2020 (6) TMI 31 - AT - Income Tax

Jurisdiction Issue: ACIT's Assessment Orders Deemed Void. Precedents Quash Assessments.

Sanat Kumar Sahana, Dipti Kumar Sahana Versus Asst. Commissioner Income Tax, Circle-23 (1), Hooghly

Sanat Kumar Sahana, Dipti Kumar Sahana Versus Asst. Commissioner Income Tax, Circle-23 (1), Hooghly - TMI Issues Involved:1. Jurisdiction of the Assessing Officer.2. Validity of the assessment orders passed by the ACIT, Circle-23(1), Hooghly.Issue-wise Detailed Analysis:1. Jurisdiction of the Assessing Officer:The primary issue in this case is whether the ACIT, Circle-23(1), Hooghly had the jurisdiction to pass the assessment orders for the assessment year 2015-16. The assessee argued that the jurisdiction lay with the ITO, Ward-23(4), Hooghly, as per CBDT Instruction No. 1/2011. The return of income was filed within the jurisdiction of ITO, Ward-23(4), Hooghly, with gross total incomes below Rs. 15,00,000. The Tribunal noted that the jurisdiction was indeed with the ITO, Ward-23(4), Hooghly, who issued notices under section 143(2) of the Income Tax Act, 1961. However, the assessments were completed by the ACIT, Circle-23(1), Hooghly. The Tribunal emphasized that the jurisdiction of income tax authorities is conferred by the Board under sections 120(1) and 120(2) of the Act, and any act by an authority without jurisdiction is void ab initio.2. Validity of the Assessment Orders:The Tribunal referred to its previous decision in the case of K.A. Wires Ltd. vs. ITO, which dealt with a similar jurisdictional issue. It was highlighted that the jurisdiction must be conferred by the Board, and any notice or assessment by an officer without such jurisdiction is invalid. The Tribunal cited multiple cases, including the Hon’ble Supreme Court's decision in ACIT & Anr. Vs. Hotel Blue Moon, which held that non-issuance of a statutory notice by the jurisdictional officer renders the assessment invalid. In the present case, the ACIT, Circle-23(1), Hooghly, did not have the jurisdiction to pass the assessment orders, as the jurisdiction was not transferred from the ITO, Ward-23(4), Hooghly. The Tribunal concluded that the assessment orders passed by the ACIT, Circle-23(1), Hooghly, were without jurisdiction and thus quashed them.Conclusion:The Tribunal upheld the assessee's contention that the assessment orders passed by the ACIT, Circle-23(1), Hooghly, were without jurisdiction and quashed the same for both assessment years. The appeals of the assessee were allowed.