2023 (8) TMI 771 - HC - Income Tax

Appeal dismissed in favor of Revenue, upholding Tribunal decision for fresh assessment.

M/s. Chandrika Investments Versus The Income-Tax Officer Ward 4 (3) Bangalore

The Court dismissed the appeal, ruling in favor of the Revenue and against the assessee on all issues raised, including the validity of the assessment ... Validity of assessment - Appropriate Stage to raise the issue of Jurisdiction of AO - ITAT remitted the matter for framing the assessment order by the competent officer - HELD THAT:- This court in Fidelity Business Services India (P.) Ltd [2018 (7) TMI 1738 - KARNATAKA HIGH COURT] has held that the words ‘as it thinks fit’ confer wide powers upon the ITAT to pass such orders in the subject matter of appeal. As in Abhishek Jain, the Delhi High Court has held [2018 (6) TMI 211 - DELHI HIGH COURT] as far as territorial or pecuniary jurisdiction are concerned, objection should be taken at the earliest possible opportunity and/or before the settlement of issues and not at the subsequent state. Jurisdiction as to the subject matter is distinct and stands on a different footing Admittedly, assessee has not raised any objection with regard to pecuniary jurisdiction before the AO. In view of the law laid down in Abhishek Jain that any objection with regard to territorial and pecuniary jurisdiction should be taken at the earliest possible opportunity before the settlement of issues and not at a subsequent stage and the interpretation of Section 254 of the Act by this Court, we find no error in the order passed by the ITAT. All questions raised by the appellant in the memorandum of appeal are similar in nature, i.e., assailing the ITAT’s order and remitting the case for framing fresh assessment by the competent officer. The main ground urged is that the AO had no jurisdiction. Appeal dismissed. Questions of law are answered in favour of the Revenue and against the assessee. Issues involved:The judgment involves the following Issues:1. Validity of the assessment order passed by the Income-tax Officer.2. Restoration of the matter for framing a de-novo assessment by a competent officer.3. Jurisdictional validity of the assessment order.4. Adjudication of various grounds of appeals filed by the appellant.Issue 1: Validity of the assessment order:The appeal raised questions regarding the justification of the Tribunal in not quashing the assessment order passed by the Income-tax Officer. The appellant argued that the assessment order was not valid on the facts and circumstances of the case. The contention was that the Tribunal erred in restoring the matter for framing the de-novo assessment by the ACIT or the DCIT instead of annulling the assessment order. The appellant emphasized that the jurisdictional defect cannot be cured, rendering the assessment proceedings void-ab-initio.Issue 2: Restoration for de-novo assessment:The Tribunal's decision to restore the matter for framing a de-novo assessment by a competent officer was challenged by the appellant. It was argued that the Tribunal should have annulled the assessment order based on the CBDT instruction, which stated that the ITO had no jurisdiction to frame the assessment. The appellant contended that allowing the revenue a second opportunity to pass an assessment order was impermissible in law.Issue 3: Jurisdictional validity of assessment order:The objection raised by the assessee pertained to the pecuniary jurisdiction, which, as per the respondent, should have been raised at the earliest point of time. The ITAT concluded that the assessment order was irregular but not illegal, and therefore remitted the case for framing a fresh assessment. The respondent cited authorities to support this position, emphasizing that objections regarding territorial and pecuniary jurisdiction should be raised at the earliest possible opportunity.Issue 4: Adjudication of grounds of appeal:The appellant raised various grounds of appeal, all challenging the ITAT's decision to remit the case for framing a fresh assessment by a competent officer. The main argument put forth was the lack of jurisdiction on the part of the AO. However, the Court found no error in the ITAT's decision based on the law laid down in previous cases.In conclusion, the Court dismissed the appeal, answering the questions of law in favor of the Revenue and against the assessee, with no costs incurred.