TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 418
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....ed by the company from three (3) associate companies. Out of this Rs,1,40,00,000/- addition, the Assessing Officer states that a protective addition of Rs. 40,00,000/- is made in the hands of the intermediary companies. Aggrieved the assessee carried the matter in appeal without success. The ld. First Appellate Authority, upheld the order of the Assessing Officer. 3.Further aggrieved, the assessee is before us. 4.The assessee filed an application for admission of additional ground. The addition ground reads as follows:- " For that the assessment is bad in law since no valid notice u/s 143(2) was issued by the Assessing Officer, who was vested with the jurisdiction to issue notice within due time allowed under the law and as such the entire proceedings are bad in law and the assessment in liable to be quashed." On merits, grounds are raised against the addition made u/s 68 of the Act. 4.1.The ld. Counsel for the assessee submitted that the jurisdiction of the assessee was with ITO, Ward-8(3), Kolkata and whereas ITO, Ward-33(1), Kolkata, issued the notice u/s 143(2) of the Act on 06/08/2013 and thereafter on 03/02/2014, the file was transferred to ITO, Ward-8(3), Kolkata. He ....
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....68 of the Act, the Bench has been consistently remanding such matters back to the file of the Assessing Officer for fresh adjudication, in accordance with law. He pointed out that in this case, certain protective addition has also been made by the Assessing Officer and hence the Bench may consider setting aside the matter to the file of the Assessing Officer to verify as to what happened in the case of protective assessments. 5.2.In reply, the ld. Counsel for the assessee relied on certain case-law and submitted that Section 124(3) of the Act, comes into play, only when the officer issuing a notice has jurisdiction and does not apply to a case where there is no inherent jurisdiction to a Assessing Officer. He argued that any act by a non-jurisdictional Assessing Officer is void ab initio and cannot be rectified. 6.We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:- 7.The address of the assessee as given in the return of income and as given in the PAN Card, has not undergone any change for the previous assessment years,....
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....irection issued by the Board shall be deemed to be a direction issued under sub-section (1). (2) The directions of the Board under sub-section (1) may authorise any other income-tax authority to issue orders in 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 anyone 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 1[Principal Director General or] Director General or 14[Principal Director or] Director to perform such functions of any other income-tax authority as may be assigned to him by the Board; (b)empower the 1[Principal Director General or] Director General or 14[Principal Ch....
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....shall be such authority as may be specified in the notification. 8.2.From a plain reading of the above, it is clear that u/s 120(1) of the Act, the Income Tax Authorities will have to exercise Acts only in accordance with the jurisdiction conferred by the Board. U/s 120(3) of the Act, such powers can be conferred by the Board having regard to the territorial area, class of person, income or class of the cases. The CBDT under sec. 120(5) of the Act, can also confer jurisdiction on two or more Assessing Officers (concurrent jurisdiction). The CBDT can also by notification confer powers on the authorities for the purpose of assessment as may be notified in the notification. This shows that concurrent jurisdiction can be exercised only when CBDT confers such jurisdiction u/s 120(4) and 120(5) of the Act. 8.3.In accordance with the powers conferred u/s. 120 (1) and 120(2) of the Act, the CBDT issued notification on no. 191/2002(F.No.187/9/2002-ITA-1 dated 30.7.2002) whereby the CBDT conferred the jurisdiction by specifying the Designation of the specific Income Tax Authorities, its Head Quarters, Territorial Area, Persons or classes of persons and cases or class of cases. 8.4.As per ....
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....b-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 sub-section (2) of section 115WE or sub-section (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 (2) of section 115WD or sub-section (1) of section 142 or under sub-section (1) of section 115WH or under section 148 for the making of the return or by the notice under the first proviso to section 115WF 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 subsection (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 As....
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....to fill PAN on the return. It has to also fill its address and some of the details are picked-up by the assesse. If the Department's system fails to correctly transfer the return to the jurisdictional Assessing Officer and transfer the same to a Assessing Officer though who has no jurisdiction as per the CBDT's notification, such mistake cannot confer the jurisdiction on such an Assessing Officer. Jurisdiction can be conferred only by notification u/ s 120(1) and 120(2) of the Act only. 8.10.The Ld DR submitted that there was transfer order of the assessee's case for the assessment year in question, from ITO Ward 33(1) to ITO Ward 8(3). There can be a valid transfer order from ITO Ward 33(1) only if he was vested with the jurisdiction over the assessee. As he was never vested with the jurisdiction either by the notification of the CBDT or by any order of the Commissioner of Income tax earlier to the issue of notice u/ s 143(2) of the Act, he could not have validly transferred the case to ITO, Ward-8(3), Kolkata. The file/case was restored to its jurisdictional area. When the said ITO Ward 33(1) was not having valid jurisdiction at the time of issue of notice u/ s 143(2) o....
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....e Assessing Officer who has been divested of the jurisdiction on 30.7.2002 cannot file the appeal after the said date. In that case even the authorization was also granted for filing the appeal by the CIT-XIII, Kolkata who lost the jurisdiction after the notification. In that case after the dismissal of the appeal of the Department by the Tribunal on the aforesaid ground of jurisdiction, the Revenue filed an appeal before the Hon'ble High Court but the same was dismissed. The Revenue thereafter came up with condonation petition and a filed fresh appeal before the ITAT but the same was also dismissed in ITA No. 1768 and 1769/Kol/2006, B-Bench on 15.9.2014. The Revenue filed an appeal before the Hon'ble High Court which was dismissed with the following observations: "The appeal carried by theACIT-39 to the Appellate Tribunal was dismissed as not competent. The order of the Appellate Tribunal was challenged by the Revenue in this Court. This Court did not interfere with the order of the Tribunal and the matter rested there without this Court's order being challenged by the Revenue before the Supreme Court. In the present case, the matter pertains to the same assessment y....
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....3 has lost the Jurisdiction then the notice and order issued by him is a nullity. 8.22. The Lucknow Bench of the ITAT in ITA No. 89 and 90/LKW /2015 dated 16.4.2015 in the case of Md Rizwan held that notice u/ s 143(2) issued by non-jurisdictional Assessing Officer is a nullity. 8.23. Same view have been taken a number of other cases some of which are under:- 1. A.L. Ahuja v/s. DCIT SOT (2003) page 475 at page 480 If at the time of issue of notice u/s. 158BC the Assessing Officer had no jurisdiction the assessment is illegal. 2. Income Tax officer vs. Sarkar & Co. 1954 AIR 613 Calcutta. If at the time of filing, of the appeal the ITO had no seisin over he assessee's case and case is transferred by the Commissioner of Income Tax from ITO Ward-III(2) to some other Officer, on the date of filing of the Appeal, the ITO Ward III(2) cannot file the Appeal and the appeal of the department rightly dismissed by the ITAT. 3. Ram Krishna Ramnath vs. Commissioner of Income Tax AIR 1932 Page 65 Nagpur When by notification dated 28th March, 1923 the powers conferred on the ITO should be exercised by the ACIT the Notice issued by the ITO was illegal 4. CIT West Bengal and another vs. ....
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....the notices saying that these notices were not served upon him and that he never received notice u/s 143(2) of the Act and that further subsequent notices served and received by the assessee were beyond the period of limitation prescribed under the law. The assessee submitted that he changed his address and the new address was mentioned in the return of income filed for subsequent years. The assessee also submitted that he filed Form No.18 with Registrar of Companies, regarding change of address. No separate intimation was given to the Assessing Officer by the assessee regarding change of address. The Court held that mere mentioning of the new address on subsequent return without specifically intimating the Assessing Officer with respect to change of address and without getting the PAN database changed, is not enough and sufficient. The court found that the assessee claimed to have filed a letter for change of address but such letter was never produced before any of the authorities. It was held that on the facts of the case, the notice issued on the address available on the PAN data base was proper and valid service of notice u/s 143(2) of the Act. The court held that the change of....