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TMI Blog2022 (6) TMI 1458X X X X Extracts X X X X X X X X Extracts X X X X ..... issue the aforesaid notice. As has been held by the various courts of the country including the Apex Court, the issuance of notice u/s 143(2) by the concerned Assessing Officer of a competent jurisdiction is mandatory to assume jurisdiction to proceed to frame assessment u/s 143(3) of the Act. The identical issue also came into consideration in the case of Bhagyalaxmi Conclave (P) Ltd. v. DCIT [ 2021 (2) TMI 181 - ITAT KOLKATA] wherein the Tribunal further relying upon various other decisions of the Co-ordinate Benches of the Tribunal has decided the issue in favour of the assessee and held that when the notice u/s 143(2) was issued by an officer who did not have jurisdiction to proceed with the assessment and the assessment was framed by the other officer who did not issue the notice u/s 143(2) before proceeding to frame the assessment, then such an assessment order was bad in law. Thus assessment order passed by the Assessing Officer (ACIT) was bad in law for want of issuance of notice u/s 143(2). Decided in favour of assessee. - SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER For the Appellant : Shri Aman Raja, Advocate For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eer, REO Works Division, Bhagalpur completed the assessment under section 143 (3) of the Act at a total income of Rs. 82,19,760/- vide order of assessment dated 26/12/2017 and the confirmation of the same by the CIT (A)-1, Patna is wholly unwarranted, arbitrary and unjustified. 8. For that on the facts and in circumstances of the case the ld. Assessing Officer completed the assessment proceeding without following the instruction no. 20/2015 dated 29/12/2015 with ulterior motives as the addition made under the head on account of undisclosed TDS and addition on account of receipt from Executive Engineer, REO Work Division BGP is not a subject matter of limited scrutiny is wholly unwarranted, arbitrary and unjustified. 9. For that on the facts and in circumstances of the case the ld. Assessing Officer has erred in converting the limited scrutiny into a complete scrutiny without following the proper guidelines. 10. For that on the facts and in circumstances of the case the determination of the total income at Rs. 82,19,756/- as against the returned income of Rs. 34,65,210/- and the confirmation of the same by the CIT (A)-1, Patna is wholly arbitrary, unwarranted, wrong, illega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the impugned order is misconceived and arbitrary in nature. 21. For that the appellant prays to add, amend, modify, and delete any ground, if necessarily. 22 For that other grounds, if any, will be urged at the time of hearing. 2. A perusal of grounds no.4 to 6 of the appeal reveals that the assessee through these grounds has contested the jurisdiction of the concerned Assessing Officer/Assistant Commissioner of Income Tax (ACIT) to frame assessment order dated 26.12.2017 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 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); 3. Since assessee through the 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 legal grounds and proceed to adjudicate these first as if the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Ward-3(3), Aurangabad 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 ACIT, in this case, was bad in law for want of issue of notice u/s 143(2) of the Act. The ld. DR, on the other hand, strongly relied upon the findings of the CIT(A) in this respect to submit that the pecuniary jurisdiction has been fixed by the CBDT for the underlying object of equal distribution of work for administrative convenience and that the same was not a rigid limit. 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 the provisions of section 120 of the Act, which, for the sake of ready reference, are reproduced as under: Jurisdiction of income- tax authorities (1) Income- tax authorities shall exercise all or any of the powers and perform all or any of the functions Conferred on, or, as the case may be, assigned to such authorities by or under this Act in accordance with such directions as the Board may issue for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided to increase the monetary limits as under: Income Declared (Mofussil areas) Income Declared (Metro cities) ITOs ACs/DCs ITOs DCs/ACs Corporate returns Upto Rs. 20 lacs Above Rs. 30 lacs Upto Rs. 30 lacs Above Rs. 30 Lacs Noncorporate 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. The ld. CIT(A) has noted in the impugned order that the aforesaid pecuniary limit of Rs. 15 lakh for non-corporate assessees in Mofussil area has been further increased to Rs. 20 lakh. 7. A perusal of the above provisions of law along with the CBDT Instructions would show, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 201516, 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 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 indivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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