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TMI Blog2024 (9) TMI 1370X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessee, the same ultimately, reached Ward 8(2), Delhi, from where the final assessment order was passed. We are of the considered view that even if it is assumed that in accordance with the order dated 15.11.2014 u/s 120 of the Act, the jurisdiction vested with Ward 8(2), Delhi, then, why the assessment for the previous year AY 2014-15 stood transferred from the ITO, Ward 40(1) to ITO 70(2) from where the assessment order was passed on 31.01.2017. We are of the considered view that it is not a case where the notice was issued and assessment completed by invoking provisions of concurrent jurisdictions, rather, it appears that in whimsical manner the AOs had exercised jurisdiction under the Act and transferred the assessment. There is no substance in the contention that due to sections 292BB or sub-section (3)(a) of section 124 of the Act, the assessee is barred to raise the ground objecting to the assumption of jurisdiction. More particularly when objections were raised at earliest and even considered by assessing officers. Decided in favour of assessee. - Shri G.S. Pannu, Hon ble Vice President And Shri Anubhav Sharma, Judicial Member For the Assessee : Shri R.R. Singhla, CA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Ward-70(2), Delhi at that time. It is also submitted that the assessment was finally completed by ITO, Ward-8(2), Delhi and the case was transferred from one AO to another without following proper procedure as prescribed in section 127 of the Act. In this regard, the AR has submitted as under: Notice u/s 143(2) issued were without jurisdiction:- The assessee had filed his return of Income for the AY 2015-16 at his business address at Noida but with the Income Tax Officer Ward 25(1), Delhi having jurisdiction upon him based on his permanent residence. Assessment for AY 2014-15 was pending before the Income Tax Officer, Ward 70(2), New Delhi but a notice u/s 143(2) dated 19-09-2016 was received by the Income Tax Officer Ward 40(1), Delhi. Notice u/s 143(2) dated 29-09-2016 was also received by-the assessee from Income Tax Officer, Ward 2(2), Noida. As there cannot be two simultaneous jurisdiction at the same time, these notices were Without-jurisdiction and were objected by the assessee. Copies of the following are being enclosed herewith for your kind perusal:- Notice of demand along with copy of Assessment order for AY 2014-15 Copy of notices u/s 143(2) dated 19-09-2016 and 29-09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been observed as under:- A survey of the above provisions of the Act highlights the following situations. After creating the various Income Tax authorities, the Act does not prescribe their respective jurisdiction or functions. Any case can be dealt with by any Income Tax authority with the possible exception of the Board. Accordingly, the various Income Tax authorities are of co-ordinate jurisdiction. What function or functions, which authority or officer, shall perform is left to be decided either by the Board or by the Commissioner. On what principles the Board and the Commissioner will allocate the functions is not indicated in the Act. The principle is, however, apparent from the nature of the enactment. The Act has been enacted with a view to collect revenue. Income Tax is the main source of revenue for the State. It is through revenue that the machinery of the State is run. It is desirable that the tax should be collected as early as possible. Collection of tax is preceded by assessment thereof. It is consequently desirable that the assessment proceedings should be completed expeditiously but expeditious disposal of an assessment does not mean that the assessee may be put to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there was no dispute about validity of initiation of the said proceedings. Once proceedings were validly initiated but disposed of by an officer having no jurisdiction, the proceedings do not come to an end but should be finalized by an officer having jurisdiction. Therefore, while accepting the decision of the tribunal on the question of cancellation of penalty, the High Court held that the proceedings had not been finalized and could be finalized by the Income Tax Officer. In the present case, proceedings were initiated both by the AO, Delhi and ITO Dimapur. Even if it is assumed that the proceedings initiated, by AO, Delhi were not in accordance with law, there is no finding and indeed the respondent did not contest the proceedings initiated by ITO, Dimapur. ITO, Dimapur had accepted that the assessment order should be passed by AO, Delhi. Even if the said opinion/belief was wrong, it would not affect the initial initiation of proceedings by ITO, Dimapur, who had passed the assessment orders in the second round. 39. A Division Bench of Bombay High Court in Commissioner of Income Tax vs. BharatkumarModi 2000) 246 ITR 693, referred to the well settled principle of law; setting o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent officer). 19. We would reiterate that sub-section (1) to, Section 124 states that the Assessing Officer would have jurisdiction over the area in terms of any direction or order issued, under sub-section (I) or sub-section (2) to Section 120 of the Act. Jurisdiction would depend upon the place where the person carries on business or profession or the area in which he is residing. Subsection (3) clearly states that no person can call in question jurisdiction of an Assessing Officer in case of non-compliance and/or after the period stipulated in clauses (a) and (b), which as observed in S. S. Ahluwalia (supra) would negate and reject arguments predicated on lack of subject matter jurisdiction. Where an assessee questions jurisdiction of the Assessing Officer within the time limit and in terms of sub-section (3), and the Assessing Officer is not satisfied with the correctness of the claim, he is required to refer the matter for determination under sub-section (2) before the assessment is made. Reference of matter under sub-section (2) would not be required when Assessing Officer accepts the claim of the assessee and transfers the case to another Assessing Officer in view the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer, Ward-1 (1), Noida should not continue with the assessment as-the petitioner-assessee was . regularly filing returns with the Income-Tax Officer, Ward-58 (2), Delhi. Objection as raised were treated as made in terms 'of sub-section (3) to Section 124, notwithstanding-the fact that there was delay and non-compliance. The Income-Tax Officer, Ward-1 (1), Noida accepted the request/prayer of the petitioner and. had transferred pending proceeding to the Assessing Officer, Ward-58 (2), Delhi. Therefore, there was no heed, to invoke, and follow the procedure mentioned in sub-section (2) to Section 127 of the Act. Section 127 of the Act would come into play when the case, is to be: transferred from the Assessing Officer having jurisdiction to a third officer not having jurisdiction over an assessee (a case) in terms of the directions of the Board under section 120 of the Act. Section 127 of the Act could also apply when the department wants transfer of a case, and Sections 120 and 124 of the Act are not attracted. 22. Counsel for the petitioner had relied upon judgment of the Supreme Court in Hasham Abbas Sayyad Vs. Usman Abbas Sayyad Ors., (2007) 2 SCO 355 which draws distinctio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AY 2015-16 by ITO, Ward 40(1) u/s 143(2) on 19.09.2016, the assessment for AY 2014-15 was also pending with ITO, Ward-70(2). It was, thus, submitted that the notice could not have been issued by ITO, Ward 40(1). It was further submitted that the AO had suo moto transferred the assessment to ITO, Ward 2(2) where objections were raised with regard to the exercise of jurisdiction which was rejected and thereafter, the case was transferred to ITO, Ward 40(1), Delhi, and ITO, Ward 8(2) Delhi concluded the assessment. Thus, relying the following judgements, it was submitted by the ld. counsel that the assessment was completed without a valid notice u/s 143(2) of the Act by the jurisdictional Assessing Officer and otherwise the assessment was completed by an AO who was not having the jurisdiction:- (i) P.A. Ahammed Vs Chief Commissioner of Income Tax (2006) 282 ITR 334 (Ker); (ii) Sunworld Infrastructure Pvt Ltd Vs ITO Ward 24(3), New Delhi; (iii) Rungta Irrigation Limited Vs ACIT Central Circle- 3(1), Kolkata. ITA No. 1224/Kol/2019; (iv) Abhishek Jain Vs Income Tax Officer, Ward 55(1), Delhi (2018) 405 ITR 1 Delhi. 4.1 Reliance in this regard was also placed on ACIT vs. S.K. Industries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee submitted his reply vide letter dt.23.11.2017 in response to notice u/s 142(1) dt. 07.11.2017 issued by Ward 8(2), Delhi, in which no objection was raised regarding assumption of jurisdiction or service of notice u/s 143(2). In this regard, Section 292BB of the act is reproduced here: Where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment. Sec 124 of the act may also be considered in this regard, relevant portion of which is reproduced as under: (3) No person shall be entitled to call in question the jurisdiction of an Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with address at Pitampura South, Delhi. As per CBDT notification dt. 22.10.2014, the jurisdiction of the assessee on the basis of the address as per said ITR lies with ITO Ward-40(1), Delhi. Thus, the ITO Ward-40(1), Delhi has issued the notice dt. 19.09.2016 u/s 143(2) of the Act for the assessment year in appeal. Later, when it came to the notice that the assessee is a director in M/s Emgreen Impex Pvt. Ltd., then in accordance with CBDT notification dt. 22.10.2014, the case was transferred from ITO, Ward-40(1), Delhi to ITO, Ward-8(2), Delhi (said CBDT notification is enclosed). For migration of PAN from ITO, Ward-40(1), Delhi to ITO, Ward- 8(2), Delhi, a proposal was sent to CIT office and then, the PAN was transferred by CIT office itself to respective jurisdiction i.e. Ward 8(2), Delhi on 29.03.2017 (please refer to PAN Jurisdiction History enclosed). Without prejudice to above submissions, Sub-section 3(a) of Sec 124 of the act may kindly be considered in this regard, which is reproduced as under: (3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer (a) where he has made a return under sub-section (1) of section 115WD or under sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revious AY 2014-15, notice was initially issued by ITO, Ward 40(1), Delhi and subsequently, the ITO, Ward 40(1), Delhi had suo motto transferred the case for AY 2014-15 to ITO, Ward- 70(2) Delhi and, ultimately, the assessment for AY 2014-15 was concluded on 30.12.2016 by ITO, Ward 70(2), Delhi. Thus, in this period, admittedly, ITO, Ward 40(1), Delhi, was of the belief that the jurisdiction for assessment of the assessee lies with ITO, Ward 70(2), Delhi only and not with him. Certainly thus the issuance of notice u/s 143(2) for present AY 2015-16 again by ITO, Ward 40(1) Delhi on 20.09.2016 is questionable. 6.1 In the response filed by the AO, it claimed that this notice u/s 143(2) was issued by ITO Ward 40(1) for AY 2015-16 because the assessee disclosed income from business and profession. However, we find that then, ITO, Ward 40(1), New Delhi by letter dated 26.09.2016, copy of which is available on record, at page 31 of the paper book had transferred the assessment for this AY 2015-16 to the office of Addl. CIT, Range-1, Noida with a note that as an abundant precaution, notice u/s 143(2) of the Act was issued but the case falls under the jurisdiction of Addl. CIT, Range-1, Noi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between different tax authorities and the assessee, we find that by letter dated 31.01.2016 available at page 36 of the paper book, the assessee had written to ITO, Ward-2(2), Noida to disclose in response to notice issued from the said office as to under which provision the notice is issued as the notice mentions two different sections of the Act for which by letter dated 13.02.2016 available at page 33, it was informed to the assessee by ITO, Ward 2(2), Noida that the notices u/s 143(2) already stands issued on 19.09.2016 and 29.09.2016 and that the notice dated 19.09.2017 issued by ITO, Ward 2(2), Noida is one u/s 142(1) of the Act and, therefore, on the notice both sections 143(2)/142(1) are mentioned. 8.1 It further comes up that thereafter, on 23.02.2017 the assessee wrote to ITO, Ward 2(2), Noida that he had questioned the exercise of jurisdiction by ITO, Ward 2(2), Noida as the notice was issued u/s 143(2) by ITO, Ward 40(1), Delhi. Further, by letter dated 22.07.2017, the assessee again questioned the exercise of jurisdiction by ITO, Ward 2(2), Noida. It was specifically mentioned that the assessee had objected to the transfer from Delhi to Noida and that by email dated 01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not vitiated. The question actually to be examined was if jurisdictional AO had issued notice u/s 143(2) with in time which Revenue has failed to justify and establish the validity of issuance of the notice u/s 143(1) by ITO, Ward 40(1) on 20.09.2016. We find no justification as to how the tax authorities of Noida Office, when transferred the case of the assessee to Ward 40(1), Delhi, even to say on request of assessee, the same ultimately, reached Ward 8(2), Delhi, from where the final assessment order was passed. We are of the considered view that even if it is assumed that in accordance with the order dated 15.11.2014 u/s 120 of the Act, the jurisdiction vested with Ward 8(2), Delhi, then, why the assessment for the previous year AY 2014-15 stood transferred from the ITO, Ward 40(1) to ITO 70(2) from where the assessment order was passed on 31.01.2017. 10. We are of the considered view that it is not a case where the notice was issued and assessment completed by invoking provisions of concurrent jurisdictions, rather, it appears that in whimsical manner the AOs had exercised jurisdiction under the Act and transferred the assessment. There is no substance in the contention th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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