High Court rejects appeal on jurisdictional error in Income Tax Assessment for AY 2012-13

The High Court dismissed the appeal in a case concerning jurisdictional error in an Income Tax Assessment for Assessment Year 2012-13. The appellant contested the ITAT's decision to quash the assessment order made by the Assessing Officer in Kolkata, arguing that the jurisdiction lay with the Assessing Officer in New Delhi. The High Court agreed with the ITAT, emphasizing that the objection raised by the assessee within the specified time should have been referred for determination before assessment. The court found the actions of both Assessing Officers to be contrary to the law, leading to the dismissal of the appeal.

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Issues:
Jurisdictional error in Income Tax Assessment for Assessment Year 2012-13.

Analysis:
The appellant challenged the order of the Income Tax Appellate Tribunal (ITAT) regarding the assessment order for the Assessment Year 2012-13. The counsel for the Appellant argued that the ITAT erred in quashing the assessment order passed by the Assessing Officer in Kolkata, emphasizing that the PAN of the assessee-company was under the jurisdiction of the Assessing Officer in Kolkata. The counsel contended that the ITAT failed to consider that the assessee had not requested a change of jurisdiction under Section 127 of the Income Tax Act between the relevant assessment years. However, upon reviewing the acknowledgment receipt of the return of income, it was found that the assessee had been filing returns since the inception at the address in New Delhi. When the assessee's case was selected for scrutiny in the Assessment Year 2012-13, the assessee objected to the jurisdiction of the ITO in Kolkata, asserting that the jurisdiction lies with the Assessing Officer in New Delhi.

The High Court concurred with the Tribunal's view that since the assessee raised the objection within the stipulated time under Section 124(3) of the Act, the Assessing Officer should have referred the matter for determination before making the assessment. However, the Assessing Officer rejected the objection and referred the matter to the PCIT after a significant delay. The PCIT, instead of deciding the jurisdiction issue, postponed it until after the completion of the assessment. The High Court found that the actions of both the Assessing Officers were contrary to the law, specifically Section 124(4) of the Act, which mandates a different approach. Consequently, the High Court held that no substantial question of law arose for consideration in the appeal, leading to the dismissal of the appeal.

This judgment highlights the importance of adhering to jurisdictional requirements in income tax assessments, emphasizing the need for timely consideration and resolution of jurisdictional disputes to ensure compliance with the legal framework set out in the Income Tax Act.

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