TaxTMI 
TaxTMI 
2020 (12) TMI 858
X X X X Extracts X X X X
X X X X Extracts X X X X
....A) has failed to appreciate that the Ld. A.O. who is an Income Tax Officer has no jurisdiction to assess the case of the appellant having declared income more than Rs. 15 lacs in the impugned year now under appeal in view of CBDT Instruction No. 1/2011 on the facts and in the circumstances of the case. 4. For that the Ld. CIT(A) is not justified to confirm the addition of Rs. 1,05,00,000/- towards un-explained investment in fixed deposits as made by the Ld. A.O. ignoring the relevant documents/papers submitted before him on the facts and in the circumstances of the case. 2. Further the assessee has filed revised grounds of appeal, which read as under:- 1. For that the assessment order dated 30.11.2017 as passed by the Income Tax Officer, Angul Ward, Angul (hereinafter referred to as) the "learned A.O." U/s. 144/147 of the I.T. Act., 1961 for the Asst. Year 2012-13 determining the total income at Rs. 1,45,72,740/- is not just and legal on the facts and in the circumstances of the case. 2. For that the initiation of proceeding U/s. 147 and issuance of notice U/s. 148 for the Asst. Year 2012-13 on the sole basis of survey report and without any conviction....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under:- Date of issue of notice Notice u/s. Date of fixation of hearing Fate of notice Remarks 27/03/2017 148 30 days from the date of receipt of this notice Duly served by e-mail. No compliance. 12/07/2017 142(1) 20/07/2017 Duly served by e-mail. Appeared on 21.07.17 and submitted authorization only. 01/09/2017 142(1) 12/09/2017 Duly served by hand and through email. No Compliance 04/10/2017 142(1) 16/10/2017 Duly served by hand and through email. No compliance. 24/10/2017 142(1) 02/11/2017 Duly served by hand and through email. No compliance. 03/11/2017 142(1) 13.11.2017 Duly served by hand and through email. Filed a written submission. From the above table, it is clear that the assessee did not comply to the notice issued on different dates, therefore, the AO after recording reasons for completing the assessment u/s. 144 of the Act, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re the CIT(A) stating that he was requested by his accountant who frequently fallen sick and he was not qualified enough to make proper submissions and produced documentary evidence such as bank statement before the AO. Before the CIT(A), the ld. AR submitted additional evidence, which was sent to the AO for remand report. The AO submitted remand report which read as under:- "OBSERVATION OF THE A O.: During the course of remand hearing proceedings, notice for hearing was issued to the assessee vide this office letter dtd. 16.04.2019 to produce supporting evidences and explanations, if any, in support of his claim made before the Ld. CIT(A). The relevant portion of the notice is reproduced hereunder for better appreciation of the fad: "The CIT(A)-2, Bhubaneswar has directed the undersigned to submit a remand report in respect of your above appeal. You are hereby required to make compliance in terms of the additional evidence filed by you before the CIT(A)-2, Bhubaneswar alongwith a copy thereof and supporting documentary evidence. Your case is fixed for hearing on 29.04.2019 at 03.30 P.M. Please note that in case of non-compliance on your part, it....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wn bank account and, therefore, there is no question of any undisclosed investment. The assessee relied on number of cases before the CIT(A) regarding the jurisdictional issue and submitted that the assessment order is void ab initio. The judgments relied on by the assessee has been incorporated by the CIT(A) in his order. The CIT(A) after discussing the details in his order with regard to the legal issue raised by the assessee before the CIT(A), dismissed the appeal of the assessee by holding as under:- 4.3.1 I have carefully examined the assessment order, submissions of the appellant, remand report and rejoinder. Il is undisputed that for six assessment years immediately after Asst. Year 2012-13, the total income declared by the appellant is such that the assessing officer had jurisdiction over the appellant. Therefore, the assessing officer had jurisdiction even for assessment year 2012-13 even though the total income was Rs. 35,09,540/-. Moreover, the appellant appeared through his accountant and did not raise any objection what-so-ever to either the notice or the assessment proceedings. The appellant has participated in the assessment proceedings without raising any o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppeal is dismissed. 5. Ground No. 2: 5.1 In this ground, the appellant has contested that the sole basis for reopening the assessment is a survey report and the Assessing Officer has not applied his mind. It is seen from the assessment order that a survey u/s. 133A of the Income Tax Act, 1961 was carried out by Investigation Wing of the Department. During the course of survey, three fixed deposits of Rs. 50 lakh each were noticed. A report regarding this was made by the Investigation Wing and sent to the Assessing Officer. The Assessing Officer found that in the balance sheet under the head 'deposits and investment' the appellant has shown an amount of Rs. 7,15,280/- and therefore he came to the conclusion that the fixed deposits, found during the course of survey are unexplained and he issued notice u/s. 148 of the Income Tax Act, 1961 after seeking approval from competent authority. Thus, it is clear that the Assessing Officer has applied his mind after receiving information from the Investigation, Wing. Therefore, contention of the appellant is rejected and the ground of appeal is dismissed. 6. Ground No. 3: In this rejoinder dated 23.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1. Proceedings u/s-147 of the I.T. Act. 6. Assessee is an individual carrying on works contract business. Assessee filed the original return u/s-139(1) on 30.09.2012. Copy of the I.T. return Audited P&L A/c and Balance Sheet as on 31.03.2012 are enclosed Annexure-1. (2) LA A.O. has initiated re-assessment proceedings u/s-147 of the I.T. Act on the basis of reason recorded on 17.03.2017 and issued notice u/s-148 on 27.03.2017 as mentioned in the assessment order. It is submitted that assessee has not received any notice issued u/s. 148 of the I.T. Act. (3) As per note sheet copy received by the assessee, it has been noted by the Ld A.O. that re-assessment proceedings has been initiated on the basis of survey conducted on 05.02.2015 and a survey report of DDIT (Inv). Copy of note sheet of reassessment proceedings is enclosed on Annexure-2. (4) The present re-assessment proceedings has been initiated after two years on the basis of survey conducted on 05.02.2015 that there is a undisclosed investment in fixed deposits to the tune of Rs. 1,50 Crore and also assessee has not shown any interest income as noted in the note sheet entry Dt. 17.03....
X X X X Extracts X X X X
X X X X Extracts X X X X
....000038 of the assessee. In Support of above a facts copies statements of fixed deposits A/c and current A/c No-26350500000038 showing transfer to fixed deposits for Rs. 1,00,00,000/- on 21.07.2011 are enclosed as Annexure-3. The above current A/c No-26350500000038 has been duly disclosed in the Balance Sheet as on 31.03.2012. As the fixed deposits have been made from the disclosed bank A/c of the assessee addition of Rs. 1,00,00,000/- as un-explained investment u/s-69 of the I.T. Act is not legally sustainable and liable for deletion. 4. Objection to Assessment u/s-144 of the I.T. Act The assessee strongly objects to the assessment completed u/s-144 of the I.T. Act, as the assessee had made compliance on 12.07.2017 and 30.11.2017 during assessment proceedings as evident from the note sheet entry. The Ld A.O. hastily completed the assessment on 30.11.2017 without providing proper opportunity to the assessee although time was available up to 31.12.2018 to pass the assessment order. 10. On the other hand, ld. Sr. DR relied on the order of lower authorities and submitted that the assessee did not raise any objection as per Section 124(3)(....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e notice u/s. 148 of the Act. With regard to merit of the case, the CIT(A) confirmed the action of AO. Accordingly, the CIT(A) dismissed the appeal of the assessee in toto. In the instant appeal, we have to decide first as to whether the Assessing Officer was well within the jurisdiction while framing the assessment or not. On perusal of the assessment order, we find that the assessee has filed return of income declaring total income of Rs. 35,09,538/- and return was filed with ACIT, Circle-1, Bhubaneswar. As per CBDT Instruction No. 211, dated 31.01.2011 fixing monetary limits for assigning the case to the AO which are placed in the paper book page No. 1, according to the CBDT Instruction in case of non-corporate returns, the Income Tax Officer is upto Rs. 15 lakhs, whereas the assessee has filed return of income is of Rs. 35,09,538/-. Ld. AR before us submitted that there was no service of notice issued u/s. 148 of the Act and the notice u/s. 143(2) of the Act has not been served to the assessee. It is very much clear that the AO while computing the total income has taken the income as per return at Rs. 35,09,538/- which is more than Rs. 15 lakhs as prescribed by the CBDT. For mo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....truction No. 1/2011 (F. No. 187/12/2010-IT(A-1) has already increased the monetary limit upto Rs. 15 lakhs for non-corporate return of income, which can be assessed by only the ITOs and above Rs. 15 lakhs the income of the assessee can be assessed by Acs/DCs. The present assessee belongs to Angul, which is not a metro city, then it was the duty of the revenue authorities to sit upon their proper jurisdiction very much available to them. Ignorance of law cannot be denied. 13. The Kolkata Bench of the Tribunal in the case of Sukumar Ch. Sahoo Vs. ACIT, ITA No. 2073/Kol/2016, order dated 27.09.2017 (2017) 60 ITR (Trib) 0225 (Kolkata) while dealing with the similar issue, has observed that as per the CBDT Instruction the monetary limits in respect to an assessee who is an individual which falls under the category of 'non corporate returns' the ITO's increased monetary limit was upto Rs. 15 lacs; and if the returned income is above Rs. 15 lacs it was the AC/DC. So, since the returned income by assessee an individual is above Rs. 15 lakh, then the jurisdiction to assess the assessee lies only by AC/DC and not ITO. So, therefore, only the AC/DC had the jurisdiction to asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssee lies only by AC/DC and not ITO. So, therefore, only the AC/DC had the jurisdiction to assess the assessee. It is settled law that serving of notice u/s. 143(2) of the Act is a sine qua non for an assessment to be made u/s. 143(3) of the Act. In this case, notice u/s. 143(2) of the Act was issued on 06.09.2013 by ITO, Ward-1, Haldia when he did not have the pecuniary jurisdiction to assume jurisdiction and issue notice. Admittedly, when the ITO realized that he did not had the pecuniary jurisdiction to issue notice he duly transferred the file to the ACIT, Circle-27, Haldia on 24.09.2014 when the ACIT issued statutory notice which was beyond the time limit prescribed for issuance of notice u/s. 143(2) of the Act. We note that the ACIT by assuming the jurisdiction after the time prescribed for issuance of notice u/s. 143(2) of the Act notice became qoarum non judice after the limitation prescribed by the statute was crossed by him. Therefore, the issuance of notice by the ACIT, Circle-27, Haldia after the limitation period for issuance of statutory notice u/s. 143(2) of the Act has set in, goes to the root of the case and makes the notice bad in the eyes of law and consequential....
X X X X Extracts X X X X
X X X X Extracts X X X X
....007) 291 ITR 80 and in the case of Subhash Chander v. CIT (2008) 166 Taxman 307 and the decision of the Hon'ble Allahabad High Court in the case of CIT vs. Sohal Lal Sewa Ram Jaggi (2009) 222 CTR 412 and various other decisions. He further held that where the jurisdiction has irregularly been exercised and the assessee participated in the proceedings, the assessee can be said to have waived the objection regarding jurisdiction. Further, the assessee has mentioned his address of Gurgaon in the return of income. The ld. CIT(A) accordingly held that the Assessing Officer has rightly assumed jurisdiction over the assessee and there is no irregularity or illegality. 27. It is the submission of the ld. counsel for the assessee that the Assessing Officer, Gurgaon was intimated vide letter dated 4th May, 2015 that the original return was filed on 6th March, 2013 with the Assessing Officer of Delhi and the Assessing Officer, Gurgaon could have verified as to which place the PAN is linked with. It is also the argument of the ld. counsel for the assessee that the case of the assessee was not transferred from the Assessing Officer of Delhi to Assessing Officer of Gurgaon by passin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e opportunity of being heard in the matter, wherever it is possible to do so, and after recording, his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Director-General or Chief Commissioner or Commissioner,- 6. where the Directors-General or Chief Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Director-General or Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order; (b) where the Directors-General or Chief Commissioners or Commissioners aforesaid are not i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to do so, the assessee shall be given a reasonable opportunity of being heard before an order of transfer is passed and that the competent authority will record his reasons for the transfer. The Explanation to Section 127, makes it clear that once an order of transfer is made under the section, all pending proceedings for different years are transferred and the Assessing Officer to whom the case is transferred would be in a position to continue all the pending proceedings and to institute further proceedings against the assessee in respect of any year, past or future, and even to reopen the assessment for an earlier year which stood completed at the date of the transfer. It is clear that in the absence of any transfer order no Assessing Officer other than the one who initiated the proceedings or completed the assessment shall have jurisdiction to continue with the proceedings or even to reopen a concluded assessment. It is common ground between the parties that the file of the petitioner pertaining to the assessment year 1988-89 has not been transferred from the jurisdiction of the Assessing Officer, Pune, to the Income-tax Officer, Jalandhar (respondent No. 2 herein). As a matter....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... AY 2007-08. The mere fact that the definition of an AO in terms of Section 2(7-A) of the Act also includes a DCIT and other superior officers or an ITO of some other ward who may be vested with the relevant jurisdiction by virtue of orders issued under Section 120(1) or Section 120(2) of the Act will not make a difference to the above legal position. The reason is not far to seek. It is only the AO who has issued the original assessment order dated 13th April 2009 for AY 2007-08 under Section 143(3) of the Act who is empowered to exercise powers under Section 147/148 to re-open the assessment. This is because he alone would be in a position to form reasons to believe that some income of that particular AY has escaped assessment. This again cannot be based on a mere change of opinion. Further, in terms of Section 151 of the Act such a move will have to have the prior approval of the CIT. Under the scheme of the Act, if a superior officer forms an opinion that the original assessment order is prejudicial to the interests of the Revenue, recourse can be had to Section 263 of the Act. In any event the question of an ITO who is not the AO who passed the original assessment order under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....BC/153A. We find the Hon'ble Bombay High Court in the case of Mavany Brothers vs. CIT (supra) while adjudicating an identical issue has observed as under:- "13. We have considered the rival contentions. The jurisdiction under Section 147/148 of the Act is an extra ordinary jurisdiction and can only be exercised when condition precedent as provided in Sections 147/148 of the Act are satisfied. It is the appellant's case that the aforesaid conditions are not satisfied inasmuch as in the absence of the Assessing Officer having the original return of income available it would not be possible for him to have a reasonable belief that income chargeable to tax has escaped assessment. This issue of jurisdiction according to the respondent-Revenue could only have been raised before the Assessing Officer and not having been raised before him, the appellant had waived its rights to raise the same. The appellant having submitted to the jurisdiction of the Assessing Officer cannot now challenge the same. This is not entirely correct. It is well settled that mere acquiescence will not give jurisdiction to an authority who has no jurisdiction. In fact this Court in CIT V/s. ITSC r....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... application of general principles governing the matter, there can be no doubt that the District Court of Monghyr was coram non judice, and that its judgment and decree would be nullities.' (Kiran Singh case [AIR 1954 SC 340: (1955) 1 SCR 117], AIR p. 342, para 6)" Thus, it is open to the petitioner to raise the issue of jurisdiction before the appellate authorities." 32. In view of the above discussion and considering the fact that the assessee was employed with Delhi Police and was regularly filing his return of income at Delhi under ITO, Ward 64(3) [earlier ITO, Ward 40(3)] and since this fact was known to the ITO at Gurgaon, therefore, in absence of any transfer of jurisdiction u/s. 127, we hold that the ITO, Gurgaon has no jurisdiction over the assessee. Therefore, respectfully following the decision of the Hon'ble Punjab & Haryana High Court, which is the jurisdictional High Court in view of the assessment order being passed by the ITO at Gurgaon, we hold that the Assessing Officer, Gurgaon had no jurisdiction over the assessee to issue notice u/s. 148 and consequently pass the order u/s. 147/143(3). Therefore, the notice issued u/s. 148 is quashed. Since the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....#39;ble High Court held that in case the assessee shifts his residence or place of business or work, etc., the Assessing Officer 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 going through para 51 of the order, it shows that at clause 8 of para 51, there was exchange of correspondence between the ITO of Delhi and ITO of Dimapur and ITO Dimapur considered and accepted that for assessment year 1984-85 to 1987-88, the Assessing Officer at Delhi had jurisdiction to initiate and complete the assessment proceedings. Similarly, order u/s. 127 of the Act was passed and the case was transferred to ITO, Ward 20, New Delhi. Thus, the case of S.S. Ahluwalia (supra) cannot be equated with that of the assessee. In any case, since the Assessing Officer of Gurgaon has passed the ITA Nos. 2682, 2913, 2683, 3112, 2684, 2700/Del/2018 39 assessment order, who falls under the jurisdiction of Punjab & Haryana High Court, therefore, the decision of Hon'ble Punjab & Haryana High Court will prevail over the decision of the Hon'ble Delhi High Court. If the assessment proceedi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the parties nor by a superior court, and if the court passes order/decree having no jurisdiction over the matter, it would amount to a nullity as the matter goes to the roots of the cause. Such an issue can be raised at any belated stage of the proceedings including in appeal or execution. The finding of a court or tribunal becomes irrelevant and unenforceable/inexecutable once the forum is found to have no jurisdiction. Acquiescence of a party equally should not be permitted to defeat the legislative animation. The court cannot derive jurisdiction apart from the statute. (Vide: The United Commercial Bank Ltd. v. Their Workmen AIR 1951 SC 230; Smt. Nai Bahu v. Lal Ramnarayan & Ors., AIR 1978 SC 22; Natraj Studios Pvt. Ltd. v. Navrang Studio & Anr., AIR 1981 SC 537; Sardar Hasan Siddiqui & Ors. V. State Transport Appellate Tribunal, U.P., Lucknow & Ors. AIR 1986 All. 132; A.R. Antulay v. R.S. Nayak & Anr., AIR 1988 SC 1531; Union of India & Anr. V. Deoki Nandan Aggarwal, AIR 1992 SC 96; Karnal Improvement Trust, Karnal v. Prakash Wanti (Smt.) (Dead) & Anr., (1995) 5 SCC 159; U.P. Rajkiya Nirman Nigam Ltd. v. Indure Pvt. Ltd. & Ors., AIR 1996 SC 1373; State of Gujarat v. Rajesh Kum....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the Tribunal. Also, the Hon'ble Gujarat High Court in the case of Madhu Silica (P) Ltd. v. CIT (1997) 227 ITR 350 (Guj) has noted that circular being in the nature of laying down general guide lines for proper administration of the Act for those who are employed in the execution of the Act are bound to observe such instructions particularly those which are beneficial to the assessee. 17. The Hon'ble Supreme Court in the case of UCO Bank vs. CIT (1999) 11 SITC 415 (SC), has also observed that so long as circular issued under section 119 of the Act is in force, it would be binding on the departmental authorities to ensure a uniform and proper administration and application of the Income Tax Act. The Hon'ble Apex Court also in the case of CIT vs. Anjum M.H. Ghaswala & Ors. (2002) 166 Taxation 586, has held that circular issued by CBDT are legally binding on the Revenue. The power of the CBDT are wide enough to enable it to grant relaxation from the provisions of several sections enumerated in clause (a) to Section 119(1) of the Act. 18. In view of the above judicial decisions as well as the factual aspects of the matter, we find that the assessee has filed his retu....