9911796707
TMI Blog2024 (6) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... nology [ 2023 (6) TMI 1076 - SC ORDER] which was relied by the Ld. D.R. to defend his arguments that the notice u/s 143(2) of the Act if issued by wrong AO then the assessee is at liberty to take objection to raise the issue within one month of the issuance of the notice in the assessment proceedings. The Coordinate Bench held that the facts of the case of Kalinga Institute of Industrial Technology (supra) are distinguishable and not applicable. Thus issuance of notice u/s 143(2) of the Act by the Assessing Officer not having jurisdiction over the assessee renders the assessment proceedings as a nullity. Appeals of the assessee are allowed. - SHRI RAJESH KUMAR, HON BLE ACCOUNTANT MEMBER AND SHRI SONJOY SARMA, HON BLE JUDICIAL MEMBER For the Assessee : Shri S.L. Kochar Shri A. Kochar, AR For the Revenue : Shri Partha Pratim Barman, Addl. CIT, Sr. DR ORDER PER SONJOY SARMA: The captioned appeals are preferred by the assessee against the two separate orders of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the Ld. CIT(A) ] both dated 20.09.2023 for the AY 2012-13 2013-14 respectively. 2. First we take up ITA No. 1099/Kol/2023 verdict of it will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction. 5. The Ld. D.R on the other hand relied on the order of authorities below. The ld DR contended that the transfer of case was within the jurisdiction of concerned CIT and therefore the assessee had no locus standi to question the jurisdiction of the ACIT. The ld DR contended that the assessee has questioned the issuance of notice by ACIT within one month of its issuance and therefore the assessee cannot be allowed to raise this issue at this stage. The ld DR relied on the decision of Hon ble Apex Court in the case of DCIT(Exemption) Another vs. Kalinga Institute of Industrial Technology; Special Leave to Appeal (C) No(s). 29304/2019 and WP(C ) No. 898/2017 to defend his arguments that the notice u/s 143(2) of the Act if issued by wrong AO then the assessee is at liberty to take objection to raise the issue within one month of the issuance of the notice in the assessment proceedings. 6. We have heard the rival contentions and perused the materials on records. Undisputedly the income returned by the assessee during the year was Rs. 2,70,140/- and the assessee is in metro city of Kolkata. Therefore the notice u/s 143(2) 142(1) of the Act was to be issued by ITO concerned a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riber authorities for transferring of the case, prima facie it indicates that the assessment in the case of the assessee ought to have been framed by the Income-tax Officer and not by the ACIT as the income declared in the Income-tax return is less than Rs.20 Lakhs. Now, whether under such given facts and circumstances, the assessment order in question is a nullity, needs to be examined in the light of judicial precedents. Though, the ld. Counsel for the assessee has referred and relied on the decisions of this Tribunal in the case of Alpha National Trading Co. (supra), we were able to lay our hands on the decision of this Tribunal in the case of Deepak Kedia vs. ACIT in ITA No. 881/Kol/2023; Assessment Year 2014-15; order dt. 03/11/2023 wherein also the issue regarding the validity of service of notice u/s 143(2) of the Act has been adjudicated and relevant finding of the Tribunal reads as follows:- 4. According to Ld. Counsel for the assessee since the income tax return filed by the assessee is less than Rs. 30 Lakh therefore, the jurisdiction to issue notice u/s 143(2) of the Act to frame the assessment was with the ITO and not with the ACIT. Ld. Counsel for the assessee submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.30 lacs in case of corporate assessee in metro cities, the jurisdiction to frame the assessment lies to the Income Tax Officer whereas if the returned income is more than Rs.30 lacs, the jurisdiction lies with the concerned ACIT/JCIT. The ld. counsel has submitted that the jurisdiction to pass the assessment order in this case laid with the ACIT/DCIT as the income declared by the assessee was more than Rs.30 lacs. The ld. counsel has further invited our attention to the impugned assessment order to show that the assessment order in this case has been passed by DCIT, Circle-1(1), Kolkata. He has further invited our attention to the first para of the assessment order wherein, it has been mentioned that notice u/s 143(2) dated 09.08.2013 was issued and duly served upon the assessee. The ld. counsel has further invited our attention to the copy of the aforesaid notice u/s 143(2) dated 09.08.2013 which has been placed at page 27 of paperbook. A perusal of the aforesaid notice u/s 143(2) dated 09.08.2013 reveals that the same has been issued by the Office of the Income Tax Officer (ITO), Ward-1(1), Kolkata. The ld. counsel in this respect has submitted that in this case, the jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orise any other income- tax authority to issue orders in writing for the exercise of the powers and performance of the functions by all or any of the other income- tax authorities who are subordinate to it. (4) In issuing the directions or orders referred to in sub- sections (1) and (2), the Board or other income- tax authority authorised by it may have regard to any one or more of the following criteria, namely:- (a) territorial area; (b) persons or classes of persons; (c) incomes or classes of income; and (d) cases or classes of cases 6. A perusal of the aforesaid statutory provisions would reveal that the jurisdiction of Income Tax Authorities may be fixed not only in respect of territorial area but also having regard to a person or classes of persons and income or classes of income also. Therefore, the CBDT having regard to the income as per return has fixed the jurisdiction of the Assessing Officers. The ld. Counsel in this respect has relied upon the CBDT Instruction No.1/2011 [F.No.187/12/2010-IT(A-I), for the sake of convenience is reproduced as under: Instruction No.1/2011 [F.No.187/12/2010-IT(A-I), DATED 31-1-2011 References have been received by the Board from a large nu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notice u/s 143(2) before proceeding to frame the assessment, then such an assessment order was bad in law. The relevant part of the order passed in Bhagyalaxmi Conclave (P) Ltd. (supra) is reproduced as under: 5.2. The assessee relied on the recent decision of this Tribunal in the case of Hillman Hosiery Mills Pvt. Ltd. vs. DCIT, in ITA No. 2634/Kol/2019, order dated 12.01.2021. We find that the issues that arise in this appeal are clearly covered in favour of the assessee. This order followed the principles of law laid down in a number of other decisions of the ITAT, Kolkata Bench on this issue. 5.3. Kolkata B Bench of the Tribunal in the case of Hillman Hosiery Mills Pvt. Ltd.(supra) held as follows: 10. In this case, the ITO Ward-3(3), Kolkata, issued notice u/s 143(2) of the Act on 04/09/2014. In reply, on 22/09/2014, the assessee wrote to the ITO, Ward-3(3), Kolkata, stating that he has no jurisdiction over the assessee. Thereafter on 31/07/2015, the DCIT, Circle-11(1), Kolkata, had issued notice u/s 142(1) of the Act to the assessee. The DCIT, Circle-11(1), Kolkata, completed assessment u/s 143(3) of the Act on 14/03/2016. The issue is whether an assessment order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d-1(1), Durgapur. Later, the case was transferred to the jurisdiction of the ACIT on 11/08/2017. Thereafter, no notice u/s 143(2) of the Act was issued by the Assessing Officer having jurisdiction of this case and who had completed the assessment on 26/12/2017 i.e., ACIT, Circle-1(1), Durgapur. Under these circumstances, the question is whether the assessment is bad in law for want of issual of notice u/s 143(2) of the Act. 9. This Bench of the Tribunal in the case of Shri Sukumar Ch. Sahoo vs. ACIT in ITA No. 2073/Kol/2016 order dt. 27.09.2017, held as follows:- 5. From a perusal of the above Instruction of the CBDT it is evident that the pecuniary jurisdiction conferred by the CBDT on ITOs is in respect to the 'non corporate returns' filed where income declared is only upto Rs.15 lacs ; and the ITO doesn't have the jurisdiction to conduct assessment if it is above Rs 15 lakhs. Above Rs. 15 lacs income declared by a non- corporate person i.e. like assessee, the pecuniary jurisdiction lies before AC/DC. In this case, admittedly, the assessee an individual (non corporate person) who undisputedly declared income of Rs.50,28,040/- in his return of income cannot be assessed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce u/s. 143(2) of the Act notice became qoarum non judice after the limitation prescribed by the statute was crossed by him. Therefore, the issuance of notice by the ACIT, Circle-27, Haldia after the limitation period for issuance of statutory notice u/s. 143(2) of the Act has set in, goes to the root of the case and makes the notice bad in the eyes of law and consequential assessment order passed u/s. 143(3) of the Act is not valid in the eyes of law and, therefore, is null and void in the eyes of law. Therefore, the legal issue raised by the assessee is allowed. Since we have quashed the assessment and the appeal of assessee is allowed on the legal issue, the other grounds raised by the assessee need not to be adjudicated because it is only academic. Therefore, the additional ground raised by the assessee is allowed. 7. In the result, appeal of assessee is allowed. 9.1. This Bench of the Tribunal in the case of Krishnendu Chowdhury vs. ITO reported in [2017] 78 taxmann.com 89 (Kolkata-Trib.) held as follows:- Return of income of assessee was Rs. 12 lakhs - As per CBDT instruction, jurisdiction for scrutiny assessment vested in Income-tax Officer and notice under section 143(2) mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, in the absence of such notice, the entire proceedings would be invalid. 8. The law on the point as regards applicability of the requirement of notice under Section 143(2) of the Act is quite clear from the decision in Hotel Blue Moon's case (supra). The issue that however needs to be considered is the impact of Section 292BB of the Act. 9. According to Section 292BB of the Act, if the assessee had participated in the proceedings, by way of legal fiction, notice would be deemed to be valid even if there be infractions as detailed in said Section. The scope of the provision is to make service of notice having certain infirmities to be proper and valid if there was requisite participation on part of the assessee. It is, however, to be noted that the Section does not save complete absence of notice. For Section 292BB to apply, the notice must have emanated from the department. It is only the infirmities in the manner of service of notice that the Section seeks to cure. The Section is not intended to cure complete absence of notice itself. 10. Respectfully following the propositions of law laid down in all these case-law and applying the same to the facts of the case, we hold tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is placed on record in the paper book at pages 1 and 2. Ld. Counsel submitted that the issue is squarely covered by the recent judgment of Hon ble jurisdictional High Court of Calcutta in the case of PCIT Vs. Shree Shoppers Ltd. in ITAT/39/2023 in IA No.GA/1/2023, dated 15.03.2023, wherein substantial questions of law before the Hon ble Court were as under: (i) whether on the facts and circumstances of the case the Tribunal was justified in law to quash the Assessing Order passed under section 143(3) of the said Act on the ground that the valid Notice under Section 143(2) was not issued in accordance with law despite the fact that said Notice was already issued by the jurisdictional Assessing Officer before the process of Restructuring Departmental Cadre? ii) Whether on the facts and circumstances of the case the Tribunal was justified in law in not appreciating the fact that the Notice under Section 143(2) of the said Act is issued only once at the time of initiating of the scrutiny assessment, thereafter mere change of jurisdictional Assessing Officer within the same Range and/or Pr.CIT cannot affect the assessment proceedings? 5. On the above substantial questions of law, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment has been framed by DCIT, Circle-9(2), Kolkata but the point in dispute is that on date of issuing a notice u/s. 143(2) of the At, whether the ITO, ward-9(4), Kolkata was having a valid jurisdiction to issue such notice u/s. 143(2) of the Act. 6. Ld. Counsel also placed on record the order of the Coordinate Bench of ITAT, Kolkata in the case of Shree Shoppers Ltd. Vs. DCIT in ITA No. 865/Kol/2018 dated 08.09.2022 findings of which have been affirmed by the Hon ble jurisdictional High Court of Calcutta as stated above. 7. Per contra, Ld. Sr. DR placed reliance on the order of Ld. AO. 8. We have heard the rival contentions and perused the material available on record and find that the issue raised by the Ld. Counsel on the jurisdictional aspect in respect of notice issued u/s. 143(2) is no longer res integra. It is a settled position of law that for carrying out an assessment proceedings u/s. 143(3) of the Act, statutory requirement of serving a valid notice u/s. 143(2) of the Act is a must and in absence of which the subsequent proceedings become invalid. In the present case before us, it is a fact that assessee has reported total income of Rs.43,53,620/- which exceeds the thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction of the concerned Assessing Officer to frame the assessment. 8. In this case, since the concerned ACIT who had pecuniary jurisdiction to frame the assessment did not issue notice u/s 143(2) of the Act, therefore, the assessment framed was bad in law in view of the case laws as cited above. The impugned assessment order framed by the Assessing Officer, therefore, is bad in law and the same is hereby quashed. 9. In the result, the appeal of the assessee stands allowed. 5. Considering the facts of the case, we are of the view that ACIT, Circle43, Kolkata has no jurisdiction to frame the assessment order and to issue notice u/s 143(2) of the Act. Therefore, the assessment framed is bad in law in view of the ratio laid down by the above referred decisions. Accordingly, the assessment order framed by the AO is hereby quashed. 10. Perusal of the above decision indicates that issuance of notice u/s 143(2) of the Act by the Assessing Officer not having jurisdiction over the assessee renders the assessment proceedings as a nullity. However, the case of the assessee before us is on a much stronger footing because leaving aside the issuance of notice u/s 143(2) of the Act, even the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
