AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2021 (4) TMI 1020
X X X X Extracts X X X X
X X X X Extracts X X X X
....ter objecting to the notice given u/s 143(2) of the Act, dt. 23/09/2013 by the ITO, Wd -6(1), Kolkata, on the ground that this officer does not hold jurisdiction over the assessee. Thereafter, the Commissioner of Income Tax passed an order u/s 120 of the Act, transferring the jurisdiction of the assessee to the file of Tax Recovery Officer (TRO), Range-2, Kolkata. The details of this transfer orders are at page 1 para 2 of the assessment order. Thereafter, the TRO-2, Kolkata, passed an order u/s 144 of the Act, determining the total income of the assessee at Rs. 5,02,98,220/- 2.1. Aggrieved the assessee carried the matter in appeal. The ld. First Appellate Authority passed an ex-parte order. While doing so, he has not disposed off the case on merits. He dismissed the case for non-prosecution, which is not permissible in law. 3. Aggrieved the assessee is in appeal before us. 4. The ld. Counsel for the assessee, filed an additional grounds of appeal under Rule 11 of the Income-tax (Appellate Tribunal) Rules, 1973 ('Rules'). The original grounds of appeal and the additional grounds read as follows:- "1a. That the Ld. CIT(A) was wrong in passing ex-parte order allegin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dition in a generalized manner is unjustified and needs to be deleted. 4. That the assessee craves leave to add, alter, amend or withdraw any ground or grounds of appeal before or at the time of hearing." 4.1. The additional grounds raised by the assessee read as follows:- "1. For that the Assessing Officer issuing the notice u/s 143(2) of the IT Act 1961 did not have jurisdiction over the case of the assessee hence said notice and the consequential assessment order is bad in law and hence the same is quashed. 2. For that the Assessing Officer passing the order u/s 144 of the IT Act 1961 did not have jurisdiction over the case of the assessee hence the assessment order is bad in law and hence the same be quashed." 5. The ld. Counsel for the assessee, Shri Miraj D. Shah, submitted that, under the original grounds, the issue has to be restored to the file of the Assessing Officer for the reason that there was violation of principles of natural justice. He pointed out that notice of hearing was not received by the assessee from the Assessing Officer and only when it received penalty notice u/s 271(1)(c) of the Act, dt. 16/03/2020, it came to know about....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e submits that this notice is bad and non-existent in law. He emphasised that on receipt of the notice dt. 23/09//2013, the assessee on 03/10/2013 had written to the ITO Ward-6(1), Kolkata, pointing out that, he has no jurisdiction to issue notice u/s 143(2) of the Act, to the assessee company. He submitted that the Assessing Officer has not replied. He further pointed out that the TRO-2, Kolkata, completed best judgment assessment u/s 144 of the Act, without issuing the statutory notice u/s 143(2) of the Act and hence, the assessment is bad in law. For this proposition, he relied on the judgment of the Hon'ble Supreme Court in the case of ACIT & Anr. Vs. Hotel Blue Moon reported in 321 ITR 362 (SC). He prayed for relied. 7. The ld. D/R, Smt. Ranu Biswas, on the other hand, opposed the contention of the assessee and submitted that, the assessee kept changing his address and though the same was intimated to the Assessing Officer, the PAN Data of the assessee was not changed. She submitted that, as per the PAN Data, the jurisdiction of the assessee lies with the ITO, Ward 6(1), Kolkata. She further pointed out to the acknowledgement of the return of income filed by the assessee an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessee has also filed its return of income for the impugned Assessment Year with the address "8, AJC Bose Road, Kolkata - 700017"on 17/01/2013. Copy of the official ROC record, discloses the above address from that date. The address of the assessee for the previous year 2010-11 and 2011-12 is the same. 10.1. The territorial jurisdiction as applicable to the assessee for the Assessment Year 2012-13, is given by the CBDT, vide notification 220A/2001 dt. 31/07/2001. As per this notification, the territorial area falling with the pin code 700017 is with Commissioner of Income Tax (CT) Kol-III and the jurisdictional Assessing Officer for the assessee company is ITO, Ward - 7(1), Kolkata, Range-7. This case never fell within the jurisdiction of ITO, Ward-6(1), Kolkata. Notice u/s 143(2) of the Act, was issued by this non-jurisdictional officer. 10.2. The undisputed fact in this case is that, the notice u/s 143(2) of the Act was issued by the ITO, Ward-6(1), Kolkata. This officer did not have the jurisdiction over the assessee. The ITAT Kolkata Bench of the Tribunal in the case of Hillman Hosiery Mills Pvt. Ltd. vs. DCIT in ITA No. 2634/Kol/2019, order dt. 12/01/2021, under sim....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of notice before the jurisdictional Assessing Officer and even otherwise, Section 292BB of the Act, comes into play and the assessment cannot be annulled. On merits, he relied on the orders of the lower authorities. 7. I 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, I hold as follows:- 8. I find that there is no dispute in the fact that the notice u/s 143(2) of the Act dt. 29/09/2016 has been issued by the ITO, Wd-1(1), Durgapur. Later, the case was transferred to the jurisdiction of the ACIT on 11/08/2017. Thereafter, no notice u/s 143(2) of the Act was issued by the Assessing Officer having jurisdiction of this case and who had completed the assessment on 26/12/2017 i.e., ACIT, Circle-1(1), Durgapur. Under these circumstances, the question is whether the assessment is bad in law for want of issual of notice u/s 143(2) of the Act. 9. This Bench of the Tribunal in the case of Shri Sukumar Ch. Sahoo vs. ACIT in ITA No. 2073/Kol/2016 order dt. 27.09.2017, held as follows:- "5. From a perusal of the above....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 assessment order passed u/s. 143(3) of the Act is not valid in the eyes of law and, therefore, is null and void in the eyes of law. Therefore, the legal issue ra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee 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 prerequisite, in the absence of such notice, the entire proceedings would be invalid. 8. The law on the point as regards applicability of the requirement of notice under Section 143(2) of the Act is quite clear from the decision in Hotel Blue Moon's case (supra). The issue that however needs to be considered is the impact of Section 292BB of the Act. 9. According to Section 292BB of the Act, if the assessee had participated in the proceedings....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct is mandatory if the Assessing Officer seeks not to accept any part of the return as furnished by the assessee or make an assessment order contrary thereto and, even in course of reassessment proceedings, such notice cannot be dispensed with. 10. One of the arguments put forth on behalf of the Revenue is that in course of reassessment proceedings once a notice is issued under Section 148 of the Act, the assessee is made aware of what part of the income or on what count the assessee's income is perceived to have escaped attention. It is submitted that in such a scenario, the requirement of a notice under Section 143(2) may be somewhat diluted, if not unnecessary. Apart from the fact that such argument cannot be countenanced in the light of the dictum in Hotel Blue Moon (supra), it is evident that an assessment under Section 143(3) of the Act is consequent upon a hearing and the production of evidence on such points on which the Assessing Officer may harbour doubts and are indicated in his notice under Section 143(2) of the Act. Section 143(3) of the Act contemplates an assessment undertaken by the Assessing Officer upon material being produced by the assessee on groun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r, it is evident from the order impugned passed by the Appellate Tribunal that no notice under Section 143(2) of the Act had, in fact, been issued in this case. In such a situation, where a notice that is mandatorily required to be issued is found not to have been issued, Section 292BB of the Act has no manner of operation. The two substantial questions of law are answered accordingly as follows: (1) If the time for issuance of the notice under Section 143(2) of the Act has expired or the time for completing the reassessment proceedings under Section 153(2) of the Act has run out, the failure to issue such notice under Section 143(2) of the Act would result in the entire proceedings, including any order of assessment, to be quashed. (2) Section 292BB of the Act does not dispense with the issuance of any notice that is mandated to be issued under the Act, but merely cures the defect of service of such notice if an objection in such regard is not taken before the completion of the assessment or reassessment. In addition, it is held that in the light of the Supreme Court dictum in Hotel Blue Moon (supra), the view expressed in Humboldt Wedag India (....