9911796707
TMI Blog2025 (1) TMI 1404X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax (Appeals)-1, Guwahati [hereinafter referred to as 'CIT(A)'] passed u/s 250 of the Income Tax Act (hereinafter referred to as the 'Act'). 2. The assessee in this appeal is aggrieved by the action of the ld. CIT(A) in confirming the addition made by the Assessing Officer of Rs. 5,52,956/- which has been claimed by the assessee as agricultural income, however, the lower authorities rejected the said claim of the assessee and treated the same as income of the assessee from unexplained sources. Apart from assailing the aforesaid addition on merits, the assessee has taken the following additional ground also: "FOR THAT in the facts and circumstances of the instant case, the Ld. Commissioner of Income Tax (Appeals)-NFAC acted unlawfully in not appreciating that none of the conditions precedent existed for and/or were fulfilled by the Ld. Income Tax Officer, Ward-24(1), Hooghly for his specious action of framing the assessment order u/s 143(3) of the Income Tax Act, 1961 on 26-12-2019 in the instant case de hors any notice u/s 143(2) of the Income Tax Act, 1961 and without complying to the mandatory tenets of s. 127 of the Act and the impugned inaction on that account renders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pass the assessment order in this case lied with concerned ITO, Ward-24(1), Hooghly. He has submitted that in this case, the notice u/s 143(2) of the Act has been issued by the ACIT, Circle-24(1), Hooghly, whereas, the assessment order was passed by ITO, Ward-24(1), Hooghly. The ld. counsel has submitted that issuing of notice u/s 143(2) of the Act by the Assessing Officer having jurisdiction over the assessee is sine qua non to assume jurisdiction to frame the assessment u/s 143(3) of the Act. He, therefore, has submitted that since the notice u/s 143(2) of the Act had been issued by a non-jurisdictional Assessing Officer, the said notice did not have any legal sanctity and consequent to such an invalid notice, the impugned assessment framed u/s 143(3) was bad in law. The ld. Counsel has submitted that the issue is squarely covered by the recent decision of the jurisdictional Hon'ble Calcutta High Court in the case of PCIT vs. Shree Shoppers Ltd. in ITAT/39/2023 in IA No.GA/1/2023 dated 15.03.2023. The ld. Counsel for the assessee has further relied on the decision of the Coordinate 'C' Bench of the Tribunal in the case of M/s J R Roadlines Pvt. Ltd. vs. DCIT in ITA No.2534/Kol/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Hon'ble Supreme Court in the case of ACIT vs. M/s Hotel Blue Moon (supra). The ld. counsel, therefore, has submitted that in this case the concerned DCIT did not issue any notice u/s 143(2) of the Act before proceeding to frame assessment u/s 143(3) of the Act. He has submitted that since the concerned ITO, Ward-1(1) did not have jurisdiction to issue notice u/s 143(2) of the Act as such the said notice issued by him did not have any legal sanctity. He, therefore, has submitted that the assessment framed by the DCIT, in this case, was bad in law for want of issue of notice u/s 143(2) of the Act. The ld. DR could not rebut the aforesaid legal position based on aforesaid factual aspect put by the ld. counsel for the assessee. However, she has relied upon the findings given by the Assessing Officer in the assessment order. 5. We have considered the rival contentions of ld. representatives of both the parties and gone through the records. Before proceeding further, it will be appropriate to refer to section 120 of the Act which, for the sake of ready reference, is reproduced as under: "Jurisdiction of income- tax authorities (1) Income- tax authorities shall ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned 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 (Mofussil areas) Income Declared (Metro cities) ITOs ACs/DCs ITOs DCs/ACs Corporate returns Upto Rs. 20 lacs Above Rs. 20 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 from 1-4-2011." 7. A perusal of the above provisions of law along with the CBDT Instructions would show, in this case, the competent officer to proceed with the assessment by way of issue of notice u/s 143(2) of the Act was DCIT/ACIT, whereas, the notice u/s 143(2) has been issued by the ITO, Ward-1(1), Kolkata who did not have any jurisdiction to issue the aforesaid notice. As h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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-IT(A-I)], dt. 31/01/2011, the jurisdiction of the assessee is with the Assistant Commissioner of Income Tax, Circle- 1, Durgapur, as the assessee is a non-corporate assessee and the income returned is above Rs. 15,00,000/- and whereas, the statutory notice u/s 143(2) of the Act, was issued on 29/09/2016, by the Income Tax Officer, ward-1(1), Durgapur, who had no jurisdiction of the case. He submitted that the assessment order was passed by the ACIT, Circle-1(1), Durgapur, who had the jurisdiction over the assessee, but he had not issued the notice u/s 143(2) of the Act, within the statutory period prescribed under the Act. Thus, he submits that the assessment is bad in law. 5.1. On merits, he rebutted the findings of the lower authorities. The ld. Counsel for the assessee relied on certain case-law, which I would be referring to as and when necessary. 6. The ld. D/R, on the other hand, submitted that the concurrent jurisdiction vests with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransferred 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 emerged: i) The assessee had filed return of income declaring Rs. 50,28,040/-. The ITO issued notice under section 143(2) of the Act on 06.09.2013. ii) The ITO, Ward-1, Haldia taking note that the income returned was above Rs. 15 lacs transferred the case to ACIT, Circle-27, Haldia on 24.09.2014. iii) On 24.09.2014 statutory notices for scrutiny were issued by ACIT, Circle-27, Haldia. 6. We note that the CBDT Instruction is dated 31.01.2011 and the assessee has filed the return of income on 29.03.2013 declaring total income of Rs. 50,28,040/-. As per the CBDT Instruction the monetary limits in respect to an assessee who is an individual which falls under the category of 'non corporate returns' the ITO's increased monetary limit was upto Rs. 15 lacs; and if the returned income is above Rs. 15 lacs it was the AC/DC. So, since the returned income by assessee an individual is above Rs. 15 lakh, then the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax Officers becomes void since issue of notice under section 143(2) was not done by Income-tax Officers as specified in CBDT instruction No. 1/2011." 9.2. The Hon'ble High Court of Calcutta in the case of West Bengal State Electricity Board vs. Deputy Commissioner of Income Tax, Special Range - I, reported in [2005] 278 ITR 218 (Cal.) has held as follows:- "Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Assessment years 1983-84 to 1987- 88 - Whether a question of law arising out of facts found by authorities and which went to root of jurisdiction can be raised for first time before Tribunal - Held, yes Whether jurisdiction of Assessing Authority is not dependent on date of accrual of cause of action but on date when it is initiated - Held, yes - Whether once a particular jurisdiction is created, same must be prospective and cannot be retrospective and it has to be interpreted having regard to manner in which it has been sought to be created - Held, yes - Assessee" 9.3. The Hon'ble Supreme Court in the case of CIT vs. Laxman Das Khandelwal [2019] 108 taxmann.com 183 (SC), held as follows:- "7. A closer look at Section 292BB shows that if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r having no jurisdiction, Section 292BB of the Act, does not comes into play. Coming to the argument of the ld. D/R that objection u/s 124(3) of the Act has to be taken by the assessee on rectifying notice u/s 143(2) of the Act from a non-jurisdictional assessing officer, I am of the view that I need not adjudicate this issue, as I have held that non-issual of statutory notice/s 143(2) of the Act by the jurisdictional Assessing Officer makes the assessment bad in law. Under these circumstances, we allow this appeal of the assessee." 6. Respectfully following the propositions of law laid down in these orders stated above, we hold that the orders are bad in law for the reason that the assessing authority passed the order u/s 143(3) of the Act i.e. DCIT-13(1), Kolkata has not issued a notice u/s 143(2) of the Act and also for the reason that the jurisdiction of these cases lies with the ITO and not the DCIT. Hence all the orders passed by the ld. CIT(A) in these four cases are hereby quashed and the appeals of the assessees are allowed." 8. In view of above discussion made and in the light of the various case laws, the assessment order passed by the Assessing Officer (DCIT) was ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Tribunal. In the result, the appeal filed by the revenue is dismissed and the substantial question of law are answered against the revenue." 5.1. While giving this judgment, the Hon'ble Court noted the factual findings of the Tribunal which is reproduced as under: "The short issue which falls for consideration in the instant case is whether there is valid notice issued under Section 143 (2) of the Act for commencing the Scrutiny assessment. The Tribunal has noted the facts and rendered a finding that on the date when the case was selected for scrutiny, the authority who issued the notice namely, the Income Tax Officer, Ward No.9 (4), Kolkala did not have jurisdiction and the jurisdiction was with the Deputy Commissioner of Income Tax. The following factual finding has been recorded by the Tribunal : "Therefore, the legal ground stands to be admitted and the same re1ates to invalid notice issued u/ 143(2) of the Act. It is a settled position of law that for carrying out the assessment proceedings u/s. 143(3) of the Act, the statutory requirement of serving of valid notice u/s. 143(2) of the Act is must and in absence thereof the subsequent proceedings become invalid. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such corporate assessee will lie with the DCs/ ACs. It is not in dispute that as on the date of selecting the case for scrutiny, the very basis for having jurisdiction over the assessee is the returned income which was more than Rs. 30 lakhs and the same was lying with the DCs/ACs but the notice u/s. 143(2) of the Act has been issued by ITO, Ward 49(1), Kolkata. It is true that subsequently the assessment has been framed by ACIT, Circ1e-49, Kolkata but the point in dispute is that on the date of issuing a notice u/s. 143(2) of the Act, whether the ITO, Ward- 49(1), Kolkata was having a valid jurisdiction to issue such notice u/s. 143(2) of the Act. We find that Hon'ble jurisdictional High Court in the recent judgment in the case of PCIT Vs. Shree Shoppers Ltd. (supra) has decided identical issue in favour of the assessee. 9. Thus, from the perusal of the findings given by Hon'ble jurisdictional High Court and from the examination of facts of the present case, we find that the aforesaid judgment of the Hon'ble High Court is squarely applicable on the facts of the present case. We thus, unhesitatingly hold that ITO, Ward-49(1), Kolkata had no valid jurisdiction over the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
