TaxTMI 
TaxTMI 
2020 (6) TMI 8
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....43(1) of the Act and thereafter completed assessment u/s 143(3) r.w.s. 147 of the Act was completed on 13/12/2016, determining the total income at Rs. 18,42,160/- interalia making an addition of Rs. 15,31,700/-, as cash credit being, net income earned from Client Code Modification (CCM). Aggrieved the assessee carried the matter in appeal before the ld. First Appellate Authority. The ld. CIT(A) rejected the arguments of the assessee, both against the reopening of the assessment as well as against the merits of the addition. 3. Further aggrieved the assessee is in appeal before us challenging both the reopening of the assessment as well as the addition made u/s 68 of the Act on merits. 4. The ld. Counsel for the assessee, Shri Somnath Ghosh, challenged the reopening of the assessment u/s 147 of the Act by submitting that, a perusal of the reasons recorded, a copy of which was placed at page 97 of the paper book, reveals total non-application of mind by the Assessing Officer to the material received by him. He submitted that the assessee had not entered into any derivative transaction during the year. He submitted that the information received by the Assessing Officer, which trigge....
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....n the judgment of the Hon'ble Bombay High Court in the case of Bayer Material Science P. Ltd. vs. DCIT (2016) 382 ITR 333 (Bom.), for the proposition that the assessment under such circumstances would be bad in law. He further argued that the Assessing Officer who recorded reasons and issued notice u/s. 148 of the Act was ITO Ward 1(1)- Kolkata, who had no jurisdiction over the case of the assessee. He submitted that later the file was transferred to ITO, Ward-4(3), Kolkata, as this officer had jurisdiction. He submitted that ITO, Ward-4(3), Kolkata, without issuing fresh notice or recording reasons that he is satisfied that income to tax has escaped assessment u/s 143(3) of the Act. Thus, he submitted that this renders the assessment order illegal and without jurisdiction. 5. On merits, the ld. Counsel for the assessee submitted that the National Stock Exchange of India (NSE) vide letter dt. 16/01/2017, has furnished information to the Assessing Officer in response to notice u/s 133(6) of the Act that in the case of the assessee stated that there is no "no client code modifications details during the period from April 01,2008 to March 31, 2009 in Capital Market and Currency Deriv....
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....or reopening of the assessment as furnished by the ITO, Ward-1(1), Kolkata, to the assessee, dt. 11/07/2016, is extracted for ready reference:- "Sub: Scrutiny u/s. 147 of the I.T. Act, in respect of M/s. Aereo Dealcom Private Limited, PAN- AACCA5934G for the A.Y. 2009-10 - matter regarding. Ref: Your letter dated 14.04.2016. With reference to your above letter, it is to inform you that the reason for reopening of your case is as follows: "As per information received from the ADIT(Inv.), Unit-1 (3), Ahmedabad that the assessee company was a beneficiary by way of Client Code modification(CCM) at the time of derivative transaction in National Stock Exchange. The assessee thus got the benefit of net income due to Client Code Modification for the sum of Rs. 15,31,700/-." Therefore, the Assessing Officer has reason to believe that the income of M/s. Allied Commotrade Pvt. Ltd to the tune of Rs. 15,31, 700/- for the relevant asstt. year has escaped assessment and accordingly the case was reopened u/s.147 of the I.T. Act." 8.1. In response to a notice u/s 133(6) of the Act, the NSE issued a letter on 16/01/2017 and stated as follows:- "Please find no the client code mo....
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....ble to tax to extent of accommodation entry had escaped assessment - Whether information received from investigation wing could not be said to be tangible material per se without a further inquiry being undertaken by Assessing Officer to establish link between 'tangible material' and formation of reason to believe that income had escaped assessment and consequently, reassessment was unjustified" 8.3. The Hon'ble Delhi High Court in the case of PCIT vs. G & G Pharma Ltd. (supra), has held as follows:- "Held that after setting out four entries, stated to have been received by the assessee on a single date, i.e., 10-2-2003, from four entities which were termed as accommodation entries, which information was given to him by the Directorate of Investigation, the Assessing Officer stated that he had also perused various materials and report from Investigation Wing and on that basis it was evident that the assesseecompany had introduced its own unaccounted money in its bank account by way of above accommodation entries. The above conclusion is unhelpful in understanding whether the Assessing Officer applied his mind to the materials that he talks about particularly since he di....
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....essment order as provided under 4th Proviso to sub-section(2) of Section 153 of the Act has already expired when the petition was filed." 10.2. The Hon'ble Bombay High Court in the case of Mohanlal Champalal Jain vs. ITO reported in [2019] 102 taxmann.com 293 (Bombay) under similar circumstances has held as follows:- "IT : Where Assessing Officer issued a reopening notice on ground that assessee had made transactions of huge amount in national/multi commodity exchange but he had not filed his return of income and assessee filed an objection that he had earned no income out of trading in commodity exchange and he had actually suffered loss and, therefore, he had not filed return of income, since, Assessing Officer had not looked into objections raised by assessee and proceeded ahead, impugned reassessment notice was unjustified" 10.3. The Hon'ble Gujarat High Court in the case of Vishwanath Engineers vs. ACIT reported in [2013] 352 ITR 549 (Guj.) held as follows:- "Thereafter, Assessing Officer issued notice under section 148 on ground that assessee was only a work contractor and, thus, was not entitled to deduction under section 80-IB - Assessee raised objection to notice -....
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....me; 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 or incomes or classes of (5) The directions and orders referred to in sub- sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, require two or more Assessing Officers (whether or not of the same class) to exercise and perform, concurrently, the powers and functions in respect of any area or persons or classes of persons or incomes or classes of income or cases or classes of cases; and, where such powers and functions are exercised and performed c....
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.... 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 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....
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....y 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 pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year. 129. Change of incumbent of an office Whenever in respect of any proceeding under this Act an income- tax authority ceases to exercise jurisdiction and is succeeded by another who has and exercises jurisdiction, the income- tax authority so succeeding may contin....
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....ether 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 Commissioners as stipulated therein) then if the other Income-tax authority also agrees then the question will be resolved mutually or else it will be referred to the CBDT. So, once the AO of an assessee is vested with the jurisdiction u/s. 124 read with sec. 120(1) & (2) of the Act and issues statutory notices against an assessee, no person (assessee) shall be entitled to call in question the jurisdiction of an AO within the period prescribed under clauses (a), (b) and (c) of section 124(3) of the Act. We also note that sec. 124(5) saves the action of the AO who has territorial jurisdiction over the assessee in respect of the income earned by the assessee fro....
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....ze an Income Tax authority by a notification as stipulated in clause (b) of sub-sec.(2) of section 127 of the Act. Subsection(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 whom the case of an assessee is transferred to take forward the proceedings from the point where the earlier jurisdictional AO had left. Here, it would be important to note the Explanation to section 127 defines the expression 'case'. A reading of the said Explanation shows that the expression 'case' in relation to any person, whose name is specified in the transfer order passed u/s. 127 of the Act, means all proceedings under the Act in respect of any year which may be pending on the date of such order or direction or it may have been completed on or before such date, and includes also all proceedings under the Incometax Act which may be commenced after the da....
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....nsferred 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 jurisdiction as per sec. 124 read with sec. 120(1) or (2) of the Act and the ACIT, Circle 21(1), Delhi's action of issuing the statutory notice u/s. 143(2) of the Act was saved by sub-sec. (5) of section 124 of the Act read with sub-section (4) of sec. 127 of the Act. We are however unable to accept such contention for the following reasons. For adjudicating this contention, let us first examine the relevant provisions of sub-section (5) of sec. 124 of the Act and sub-sec. (4) of sec. 127 of the Act, which read as follows: Sec. 124(5):- Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer sh....
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....ho 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 provisions of Section 124(5) being overriding in nature, the ACIT Circle 21(1), New Delhi simultaneously held concurrent jurisdiction is devoid of any merit. Such interpretation is not in accord with the extant provisions of Section 124(5) read with Section 127 of the Act. In our opinion once an order u/s 127(2) was passed on 08.10.2008 by the ld. CIT-V, Delhi unconditionally transferring the jurisdiction over the appellant's case to the charge of ACIT, Central Circle 1, Ranchi; then by virtue of such an order, the jurisdiction enjoyed by ACIT at New Delhi in terms of Section 124 read with Section 120(1) & (2) stood abrogated. Accordingly after 08.10.2008, the ACIT at New Delhi could not ha....
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....or 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 Calcutta High Court in M/s. Ramshila Enterprises Pvt. Ltd. (infra) clearly held that, "The jurisdiction over the subject-matter has to be conferred by law. The jurisdiction in this case had been transferred by the order dated 3rd September, 2012 by no other than the CIT Kolkata- II, Kolkata himself. Once that was done CIT Kolkata - II, Kolkata lost the seisin over the matter. He became 'functus officio'." [Emphasis given by us]Thus, the contention of the Ld. CIT, DR that the jurisdiction is an administrative issue and not a subject matter stands negated in the light of the jurisdictional High Court's specific observations (supra). 21. Coming to the next contention of the Ld. CI....
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....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 sub-section (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 Enterprises Pvt. Ltd. (infra),since the jurisdiction was divested of the earlier AO by virtue of transfer order u/s. 127 of the Act, the earlier AO, which in this case is AO at Delhi (DCIT. Circle -15, New Delhi) ceased to be Assessing Officer after the date of transfer i.e. 08.10.2008 and therefore he (i.e. AO at New Delhi) ought not to have issued statutory notices upon the assessee unless he had been re-empowered or vested by a fresh transfer order u/s. 127 of the Act (i.e. from AO, Ranchi to AO, Delhi), which is not the case of the Revenue. In the circumstances therefore, the AO at Delhi (ACIT, Circle-21 (1), New Delhi) could not have usurped the jurisdiction when his predecessor i.e.....
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....isdiction 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 validly done so, once he himself had passedan order u/s 127 of the Act in terms of which assessee's case stood transferred. The facts of the said case M/s. Ramshila Enterprises Pvt. Ltd. Vs. Pr. CIT can be summarized as follows:- Sl. No. Date Events 1. 21st May, 2010 Assessment u/s. 147/143(3) by ITO, Wd-4(1), Kolkata (for AY 2008-09). 2. 3rd September, 2012 CIT, Kolkata-II transferred the jurisdiction over the assessee to ACIT/DCIT, Central Circle-XIX, Kolkata for better co-ordination, effective investigation and meaningful assessment, consequent to a search conducted on 17th November 2011 upon M/s. Atha Mines (AY 2012-13). 3. 18th March, 2013 ACIT/DCIT, Central Circle-XIX, Kolka....
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....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 Commissioner of Income Tax, Kolkata-II, had jurisdiction over the appellant at the time of issue of the Show Cause notice on 18th March, 2013 and passing of the order on 26th March, 2013 under section 263 of the Income Tax Act, 1961 in spite of transfer of jurisdiction to the Commissioner of Income Tax, Central Circle, Kolkata vide an order dated 3rd September, 2012 under section 127 (2)(a) of the said Act and its purported findings in that behalf are arbitrary, unreasonable and perverse?." 25. In this case which is reported as M/s.Ramshila Enterprises Pvt. Ltd. Vs. Pr. CIT (2016) 383 ITR 546 (Cal), we note that the gist of department's contention was taken note by the Hon'ble High Court, which is as under: "Mr. Ghosal, learned senior advocate app....
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....eputy 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 jurisdiction and is, therefore, a nullity. He drew our attention to a judgment of the Apex Court in the case of Pandurang and Others versus State of Maharashtra reported in (1986) 4 SCC436for the proposition that even a right order by a wrong forum is a nullity.In the aforesaid judgment their Lordship held as follows: "4.When a matter required to be decided by a Division Bench of the High Court is decided by a learned Single Judge, the judgment would be a nullity, the matter having been heard by a court which had no competence to hear the matter, it being a matter of total lack of jurisdiction. The accused was entitled to be heard by at least two learned Judges constituting a Division Bench and had a right to claim a verdict as regards his guilt or innocence....
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....sed 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 also acted upon. The jurisdiction over the subject-matter has to be conferred by law. The jurisdiction in this case had been transferred by the order dated 3rd September, 2012 by no other than the CIT Kolkata- II, Kolkata himself. Once that was done CIT Kolkata - II, Kolkata lost the seisin over the matter. He became 'functus officio'. Reference in this regard may be made to the Stroud's Judicial Dictionary of Words and Phrases, 7th Edition, Page 1085 wherein the following meaning has been expressed: "FUNCTUS OFFICIO. An arbitrator or referee cannot be said to be functus officio when he has given a decision which is held to be no decision at all (Davies v Howe Spinning Co LTD.27 B.W.C.C.207). Where a judge has made an order for a stay of execution which has been passed a....
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....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 held that under that section the Collector had no such power, as the provision gave him the power only to give his opinion as regards the duty with which in his judgment the instrument was chargeable and when that function was performed by the Collector he became functus officio. It was observed by the Supreme Court that the power to impound only exists when an instrument is produced before judicial officers or other officers performing judicial functions as evidence of any fact to be proved, or before other public officers who have to perform any function in regard to those instruments as, for example, registration. The Supreme Court also approved the decisions in Collector, Ahmednagar v. Rambhau, AIR 1930 Bom 392 (FB). Paiku v. Gaya, ILR (1948) Nag 950 : (AIR1949Nag 214) and Panakala Rao v. Kumaraswami, AIR 1937Mad 763 whe....
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....(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 parties or their pleaders. Sub-rule (3) provides that the judgment may be pronounced by dictation in an open court to a shorthand writer [if the Judge is specially empowered (sic by the High Court) in this behalf].The proviso thereto provides that where the judgment is pronounced by dictation in open court, the transcript of the judgment so pronounced shall, after making such corrections as may be necessary, be signed by the Judge, bear the date on which it was pronounced and form a part of the record. Rule 3 provides that the judgment shall be dated and signed by the Judge in open court at the time of pronouncing it and when once signed, shall not afterwards be altered or added to save as provided by Section 152 or on review. Thus, where a judgment is reserved, mere dictation does not amount to pronouncement, but where the judgment is dictated in open court, that itself amount....
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.... 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 erred in passing an order dated 26.03 2013 u/s 263 setting aside the order of the ITO, Ward-4(1), Kolkata dated 21.05.2010. 29. Coming back to the case in hand, and having taken note of the ratio laid down by the Hon'ble jurisdictional High Court (supra), we note that in the present case, after the order of the CIT-V, New Delhi dated 08.10.2008 transferring the jurisdiction of the assessee's case to DCIT, Central Circle, Ranchi, the CIT, Delhi became functus officio and thereby his subordinate officers viz., ACIT, Circle 21(1), New Delhi, could not have issued notice u/s. 143(2) dated 28.07.2016 and in that view of the matter the notice issued by the ACIT, Circle-21(1), New Delhi u/s 143(2)was without jurisdiction and, therefore, non-est in the eyes of law. 30. Our above finding also finds support from the decision of this Tribunal in the case of Chankya Finvest Pvt Ltd Vs ITO (34 taxma....
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.... 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 and adjudicate the validity of reopening or grant an adjournment of 15 days to obtain certified copies of all related records so that we can represent the matter properly." The CIT(A) sent this written submission to ITO, Ward-6(1), Kolkata vide letter No. CIT(A)VI/Kol/Remand/2011-12/368 dated 20-02-2010 and the AO sent its remand report vide letter No. Wd6(1)/Kol/ChanakyaFinvest/11-12/826 dated 23-04-2010, which is as under: "Kindly refer to your letter No. CIT(A)-VI/Kol/Remand Report/2011-12/368 dated 20.02.2012. In this connection following information as available from the record are chronologically appended below: Date Happening 1. 04-01-10 Order u/s l27 passed by the Ld. CIT, Delhi-I, New Delhi. 2. 23-03-10 Proposal to re-open the case was sent to Ld. Addl. CIT, Range-3 Delhi. 3. 25-03-10 Delhi. Ld. Addl. CIT, Range-3, accorded the approval for re-open the case. 4. 25-03-10 Notice u/s 148 issued a....
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....file any objection regarding the jurisdiction of the Assessing Officer and did not attend the proceedings thereafter. The assessment has been completed on 29-12-2010. 9. The Income-tax Officer, Ward (1) has submitted that the case records were not transferred to him and was still lying with ITO Ward 3(3), New Delhi on the date of issuance of notice u/s 148. In the absence of the transfer of case records, the jurisdiction is not transferred automatically since the ITO Ward 6(1), Kolkata did not know about the order passed u/s 127 by the Commissioner of Income-tax-1, New Delhi." And further, he decided the issue by dismissing the assessee's issue of reopening u/s. 148 of the Act, vide ground Nos. 17 to 20 as under: "17. The assessee had never questioned the jurisdiction of the Assessing Officer in the course of assessment proceedings. Section 124(3) of the Income-tax Act makes it clear that the jurisdiction of the Assessing Officer cannot be challenged after the expiry of one month from the date of service of notice on the assessee under section 143(2)/148. The Hon'ble Allahabad High Court in the case of Hindustan Transport Co. v. IAC [1991] 189 ITR 326 (All.)has hel....
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..../s 148 and/or completing the assessment. In the facts and circumstances of the case it is also held that appellant was given proper opportunity after serving the notice u/s 148 and during assessment by the Assessing Officer. Hence, these three grounds of appeal are dismissed." Aggrieved, assessee is in appeal before us. 5. We have heard rival submissions and gone through facts and circumstances of the case. First of all, it is to be seen that what is the chronology of events, as recorded by the AO in his remand report given, during course of appellate proceedings before CIT(A). The chronology of events is as under: Date Happening 1. 04-01-10 Order u/s l27 passed by the Ld. CIT, Delhi-I, New Delhi. 2. 23-03-10 Proposal to re-open the case was sent to Ld. Addl. CIT, Range-3, Delhi. 3. 25-03-10 Ld. Addl. CIT, Range-3, accorded the approval for re-open the case. 4. 25-03-10 Notice u/s 148 issued and served by ITO, Ward-3(3), New Delhi. 5. 30-11-10 Record received by the under signed from ITO, Ward-3(3), New Delhi. 6. 03-12-10 The assessee complied to the notice u/s 148 vide petition dated 03-12-10. 7. 03-12-10 Notice u/s 143(2) and 142(1) both were ....
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....eedings under the Act which may be commenced after the date of such transfer in respect of any year whatever are also included therein, so that the AO to whom such case is transferred would be in a position to continue the pending proceedings and also institute further proceedings against the assessee in respect of any year. The proceedings pending at the date of transfer can be thus continued but in the case of such proceedings the provisions in regard to issuance of notices contained in the main body of section 127(2) of the Act would apply and it would not be necessary to reissue any notice already issued by AO from whom the case is transferred. For this, assessee has relied on the decision of Hon'ble P&H High Court in the case of Lt. Col. Paramjit Singh v. CIT [1996] 89 Taxman 536. 7. After going through the provisions of sections 120, 124 and 127 of the Act, the plenary powers regarding conferment of jurisdiction has been vested, by delegation by the statute, on the Commissioner having jurisdiction in respect of assessment of the case. This power, in the absence of any prohibition or restriction, empowers the Commissioner of Income-tax to effect realignment of jurisdict....
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....IT, Delhi-1 passed order u/s. 127 of the Act on 01-01-2010 transferring the jurisdiction of the assessee to ITO, Wd-6(1), Kolkata and the jurisdiction in respect to every action for all assessment years lies with the ITO, Wd-6(1), Kolkata and only he is competent to issue notice u/s. 148 of the Act. In such circumstances, the notice issued u/s. 148 of the Act by the ITO, Ward-3(3), New Delhi is bad and illegal in view of the clear provisions of the Act because an order for transfer of case was validly made by CIT and the purpose for transfer was simply that all future proceedings are to be taken by ITO, Ward-6(1), Kolkata w.e.f. 04-01-2010. Hence, the notice issued u/s. 148 of the Act dated 25.03.2010 is quashed. 9. In the result, appeal of assessee is allowed." 31. We further find that the decision of the Hon'ble Bombay High Court in the case of Fiat India Automobiles Ltd Vs Vijender Singh (211 Taxman 570) support the legal ground canvassed by the appellant before us. The relevant facts and findings of the said case were as follows: "3. The basic argument of the Petitioner is that once the CIT-10 Mumbai in exercise of the powers vested in him under Section 127(2) of the A....
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.... corrigendum order dated 27.03.2012 has been served upon the petitioner till date. 8. Mr. Pinto, learned Counsel for the Revenue on instruction from CIT-10 Mumbai informs us that there is no proof of serving the corrigendum order dated 27.03.2012 upon the petitioner. It is neither the case of the revenue that before passing the corrigendum any notice was issued to the petitioner nor it is the case of the revenue that the corrigendum order was passed after hearing the petitioner. 9. Although in the affidavit in reply the revenue claims to have annexed a copy of the corrigendum order dated 27.03.2012 no such order was in fact annexed to the affidavit-in-reply. It is only during the course of hearing the Counsel for the revenue admitted the lapse and tendered a copy of the letter dated 20.03.2012 addressed by ACIT-10(1) Mumbai to CIT-10 Mumbai as well as the corrigendum order dated 27.03.2012 to the Court as also to the Counsel for the Petitioner. ..... 11. The corrigendum order dated 27/3/2012 passed by CIT-10 Mumbai reads thus:- ...... 12. The question therefore to be considered is, when the CIT-10 Mumbai has transferred the jurisdiction to assess/reassess the peti....
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....emands of ACIT-10(1) and instead ought to have admonished the ACIT-10(1) for making such unjust request. The CIT-10 Mumbai ought to have known that there is no provision under the Act which empowers the CIT to temporarily withdraw the order passed by him under Section 127(2) of the Act for the sake of administrative convenience or otherwise. If the CIT-10 Mumbai was honestly of the opinion that the order passed under Section 127(2) of the Act was required to be recalled for any valid reasons, then, the CIT-10 Mumbai ought to have issued notice to that effect to the petitioner and after hearing the petitioner ought to have passed any order as he deemed fit and serve the same to the petitioner. 16. In the present case, admittedly, the CIT-10 Mumbai has not issued any notice and has not heard the petitioner before passing the Corrigendum order and in fact the said corrigendum order has not been communicated to the petitioner before issuing the impugned notice dated 30.03.2012 and admittedly the alleged corrigendum order is served upon the petitioner for the first time today in Court. 17. In these circumstances, we quash and set aside the impugned notice dated 30.03.2012 issued b....
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....on to AO's jurisdiction in terms of section 124(3)(b). In the instant case, however, the appellant had mentioned its PAN in the return of income filed for AY 2015-16. By virtue of the order u/s 127 dated 08.10.2008,it was within the knowledge of the AO at Delhi that the jurisdiction over the case of the assessee solely vested with AO at Ranchi in the month of June 2016. On these facts we therefore find that the ratio laid down in the judgment of the Hon'ble Delhi High Court (supra) is not applicable because the factual context in which it was rendered was vastly different. 33. Similarly, in the case of S.S. Ahluwalia (supra), the assessee was assessed at Delhi from 1980-81 to 1983-84. From the assessment year 1984-85 to 1987-88, filed his returns at Dimapur. The case of the assessee was reopened u/s 148 by the ACIT, Investigation, Delhi, on the basis of CBI search. When the question of jurisdiction came before the Hon'ble High Court, it was held that where the assessee shifts his residence etc., the AO of the place where the assessee has shifted or otherwise will have jurisdiction and it is not necessary that in such case an order u/s 127 is required to be passed. While goin....
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....a curable defect. This view was reiterated by the Hon'ble Apex Court in the case of CIT Vs Laxman Das Khandelwal(108 taxmann.com 183). The relevant observations are as follows: "5. At the outset, it must be stated that out of two questions of law that arose for consideration in Hotel Blue Moon's case2 the first question was whether notice under Section 143(2) would be mandatory for the purpose of making the assessment under Section 143(3) of the Act. It was observed:- "3. The Appellate Tribunal held, while affirming the decision of CIT (A) that non-issue of notice under Section 143(2) is only a procedural irregularity and the same is curable. In the appeal filed by the assessee before the Gauhati High Court, the following two questions of law were raised for consideration and decision of the High Court, they were: "(1) Whether on the facts and in circumstances of the case the issuance of notice under Section 143(3) of the Income Tax Act, 1961 within the prescribed time-limit for the purpose of making the assessment under Section 143(3) of the Income Tax Act, 1961 is mandatory? And (2) Whether, on the facts and in the circumstances of the case and in view of the undi....
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....served upon him; or (b) Not served upon him in time; or (c) Served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment." 7. A closer look at Section 292BB shows that if the assessee has participated in the proceedings it shall be deemed that any notice which is required to be served upon was duly served and the assessee would be precluded from taking any objections that the notice was (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner. According to Mr. Mahabir Singh, learned Senior Advocate, since the Respondent had participated in the proceedings, the provisions of Section 292BB would be a complete answer. On the other hand, Mr. Ankit Vijaywargia, learned Advocate, appearing for the Respondent submitted that the notice under Section 143(2) of the Act was never issued which was evident from the orders passed on record as well as the stand taken by the Appellant in the memo of appeal. It was further submitted that issuance of notice under Section 143(2) of the Act being prer....