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TMI Blog2021 (5) TMI 1079X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been filed electronically up till 2014-15 and the designation of the Assessing Officer has always been shown as Range-18, New Delhi. The question of jurisdiction which was raised by the assessee before the ITO, Ward-10, Kolkata at the very first instance should have been referred to the ld. PCIT to decide the question of jurisdiction; and secondly even if the matter was referred to him by ld. DCIT, Circle-10 on 14.12.2014 then Ld. PCIT was bound to decide the issue of jurisdiction first, before directing the AO to pass the assessment. The Assessing Officer cannot on its own asked the assessee to move an application u/s.127 for migration of PAN, because the power of transferring the case u/s.127, lies with higher authorities. Power u/s. 127 has been given to PDG/DG/PCC/CC/PCIT or CIT to transfer the case of an assessee from one jurisdiction to other under various circumstances The entire case of the revenue hinges upon the interpretation that allotment of PAN is the criteria and foundation of deciding the jurisdiction of the AO - Nowhere in the statute it has been provided that PAN address will decide the territorial jurisdiction of the AO. Section 139A merely provides wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii) Addition Rs. 2,88,61,495/- on account of credits (total unsecured loans). iv) Addition Rs. 6,61,873/- on account of depreciation. by admitting additional evidences filed by assessee without providing any opportunity to the AO in contravention of the Principal of Natural justice . Whereas the assessee in his Cross Objection has challenged the validity of the assessment on the ground that Assessing Officer did not had valid jurisdiction over the case. The grounds raised in the Cross Objection reads as under: 1. That the Assessing Officer has not valid jurisdiction over the case of the appellant. The return was being filed year after year by the appellant in Delhi and consequently the assessment so framed in furtherance of such invalid assumption of jurisdiction is also bad in law. 2. That the Ld. CIT(A) is correct in law in allowing the relief to the assessee and consequently the objection as raised by the Revenue in its appeal is not maintainable and deserved to be dismissed. 2. Since, the issue raised in the Cross objection goes to the very root of the validity of the assessment, therefore, same is being taken up first. 3. The brief facts apropos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fice at New Delhi. A copy of the Certificate of Incorporation is attached herewith for your kind consideration and record please. b) The territorial jurisdiction being ex Delhi, the appellant continuously filed its return of income since inception at New Delhi Jurisdiction only as under- i) For the Assessment year 2005-06 the return was prepared manually and filed with Additional Commissioner, Range 18, New Delhi. A stamp was obtained as receipt for filing the return. ii) For the Assessment year 2006-07 to 2008-09 the returns were filed electronically + one hard copy of the acknowledgements were file physically at the relevant ward/circle/range 18 at New Delhi under a stamp of the relevant ward/circle/range at New Delhi. iii) For the Assessment year 2009-10 to 2012-13 the returns were filed electronically, showing designation of the Assessing Officer as Range 18, New Delhi, under digital signatures and therefore there was no need to file hard copy of acknowledgements with the relevant ward/circle/range at New Delhi. A copy of the acknowledgements for the Assessment year 2005-06 to 2012-13 are being attached herewith for your kind consideration and record please. c) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve served notices U/s 143(2) dated 06.08.2013 and U/s. 142(1) of the I.T. Act dt. 15.05.2014 and 20.01.2015. The Assessing Officer has also claimed that notices U/s 143(2) and U/s. 142(1) of the LT. Act remained un-complied with by the assessee and aiso that the questionnaires U/s 142(1) dt. 15.05.2014 and 20.01.2015 remained un-complied. According to the A.O. a final notice U/s. 142(1) presumably issued by the A.O. on 02.02.2015 also remained un-complied. 1.4 As a matter of fact, the claims/observations of the Assessing Officer in the Assessment Order are factually incorrect, The fact is that only one notice U/s 143(2) dated 06.08.2013 was received by the appellant on 22.08.2013 at the then address of the registered office which was complied with on 29.08.2013 which is well within one month as required under the provisions of Section 124(3) duly received by the Assessing Officer on 02.09.2013. in the said response, the appellant challenged the jurisdiction of the Assessing Officer because the Assessing Officer [D.C.I.T. Circle 10(2), Kolkata] was not empowered under law to have territorial jurisdiction over the case which have principal place of business at Delhi. 1.5 That w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated with registered office in New Delhi. Its directors as well as its principal place of business always remained in New Delhi. The appellant has no business connection in Kolkata. It has filed its return of income manually as well as electronically for all previous years with the AO having jurisdiction on the appellant in New Delhi. It was further contended by the appellant that there was no order u/s 127 ever passed for transferring the jurisdiction from New Delhi and thus the order framed u/s 144 should be held to be void ab-initio. The AO in his report mentions that as per the record available with STD AST, the appellant had filed its return of income for AY 2006-07 vide acknowledgement no. 57000184 in the AO code WBG- D-805-1 on 25.12.2006, the same was processed u/s 143(1) on 20.02.2008. The AO mentions that the appellant has itself mentioned in the AO column in its return for AV 2006-07 as AO ward-10(2), Kolkata. Thereafter, the AO has given entire Pan History of the appellant. The AO further states that in ail subsequent returns filed by the appellant from AY 2007-08 to 20012-13, all the returns were duly processed in Kolkata and the appellant never raised any objections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding the jurisdiction of the assessee and no notice/order or acknowledgement was ever served on the assessee by the Assessing Officer, Kolkata. It was only in the Assessment Year 2012-13, assessee for the first time in February, 2016 came to know that assessee s bank account has been attached by Assessing Officer, Kolkata and then it was discovered that exparte assessment order has been passed by the Assessing Officer, Circle-10, Kolkata against the demand raised. Thereafter, true copy of the assessment order was obtained from Assessing Officer, Circle -10, Kolkata and on that basis appeal was filed with Ld. CIT(A), Kolkata on 03.03.2016 which was admitted and decided by the impugned order dated 19.07.2016. 8. Ld. counsel further submitted that one of the notices sent u/s.143(2) at a New Delhi address by the Assessing Officer on 06.08.2013 signed by ITO, Ward-10, Kolkata for Assessment Year 2012-13 was received by the assessee and immediately thereafter, assessee has raised objection to the jurisdiction of ITO, Ward-10(2), Kolkata vide letter dated 29.02.2013 which was sent through speed post on the same date. The copy of which has been placed in the additional paper book pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se has been made out by the Assessing Officer or Ld. CIT(A) that the natural jurisdiction of the assessee falls in any of the four categories mentioned in Section 120(3). Further, PAN or allotment of PAN is not a criteria mentioned in Section 120(3) so as to provide jurisdiction to the Assessing Officer, Kolkata because the allotment of PAN is not under the control of the assessee. U/s.124(1) jurisdiction of the Assessing Officer over the assessee is decided by the CBDT on the basis of where assessee is either carrying the business in that area assigned to the Assessing Officer u/s.120 or the assessee residing within that area. In support of his contention, he strongly relied upon the judgment of Hon ble Delhi High Court in the case of S.S. Ahluwalia (2014) 46 Taxmann.com 169. The relevant observation of the Hon ble High Court reads as under: 34. On analyzing the new Section 124, it is viewed that as per sub-section (1), Assessing Officer has jurisdiction in respect of persons carrying on business or profession where such business or profession was being carried out or situated within the area or where the business or profession was carried on in different areas, if the princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority which lacks inherent subject matter jurisdiction, [emphasis supplied] 11. Thus, he submitted that in the present case there is inherent law of jurisdiction with the Assessing Officer, Kolkata u/s.124(1), secondly, objection u/s.124(3) raised within the statutory period has not been disposed of as per the requirement of Section 124(2)/124(4). Therefore, the entire assessment order is bad in law. In support of his contention, he relied upon the following judgment. i. Sekhar Kumar Goenka vs. ACIT, (2014) 47 taxmann.com 236 (Cuttack-Trib). ii. Joginder Singh v. CIT, (1981) 6 Taxman 245 (Punj. Har.) iii. Kunji Mal Sons v. CIT (1982) 138 ITR 391 (Delhi) iv. Abhishek Jain v. ITO (2018) 94 taxmann.com 355 (Delhi). 12. On the other hand, ld. CIT-DR submitted that, firstly, as per the PAN history of the assessee, PAN of the assessee was with Ward-10(2), Kolkata upto 01.07.2016. Since PAN of the assessee was in Kolkata, any e-return of income filed by the assessee and would automatically be linked with the jurisdiction of Ward-10(2), Kolkata. Secondly, the assessee has filed its return of income for the Assessment Year 200708 with Ward-10(2), Kolkata. During the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3rd October, 2007. Even in the Assessment Year 2008-09, the acknowledgement bears the stamp of ITO, Ward-18(2), New Delhi dated 24th February, 2009. From Assessment Year 2009-10, the assessee has been filing the return of income electronically and designation of the Assessing Officer as per the Income Tax Department software where returns are uploaded, has mentioned the jurisdiction as Range-18, New Delhi. Thereafter all the returns of income have been filed electronically up till 2014-15 and the designation of the Assessing Officer has always been shown as Range-18, New Delhi. 14. The Department s case before us is mainly that, the PAN data base shows that the PAN jurisdiction was with Ward10(2), Kolkata and it was only on 01.07.2016 the assessee s case was transferred from Ward-10(2), Kolkata to Circle-27, Delhi. Thus, PAN jurisdiction all throughout these years lied with ITO, Ward-10, Kolkata only. Further, from the perusal of the document submitted by the ld. DR which contains the copy of return of income for the Assessment Year 2007-08, we find that the addressed mentioned in the return of income is D-1108, New Friends Colony, New Delhi 110065 . Even the manual copy fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not have decided the jurisdiction on its own at that time and should have immediately referred the matter to the concerned higher authorities. As brought on record by the ld. CIT-DR, almost after 16 months from the date when assessee has filed its objection regarding jurisdiction of the Assessing Officer at Kolkata, Ld. DCIT, Circle-10 had referred the matter to ld. PCIT to decide the issue. As per the mandate of the law as provided u/s. 124(2), the ld. PCIT was required to adjudicate the issue of jurisdiction first before asking the Assessing Officer to proceed with the assessment. However, instead of deciding the issue of jurisdiction, Ld. PCIT merely opined that transfer of jurisdiction will be considered after the completion of the assessment. Such an instruction in our opinion was not in accordance with law. First of all, the question of jurisdiction which was raised by the assessee on 29.08.2013 before the ITO, Ward-10, Kolkata at the very first instance should have been referred to the ld. PCIT to decide the question of jurisdiction; and secondly even if the matter was referred to him by ld. DCIT, Circle-10 on 14.12.2014 then Ld. PCIT was bound to decide the issue of juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. Even the Assessing Officer or the Ld. CIT(A) has not made out any case that assessee s case falls in either of the given categories provided in sub Section (3) of Section 120. Allotment of a PAN from a particular place cannot provide jurisdiction to the Assessing Officer. The jurisdiction of the Assessing Officer over an assessee is decided by the CBDT on the basis of from where the assessee is either carrying the business in that area assigned to the Assessing Officer u/s.120 or the assessee is residing within that area. Admittedly, the assessee company does not only have registered office in New Delhi but also has been carrying out all its activities from which it has been earning income from New Delhi and has been filing the return of income from New Delhi. Even in the software of the Income Tax Department where return of income is uploaded online, the designation of the Assessing Officer as per the address has always been mentioned as Range-18, New Delhi. Had there been the allotment of jurisdiction by virtue of PAN, then the software of the Department would have assigned the jurisdiction as when assessee uploads the return of income electronically online. Be that a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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