Tribunal directs reassessment, orders jurisdictional issue first, assessee to be given opportunity, appeal partly allowed.

The tribunal set aside the assessment order, directing the Assessing Officer to first decide the jurisdictional issue raised by the assessee. A fresh assessment order was to be passed by the proper jurisdiction, adjudicating the merits of the additions after providing the assessee a reasonable opportunity. The appeal was partly allowed for statistical purposes.

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Issues Involved:
1. Jurisdiction of the Assessing Officer.
2. Merits of the additions made by the Assessing Officer.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Assessing Officer:

The primary issue raised by the assessee was that the Deputy Commissioner of Income Tax (DCIT) Circle-3, Gurgaon, did not have jurisdiction over the assessee, as the assessee was previously assessed by the DCIT Circle-13(1), New Delhi. The assessee argued that the jurisdiction should have remained with the DCIT Circle-13(1), New Delhi, as per the notification issued by the Central Board of Direct Taxes (CBDT) and the provisions of Section 120 of the Income Tax Act, 1961. The assessee filed objections under Section 124 of the Act immediately upon receiving the statutory notice under Section 143(2) from the DCIT Circle-3, Gurgaon, but the objections were not addressed. The tribunal observed that the regular jurisdiction of the assessee was indeed with the ACIT, Circle-13(1), New Delhi, for several assessment years, including those before and after the assessment year in question (2012-13). The tribunal concluded that the DCIT Circle-3, Gurgaon, should have first decided the jurisdictional objection before proceeding with the assessment. Consequently, the tribunal found that the assumption of jurisdiction by the DCIT Circle-3, Gurgaon, was not free from doubt, thereby affecting the jurisdiction of the Commissioner of Income Tax (Appeals)-1, Gurgaon, as well.

2. Merits of the Additions:

The second issue pertained to the merits of the additions made by the Assessing Officer, which included Rs. 21,68,127 on account of credit card payments and Rs. 1,37,875 on account of hotel services. The assessee contended that these expenses were incurred on behalf of NTF (India) Pvt. Ltd., where the assessee was the Managing Director, and that the company had claimed these expenses in its profit and loss account. The assessee provided supporting evidence and submissions to the Commissioner of Income Tax (Appeals), but the CIT(A) dismissed the appeal, stating that no written submissions were made by the assessee on the issue of disallowances/additions. The tribunal found that the assessee had indeed filed detailed submissions and supporting evidence before the CIT(A), and the CIT(A) had even obtained a remand report from the Assessing Officer. Therefore, the tribunal concluded that the CIT(A) erred in disregarding the submissions and in making the observation that no written submissions were filed by the assessee.

Conclusion:

The tribunal set aside the entire assessment order and directed the Assessing Officer to first decide the jurisdictional issue raised by the assessee. The tribunal further directed that a fresh assessment order be passed by the Assessing Officer exercising proper jurisdiction over the assessee, and to adjudicate the merits of the additions after providing a reasonable opportunity to the assessee. The appeal was thus partly allowed for statistical purposes.

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