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TMI Blog2023 (7) TMI 1425X X X X Extracts X X X X X X X X Extracts X X X X ..... -3(1), Raipur, who has framed the assessment of the assessee was not in accordance with the CBDT Instruction No. 01/2011, dated 31.01.2011 and 06/2011, dated 08.04.2011, therefore, the instruction assumed was invalid in terms of non-following the binding instructions issued by the CBDT and, therefore, the order remained on the basis of such reopening was also void ab initio and needs to be struck down. Reopening proceedings were initiated without having vested jurisdiction by the DCIT-1(1), Raipur and also the same was thereafter wrongly been framed by an officer, who was not having jurisdiction over the case of the assessee as per the criteria laid down by the CBDT Instructions. The order framed u/s. 147/143(3) of the Act by the ACIT, Circle-3(1), Raipur, dated 11.02.2015 for the assessment year 20047-2008 in the case of assessee, is liable to be quashed and we do so. Thus, the legal ground of assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... nces of the case and in law, assessment made u/s 147 dt. 11-2-15 is invalid on the count that the Id AO has not issued notice u/s 143(2) before making assessment u/s 147; in absence of notice u/s 143(2), assessment made u/s 147 is liable to be quashed." Additional Gr. No. 3: "3. On the facts and circumstances of the case and in law, reopening u/s 148 dt. 21-3-14 is invalid as it is based on mechanical approval granted by the Id PCIT u/s 151(l) which is without application of mind on the part of the Id PCIT as he has not cared/ pointed out the glaring mistake of Id AO that Id AO was not having pecuniary jurisdiction for recording reasons & for making assessment u/s 147 as returned income was Rs. 5,22, 820 which is in contravention to the CBDT Instruction No. 1, dt. 31-1-2011 which is much binding on IT authorities u/s. 119; approval u/s 151(l) is invalid; and thus, reopening u/s 148/147 is liable to be quashed." 3. Ld. AR at the outset, argued only on the additional grounds. The revised grounds No. 1 & 2 have not been pressed by the ld. AR of the assessee before us and in this regard ld. AR has endorsed to it, therefore, both the grounds are dismissed as not pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eable to tax as escaped assessment in the year under consideration. The explanation submitted by the AR of the assessee was not supported with documents, books of accounts, therefore, the ld. AO has observed that the onus cast upon the assessee was not discharged and inferred that the assessee has no explanation on discrepancies as detected and the assessee does not want to show anything in this matter. Finally, the ld. AO has added the amount of Rs. 21,49,054/- in the income of the assessee, thereby making the total assessed income as Rs. 27,64,854/-. 7. Dissatisfied with the order of the ld. AO, the assessee preferred appeal before the Commission of Income Tax (Appeal) but without success the appeal of the assessee was dismissed. 8. Now, the assessee is in appeal before us to challenge the decision of the ld. CIT(A). 9. Ld. AR argued on the additional ground No. 1 assailing the validity of jurisdiction of the ld. AO i.e. DCIT-1(1), Raipur/ACIT-3(1), Raipur mentioning the reason that the AO was not having pecuniary jurisdiction over the assessee for recording reasons u/s. 148 of the Act on 19.03.2014 and for making assessment u/s. 147 of the Act on 11.02.2015 as the returned in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficers after recording reasons in this regard. The said Instruction No. 6/2011 is as under :- INSTRUCTION NO. 6/2011 [F. NO. 187/12/2010-ITA-I], ______________________________________________ SECTION 119 OF THE INCOME - TAX ACT, 1961 - CENTRAL BOARD OF DIRECT TAXES - INSTRUCTIONS TO SUBORDINATE AUTHORITIES INSTRUCTIONS - REGARDING INCOME LIMITS FOR ASSIGNING CASES TO DEPUTY COMMISSIONERS/ASSISTANT COMMISSIONERS/ITOS INSTRUCTION NO. 6/2011 [F. NO. 187/12/2010-ITA-I], DATED 8-4-2011 Reference may kindly be made to Board's Instruction No. 1/11, dated 31-1-2011 which lays down revised monetary limit of cases to be assessed by DCsIT/ACsIT in metro cities and mofussil areas w.e.f. 1-4-2011. Some CCsIT have expressed the view that the limit fixed in the aforesaid Instruction, if strictly enforced would lead to unequal distribution of workload between the ACITs and the ITO in some of the charges. 2. In view of the above, the Instruction No. 1, dated 31-1-2011 has been reconsidered by the Board and it has been decided that if the application of above limits in any CIT charge leads to a substantially uneven distribution of workload between DCsIT/ACsIT am ITOs, the CCIT/D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as on 30.09.2015, therefore, the assessment order so framed would also not be saved on the said basis. To sum up, as the impugned assessment u/s. 143(3), dated 29.12.2016 had been framed by the ITO- Ward 1(1), Bhilai de-hors the issuance of a valid notice u/s. 143(2) of the Act, therefore, the same cannot be sustained is liable to quashed. We, thus, in terms of our aforesaid observations quash the assessment framed by the A.O u/s. 143(3), dated 29.12.2016 for want of valid assumption of jurisdiction on his part. ii) Sudhir Kumar Agrawal, ITA No. 158/RPR/2017, order dated 17.10.2022, wherein the Tribunal has held as under:- 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of notice under section 142(1)/143(2). In that scenario, the order passed thereafter is protected on the question of jurisdiction. In the present case, I.T.A No. 266 to 269/Agra/2013 however, no proceeding has been initiated by issuing notice u/s 143(2)/142(1) on the basis of return filed u/s 139(1) with the DCIT (CC), who is the AO for the three impugned assessment orders initiated u/s 147 of the Act. Since clause (a) does not apply to proceedings u/s 147 of the Act, it cannot protect the three reassessment orders. Clause (b) applies where the assessee has not filed return originally u/s 139(1) of the Act. In such a case, the Assessing Officer can issue notice under section 148(1) of the Act, asking the assessee to file the return and in that situation, if the assessee does not call in question the jurisdiction of the Assessing Officer issuing the notice under section 148(1) before the expiry of the time allowed by the notice, such proceedings and reassessment made thereafter is protected on the question of jurisdiction, but in the present case, undisputedly, return of income was originally filed by the assessee u/s 139(1) with its erstwhile Assessing Officer and as per the AO, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above submissions, it was the prayer of the ld. AR that since the reopening itself was invalid, the assessment order u/s. 147 r.w.s143(3) of the Act, dated 11.02.2015 passed by the ld. AO having no pecuniary jurisdiction was invalid, nonest, bad in law, and deserve to be quashed. 14. On the contrary, ld.Sr. DR has filed his written submission, wherein he has submitted as under :- *Assessment was earlier completed us 143(3) by DCIT circle(l)(l),Raipur and income was assessed at Rs. 6,15,800/- on ITR income 5,22,820/- * The assessment order was accepted by the assessee and have not objected the jurisdiction on territorial and pecuniary ground. * Based on above material facts, the DCIT (l)(l),Raipur has reason to believe of escaped income and the case was reopened by the same AO. * The DCIT obtained approval under section 151 of the Act on 20-03-2014. The DCIT circle(l)(l),Raipur issued notice under section 148 of the Act on 21-03-2014 and served on 22-03-2014. *The assesee has not objected the legality of notice, procedure and service of notice to the DCIT(Circle-1)(1) Raipur in view of section 124(3) of the Act. * The assesee also have not object the proceedings under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal has held that deciding any ground based on any additional evidence before CIT(A), without calling for a remand report from the Assessing Officer, is untenable in law. It was, therefore, the submission of ld.Sr. DR that the assessee should not be allowed to raise such fresh issue before the ITAT for which no objection was taken before the revenue authorities or alternatively the same should be restored back for adjudication by the authorities below. 17. We have considered the rival submissions, perused the material available on record and the case laws pressed into our service. Regarding admissibility of additional legal ground of the assessee with respect to challenging the jurisdiction of the AO which was not challenged before the AO under the provisions of Section 124(3) of the Act within the stipulated time period of one month from the date of which the notice u/s. 143(2) of the Act was served upon the assessee, as opposed by the ld.Sr. DR, we take guidance from the observation of the coordinate bench of this Tribunal in the case of Sudhir Kumar Agrawal, in ITA No. 158/RPR/2017, order dated 17.10.2022, wherein it has been observed in para 14 as under :- 14. We sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of Section 120, therefore, the provisions of sub-section (3) of Section 124 which places an embargo on an assessee to raise an objection as regards the validity of the jurisdiction of an A.O would get triggered only in a case where the dispute of the assessee is with respect to the territorial jurisdiction and would have no relevance in so far his inherent jurisdiction for framing the assessment is concerned. Also, support is drawn from a recent judgment of the Hon'ble High Court of Calcutta in the case of Principal Commissioner of Income-tax Vs. Nopany & Sons (2022) 136 taxmann.com 414 (Cal). In the case before the Hon'ble High Court the case of the assessee was transferred from ITO, Ward-3 to ITO, Ward-4 and the impugned order was passed by the ITO, Ward-4 without issuing notice u/s 143(2) and only in pursuance to the notice that was issued by the ITO, Ward-3, who had no jurisdiction over the assessee at the relevant time. Considering the fact that as the assessment was framed on the basis of the notice issued under Sec. 143(2) by the assessing officer who had no jurisdiction to issue the same at the relevant point of time, the Hon'ble High Court quashed the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, held that circulars issued under Section 119 of the Income Tax Act, 1961 and 37B of Central Excise Act are binding on the Revenue. (See Navnit Lal C Jhaveri vs. K.K. Sen (1965) 56 ITR 198 (SC); Ellerman Lines Ltd. vs. CIT 1972 CTR (SC) 71 (1971) 82 ITR 913 (SC); K.P. Varghese vs. ITO (1981) 24 CTR (SC) 358 : 1981 (4) SCC 17i Union of India vs. Azadi Bachao Andolan (2003) 184 CTR (SC) 450 : 2003 (8) SCALE 287, 308 Collector of Central Excise vs. Usha Martin Industries 1994 (94) ELT : 1997 (7) SCC 47 Ranadey Micronutrients vs. CCE 1996 (8) ELT 19 : 1996 (10) SCC 387; Collector of Centra Excise vs. Jayant Dalai (P) Ltd. 1998 (100) ELT 10 : 1997 (10) SCC 402; Collector of Centra. Excise vs. Kores India Ltd. 1997 (89) ELT 441 : 1997 (10) SCC 338; Paper Products Ltd. vs. Collector of Central Excise 1999 (112) ELT 765 : 1997 (7) SCC 84; Dabur India Ltd. vs. CCE 2003 (157) ELT 129). 8. The somewhat different approach in M/s. Hindustan Aeroneutics V. Commissioner of Income Tax, Karnataka, Bangalore 2000 (5) SCC 365 by two learned Judges of this Court, apart from being contrary to the stream of authority cannot be taken to have laid down good law in view of the subsequent decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 31.01.2011 & No. 6/2011, dated 08.04.2011 is not accepted by the revenue authorities, as has been occurred in the present case in hand, anyone can frame the assessment/reassessment even having no jurisdiction to enter into the same. The power conferred upon the CBDT to issue instructions and directions by section 119 of the Act is for proper working of the Act, which should be followed by the revenue authorities in true spirit. Accordingly, the Tribunal quashed the reassessment framed by the ITO/AO, who was having no jurisdiction over the assessee. 20. Further, the coordinate bench of the Tribunal in the case of Ravi Sherwani, in ITA No. 64/RPR/2020, vide order dated 29.05.2023, in para 11 has held that, "controversy involved in the present appeal lies in a narrow compass, i.e, sustainability of the assessment framed by the ACIT, Circle 4(1), Raipur vide his order passed u/s 143(3) of the Act, dated 29.03.2016, which in turn was based on a notice u/s 143(2) of the Act, dated 08.09.2014 issued by the ITO-1(3), Raipur, i.e a non-jurisdictional officer. We find that the issue involved in the present appeal is squarely covered by the order of this Tribunal in the case of Durga Ma ..... 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