TaxTMI 
TaxTMI 
2020 (2) TMI 94
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....e liable to tax in that period. From AY 2010-11 onwards, the petitioner states that he had shifted to Shimoga, Karnataka, carrying on business there. Hence returns of income were being filed from AY 2012-13 onwards at Shimoga, till date, and intimations under Section 143(1) had also been issued in respect of some of the years. 4. While this is so, the petitioner received, in respect of AY 2008-09, a notice under Section 148 dated 30.03.2015. Though initially a dispute was raised by the petitioner in regard to the date of dispatch and service of the aforesaid notice, pursuant to the records being summoned and perused, which contained an acknowledgment of receipt of the notice by the petitioner on 04.04.2015, the dispute raised with regard to date of dispatch and service thereof were not pursued and have been given up by Mr.Sivaraman, learned counsel for the petitioner and no further arguments raised in that regard. 5. The petitioner replied to the notice on 18.05.2015 requesting three months' time to collect the details needed to file a return as called for. By letter dated 09.10.2015, the respondent/Deputy Commissioner of Income Tax, International Taxation, Madurai called ....
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....pon the status of the petitioner in India at the relevant point in time i.e. during the financial year relevant to AY 2008-09. The petitioner replied through counsel on 20.10.2015 enclosing the particulars sought for. 7. On 10.12.2015, the respondent writes to the petitioner stating that since the total number of days when the petitioner had been resident in India had been five months, he was a non-resident for the purposes of assessment under the Act. She goes on to state that since the PAN address of the petitioner is in Madurai, he would be assessed to tax by the Deputy Commissioner of International Taxation, Madurai. Hence, the petitioner was required to file a return of income for the years in question before the respondent Assessing Officer. This communication marks a departure in the stand of the officer as her initial stance was that the assessment would be completed only by the officials at Karnataka where the petitioner is consistently being assessed. 8.Vide communication dated 17.12.2016, the petitioner set forth his objections to the proposals for assessment, stating that though he was resident in Madurai at the time when he sought allotment of PAN number, his bus....
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.... Income Tax Officer and others (319 ITR 18). 11.However without reference to the request of the petitioner, on 22.03.2016, the respondent proceeds to pass the impugned order of re-assessment reiterating the assumption of jurisdiction by her as well as dealing with the assessment on merits, as against which the petitioner is before this Court. 12.The assumption of jurisdiction by an assessing authority is determined by the provisions of Section 120 of the Act that deals with the jurisdiction of income tax authorities and states that the authorities shall exercise all or any of the functions and powers conferred on them for this purpose by the Board or by those officers/authorities to whom such power has been delegated by the Board. Section 120 reads thus: 120. Jurisdiction of income- tax authorities (1) Income- tax authorities shall exercise all or any of the powers and perform all or any of the functions Conferred on, or, as the case may be, assigned to such authorities by or under this Act in accordance with such directions as the Board may issue for the exercise of the powers and performance of the functions by all or any of those authorities. (2)....
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.... lower in rank amongst them shall exercise the powers and perform the functions as any higher authority amongst them may direct, and, further, references in any other provision of this Act or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such higher authority and any provision of this Act requiring approval or sanction of any such authority shall not apply. (6) Notwithstanding anything contained in any direction or order issued under this section, or in section 124, the Board may, by notification in the Official Gazette,, direct that for the purpose of furnishing of the return of income or the doing of any other act or thing under this Act or any rule made thereunder by any person or class of persons, the income- tax authority exercising and performing the powers and functions in relation to the said person or class of persons shall be such authority as may be specified in the notification. 13. The scope and extent of the exercise of such jurisdiction by an assessing authority, once vested, is set out in terms of Section 124 of the Act, extracted below: 'Jurisdiction of Assessing Officers: 124. (1) Where by vi....
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....F or under the first proviso to section 144 to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier; (c) where an action has been taken under section 132 or section 132A, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 153A or sub-section (2) of section 153C or after the completion of the assessment, whichever is earlier. (4) Subject to the provisions of sub-section (3), where an assessee calls in question the jurisdiction of an Assessing Officer, then the Assessing Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub-section (2) before the assessment is made. (5) Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer shall have all the powers conferred by or under this Act on an Assessing Officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under sub-secti....
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....e Board or any such Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal 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 name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pendi....
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....tion of records, to the effect that the petitioner, as on date and since AY 2012-2013 is an assessee on the file of the Income tax Officer at Shimoga. 18. If jurisdiction thus vested with the Income Tax Officer at Shimoga, an alternate assessing authority assuming jurisdiction of the petitioners' file can be only by transfer of the file and such power of transfer is to be exercised by the Director General or Chief Commissioner or Commissioner, after recording reasons for such transfer and after hearing the assessee concerned. In this case, no order transferring the file of the petitioner from the jurisdiction of the Income Tax Officer, Shimoga to the Deputy Commissioner of Income Tax, International Taxation, Madurai, has been produced before me. 19. Instead, the learned Standing Counsel produces a Notification in F.No. Addl CIT, Rg,CBE/IT/CBE/1/2014-15, dated 15.11.2014, reading as follows: 'GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT Office of the Additional Commissioner of Income-tax (International Taxation), Coimbatore. F.No. Addl CIT, Rg,CBE/IT/CBE/1/2014-15 &nbs....
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.... Income from any source which (1) is received or deemed to be received in (b) Persons being companies registered under the Companies Act, 1956, and having registered office or principal place of business in the area mentioned in Column 4(1); (c) Persons being other than companies deriving income from sources other than income from business or profession (a) All powers and functions of Assessing Officer including functions and powers relating to Tax Deduction at Source under section 194E, 195, 196A, 196B, 196C, 196D, 197 and 201 of the Income Tax Act, 1961 in respect of such persons mentioned in (b) All functions and powers of Assessing officer under the Income tax Act 1961 relating to Tax Deduction at Source under section 194E, 195, 196A, 196B, 196C, 196D, 197 and 201 of the Income Tax Act, 1961, on payments made to nonresidents and foreign companies in respect of persons mentioned in items (b) to (e) of This notification shall come to effect from 15th November 2014. S.RAVICHANDRAN Additional Commissioner of Income tax International Taxation Coimbatore. Thus according to the respondent, jurisdiction has been validly assumed by her. 21. She also relies ....
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....edings for escapement of income. 23. While considering the challenge to assumption of jurisdiction of officer at Noida, the Division Bench notes specifically the existence of concurrent jurisdiction by multiple officers over a particular assessee in line with the four-fold criteria set out for the purposes of assessment in Section 120 (3). 24. Concurrent jurisdiction of assessing officers set out in Section 124 was considered by the Delhi High Court in the case of Commissioner of Income Tax V. S.S.Ahluwalia ((2014) 46 taxmann.com169), wherein also the Division Bench, while considering the provisions of Section 120, 124 and 127 recognised the flexibility and choice available with both the officials of the department as well as by the assessee in the matter of initiation and finalization of assessment proceedings. At paragraph 13, the Bench in SS.Ahluwalia (supra) states as follows: "(13)The provisions indicate that Sections120, 124 and 127 of the Act recognizes flexibility and choice, both with the assessee and the authorities i.e. the Assessing Office before whom return of income could be filed and assessment could be made. The Assessing Officer within whose area an ....
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....e accruing or arising within the area as it is not the case of the petitioner-assessee that the said officer did not have jurisdiction in view of location of the bank account and/or petitioner's place of work. 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 income accruing, arising or received in that area over which the assessing officer exercises jurisdiction. However, notwithstanding Section 124(5), the Act does not postulate multiple assessments by different assessing officers, or assessment of part or portion of an income [see Kanjimal & Sons Vs. Commissioner of Income Tax, New Delhi, (1982) 138 ITR 391 (Del)]. Thus, it is necessary that the Assessing Officers having concurrent jurisdiction ensure that only one of them proceeds and adjudicate. This is the purport and objective behind sub-section (2) to Section 124 of the Act. 26. The Delhi High Court has concluded that the objections raised by Abishek Jain cannot be equated with lack of subject matter of jurisdiction and relates only to place of assessment. They thus reject the challenge to the assumption of jurisdict....
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....ent. 31.The Delhi High Court in Veena Devi Karnani considered a case where the assessee had shifted her address during the financial year relevant to AY 2010-2011. She filed her return under the same existing PAN number reflecting the new and changed address. The Assessing Officer continued to be the same both for the earlier as well as present year. Despite having been intimated of the change in address, proceedings for re-assessment were initiated and notice under Section 148 on the ground that there had been escapement of income for AY 2011-2012, were issued only to the old address. 32. The assessee challenged the re-assessment proceedings on the ground that the notice had been sent to her old address and was thus invalid particularly, when she had specifically disclosed the change of address to the Department. The challenge was accepted by the Court holding in conclusion that the narrative of facts and behavior of the Assessing Officer was disturbing, to say the least. The proceedings had been initiated by the Officer mechanically and on the basis of the address supplied by the Bank without noting that the address supplied by the Bank was incorrect and without verifying t....
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....e Income Tax purposes. However, since the PAN address of the assessee is in Madurai, assessee should be assessed to tax only with DCIT International Taxation, Madurai. Hence assessee is required to file Return of Income for A.Y. 2008-09 as mandated by notice u/s 148 of IT act 1961 on or before 18.12.2015. ......' 36. In fact in earlier communications, she had taken the stand that the assessment of the petitioner would be transferred either to International Taxation, Bangalore or the Assessing Officer at Shimoga based on the status of the petitioner in the relevant financial year. The lack of clarity on the part of the department as to who the proper officer would be to assume jurisdiction, is obvious and glaring. 37. The petitioner in rejoinder to the counter has set out the periods of his entry and exit into and out of India, as follows: 1. 01.01.2015 to 12.01.2015-Los Angeles (US)-12 days - 01.01.2015 exit from Dubai and entered US 2. 12.01.2015 to 22.01.2015 - Dubai - 10 days - 12.01.2015 exit from US and entered Dubai 3. 22.01.2015 to 08.02.2015 - Mozambique - 17 days - 22.01.2015 exit Dubai and entered Mozambique 4. 0....
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....Madurai. Assessee also vide the above letter submitted the assessee has been filing return of income regularly with ITO-Ward-1 Shimoga and is assessable under the jurisdiction of ITO Ward -1 Shimoga. Hence in order to ascertain the rightful jurisdiction and residential status of assessee, a letter dated 09.10.2015 was sent to assessee calling for details of residence in India of the assessee.' Emphasis by underlining, mine) 41. In the face of such patent lack of clarity on the part of the officer, who on 09.10.2015, was still uncertain as to the proper officer to assume jurisdiction, the provisions of Section 124(3) cannot be resorted to by the Department. 42. In the present case the petitioner has, no doubt obtained a PAN from the Assessing Officer at Madurai, wherein the address of the assessee is stated to be in Madurai. However, no assessments have been completed by the officials at Madurai, till date. For AY 2012-2013 to 2015-2016 the petitioner has filed returns of income electronically, stipulating his jurisdictional officer as the Income tax officer, Shimoga, Karnataka. These returns of income have been processed and intimations issued by the CPC wherein the ....