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TMI Blog2025 (4) TMI 1571X X X X Extracts X X X X X X X X Extracts X X X X ..... itting the present appeal vide order dated 17.02.2025, has framed the following substantial questions of law:- "(a) Whether the Learned Tribunal was justified in not considering the fact that both officers i.e. ITO, Ward-4 (3), Guwahati and DCIT, Circle-4, Guwahati within the same Range & at the same station are having concurrent jurisdiction over the assessee? (b) Whether the Learned Tribunal is justified in admitting the new grounds without putting on record reason of assessee of not raising the issue earlier? (c) Whether the Learned Tribunal is justified in not taking note that the intent of Instruction No. 1/2011 is to reduce hardship to the taxpayers in respect of transfer to AC/DC at different station and that the issuance of notice u/s 143 (2) and assessment u/s 143 (3) of Income Tax by assessing officer at same station of same Range with same supervisory joint commissioner is complete fulfillment of all conditions and assessment procedure as whole?" 4. Having carefully scrutinizing the material available on record, we are of the view that none of the above substantial questions of law arise in this appeal. However, another substantial question of law, which has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). 7. Aggrieved by the assessment order dated 27.12.2017, the assessee preferred an appeal before the CIT (Appeals), which came to be dismissed on 30.07.2019, whereby the CIT (Appeals) upheld the order of the Assessing Officer and has also directed the Assessing Officer to take necessary and requisite action against the assessee as per other laws, i.e. the provisions contained in the Prohibition of Benami Property Transaction Act, 1988 (as amended till 2016) and the Prevention of Money Laundering Act, 2002 after following due procedure as per the Instructions and Rules. 8. Being aggrieved with the order passed by the CIT (Appeals), the respondent/assessee preferred an appeal before the ITAT under Section 253 of the I.T. Act, wherein an additional ground was raised, which was not raised in the appeal preferred before the ITAT. Vide the said additional ground, the assessee had claimed before the ITAT that the Income Tax Officer has no jurisdiction to issue notice under Section 143 (2) of the I.T. Act to the assessee because it has no authority to assess the income of an assessee, whose return is more than Rs. 20,00,000/- (Rupees Twenty Lakhs) in the moffusil area as per the instruc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 on 27.12.2017 by the Ld. Deputy Commissioner of Income Tax, Circle-4, Guwahati without adhering to the mandatory tenets is therefore ab initio void, ultra vires and ex-facie null in law.' 4. Brief facts of the case are that the assessee is an individual who filed his return of income for the year under consideration wherein he declared total income to the tune of Rs.20,03,070/-. On the legal issue raised by the assessee, the Ld. AR for the assessee submitted that as per the CBDT Instruction No. 1/11 (F. No. 187/ 12/2010-IT(AT) dated 31.01.2011 CBDT has fixed new monetary limit in Mufassil areas, according to which income above Rs. 15 lacs for 'non corporate assessee' and Rs.20 lacs for 'corporate returns' has to be assessed by ACIT/DCIT. Thus, according to Ld. Counsel, since assessee's principal business is in Moffusil area, the AO should have acted upon the instructions given by the CBDT which is binding on the officers of the Department; and since the assessee has declared more than Rs.20 lacs as his returned income, then the scrutiny assessment could have been done by only the ACIT/DCIT and not by the ITO who does not have the pecuniary jurisdiction to do so. However, in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary jurisdiction lies before AC/DC. In this case, admittedly, the assessee an individual (non corporate person) who undisputedly declared income of Rs. 20,03,070/- in his return of income cannot be assessed by the ITO as per the CBDT circular (supra). From a perusal of the paper book, it reveals that the statutory notice u/s 143 (2) of the Act was issued by the then ITO, Ward-4 (3), Guwahati on 20.09.2016 (Refer Page 211 of PB); and the same was served upon the assessee as noted by the AO in the assessment order. Later on the ITO taking note that since the returned income is more than Rs. 15 lacs, he transferred the case to DCIT, Circle-4, Guwahati who issued interim notice u/s 142 (1) dated 03.03.2017 (Refer Page 209 of PB) and framed the assessment order without issuing notice u/s 143 (2) of the Act. From the aforesaid facts the following facts emerged: i) The assessee had filed return of income declaring Rs.20,03,070/-. The ITO issued notice under section 143 (2) of the Act on 20.09.2016. ii) The ITO, Ward-4(3), Guwahati taking note that the income returned was above Rs. 15 lacs transferred the case to DCIT, Circle-4, Guwahati. iii) On 03.03.2017 notice u/s 142 (1) was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e quashed the assessment and the appeal of assessee is allowed 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. 7. In the result, the appeal of the assessee is allowed." 10. Having gone through the order passed by the ITAT, it is clear that it had interfered with the order passed by the CIT (Appeals) as well as the assessment order passed by the DCIT on the ground that only the DCIT has the jurisdiction of issuing notice under Section 143 (2) of the I.T. Act to the assessee and then only got the jurisdiction to pass the assessment order under Section 143 (3) of the I.T. Act, whereas in the present case, the notice under Section 143 (2) of the I.T. Act was issued by the Income Tax Officer though he did not have the pecuniary jurisdiction and realizing this mistake, he transferred the file to the DCIT, who, in turn has issued a notice under Section 142 (1) of the I.T. Act but did not issue notice under Section 143 (2) of the I.T. Act within the time limit prescribed for issuance of the said notice for the concerned assessment year. It is furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly where the assessee has raised such objection before the completion of such assessment or reassessment." 12. Section 292B provides that notice as well as return of income, assessment, summons, etc., issued under the provisions of the I.T. Act cannot be treated as invalid merely by reason of any mistake, defect or omission in such notice, etc., if the same is in substance and effect in conformity with or according to the intent and purpose of the I.T. Act. The ITAT, in the present case, has interfered with the order passed by the CIT (Appeals) and the assessment order mainly on the ground that there is omission on the part of the DCIT in not issuing notice under Section 143 (2) of the I.T. Act to the assessee. The ITAT has not concluded that the notice issued to the assessee by the Income Tax Officer under Section 143 (2) of the I.T. Act is not in substance or not in conformity with the intent and purpose of the I.T. Act. In the absence of such finding, the ITAT cannot interfere with the notice or the assessment order issued against the assessee. In the present case, apart from that, the assessee is also debarred from challenging the assessment proceedings for the first time be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions. Relevant paragraph of the decision of the Hon'ble Supreme Court rendered in Jute Corporation of India Limited (supra) is reproduced hereunder:- "6. The above observations are squarely applicable to the interpretation of Section 251 (1) (a) of the Act. The declaration of law is clear that the power of the Appellate Assistant Commissioner is co-terminus with that of the Income Tax Officer, if that be so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the Income Tax Officer. No exception could be taken to this view as the Act does not place any restriction or limitation on the exercise of appellate power. Even otherwise an Appellate Authority while hearing appeal against the order of a subordinate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations if any prescribed by the statutory provisions. In the absence of any statutory provision the Appellate Authority is vested with all the plenary powers which the subordinate authority may have in the matter. There appears to be no good ..... X X X X Extracts X X X X X X X X Extracts X X X X
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