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2019 (10) TMI 344
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....tna vide which the current AO got jurisdiction over the appellant company. Ld. AO proceeded on basis of 143(2) issued by Ld. DCIT, Circle-21(1) New Delhi. No notice under 143(2) was issued at Ranchi or current AO. As such, as a matter of fact no valid notice u/s. 143(2) was issued against the return filed, as such, assessment framed thereby is ab initio void and fit to be quashed." 3. From a perusal of the aforesaid ground of appeal, we note that the issue which is canvassed before us is a pure legal issue. As held by the Hon'ble Supreme Court in NTPC Vs. CIT 229 ITR 383 (SC), such legal issue can be raised before this Tribunal and accordingly we admit this legal ground raised for the first time before us by the assessee though vehemently opposed by the Ld. CIT, DR. Moreover we note that this legal issue goes to the root of the matter and since all material facts for deciding this legal issue are available at the time of hearing, the parties were heard on this issue only with the understanding that if the assessee does not succeed, then the appeal will be re-fixed for hearing on merits. 4. The brief facts pertaining to the legal issue is that the assessee company's H....
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....e u/s 142(1), the ACIT, Central Circle-3(1), Kolkata framed the assessment order u/s 143(3) dated 29.12.2017. Narrating the foregoing facts and referring to the notices and orders passed on the subject, the Ld. AR submitted that before the completion of assessment, no notice u/s 143(2) was issued to the appellant by the AO who held valid jurisdiction over the appellant's case and in that view of the matter the order passed u/s 143(3) was without jurisdiction and is, therefore, bad in law and a nullity in the eyes of law being coram non judice. 6. It was brought to the attention of the Bench by Shri Devesh Poddar, the ld. AR, that in this case, admittedly notice u/s. 143(2) was issued only once. Such notice was issued on 28.07.2016 by the ACIT, Circle 21(1), Delhi, who admittedly did not had valid jurisdiction over the assessee's case after the case records of the appellant were transferred by virtue of an order u/s. 127 dated 08.10.2008 passed by the ld. CIT, Delhi-V. We also note that subsequent to passing of the order dated 08.10.2008 and till the case records were again transferred u/s 127 dated 03.11.2017 to the charge of the present AO, all orders during such intervening pe....
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....bring it to the notice of AO, New Delhi the fact of jurisdiction of AO at Ranchi. According to Ld. CIT, DR, without raising the objection within a month's time after receipt of notice u/s. 142(1) or 143(2), as envisaged u/s. 124(3) of the Act, the assessee is stopped/shut-out from doing so. Thereafter, in support of various contentions raised, the Ld. CIT, DR furnished a written submission, relevant extracts thereof are reproduced as under:- "i) Jurisdiction is an administrative issue and not a subject matter for the purpose. The Hon'ble Delhi High Court in the case of Abhishek Jain has held that "Sub-section(4) and (6) of Section 124 and for that matter sub-section (2) and (4) of Section 124 after amendment w.e.f 1st April, 1988 are procedural sections. They relate to administration and exercise of powers/ authority by the Assessing Officers/ Income Tax Officers and are not part of the substantive law. That the Act i. e. Income Tax Act 1961 being a complete code deals with substantive and procedural aspects. Section 120/124/127 govern the process of procedure for assessment and not the subject matter or its purpose. They relate to conduct of the Assessing ....
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....rence to said two decisions was made and it was observed that if the assessee fails to raise objection before the Income Tax Officer within the time, he will be shut out from raising the question altogether. iv). The concept of concurrent jurisdiction and inherent jurisdiction is acknowledged by Hon'ble courts and relied on Hon'ble Delhi High court decision in the case of S.S. Ahluwalia and Abhishek Jain Vs. ITO. 8. After taking us through the case laws/issues contended as aforestated, the Ld. CIT, DR argued that in the present case, the ACIT, Circle-21(1), New Delhi had the power to assess income accruing or arising within the territorial area at Delhi as it is not the case of the assessee that the said officer did not have jurisdiction in view of location of the assessee's Principal Office address at Delhi. It was urged by the Ld. CIT, DR that section 124(5) of the Act saves assessment made by an assessing officer provided that the assessment does not bring to tax anything other than "the income accruing, arising or received in that area over which the assessing officer exercises jurisdiction". However, Ld. CIT, DR clarified that notwithstanding Section 124(5) of the ....
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....visions of Section 127(4) according to which the successor AO could proceed with the assessment from the stage at which predecessor AO had left the proceedings. The ld. CIT, DR therefore strongly urged that the legal plea raised by the assessee for the first time before this Tribunal did not have legs to stand and, therefore, deserves to be rejected. In particular, in support of this contention, he drew our attention to para 9 of his written submission, which is reproduced as under: "9. In this case, it is a matter of record that no objection was raised, over the jurisdiction before the A.O within one month from the date of issue of notice. The A.O. was having territorial jurisdiction over the case and there was concurrent jurisdiction. It is to refers the decision of hon'ble Supreme Court in case of HarshadChiman Lal Modi Vs. DLF Universal Ltd. &Anr., (2005) 7 SCC 791, which classifies and draws jurisprudential difference amongst - territorial or local jurisdiction; pecuniary jurisdiction; .and jurisdiction over the subject matter. As far as territorial or pecuniary jurisdictions are concerned, objection should be taken at the earliest possible opportunity and for bef....
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....ngs u/s 127, which he had initiated by his notice dated 07.08.2017. He further brought to our attention that after the Ld. Pr. CIT-7, New Delhi dropped the proceedings initiated by him for centralization of appellant's case with ACIT, Central Circle 3(1), Kolkata, the subsequent proceedings u/s 127 for such proposed centralization were taken up by the Pr. CIT, Central Patna who held valid jurisdiction over the appellant's case at the relevant point in time. The ld. AR therefore urged that if the actions of Pr. CIT-7, New Delhi and the Pr. CIT, Central Patna are considered cumulatively and harmoniously then the only conclusion that one can draw is that the Pr. CIT-7, New Delhi had tacitly admitted that neither he nor any officer acting under his jurisdiction could exercise jurisdiction over the appellant's case for the purposes of the provisions of the Income-tax Act, 1961 after the CIT-V, New Delhi had passed the order u/s 127 dated 08.10.2008 transferring the jurisdiction to the charge of ACIT, Central Circle, Ranchi. Drawing attention to these jurisdictional facts, the ld. AR submitted that it was abundantly clear that in June 2016 when the notice u/s 143(2) was issued, the AC....
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....puted facts which are noted from the documents placed on record, aretabulated in the following chart. These facts are important to decide the legal issue before us. Sl. No. Date Events 1. Upto 08.10.2008 DCIT, Circle-15(1), New Delhi was the AO of assessee on the basis of territorial jurisdiction. 2. On 08.10.2008 CIT-V, Delhi transferred the jurisdiction over the assessee's case u/s. 127 to DCIT, Central Circle-1, Ranchi. 3. From 09.10.2008 to 03.11.2017 DCIT, Central Circle-1, Ranchi was the AO of assessee for all proceedings under the Act. 4. 28.07.2016 ACIT, Circle-21(1), New Delhi issued notice u/s. 143(2) to the assessee. 5. 30.06.2017 ACIT, Circle-21(1), New Delhi issued notice u/s. 142(1) to the assessee. 6. 17.07.2017 Assessee objected to jurisdiction of ACIT, Circle-21(1), New Delhi. 7. 07.08.2017 Show Cause Notice/proposal for centralization of assessee's case at Kolkata issued by Pr. CIT-7, Delhi. 8. 16.08.2017 Assessee objected to the jurisdiction of Pr. CIT-7, New Delhi 9. 24.10.2017 Pr. CIT, Central Patna issued Show Cause Notice for centralization of assessee's case under the c....
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.... writing for the exercise of the powers and performance of the functions by all or any of the other income- tax authorities who are subordinate to it. (3) In issuing the directions or orders referred to in sub- sections (1) and (2), the Board or other income- tax authority authorised by it may have regard to any one or more of the following criteria, namely:- (a) territorial area; (b) persons or classes of persons; (c) incomes or classes of income; and (d) cases or classes of cases. (4) Without prejudice to the provisions of sub- sections (1) and (2), the Board may, by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein,- (a) authorise any Director General or Director to perform such functions of any other income- tax authority as may be assigned to him by the Board; (b) empower the Director General or Chief Commissioner or Commissioner to issue orders in writing that the powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in respect of any specified area or persons or classes of persons o....
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....e determined by the Director General or the Chief Commissioner or the Commissioner; or where the question is one relating to areas within the jurisdiction of different Directors General or Chief Commissioners or Commissioners, by the Directors General or Chief Commissioners or Commissioners concerned or, if they are not in agreement, by the Board or by such Director General or Chief Commissioner or Commissioner as the Board may, by notification in the Official Gazette, specify. (3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer- (a) where he has made a return under sub- section (1) of section 139, after the expiry of one month from the date on which he was served with a notice under sub- section (1) of section 142 or subsection (2) of section 143 or after the completion of the assessment, whichever is earlier; (b) where he has made no such return, after the expiry of the time allowed by the notice under sub- section (1) of section 142 or under section 148 for the Making of the return or by the notice under the first proviso to section 144 to show cause why the assessment should not be completed to the best of the ....
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....ecording his reasons for doing so, pass the order; (b) where the Directors General or Chief Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Director General or Chief Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf. (3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred. Explanation: In section 120 and this section, the word "case", in relation to any person whose na....
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.... within the area ear-marked for him (AO); or if that person's (assessee's) business or profession is carried on in more places than one, then if the principal place of his business or profession is situated within the jurisdictional territorial area, the AO gets jurisdiction. Other than the assessees who are not in Business or Profession, in their cases, the AO will be vested with the jurisdiction if the person (assessee) is residing within the territorial area ear-marked by virtue of the directions or orders issued under sub-section (1) or sub-section (2) of section 120 of the Act speaks about. However, when there is a question to be determined as to whether an AO has jurisdiction to assess any person then it would be decided by the authorities as stipulated in sub-section (2) of section 124 of the Act by Directors General or Chief Commissioners or Commissioners, by the Directors General or Chief Commissioners or Commissioners concerned, as the case may be). In case, if the question is one relating to areas within the jurisdiction of different Income tax authorities(Directors General or Chief Commissioners or Commissioners, by the Directors General or Chief Commissioners or Commis....
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....om his jurisdiction to the AOs who are not functioning under his jurisdiction and therefore who are not subordinate to such authority. In the cases covered u/s 127(2) therefore, if the Pr. Director General or Director General or Pr. Chief Commissioner or Chief Commissioner or Pr. Commissioner or Commissioner, of the AO to whom the case of an assessee is proposed to be transferred, agrees for the transfer, then the transfer can made u/s. 127(2)(a) of the Act. In case however there is any disagreement between such stipulated authorities, the matter is required to be referred to the Board which in turn decides the issue of transfer or the Board can then authorize an Income Tax authority by a notification as stipulated in clause (b) of sub-sec.(2) of section 127 of the Act. Sub-section(4) of Section 127 of the Act provides that upon the transfer of case by the authorities specified in sub-section (1) or (2) of section 127 of the Act, any stage of the proceedings shall not render the re-issue of any notice already issued by the AO or AOs from whom the case is transferred. In other words, Section 127(4) saves the actions of the AO from whom the case is transferred and allows the AO to wh....
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....limits of area, where assessee's principal office was situated. The vesting of jurisdiction with the said officer was in terms of the order/ direction of the CBDT u/s. 120(1) of the Act or by Income Tax Authorities (sec. 116) who were delegated the powers to issue orders/directions vesting the jurisdiction of assessment over the authorities subordinate to it. The said Assessing Officer at New Delhi enjoyed exclusive jurisdiction over the appellant upto 08.10.2008. Thereafter, by virtue of order u/s 127(2) passed by the ld. CIT-V, Delhi dated 08.10.2008, the said AO at New Delhi was divested of his jurisdiction over the appellant and the jurisdiction stood transferred in favour of ACIT, Central Circle-1, Ranchi. From the plain reading of the order u/s 127(2) dated 08.10.2008, we find that the transfer of jurisdiction over the appellant's case from the charge of ACIT, 15(1), New Delhi to ACIT, Central Circle-1, Ranchi was absolute and without reserving any right of concurrent jurisdiction over the appellant at New Delhi. 17. Before us the Ld. CIT, DR vehemently contented that since the present assessee's principal office is at New Delhi, the AO, Delhi continued to have juris....
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....ch necessarily means that nonobstante clause is limited to operation of sub-section (1) to (4) of sec. 124 or direction/order issued under section 120 of the Act and not with regard to any order of transfer of case of an assessee made u/s. 127 of the Act. In the circumstances when one reads the definition of "case" as set out in the Explanation to Section 127 of the Act, then it means that when a Chief Commissioner or Commissioner makes an order for transfer of jurisdiction in exercise of the powers conferred by Section 127 of the Act, from an AO who is vested with jurisdiction by virtue of direction/order issued under sub-section (1) or (2) of section 120 of the Act to another AO who is not vested with such jurisdiction as per direction/order issued u/s. 120(1) and (2) of the Act; then by virtue of such transfer order u/s. 127 of the Act, the jurisdiction of an AO u/s. 124 vested by virtue of an order/direction vested on an AO as per sec. 120(1) or (2) of the Act is taken away and thus the original AO is divested of the jurisdiction enjoyed u/s. 124 read with sub-sec. (1) or (2) of section 120 of the Act. We therefore hold that contention put forth by the ld. CIT, DR that provisio....
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....ontrary the notice was issued by the ACIT, Circle 21(1), Delhi who, as held earlier, ceased to have jurisdiction over the appellant's case after 08.10.2008. Since no notice u/s. 143(2) was issued by the AO, Ranchi within the stipulated time, sub-section (4) of sec. 127 of the Act does not come to the rescue of the department. As noted earlier, the AO, Delhi ceased to be AO of assessee after the transfer order was passed by CIT-V, Delhi on 08.10.2008, so after such order by the competent authority (which fact is not disputed before us), then the CIT, Delhi became functus officio and by virtue of it even his subordinate authority i.e. AO, Delhi was also divested of the jurisdiction. For the reasons as discussed in the foregoing therefore we hold that in the given facts of the case, the appellant's case was not saved by the provisions of Section 124(5) as also by Section 127(4) of the Act. Accordingly, the contentions of the Ld. CIT, DR are rejected being devoid of any merit in law as well as on facts. 20. Coming to the next argument of the Ld. CIT, DR that jurisdiction is an administrative issue and not a 'subject matter' open for judicial intervention, we note that the Hon'ble Ca....
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....s. 127 of the Act as far back as in 2008. There is a reason for saying so when the transfer of an assessee's case as envisaged u/s. 127 occurs, the competent authority gives reasonable opportunity of being heard [except if the AO to whom case is transferred are situated in the same city, locality or place (see sub-section (3) of section 127 of the Act)] and at this juncture, we would like to remind that in the present case at hand, the assessee was given an opportunity to be heard by Commissioner at Delhi before he proposed the transfer of assessee's case to AO at Ranchi and the assessee had objected to the transfer which is found available in the paper book. After considering the assessee's objections, the Commissioner at Delhi transferred the case of assessee from AO at Delhi to AO at Ranchi. In the circumstances therefore, as discussed above, once transfer of the case of the assessee is ordered u/s. 127 of the Act, the AO who was vested with the jurisdiction by virtue of the direction or order issued under subsection (1) or (2) of sec. 120 and section 124 of the Act stood divested of the same. As held by the Hon'ble jurisdictional High Court in M/s. Ramshila E....
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....Pr. CIT, Central Patna by order dated 24.10.2017 to ACIT, Central Circle-3(1), Kolkata, there was no need to re-issue the notice u/s. 143(2) of the Act in terms of Sec. 127(4) of the Act. For this he relied on various judicial decisions. We however note that the case laws relied on by the Ld. CIT, DR were factually distinguishable. In these decisions the Courts were called upon to examine the implications arising from the provisions of Section 120 and 124 of the Act and the facts of these cases did not involve orders under Section 127 of the Act in terms of which the AO holding territorial jurisdiction in terms of Section 124 read with Section 120(1) & (2) was specifically divested of his jurisdiction by the competent authority and the jurisdiction was conferred on some other officer after complying with the procedure prescribed in Section 127 of the Act. Instead we find that a similar issue came up before this Tribunal in the case of M/s. Ramshila Enterprises Pvt. Ltd. Vs. Pr. CIT wherein the factual matrix governing the issue of jurisdiction was similar. In that case the question was whether the Commissioner who usurped the revisional jurisdiction u/s. 263 of the Act could have v....
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....lar act also includes a power to restrict the exercise of power partly.It cannot be said that the power should be exercised either as a whole or not at all.Such an argument is fallacious and defeats the very purpose of conferring a larger power.As the actual transfer of the files from the incumbent AO to the new AO had taken place only on 29.7.2013 and further the order sought to be revised by the ld.CIT u/s 263 was passed much prior to the even making of request for transfer of jurisdiction in respect of search matters, we have absolutely no doubt in our mind that only the CIT Kolkata II, Kolkata had the jurisdiction to revise the assessment order passed u/s147 as has been done in this case.The contention of the learned AR in this regard is held to be without substance and not unacceptable." 24. Aggrieved by the aforesaid order of the Tribunal, the assessee M/s.Ramshila Enterprises Pvt. Ltd. preferred an appeal before the Hon'ble jurisdictional High Court, Calcutta wherein the following question of law raising the jurisdictional issue similar to that raised by the assessee before us, was framed as under:- "Whether the Tribunal was justified in holding that the Commissi....
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....ntended that the appellant before us is not in any way connected with Atha Mines Group. But the point of substance is that the impugned order under section 263 was passed by the CIT, Kolkata-II, Kolkata in spite of the fact that the jurisdiction had already been transferred by his predecessor-in-office by his order dated 3rd September, 2012 with immediate effect. Mr.Podder contended that CIT, Kolkata-II, Kolkata thereafter had no longer any jurisdiction left with him to be exercised in respect of the return or returns filed by the assessee or assessments made. He submitted that the exercise of power was not only ex parte, without notice, but was also without jurisdiction. He drew our attention to the letter dated 18th March, 2013 received by his client from the Deputy Commissioner of Income-tax, which is a notice under section 143(2) pertaining to the assessment year 2012-2013. He submitted that the order dated 3rd September, 2012 transferring jurisdiction to a ACIT/DCIT, Central Circle-XIX, Kolkata had already become operative and was also acted upon.Therefore, CIT, Kolkata-II, Kolkata could not have exercised jurisdiction.The impugned order passed by him is altogether without jur....
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....nal or authority in such event will be incompetent, as having ceased to have jurisdiction, to proceed further with the pending proceeding or proceeding which may be instituted after such removal of jurisdiction." 27. After hearing both the parties the Hon'ble High Court has held as under: "We have considered the rival submissions. It is not necessary for us to consider whether the Commissioner had jurisdiction to restrict the order of transfer, for the simple reason that the order of transfer in this case was not a restricted one. Reading the order dated 3rd September, 2012 as a whole, it does not appear that any restricted transfer was sought to be made for any particular year or years or otherwise. The order of transfer, as we have already indicated, was passed in the interest of revenue for better coordination, effective investigative and meaningful assessment. The actual transfer of files may have taken place on 29th July, 2013 but admitted position is that a notice under Section 143(2) by the transferee assessing officer was issued on 18th March, 2013. The existence of files does not confer the jurisdiction when the same has validly been transferred and al....
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.... shall not be registered unless such instrument is duly stamped, then it follows that the registering officer must perform the duty of seeing whether an instrument presented for registration is or is not duly stamped before admitting it to registration and not afterwards. If he finds that the document is not duly stamped, then he must impound it under Section 33 of the Act. Neither in the Registration Act nor in the Stamp Act is there any provision giving to the registering officer any power to examine whether an instrument already registered was or was not duly stamped and to impound it. As soon as the registering officer registers a document presented to him for registration, the function in the performance of which the document was produced before him is over and thereafter becomes functus officio having no power under section 33 to impound the instrument. The matter is really concluded by the decision of the Supreme Court in Govt. of Uttar Pradesh v. Mohammad Amir Ahmad Khan, AIR1961SC787 That was a case where the question arose whether the Collector has any power to impound an instrument sent to him for adjudication under section 31 of the Stamp Act. The Supreme Court....
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....w its decision unless the relevant statute or rules permit such review.But the question is as to at what stage an authority becomes functus officio in regard to an order made by him.P.Ramanatha Aiyar's Advanced Law LexiCo.(3rd Edn., Vol.2, pp.1946-47) gives the following illustrative definition of the term "functus officio": Thus a judge, when he has decided a question brought before him, is functus officio, and cannot review his own decision." Black's Law Dictionary (6th Edn., p.673) gives its meaning as follows: "Having fulfilled the function, discharged the office, or accomplished the purpose, and therefore of no further force or authority." We may first refer to the position with reference to civil courts.Order 20 of the Code of Civil Procedure deals with judgment and decree.Rule 1 explains when a judgment is pronounced.Sub-rule (1) provides that the court, after the case has been heard, shall pronounce judgment in an open court either at once, or as soon thereafter as may be practicable, and when the judgment is to be pronounced on some future day, the court shall fix a day for that purpose of which due notice shall be given to the p....
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....functus officio prior to 18th March, 2013 because the transferee - assessing officer had assumed jurisdiction without which the notice dated 18th March, 2013 under Section 143(2) could not have been issued.Therefore, the order of transfer was duly published/ notified and/or communicated and thereafter acted upon by the transferee-assessing officer. We are, as such of the opinion that the issuance of the notice dated 18th March, 2013 under Section 263 and the consequent order dated 26th March, 2013 passed under Section 263 of the Income Tax Act were acts without jurisdiction and therefore a nullity. For the aforesaid reasons the question No.(a) is answered in the negative. The point is, thus decided in favour of the assessee.The appeal stands allowed." (Emphasis given by us) 28. From the aforesaid order of the Hon'ble High Court at Calcutta, we understand that in this case after the order u/s. 127 of the Act dated 03.09.2012 was passed by the CIT-2, Kolkata, he became functus officio and therefore the Hon'ble High Court held that he could not have exercised jurisdiction over the assessee's case u/s. 263 of the Act and consequently therefore he ....
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....ard-3(3), New Delhi to ITO, Ward-6(1), Kolkata. The assessee claimed before the AO as well as before CIT(A) that ITO, Ward-3(3), New Delhi did not have jurisdiction to issue notice u/s. 148 of the Act on 25-03-2010 as the case was transferred u/s. 127(2) of the Act from New Delhi to Kolkata on 04-01-2010. The assessee before CIT(A) filed written submissions as under: "This appeal is against the reopening of assessment u/s. 147 of the I. T. Act 1961. The assessee has challenged the reopening by the ITO Ward 3(3) Delhi. The notice u/s. 148 of the I.T. Act 1961 was issued by the ITO Delhi after receipt of approval from Additional CIT Delhi on 25-03-2010. However the CIT Delhi had passed an order u/s. 127 transferring the file to Kolkata on 4-1-2010 as such on 25-3-2010 the AO in Delhi did not have jurisdiction over the case, hence the reopening it without jurisdiction as it is based on the notice u/s. 148 of the I. T. Act, 1961 issued by the ITO Delhi. We have requested the AO at Kolkata to issue the copy of the order of 127 and 151 of the I.T. Act, 1961 but the same has not been issued yet. We therefore request you to either, call for the records a....
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.... 127. Copies of order u/s 127 and section 151 approved by Addl. CIT to be submitted tomorrow. The issue of jurisdiction of Delhi A.O. was not taken before the A.O. who completed the assessment. Adj. to 20-2-12." 4.CIT(A) discussed the issue and observed in paras 8 and 9 as under: "8. The appellant submitted during the appellate proceedings that he does not submit any additional evidences, books of account or other documents either before the appellate authority or Assessing Officer since these are not available with appellant. The appellant has never taken objection regarding the jurisdiction of issuance of notice u/s 148 by the Assessing Officer of New Delhi or initiation/continuation of assessment proceedings by the Income-tax Officer, Ward 6(1), Kolkata before the Assessing Officer during the assessment proceedings even when the authorised representative attended the proceedings on 08-12-2010 and 16-12-2010. The authorised representative asked for the extension of time from Assessing Officer on 20-12-2010 but did not file any objection regarding the jurisdiction of the Assessing Officer and did not attend the proceedings thereafter. The assessment has ....
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....re actually transferring the case. 19. The appellant never raised the question of jurisdiction before the Assessing Officer either at New Delhi when the notice u/s 148 was issued or at the time of assessment with the Assessing officer at Kolkata. There was a possibility to the Assessing Officer at New Delhi to get the records transferred immediately to Kolkata and a fresh notice may have been issued during the time-limitation by Assessing Officer at Kolkata. 20. Following the law laid down and upheld by the Hon'ble appellate authorities as discussed above, the legal provisions of section 124(3) on this issue and in the facts and circumstances of the case, it is held that the assessment order passed u/s 147/144 of the I.T. Act 1961 is not without jurisdiction and is as per law and hence the assessment order passed by the Assessing Officer is held to be a valid order. In the facts and circumstances of the case the proceedings u/s 148 of the I T Act 1961 is upheld to be valid in absence of any objection being raised before the Assessing Officer issuing the notice u/s 148 and/or completing the assessment. In the facts and circumstances of the case it is also held ....
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..... Further, there was reliance by Sr. DR on the case law of Hon'ble Allahabad High Court in the case of CIT v. British India Corpn. Ltd. [2011] 337 ITR 64 [2012] 20 taxmann.com 446, wherein assumption of jurisdiction, by AO for assessment, u/s. 124 of the Act that when the ITO had jurisdiction when assessment proceedings commenced and a draft assessment order was submitted to IAC but due to subsequent change in jurisdiction, unless the same brought to the notice of the authority concerned, the assessment would not be vitiated. We are with the argument of Ld. Sr. DR in respect to this argument that where the jurisdiction assumed by the AO, assessee has to object to the same u/s. 124 of the Act in case hr us aggrieved. But, what will be the effect of the order of Commissioner of Income-tax transferring the jurisdiction u/s. 127 of the Act. We are of the view, that when any case of a particular assessee which is transferred from one AO to another AO, whether within the state or without it, all proceedings which are pending against the assessee under the Act in respect of the same year as also previous years are meant to be transferred simultaneously and all proceedings under the Ac....
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....ct which may be commenced after the date of transfer in respect of any year. The word "case" is thus used in a comprehensive sense of including both pending proceedings and proceedings to be instituted in the future. Consequently, an order of transfer can be validly made even if there be no proceedings pending for assessment of tax and the purpose of the transfer may simply be that all future proceedings are to take place before the officer to whom the case of the assessee is transferred. 8. In view of the above principle regarding jurisdiction and facts of the present case, the order passed by CIT-1, Delhi, transferring jurisdiction from ITO, Ward-3(3), New Delhi on 04-01-2010, subsequent action of the AO i.e. ITO, Ward-3(3), New Delhi issuing notice u/s. 148 of the Act dated 25-03-2010 is invalid because the jurisdiction from ITO, Ward-3(3), New Delhi by CIT-1, Delhi to ITO, Ward-6(1), Kolkata. At the time of passing of order by CIT-1, Delhi transferring jurisdiction from ITO, Ward- 3(3), New Delhi dated 04-01-2010 to ITO, Ward-6(1), Kolkata, there is no proceedings pending before the ITO, Delhi and the transfer order for jurisdiction was passed on that date. Th....
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....ion 14 8 of the Act with a view to reopen the assessment for A.Y. 2005-06. The assessee by its letter dated 24.04.2012 objected to the impugned notice by specifically stating that pursuant to the order of CIT dated 22.11.2011, the ACIT-10(1) would have no locus standi or jurisdiction to issue the impugned notice dated 30.03.2012. As there was no reply, the present writ petition is filed inter alia on the ground that once the jurisdiction to assess/reassess the petitioner vested in the ACIT-10(1) is divested by the order of the CIT-10 Mumbai dated 22.11.2011, the ACIT-10(1) Mumbai would cease to have power to assess or reassess the petitioner and hence, the impugned notice issued by ACIT-10(1) Mumbai being without jurisdiction is liable to be quashed and set aside. 7. In the affidavit-in-reply filed by the DCIT-10(1) Mumbai dated 8.10.2012 it is stated that by a corrigendum order dated 27.03.2012, the CIT-10 Mumbai has temporarily withdrawn/cancelled the earlier transfer order dated 22.11.2011 for the sake of administrative convenience and therefore, the notice dated 30.03.2012 would be valid. It is the case of the petitioner that neither any notice to pass a corrigendum or....
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....in issuing the impugned notice dated 30.03.2012. 14. In our opinion, the conduct of ACIT-10(1) Mumbai as well as CIT-10 Mumbai is highly deplorable. Once the jurisdiction to assess the petitioner was transferred by the CIT-10 Mumbai from ACIT-10(1) Mumbai to DCIT Circle-1(2) Pune by order dated 22.11.2011 it was totally improper on the part of ACIT-10(1) Mumbai to request the CIT-10, Mumbai to pass a corrigendum order with a view to circumvent the jurisdictional issue. Making such a request on the part of ACIT-10(1) Mumbai to the CIT-10 Mumbai in our opinion, was in gross abuse of the process of law. If there was any time barring issue, the ACIT-10(1) Mumbai ought to have asked his counterpart at Pune to whom the jurisdiction was transferred to take appropriate steps in the matter instead of taking steps to circumvent the jurisdictional issue. It does not befit ACIT-10(1) Mumbai to indulge in circumventing the provisions of law and we strongly condemn the conduct of ACIT-10(1) Mumbai in that behalf. Instead of bringing to book the persons who circumvent the provisions of law, the ACIT-10(1) Mumbai has himself indulged in circumventing the provisions of law which i....
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.... decisions cannot be applied. In the case of Abhishek Jain (supra), the AO at Noida had issued notice u/s 148 on the basis of cash deposits made in ICICI Bank, Noida. In that case the fact that the assessee was regularly assessed in Delhi was not intimated to the AO at Noida nor did the assessee mention his PAN with the ICICI Bank. Even the assessee's address available with the bank was that of Noida. In this case it was not brought on record by the assessee that his case was transferred to Delhi by virtue of an order u/s 127 passed by the competent authority under whom the AO at Noida was functioning. The Court further found that it was only after the period of limitation prescribed in Section 149 expired on 31st March, 2016, that the assessee intimated the AO at Noida that he had been regularly assessed in Delhi. On these facts, the Hon'ble Delhi High Court held that it was mala fide on the part of the assessee not to intimate the AO at Noida prior to 31.03.2016 and that the assessee waited for the period of limitation to expire before raising this objection. In absence of any order u/s 127 and having noted that with reference to address made available by the assessee to I....
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.... and treat it to be the complete 'law' declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a latter case, the Courts must carefully try to ascertain the true principle laid down by the decision of the Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by the Court, to support their proceedings." 35. Coming back to the admitted facts in the present case, we hold that the ACIT, Central Circle-3(1), Kolkata framed the assessment order dated 29.12.2017 pursuant to transfer of case orderedby PCIT, Central Patna dated 03.11.2017 u/s. 127 of the Act, without there being valid issuance of notice u/s 143(2) of the Act. In our opinion such an order is bad in law as held by the Hon'ble Supreme Court in CIT V Hotel Blue Moon (2010) 321 ITR 362 (S.C) wherein the Hon'ble Supreme Court has held that issue of a legally valid notice u/s. 143(2) is ma....
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.... Tax Act, 1961? 27. The case of the Revenue is that the expression "so far as may be, apply" indicates that it is not expected to follow the provisions of Section 142, sub-sections (2) and (3) of Section 143 strictly for the purpose of block assessments. We do not agree with the submissions of the learned counsel for the Revenue, since we do not see any reason to restrict the scope and meaning of the expression "so far as may be, apply". In our view, where the assessing officer in repudiation of the return filed under Section 158-BC(a) proceeds to make an enquiry, he has necessarily to follow the provisions of Section 142, sub-sections (2) and (3) of Section 143." 6. The question, however, remains whether Section 292BB which came into effect on and from 01.04.2008 has effected any change. Said Section 292BB is to the following effect:- "292BB. Notice deemed to be valid in certain circumstances.-Where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in ti....
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.... Section seeks to cure. The Section is not intended to cure complete absence of notice itself. 10. Since the facts on record are clear that no notice under Section 143(2) of the Act was ever issued by the Department, the findings rendered. by the High Court and the Tribunal and the conclusion arrived at were correct. We, therefore, see no reason to take a different view in the matter." 36. For the reasons set out above therefore, we uphold the objections raised by the appellant against the validity of the impugned order u/s 143(3) for AY 2015-16. We accordingly hold that since in the present case no valid notice u/s 143(2) was issued by the AO who held jurisdiction over the case of the appellant, the consequent order passed u/s 143(3) dated 29.12.2017 was legally unsustainable and therefore is null in the eyes of law and therefore quashed. The assessee accordingly succeeds on the preliminary legal issue raised before us. 37. In the result, appeal of assessee is allowed. Order is pronounced in the open court on 6th September, 2019. ============= Document 1 In the matter of M/s Rungta Irrigation Limited 101, Pragati Tower, 26, Rajendra Place, New De'ni Be....