 and Notification No. 1/2014-15, dated 15.11.2014, based on which jurisdiction over the case of the assessee was vested with the DCIT/ACIT- 3(1), Raipur, as brought to our notice by the A.O. As the assessment in the case of the assessee had been framed by the ACIT, Circle-3(1), Raipur, who in light of the CBDT Instruction No.1/2011 (supra) r.w. CBDT Instruction No.6/2011 was not vested with any jurisdiction for framing of assessment in the case of the assessee who had declared Nil income; therefore, the order so passed by him cannot be sustained and is liable to be struck down on the said count itself. Thus, the Ground of Appeal No.1 raised by the assessee is allowed in terms of my aforesaid observat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the Learned ACIT-3(1), Raipur has erred on facts and in law by making an addition of Rs. 29,25,000/- by invoking Section 69 of the Income tax Act, 1961 on several grounds, the addition so made is illegal, arbitrary and contrary to facts and law, hence, it is prayed that the addition of Rs. 29,25,000/- made to the total income may kindly be directed to be deleted. 4. Without prejudice to the above, alternatively, it is submitted that on the facts and in the circumstances of the case, the Learned CIT (Appeal) is not justified in passing the order and confirming the addition in an ex-parte order without providing sufficient opportunity of being heard to the assessee and thereby violating the principles of natural justice. Hence, the impugned order passed by the Learned CIT (Appeal) is liable to be declared as illegal and bad-in-law. It is prayed that the order passed by the Learned CIT (Appeal) may kindly be declared as illegal and bad-in-law on account of violation of principles of natural justice. 5. The Appellant craves leave to add, amend, alter vary and / or withdraw any or all the above grounds of Appeal. 2. Succinctly stated, the assessee, who is engaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention further, the Ld. AR had taken us through the CBDT Instruction No.1/2011 [F. No.187/12/2010-IT(A-1] dated 31.01.2011 and CBDT Instruction No.6/2011 [F.NO.187/12/2010-ITA-I] dated 08.04.2011, Page 1 2 of APB. The Ld. A.R submitted that on a conjoint perusal of the aforesaid CBDT Instructions, the pecuniary jurisdiction for framing an assessment in the case of an assessee who had declared an income up to Rs. 15 lac was exclusively vested with the ITOs. The Ld. A.R submitted that as the present assessee had filed his return of income declaring Nil income, the jurisdiction to frame assessment in his case was exclusively vested with the ITO, Ward-1(2), Raipur. The Ld. A.R further submitted that as neither the A.O having jurisdiction over his case, i.e., ITO, Ward-1(2), Raipur had issued any notice u/s.143(2) of the Act nor framed the assessment, therefore, the assessment order passed u/s.147 r.w.s. 143(3) dated 28.10.2016 by the ACIT, Circle-3(1), Raipur was liable to be struck down for want of valid assumption of jurisdiction on his part. The Ld. A.R in support of his aforesaid contention, had relied on the following judicial pronouncements: (i) Durga Manikant Traders Vs. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were transferred from one Range to another Vide CIT-1, Raipur's Notification No 1/2014-15 dated 15/11/2014 and subsequent JCIT, Range-3 Raipur's Notification No 1/2014-15 dated 15/11/2014. Due to this change, the jurisdiction of the above assessee was transferred to DCIT/ACIT-3(1), Raipur. Since the Order u/s 120 of the Act was passed transferring one territory from one Range to another, specifying the jurisdiction, (iv) In the case of Bal Chand Jain Sons Vs. DCIT, it is held by Hon'ble HC of Allahabad that Provisions of sub-section (3) of section 124 bar an assessee from raising question of jurisdiction before first appellate authority or Tribunal if such an objection has not been raised before assessing authority at very first stage. [2014] 41 taxmann.com 524 (Allahabad) (v) In the case of Farrukhabad Investment India Ltd. Vs. ACIT, Hon'ble Agra Bench of ITAT held that Where additional ground of grievance against Assessing Officer's order was not raised before Commissioner (Appeals) raising of same before Tribunal was not sustainable. [2013] 34 taxmann.com 220 (Agra - Trib.) g) Considering the above facts and circumstances of the case the object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in initiating reassessment proceeding in case of assessee. [51 taxmann.com 383 (SC)/[2014] 227 Taxman 374] (iii) In the case of Devi Electronics Pvt. Ltd. Vs. ITO, Hon'ble Mumbai HC held that the likelihood of a different view when materials exist of forming a reasonable belief of escaped income, will not debar the AO from exercising his jurisdiction to assess the assessee on reopening notice. [2017 -TIOL-92-MUM-IT] g) The assessment is not reopened on the basis of satisfaction of the Assessing Officer of the searched person that the seized material/ asset belongs to assessee but on the basis of an information received from the investigation wing (Central Circle, Raipur). All conditions for issue notice u/s 148 of I. T. Act were fulfilled such as recording the satisfaction and obtaining sanction u/s 151. The information emanated from search and based on such information, the AO had reason to believe that, income escaped assessment, for the year under consideration. He submitted that, from the seized material marked LPS-1/1(Page No-41), it was noted that, amount of Rs. 29,25,000/- was shown as cash transaction by the assessee. It is submitted that, on the basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lipping the powers available under S. 147 in search cases per se is not found to be reconcilable to the scheme of the Act. In the light of scheme of the Act narrated above, the AO of the assessee cannot be compelled to pursue remedy necessarily under s.153C of the Act in exclusion to remedy available to the AO under s.147 of the Act. Reliance is also placed on decision of Hon'ble Karnataka High Court in case of Gudwill Housing Ltd. Vs. ITO reported in (2014) 45 taxmann.com 144 wherein the Hon'ble High Court observed and held as under : It is true that Section 158BD states that where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under Section 132, then the books of accounts, other documents or assets seized shall be handed over to the Assessing Officer having jurisdiction over such other person and that the Assessing Officer shall proceed under Section 158BC against such other person mind. the provisions -of- these Chapter shall apply accordingly. This. provision by itself in our opinion, is not sufficient to hold that the Assessing Officer, on the facts and in the circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch of the ITAT, Raipur, in the case of Durga Manikanta Traders Vs. ITO, ITA No.59/RPR/2019 dated 12.12.2022. Also, the objections that have been raised by the A.O as regards the validity of the jurisdiction assumed by the A.O, i.e., ACIT, Circle-3(1), Raipur, without raising of any objection by the assessee within the stipulated time period contemplated in Section 124(3)(a) of the Act had also been looked into at length in the aforementioned order. For the sake of clarity, the relevant observations of the Tribunal are culled out as follows: 13. We have heard the ld. authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 14. Admittedly, it is a matter of fact borne from record that the CBDT vide Instruction No. 1/2011, dated 31.01.2011 had, inter alia, revised the existing monetary limits for assigning cases to ITOs and DCs/ACs. For the sake of clarity, we deem it fit to cull out the CBDT Instruction No.1/2011 dated 31.01.2011,Page 1 of APB, which reads as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.01.2011 that was applicable w.e.f. 01.04.2011 duly applied to his case. Also, as per the areas earmarked in the aforesaid Instruction No.1/2011, dated 31.01.2011 as the assessee is not located in any of those cities/stations which have been held to be metro cities, therefore, his case would be as that of a non-corporate assessee who is located in a mofussil area. Also, as is borne from the record the assessee had filed his return of income for the A.Y.2014-15 declaring an income of Rs. 6,57,380/-. 15. On the basis of the aforesaid facts, we are of the considered view, that as stated by the Ld. AR, and, rightly so, as per the CBDT Instruction No.1/2011, dated 31.01.2011 the jurisdiction over the case of the assessee who is located in a mofussil area i.e. Bhilai and had filed a non-corporate return for the year under consideration, i.e., A.Y.2014-15 declaring an income of Rs. 6,57,380/- was vested with the ITO, Ward 1(1), Bhilai. Although notice u/s. 143(2), dated 24.09.2015 had been issued within the stipulated time period, i.e., within six months from the end of the relevant assessment year which would have expired as on 30.09.2015, however, the same was issued by the DCIT-1(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of ACIT, Circle-1 Vs. Pankajbhai Jaysukhlal Shah[2020] 120 taxmann.com 318 (SC). Also, we find that the similar view had been taken by this Tribunal in its recent order passed in the case of Shri Sudhir Kumar Agrawal, Durg Vs. ITO, Ward-2(2), Bhilai in ITA No.158/RPR/2017 dated 17.10.2022, wherein dealing with the multi-facet contentions that were raised by the department, the Tribunal had observed as under: 13. On the basis of our aforesaid deliberations, we are in agreement with the Ld. AR that though the assessment proceedings were rightly initiated and initially embarked upon by Dy. CIT, Circle- 1, Bhilai i.e. the officer who was vested with the jurisdiction over the case of the assessee, but the same thereafter had wrongly been framed by an officer who as observed by us hereinabove did not have jurisdiction over the case of the assessee in so far the year under consideration was concerned. As the criteria laid down vide the CBDT Instruction No.1/2011, dated 31.01.2011 for conferring the varied jurisdictions with the ITOs/DCs/ACs on the basis of income declared by the assessee in his return of income is binding upon the department and has to be scrupulously fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of an A.O is to be resolved. Apropos, sub- section (3) of Section 124 of the Act, the same places an embargo upon an assessee to call in question the jurisdiction of the A.O where he had initially not raised such objection within a period of one month from the date on which he was served with a notice under sub-section (1) of Section 142 or sub-section (2) of Section 143. In sum and substance, the obligation cast upon an assessee to call in question the jurisdiction of the A.O as per the mandate of sub-section (3) of Section 124 is confined to a case where the assessee objects to the assumption of territorial jurisdiction by the A.O, and not otherwise. Our aforesaid view is fortified by the judgment of the Hon ble High Court of Bombay in the case of Peter Vaz Vs. CIT, Tax Appeal Nos. 19 to 30 of 2017, dated 05.04.2021 and that of the Hon ble High Court of Gujarat in the case of CIT Vs. Ramesh D Patel (2014) 362 ITR492 (Guj.). In the aforesaid cases the Hon ble High Courts have held that as Section 124 of the Act pertains to territorial jurisdiction vested with an AO under sub-section (1) or sub-section (2) of Section 120, therefore, the provisions of sub-section (3) of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhilai vide his order passed u/s.143(3), dated 30.03.2015 does not suffer from any infirmity. In our considered view the aforesaid contention of the Ld. DR is absolutely misplaced and in fact devoid and bereft of any merit. As the aforesaid CBDT Instruction No.1/2011, dated 31.01.2011 exclusively vests the pecuniary jurisdiction over the case of the assessee for the year under consideration i.e. A.Y.2012-13 with the ACs/DCs, therefore, in our considered view despite vesting of concurrent jurisdiction with the Income- Tax Officer, Ward-2(2), Bhilai and the Dy. CIT, Circle-1, Bhilai the assessment in his case for the year under consideration could only have been framed by the Dy. CIT, Circle-1, Bhilai. Neither is there any reason discernible from the orders of the lower authorities nor demonstrated before us by the ld. DR which would by any means justify framing of the assessment vide impugned order u/s 143(3), dated 30.03.2015 by the Income-Tax Officer, Ward-2(2), Bhilai. Apart from that, we find that as per the mandate of sub-section (1) of section 127 of the Act, where a case is to be transferred by authorities therein specified from one or more Assessing Officers subordinate to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee the assessment order u/s.143(3), dated 30.03.2015 had been passed by a non-jurisdictional officer i.e. the Income-Tax Officer, Ward-2(2), Bhilai, which is in clear contravention of the CBDT Instruction No.1/2011 dated 31.01.2011, therefore, the same cannot be sustained and is liable to be struck down on the said count itself. Before parting, we may herein observe that a similar issue as regards the validity of an assessment framed by an A.O who had invalidly assumed jurisdiction in contravention to the CBDT Instruction No.1/2011, dated 31.01.2011 had came up in a host of cases before the various benches of the Tribunal, wherein the respective assessments framed were struck down, for the reason that the same were passed by officers who were not vested with the requisite jurisdiction as per the CBDT Instruction No.1/2011, dated 31.01.2011. Our aforesaid view is fortified by the order of the ITAT, Kolkata Bench SMC in the case of Anderson Printing House (P) Ltd. Vs. ACIT (2022) 192 ITD 548 (Kolkata-Trib.). In its order the Tribunal had after drawing support from the order of the ITAT, Kolkata in the case of Bhagyalaxmi Conclave (P) Ltd. Vs. DCIT, ITA No.2517 (Kol) of 2019, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 6. Now, in this case, the assessment has been framed by the ACIT. At this stage, it will be appropriate to refer to the provisions of section 127 of the Act as under: Power to transfer cases (1) The [Principal Director General or] Director General or [Principal Chief Commissioner or] Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. 7. A perusal of the above statutory provisions would reveal that jurisdiction to transfer case from o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment 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 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, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ested him of his jurisdiction over the case of the assessee for the year under consideration i.e. AY 2012-13, therefore, the same cannot be sustained and is liable to be struck down in terms of our aforesaid observations. We, thus, in terms of our aforesaid observations quash the order passed by the Income-Tax Officer, Ward-2(2), Bhilai for want of jurisdiction on his part. 17. On the basis of our aforesaid observations, we are of the considered view that as in the case of the present assessee before us the impugned assessment had been framed by the ITO-1(1), Bhilai vide his order passed u/s.143(3) dated 29.12.2016 on the basis of a notice u/s. 143(2), dated 24.09.2015 that was issued by the DCIT- 1(1), Bhilai, i.e., an A.O who at the relevant point of time was not vested with jurisdiction over the case of the assessee, therefore, the assessment so framed cannot be sustained and is liable to be struck down on the said count itself. Apropos the notice issued u/s.143(2) of the Act, dated 05.05.2016 by the ITO-Ward 1(1), Bhilai, we are of the considered view that as the said notice was issued after the lapse of the stipulated time period, i.e., beyond the specified time frame whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 13. At the very threshold, I am unable to comprehend on what basis the case of the assessee de-hors any order as per the mandate of Section 127 of the Act was initially transferred by the ITO, Ward-1(2), Raipur on 05/02/2014 to the DCIT, Circle-1(1), Raipur. At this stage, it would be relevant to observe that as per sub-section (3) of Section 127 of the Act, even in case there is a transfer of any case from any A.O or AOs (whether with or without concurrent jurisdiction) to any other A.O or AOs (whether with or without concurrent jurisdiction), the requirement of passing an order of transfer under the aforesaid statutory provision is required and the same cannot be dispensed with. I may further observe that the order of transfer of the assessee s case by the ITO-Ward 1(2), Raipur to DCIT-Circle 1(1), Raipur on 05.02.104 was much prior to Notifications No. 1/2014-15, dated 15.11.2014 and Notification No. 1/2014-15, dated 15.11.2014, based on which jurisdiction over the case of the assessee was vested with the DCIT/ACIT- 3(1), Raipur, as brought to our notice by the A.O. 14. Be that as it may, I am of the view that as the assessment in the case of the assessee had been framed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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