TaxTMI 
TaxTMI 
2022 (9) TMI 1177
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.... without giving opportunity to the appellant. Hence the appellant prays for relief. 4. The CIT(A) has erred in his finding that the credit in the bank account amounting to Rs. 55,00,000/- was not proved though the appellant has proved it by filing confirmation letter. Hence, the appellant prays for relief. 5. For these and such other grounds that may be urged at the time of hearing of the appeal, the appellant prays that the addition of Rs. 57,70,994/- may be directed to be deleted. 3. The assessee has also filed a petition, pleading for admission of following additional grounds: 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 the notice is bad in law and the assessment order passed on the basis of such notice is bad in law and should be quashed. a. For that the assessment order was passed without service of any valid notice u/s. 143(2) of the IT Act 1961 and therefore the assessment order passed is bad in law and should be quashed. b. That in the facts and circumstances of the case, the assessment order u/s. 143(3) of the IT Act 1961 was without jurisdiction and bad in law....
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....terest was paid to the assessee. The assessee has not furnished any verifiable evidence with regard to advancing or receiving the amount except letter from Sri P. Janardhana Reddy. Further Sri P. Janardhana Reddy also could not furnish any proof in support of his claim of receipt or payment of such amount. The AO held that all the discussions and circumstances mentioned clearly indicates that the cash transaction claimed to have been made between Sri P. Janardhana Reddy and the assessee are not genuine and in the absence of any verifiable proof in support of the payment and receipt of amount from Sri P. Janardhana Reddy, it is clear that the cash deposits made by the assessee are nothing but her own funds which were not accounted for. Accordingly added to the income returned by the assessee as unexplained cash. 5. We first take up the core issue of jurisdiction involved in this case. The Ld. AR submitted that it is apparent from the order sheet entries filed in the paper book that the AO, ITO, Ward-2(3) had issued notice to the assessee u/s. 143(2) of the Act on 27.09.2013. Later on, the case was transferred to ITO, Ward-1(4), Visakhapatnam which was further transferred to the, IT....
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..... 143(3). The matter of transfer of the assessee's case was neither intimated to the assessee by the concerned AO nor the Ld. CIT(A) has passed any order as required u/s. 127 of the Act by giving an opportunity of being heard to the assessee after recording the reasons. Therefore, the contention of the assessee is that the order passed u/s. 143(3) is bad in law, void-ab-initio and it is not a valid assessment order. The Ld. Counsel for the assessee relied on the decisions of the coordinate bench of ITAT in the case of Hillman Hosiery Mills Pvt. Ltd. Kolkata Vs. DCIT, Circle-11(1), Kolkata in ITA 2634/KOL/2019 dated 12.01.2021. "10. In this case, the ITO Ward-3(3), Kolkata, issued notice u/s. 143(2) of the Act on 04/09/2014. In reply, on 22/09/2014, the assessee wrote to the ITO, Ward-3(3), Kolkata, stating that he has no jurisdiction over the assessee. Thereafter on 31/07/2015, the DCIT, Circle-11(1), Kolkata, had issued notice u/s. 142(1) of the Act to the assessee. The DCIT, Circle-11(1), Kolkata, completed assessment u/s. 143(3) of the Act on 14/03/2016. The issue is whether an assessment order passed by DCIT, Circle-11(1), Kolkata, is valid as admittedly, he did not issue....
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.... 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 Instruction of the CBDT it is evident that the pecuniary jurisdiction conferred by the CBDT on ITOs is in respect to the 'non corporate returns filed where income declared is only upto Rs. 15 lacs; and the ITO doesn't have the jurisdiction to conduct assessment if it is above Rs. 15 lakhs. Above Rs. 15 lacs income declared by a non-corporate person i.e. like assessee, the pecuniary jurisdiction lies before AC/DC. in this case, admittedly, the assessee an individual (non corporate person) who undisputedly declared income of Rs. 50,28,040/- in his return of income cannot be assessed by the ITO as per the CBDT circular (supra). Fr....
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....ame coram 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 raised by the assessee is allowed. Since we have quashed the assessment and the appeal of assessee is allowed on the legal issue, the other grounds raised by the assessee need not to be adjudicated because it is only academic. Therefore, the additional ground raised by the assessee is allowed. 7. In the result, appeal of assessee is allowed." The Ld. AR also relied on the decision of K.A. Wires Ltd. Kolkata Vs. I.T.O. Ward-8(3), Kolkata in ITA No. 1149/Kol/2019 dated 22.01.2020. Relevant part of the order is extracted below for the sake of clarity and convenience. "6. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the pape....
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....nation. - For the removal of doubts, it is hereby declared that any income-tax authority, being an authority higher in rank, may, if so directed by the Board, exercise the powers and perform the functions of the income-tax authority lower in rank and any such direction 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 '[P....
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....ing of the return of income or the doing of any other act or thing under this Act or any rule made there under by any person or class of persons, the income-tax authority exercising and performing the powers and functions in relation to the said person or class of persons 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 notificatio....
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.... or Principal Commissioner or Commissioner as the Board may, by notification in the Official Gazette, specify. (3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer- (a) where he has made a return under sub-section (1) of section 115WD or under subsection (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 115W or sub-section (1) of section 142 or under subsection (1) of section 115W or under section 148 for the making of the return or by the notice under the first proviso to section 115W 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 wit....
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....acknowledgements of return of income for the last few years. The notice under sec. 143(2), however, was issued in this case by ITO, Ward 33(1), Kol who has not been vested with the jurisdiction over the assessee company by CBDT. 8.9. Under the scheme of "e" filing of return, the assessee has to fill PAN on the return. It has to also fill its address and some of the details are picked-up by the assessee. 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 In....
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.....7.2006 wherein the Tribunal considered the notification dated 30.7.2002 and held that after issue of the notification the Assessing Officer who was earlier vested the jurisdiction lost the jurisdiction and even though the order of the CIT(A) was received by him at the time when he was having jurisdiction, yet the 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 the ACIT-39 to the Appellate Tribunal was dismissed as not competent. The orde....
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....h authority is illegal. 8.20. In the case of P.V. Doshi Vs CIT the Gujarat High Court held that the jurisdictional issue can be taken up at any stage of the proceedings. 8.21. In the case of Rajmandir Estates (386 ITR 162) the Hon'ble Calcutta High Court held that if the Commissioner Income tax issuing notice u/s. 263 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 ....
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....come Tax Department which picks up the address of the assessee from the PAN database. The notice u/s 143(2) was sent at the assessee's address available as per the PAN database. Intimation for further hearing and three more notices were sent at the same address as available in the PAN. Finally, the assessee appeared before the tax authority but challenged 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 suf....