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TMI Blog2024 (11) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... ication Order u/s 120(5) of the Act dated 27/08/2018. In the present case, the ITO, ward-1(2)(4), Bangalore had issued the notice U/s 143(2) on 04/07/2017 thereafter the case was transfer from ACIT, Circle- 1(2)(1), Bangalore on 29/08/2018 consequent to ld. JCIT s Notification Order U/s 120(5) of the Income Tax Act dated 27/08/2018. Therefore the notice issued U/s 143(2) of the Act dated 04/07/2017 is illegal, bad in law without jurisdiction. We set aside the order of the revenue authority by quashing the order of the assessment framed u/s 143(3) of the Act dated 26/12/2018 since the issue of notice u/s 143(2) of the Act dated 04/07/2017 was not issued by the jurisdictional ld. AC/DC as specified in the CBDT Instruction No.1/2011 dated 31.1.2011 which is not a curable defect. Hence, the additional ground raised by the assessee is allowed. - Shri Laxmi Prasad Sahu, Accountant Member And Shri Keshav Dubey, Judicial Member For the Appellant : Sri Ravi Shankar S.V., A.R. For the Respondent : Sri D.K. Mishra, D.R. ORDER PER KESHAV DUBEY, JUDICIAL MEMBER: This appeal at the instance of assessee is directed against the order of CIT(A)/NFAC dated 13.6.2024 vide DIN Order No. ITBA/NFAC/S/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejudice the rate, period and on what quantum the interest has been levied are not in accordance with law and further are not discernable from the order and hence deserves to be cancelled on the facts and circumstances of the case. h. The appellant craves leave to add, alter, delete or substitute any of the grounds urged above. i. In view of the above and other grounds that may be urged at the time of the hearing of the appeal, the appellant prays that the appeal may be allowed and appropriate relief be granted in the interest of justice and equity. 2. The assessee has also raised following additional grounds of appeal: 1. The notice issued under section 143(2) of the Act by the learned Income Tax Officer, Ward 1(2)(4), is without jurisdiction, on the facts and circumstances of the case. 2. The issuance of 143(2) by the non-jurisdictional assessing officer renders the order of assessment passed as invalid in the eyes of the facts and circumstances of the case. 3. The notice issued by a non-jurisdictional assessing officer is an incurable defect as it goes to the root of assumption of jurisdiction on the facts and circumstances of the case. 4. The Appellant craves to add, alter, mod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MF is not complete. After discussing the provisions of Sec 54F of the Act, the AO was of the opinion that the law does not permit the claim of deduction unless the conditions laid down under the provisions of IT Act are satisfied. Accordingly the AO held that the assessee is not eligible for claim of exemption u/s 54F of the Act since the assessee has neither constructed nor purchased habitable residential house property within the time stipulated under the Income tax act. Further, in the opinion of AO the possession of the property in question as mentioned by the assessee is a vacant plot of land and not a residential house property and accordingly, the entire net consideration received amounting to Rs. 8,00,00,001/- is brought to tax under the head Long term capital gains . 3.2 Aggrieved by the assessment completed u/s 143(3) of the Act, the assessee preferred an appeal before the ld. CIT(A)/NFAC. 4. The ld. CIT(A)/NFAC dismissed the appeal of the assessee on that ground that in the present case as there is not even Sanction Plan from BMRCL due to various legal issues such as claim of encroachment of Storm Water Drain Department and the upcoming Metro Project by BMRCL. In absence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with a sketch of the same. 8. Details of case Laws relied upon by the Assessee. 5. Before we proceed further we must first consider the additional grounds of the appeal raised by the assessee before the Tribunal. 5.1 We have heard the both the parties on admission of the additional grounds raised by the assessee. In our opinion, by way of the additional grounds of appeal, the assessee has raised pure question of law. Further all the facts are already on record and there is no necessity of investigation of any fresh facts for the purpose of adjudication of above grounds. Accordingly, by placing reliance on the judgment of Hon ble Karnataka High Court in the case of Gundathur Thimmappa Sons Vs. CIT reported in 70 ITR 70 as well as judgment of the Hon ble Supreme Court in the case of NTPC Vs. CIT reported in 229 ITR 383 (SC) we inclined to admit the additional grounds of appeal for the purpose of adjudication as there was no investigation of any fresh facts otherwise on record and the action of the assessee is bonafide as the assessee has raised the pure question of law which arises from the facts as found by the authorities below. 6. Now before we proceed with the merit of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act was actually issued on 04/07/2017 i.e. way before the ld. JCIT s Notification Order U/s 120(5) of the Act dated 27/08/2018. 7.1 We are of the consider opinion that notice u/s 143(2) of the Act is the jurisdictional notice and any inherent defect therein is not curable. In the present facts of the case, after considering the instruction No.1/2011 cited (supra), the notice u/s 143(2) dated 04/07/2017 having been issued by an Income Tax Officer who had no jurisdiction over the assessee, such notice in our view has not been issued validly and is issued without authority in law. The revenue also could not controvert the same by submitting any other Notifications/Circular/Instruction to this effect. As per the Instruction No.1/2011 dated 31.1.2011 by the Board as in the present case, the total income declared by the assessee is Rs. 59,29,270/- for the assessment year 2016-17 and therefore, the notice ought to have been issued by ld. AC/DC himself instead of transferring the same to the ITO, Ward-1(2)(1) in consequence to JCIT s Notification Order u/s 120(5) of the Act dated 27/08/2018. In the present case, the ITO, ward-1(2)(4), Bangalore had issued the notice U/s 143(2) on 04/07/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances, we have no hesitation in setting aside the notice dated 30th March, 2019. 7. Consequently the order dated 18th November, 2019 rejecting Petitioner's objection is also quashed and set aside. 7.2 Further under the similar facts and circumstances, the coordinate bench of ITAT Kolkata in the case of Krishnendu Chowdhury Vs. ITO Ward-1 cited (supra) has also held as under: 8. We have heard rival submissions and gone through facts and circumstances of the case. We have also perused the assessment records. The crux of the issue in the case is that the notice under section 143(2) of the Act was not issued by the ITO in terms of the instruction No. 1/2011 [F.NO. 187/12/2010-IT(A-I)], dated 31.1.2011. As per the instruction the notice was to be issued by the ITO but the notice was issued by the ACIT. Therefore in view of above the notice issued by the ACIT is invalid and consequently the assessment framed by the ITO becomes void. Now the issue before us arises so as to whether the notice issued by the ACIT u/s. 143(2) of the Act is without jurisdiction in terms of the aforesaid instruction. In this connection we consider it fit to incorporate the relevant portion of Instructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable in the present case also and quash the selection of scrutiny and completion of assessment by holding as invalid. Hon'ble Chattishgarh High Court in Sunita Finlease Ltd. 's case (supra) has considered section 119 of the Act by stating that Section 119 of the Act, empowers the Board of Direct Taxes to issue orders, instructions or directions for the proper administration of the Act or for such other purposes specified in sub-section (2) of the section. Hon'ble High Court further held that such an order, instruction or direction cannot override the provisions of the Act. Direction by issuing instructions to the officers for the process of selection of cases for scrutiny for returns for a particular financial year and allowing time of three months for completion of the same cannot be considered to override or detract from the provisions of the Act. It only directs that the above exercise should be completed within three months of the date of filing of return by the assessee, which amounts to an assurance to the assessee that the return filed by him can be scrutinized by the Assessing Officer within three months of filing of the return. The Hon'ble High Court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... selected for scrutiny first time on 18.10.2004, as per copy of order sheet entry, and notice was issued fixing the hearing on 18.10.2004 itself. As per Instruction No. 9/2004 dated 20.09.2004, the process of selection of cases for scrutiny for returns filed up to 31.03.2004, in the present case assessee filed its return of income on 01.12.2003 must be completed by 15.10.2004. The factual position as noted by CIT (A) in his appellate order that notice u/s. 143(2) is dated 10.10.2004, is not supported by Ld. Sr. DR at the time of hearing rather assessee contested that this finding of fact is erroneous and actual case was selected by issuing notice as on 18.10.2004. Even the basis of recording this fact is only from the assessment order wherein it is mentioned that notice u/s. 143(2) is dated 10.10.2004 and the same was served on the assessee on 19.10.2004 fixing the date of hearing on 16.12.2004. When going through the order sheet entry, which is taken by assessee from the assessment records clearly reveals that factually notice u/s. 143(2) was first time issued on 18.10.2004 and not on 10.10./2004. This fact has not been contested by Ld. Sr. DR. Respectfully following the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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