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TMI Blog2024 (6) TMI 1278X X X X Extracts X X X X X X X X Extracts X X X X ..... risdiction of ACIT/DCIT. The assessee s returned income was Rs. 21,44,050/-, which as discussed hereinabove is more than Rs. 15 Lac, therefore the valid jurisdiction was with ACIT/DCIT. In view of aforesaid CBDT s instructions referred to supra, followed by communication by the Ld. CCIT, Raipur, we hold that the first notice u/s 143(2) issued by the ITO Ward-1(1), Raipur, was clearly against the mandate of instructions issued and thereafter subsequently no notice u/s 143(2) was issued by the jurisdictional AO i.e., DCIT-2(1), Bilaspur who had framed and passed the assessment order. Objection raised by DR that the assessee has not objected to the jurisdiction of the ITO-1(1) within the stipulated time period as per provisions of section 124(3) of one month from the date on which the notice was served on the assessee - The issue has been duly considered in the case of Durga Manikanta [ 2023 (1) TMI 1099 - ITAT RAIPUR] held as the assessee s objection to the validity of the jurisdiction assumed by the Income- Tax Officer, Ward-2(2), Bhilai is by no means an objection to his territorial jurisdiction, but in fact an objection to the assumption of jurisdiction by him in contravention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Ld. CIT(Appeal) erred in confirming the Rs. 26,89,094/- out of Rs.1,43,62,114/- as development expenses which were calculated by AO on estimates, resumptions surmises ignoring the audited books of accounts. 5. That the large other expenses were to be examined with the audited books of accounts, and bills and vouchers. The addition made on the basis of estimated report of SDM, Bilha is perverse and unwarranted. 6. That the Ld. CIT(A) is not justified to confirm addition of Development expense of Rs. 11673020/-, whereas most of the expenses are paid by cheques and without development expenses like road, drainage no plots can be sold. 7. That the Ld. CIT(A) is not justified in confirming the addition of Rs. 2765260/- being stamps expense incurred by the company, ignoring the fact that stamps purchased bears the name of the company as purchaser. 8. That the Ld. CIT(A) is not justified in confirming the addition of following Expenses: - 1. Registry Expenses :420181 2. Typing Expense 88000 9. That the appellant craves leave to add to and/or amend. Alter; rescind the grounds taken here in above, before or the time of hearing of this appeal. 3. The brief facts of the case culled ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade the following additions: Expenses Amount (in Rs.) Developing Expenses 1,16,73,020/- Stamp Expenses 27,65,260/- Registry Expenses 4,20,181/- Typing Expenses 88,000/- Total 1,49,46,491/- 4. Aggrieved by the aforesaid additions in the order of Ld. AO, assessee preferred an appeal before the Ld CIT(A) NFAC, Delhi, however the appeal of asseseee therein have been dismissed by the Ld CIT(A) with the following observations: DECISION: 6. I have carefully considered the grounds of appeal, statement of facts and the contents of assessment order along with written submission filed by the assessee. During the appellate proceedings, the assessee has filed copy of ledger account of developing expenses and written submission stating that the purchases were not known to the assessee as M/S Shrishti Infrabuild Pvt. Ltd. was engaged to take booking of the plots, to collect payment from the customers and to make payment to the assessee after deducting their commission. The AO has not pointed out any consistency/discrepancy in the books of accounts/bills/vouchers in respect of development work. 6.1 I have examined the claim of the appellant. The assessee has not submitted any evidence to rebut/neg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion vested with AC/ DC. 5. ITO-1(1), Bilaspur himself transferred the case to ACIT-I(I), Bilaspur. Letter at PN 50 of PB. He admits that jurisdiction did not vest with him but with ACIT-I(I), Bilaspur. 6. No notice u/s 143(2) issued by ACIT-2(l ), Bilaspur, who passed the assessment order. 7. A case of pecuniary jurisdiction. Reliance on: - i) Mata Road Carriers vs DCIT, at PN 84 to 101 of PB, relevant finding at PN 100 of PB, para no. 19. ii) Durga Manikanta Traders. 7. Elaborating the above synopsis, Ld. AR on behalf of the assessee submitted that order passed by the Ld. AO itself was bad in law, de hors valid assumption of jurisdiction and therefore the same deserves to be quashed. In order to substantiate such contention, Ld. AR submitted that in the present case the assessee had filed its return showing total income of Rs.21,44,050/- and the Assessee, who is a corporate assessee having retuned income more than Rs.15 Lakhs, thus, the jurisdiction on the case of assessee lies with the Assistant Commissioner or Deputy Commissioner. However, the notice for initiation of scrutiny assessment was issued by ITO Ward 1(1), Bilaspur. Regarding the prescribed threshold pecuniary limits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held as under: i) Mata Road Carriers vs DCIT, ITA No. 79/BIL/2016 vide order dated 10.07.2023 19. The coordinate bench of the Tribunal under the similar facts and circumstances, in the case of Ravi Sherwani, passed in ITA No.64/RPR/2020, order dated 29.05.2023, observations of which have been reproduced in the foregoing paragraphs, which has already been followed in the case of Amarjeet Singh Bhatia (supra), considering the observations made in the case of Durga Manikanta Traders (supra), held that the assessment framed by the AO on the basis of notice issued u/s.143(2) of the Act by the non-jurisdictional officer is void ab initio. In the present case, the ITO-1(1), Raipur having no jurisdiction over the assessee issued notice u/s.143(2) of the Act, overlooking the binding Instructions of the CBDT as well as the Notification issued by the CCIT, Raipur, which is not sustainable in the eyes of law. Had the notice u/s.143(2) of the Act been issued by the jurisdictional AO, i.e. DCIT-1(1), who was having pecuniary jurisdiction over the assessee, there would have been no case for the assessee to raise the issue of wrong assumption of jurisdiction. When the notice issued u/s.143(2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ble High Court by referring to the CBDT Instruction No.1 of 2011, dated 31.01.2011, had observed, that as the pecuniary jurisdiction over the case of the assessee before them who had returned an income of Rs. 64.34 lacs was vested with the DCs/ACs, therefore, the notice issued u/s. 148 of the Act by the ITO who during the year under consideration had no pecuniary jurisdiction over the Assessee's case was bad in the eyes of law. Considering the aforesaid lapse in the assumption of jurisdiction the Hon ble High Court had quashed the notice that was issued by the ITO u/s. 148 of the Act. Also, a similar view had been taken by the Hon ble High Court of Gujarat in the case of Pankajbhai Jaysukhlal Shah Vs. ACIT, Circle-2 (2019) 110 taxmann.com 51 (Guj.). In the said case, though the A.O who had jurisdiction over the case of the assessee had recorded the reasons to believe but notice u/s.148 of the Act was issued by another officer, therefore, the notice so issued u/s.148 of the Act was quashed by the Hon ble High Court. At this stage, we may herein observe, that the aforesaid order of the Hon ble High Court had thereafter, been upheld by the Hon ble Supreme Court in the case of AC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n No.1/2011, dated 31.01.2011, therefore, the same cannot be justified. 14. We shall now deal with the objection raised by the Ld. DR that as the assessee had not called in question the jurisdiction of the Income-Tax Officer, Ward-2(2), Bhilai within the stipulated time period of one month from the date on which he was served with the notice(s) u/ss.143(2) and 142(1), dated 03.03.2015, therefore, it was not permissible for him to challenge the same for the first time in the course of the proceeding before the tribunal. Having given a thoughtful consideration to the aforesaid claim of the ld. DR we are unable to persuade ourselves to subscribe to the same. On a careful perusal of Section 124 of the Act, it transpires that the same deals with the issue of territorial jurisdiction of an Assessing Officer. Ostensibly, sub-section (1) of Section 124 contemplates vesting with the A.O jurisdiction over a specified area by virtue of any direction or order issued under sub- section (1) and sub-section (2) of Section 120 of the Act. On the other hand, sub-section (2) of Section 124 contemplates the manner in which any controversy as regards the territorial jurisdiction of an A.O is to be res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f OSL Developers (p) Ltd. Vs. ITO, (2021) 211 TTJ (Kol) 621 and that of ITAT, Gauhati Bench in the case of Balaji Enterprise Vs. ACIT (2021) 187 ITD 111 (Gau.). Accordingly, on the basis of our aforesaid observations, we are of the considered view that as the assessee s objection to the validity of the jurisdiction assumed by the Income- Tax Officer, Ward-2(2), Bhilai is by no means an objection to his territorial jurisdiction, but in fact an objection to the assumption of jurisdiction by him in contravention of the CBDT Instruction No.1/2011, dated 31.01.2011, therefore, the provisions of sub- section (3) of Section 124 would not assist the case of the revenue. 15. We shall now deal with the contention of the Ld. DR that as both the officers in question i.e. Dy. CIT, Circle-1, Bhilai and the Income Tax Officer, Ward-2(2), Bhilai as per sub-section (5) of Section 120 were vested with concurrent jurisdiction over the assessee, therefore, initiation of the assessment proceedings by the Dy. CIT, Circle-1, Bhilai vide notice issued u/s.143(2) dated 24.09.2013, which thereafter had culminated into an assessment framed by the Income-Tax Officer, Ward- 2(2), Bhilai vide his order passed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee) is to be transferred to another A.O (having concurrent jurisdiction over the case of the assessee), even then the authority specified under sub-section (1) of Section 127 is obligated to record his reasons for doing so. Considering the aforesaid position of law, we are of the considered view that now when in the present case the assessment proceedings were initiated by the Dy. CIT, Circle-1, Bhilai vide notice u/s.143(2), dated 24.09.2013, which thereafter were taken up and culminated by the Income-Tax Officer, Ward-2(2), Bhilai vide his order passed u/s.143(3) dated 30.03.2015, then, as per the mandate of sub-section (1) of Section 127 of the Act, the specified authority i.e. Commissioner or above was obligated to have recorded his reasons for transferring the case from the aforesaid Dy. CIT, Circle-1, Bhilai to the Income-Tax Officer, Ward-2(2), Bhilai. However, nothing has been brought to our notice which would justify the transfer of jurisdiction over the Assessee's case from the Dy. CIT, Circle-1, Bhilai to Income-Tax Officer, Ward-2(2), Bhilai. 16. Be that as it may, we are of the considered view that as in the case of the assessee the assessment order u/s.14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axpayers, especially from mofussil areas, that the existing monetary limits for assigning cases to ITOs and DCs/ACs is causing hardship to the taxpayers, as it results in transfer of their cases to a DC/AC who is located in a different station, which increases their cost of compliance. The Board had considered the matter and is of the opinion that the existing limits need to be revised to remove the abovementioned hardship. An increase in the monetary limits is also considered desirable in view of the increase in the scale of trade and industry since 2001, when the present income limits were introduced. It has therefore been decided to increase the monetary limits as under: Income Declared : Income Declared (Mofussil areas) : (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 Non- corporate 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 DCIT, Circle-11(1), Kolkata, is valid as admittedly, he did not issue a notice u/s 143(2) of the Act, 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 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-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vident 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 by the ITO as per the CBDT circular (supra). From a perusal of the assessment 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 emerge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed 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. In the result, appeal of assessee is allowed. Apart from that, we find that a similar view had been taken by the ITAT, Cuttack Bench, Cuttack in the case of Kshirod Kumar Pattanaik Vs. ITO, Angul Ward, Angul, ITA No.380/CTK/2019 dated 10.12.2020. 17. Consequent to our aforesaid deliberations, we are of the considered view that as in the present case before us the assessment had been framed by the Income Tax Officer, Ward-2(2), Bhilai u/s. 143(3), dated 30.03.2015 in clear contravention of the CBDT Instruction No.1/2011, dated 31.01.2011, which divested 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 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the PAN of the assessee was lying with him at the time of issuance of notice. As soon as ITO 1(1) has realized that the amount of returned income filed by the assessee exceeds Rs. 15 Lacs, he transferred the said case to DCIT-1(1) Bilaspur. It is further submitted that the assessee at no earlier point of time either before the Ld. AO or before the Ld. CIT(A) had raised such plea of incorrect jurisdiction on account of the defect in issuing of notice u/s 143(2), therefore, as per provisions of section 124(3) such contentions at this juncture are not tenable. With such submissions, Ld. Sr. DR submitted that the question raised by the assessee on validity of jurisdiction shall not be entertained and the appeal should be deliberated upon on the merits. 12. We have considered the rival submissions, perused the material available on record and the case laws relied upon. Admittedly, in the present case the mandatory notice u/s 143(2) for initiating the assessment proceedings was issue by ITO Ward 1(1), Bilaspur vide notice dated 17.03.2016, who at relevant point of time was not vested with valid jurisdiction over the case of the assessee, since the cases having returned income above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. Vs. ITO, (2021) 211 TTJ (Kol) 621 and that of ITAT, Gauhati Bench in the case of Balaji Enterprise Vs. ACIT (2021) 187 ITD 111 (Gau.). Accordingly, on the basis of our aforesaid observations, we are of the considered view that as the assessee s objection to the validity of the jurisdiction assumed by the Income- Tax Officer, Ward-2(2), Bhilai is by no means an objection to his territorial jurisdiction, but in fact an objection to the assumption of jurisdiction by him in contravention of the CBDT Instruction No.1/2011, dated 31.01.2011, therefore, the provisions of sub- section (3) of Section 124 would not assist the case of the revenue. 15. In terms of foregoing observations of the tribunal, wherein the objection raised by the revenue are specifically dealt with, therefore, in the present case the same contention raised by the revenue cannot be decided differently. We, therefore, in absence of any cogent material brought on record by the revenue w.r.t. facts in the present case to dislodge the aforesaid conviction are unable to convince ourselves with the objections raised, accordingly the objections are disposed-off against the revenue. 16. In backdrop of aforesaid observati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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