TaxTMI 
TaxTMI 
TaxTMI 
2021 (4) TMI 1006
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....ing Assessment Year 2011-12. During the Financial Year ended on 31st March, 2011 (Assessment Year 2011-12) the company has not earned any exempt income. During the course of scrutiny assessment proceedings, to a query from the Assessing Officer, the assessee submitted that the investment is unquoted equity shares are not divided yielding one but are held to earn appreciation in their value. The appreciation in unquoted equity shares is taxable under the Income Tax Act. The company has not borrowed any fund. Thus the question of interest on borrowings attributable to such investments does not arise. The Assessing Officer without assigning any reason, refused to accept the explanation of the assessee. The submission given by the assessee stated the rationale of its offer, based on facts and legal aspects. The Assessing Officer rejected the same on the ground that CBDT has already prescribed the manner of computation in connection with the exempt income vide circular no. 5/2014 read with section 14A read with rule 8D interalia making an addition of Rs. 1,46,785/-. 2.1. Aggrieved the assessee carried the matter in appeal before the ld. First Appellate Authority. The ld. CIT(A) enhance....
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....ed." 4.2. On the additional grounds, the ld. Counsel for the assessee submitted that the assessee is challenging the jurisdiction of the Assessing Officer to issue notice u/s 143(2) of the Act and alternatively, the jurisdiction of the Assessing Officer, who has completed the assessment u/s. 143(3) of the Act. He submitted that the jurisdictional issues go to the root of the matter and as no facts need be enquired into, the legal grounds may be admitted by the ITAT. For this proposition, he relied on the judgment of the Hon'ble Supreme Court in the case of NTPC vs. CIT reported as 229 ITR 383.(SC) 5.1. The ld. D/R, could not controvert these submissions of the assessee. Hence, we admit these additional grounds of appeal. 6. The ld. Counsel for the assessee, Shri Miraj D. Shah, submitted that the notice u/s 143(2) & 142(1) of the Act was issued by the ITO, Ward-5(3), Kolkata and the assessee company, in response to the notice, submitted memorandum and article of association of the company, copy of certificate of incorporation dated 21/07/2010, copy of audited accounts and details regarding source of capital introduced in the office of the ITO Ward 5(3) on 14/01/2013. The A/R of t....
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....ue is no more res-integra. This Bench of the Tribunal in the case of Soma Roy vs. ACIT in ITA No. 462/Kol/2019; Assessment Year 2015-16, order dt. 8th January, 2020, under identical circumstances, held as under:- "5. After hearing rival contentions, I admit this additional ground as it is a legal ground, raising a jurisdictional issue and does not require any investigation into the facts. The ld. Counsel for the assessee submitted that as per Board Instruction No. 1/2011 [F. No. 187/12/2010-IT(A-I)], dt. 31/01/2011, the jurisdiction of the assessee is with the Assistant Commissioner of Income Tax, Circle-1, Durgapur, as the assessee is a non-corporate assessee and the income returned is above Rs. 15,00,000/- and whereas, the statutory notice u/s 143(2) of the Act, was issued on 29/09/2016, by the Income Tax Officer, ward-1(1), Durgapur, who had no jurisdiction of the case. He submitted that the assessment order was passed by the ACIT, Circle-1(1), Durgapur, who had the jurisdiction over the assessee, but he had not issued the notice u/s 143(2) of the Act, within the statutory period prescribed under the Act. Thus, he submits that the assessment is bad in law. 5.1. On merits, he....
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....tatutory notice u/s. 143(2) of the Act was issued by the then ITO, Ward-1, Haldia on 06.09.2013 and the same was served on the assessee on 19.09.2013 as noted by the AO. The AO noted that since the returned income is more than Rs. 15 lacs the case was transferred from the ITO, Ward-1, Haldia to ACIT, Circle-27 and the same was received by the office of the ACIT, Circle-27, Haldia on 24.09.2014 and immediately ACIT issued notice u/s. 142(1) of the Act on the same day. From the aforesaid facts the following facts emerged: i) The assessee had filed return of income declaring Rs. 50,28,040/-. The ITO issued notice under section 143(2) of the Act on 06.09.2013. ii) The ITO, Ward-1, Haldia taking note that the income returned was above Rs. 15 lacs transferred the case to ACIT, Circle-27, Haldia on 24.09.2014. iii) On 24.09.2014 statutory notices for scrutiny were issued by ACIT, Circle-27, Haldia. 6. We note that the CBDT Instruction is dated 31.01.2011 and the assessee has filed the return of income on 29.03.2013 declaring total income of Rs. 50,28,040/-. As per the CBDT Instruction the monetary limits in respect to an assessee who is an individual which falls under the category....
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....ssued by Asstt. Commissioner, Circle Haldia much after CBDT's instruction and knowing fully well that he had no jurisdiction over assessee - Whether, therefore, notice issued by Asstt. Commissioner was invalid and consequently assessment framed by Income- tax Officers becomes void since issue of notice under section 143(2) was not done by Income-tax Officers as specified in CBDT instruction No. 1/2011." 9.2. The Hon'ble High Court of Calcutta in the case of West Bengal State Electricity Board vs. Deputy Commissioner of Income Tax, Special Range - I, reported in [2005] 278 ITR 218 (Cal.) has held as follows:- "Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Assessment years 1983-84 to 1987-88 - Whether a question of law arising out of facts found by authorities and which went to root of jurisdiction can be raised for first time before Tribunal - Held, yesWhether jurisdiction of Assessing Authority is not dependent on date of accrual of cause of action but on date when it is initiated - Held, yes - Whether once a particular jurisdiction is created, same must be prospective and cannot be retrospective and it has to be interpreted having regard to man....
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....the Assessing Officer having jurisdiction over the assessee, has not issued a notice u/s 143(2) of the Act as required by the statute. Notice issue by the officer having no jurisdiction of the assessee is null and void. When a notice is issued by an officer having no jurisdiction, Section 292BB of the Act, does not comes into play. Coming to the argument of the ld. D/R that objection u/s 124(3) of the Act has to be taken by the assessee on rectifying notice u/s 143(2) of the Act from a non-jurisdictional assessing officer, I am of the view that I need not adjudicate this issue, as I have held that non-issual of statutory notice/s 143(2) of the Act by the jurisdictional Assessing Officer makes the assessment bad in law. Under these circumstances, we allow this appeal of the assessee." 11. Respectfully following the proposition of law laid down by the co-ordinate bench of the Tribunal, cited above, we have to necessarily hold that the notice u/s 143(2) of the Act, issued by the Assessing Officer who does not have jurisdiction over the assessee has not legal sanctity and is void-ab-initio. 12. The Hon'ble Calcutta High Court in the case of Pr. CIT vs. Oberoi Hotels Pvt. Ltd. (409 IT....
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....and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act 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: Provided that nothing contained in this section shall apply where the assessee had raised such objection before the completion of such assessment or reassessment." 12. Even if the provision does not carry a non-obstante clause, since Section 292BB is a provision of general application, it would be applicable in all situations; but only in so far as it proclaims to operate. Section 292BB of the Act, read in the context of several provisions of the Act which mandatorily require notices to be issued in divers situations, cannot be said to have dispensed with the issuance of such notices altogether. Section 292BB must be understood to cure any defect in the service of the notice and not authorise the dispensation of a notice when the appropriate interpretation of a provision makes the notice provided for thereunder to be mandatory or indispensable. 13. This is not a case where the assessing officer says that a notice had been issued and there ....