TaxTMI 
TaxTMI 
2022 (11) TMI 1242
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.... of the appellant u/s. 68 of the Income Tax Act, 1961. 3. that the appellant craves leave to add/or amend any ground of this appeal." 3. Assessee has also raised the following additional ground of appeal: "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 2. 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 3. That in the facts and circumstances of the case, the assessment order u/s 143(3) of the IT Act1961 was without jurisdiction and bad in law and thus the entire assessment order be quashed and or cancelled. 4. Brief facts of the case as culled out from the records are that the assessee is a limited company engaged in the business of trading in textile and tyres. Income of Rs.48,47,180/- declared in the return filed on 26.09.2012. Case selected for scrutiny under CASS followed by service of no....
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.... 143(2) of the Act was issued by ITO, Ward-9(4), Kolkata which had no jurisdiction. Since valid notice u/s. 143(2) has not been issued the assessment proceedings carried out thereafter are bad in law and to support this proposition reliance was placed on the decision of this Tribunal in the case of Bhagyalaxmi Conclave Pvt. Ltd. & Ors. Vs. DCIT, ITA No. 2517 to 2520/Kol/2019 dated 03.02.2021 and Shivam Dhatu Udyog Ltd. Vs. DCIT, ITA No. 2456/Kol/2019 dated 30.03.2021. Reliance was also placed on the judgment of Hon'ble jurisdictional High Court in the case of Pr. CIT Vs. Nopany & Sons (2022) 136 taxmann.com 414 (Cal). 8. As regards merits of the case it was submitted that the assessee has furnished complete details of M/s. KHPL which, inter alia, includes share application from, income tax return, audited financial statement, bank statement, assessment order u/s. 143(3) of the Act for AY 2012- 13 and the certificate showing non-banking financial certificate held by the alleged share applicant. It is also submitted that the directors of the assessee company and M/s. KHPL are common and the return on investment is also fair enough to explain the share premium charged by the assess....
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....assessment proceedings although not raised earlier. Therefore, the legal ground stands to be admitted and the same relates to invalid notice issued u/s. 143(2) of the Act. It is a settled position of law that for carrying out the assessment proceedings u/s. 143(3) of the Act, the statutory requirement of serving of valid notice u/s. 143(2) of the Act is must and in absence thereof the subsequent proceedings become invalid. In the case of assessee, the facts are that the assessee has declared income of Rs.48,47,180/- in the e-return filed on 26.09.2012. For selecting the case for scrutiny notice u/s. 143(2) of the Act was issued by ITO, Ward-9(4), Kolkata dated 23.09.2013. The Central Board of Direct Taxes (CBDT vide Instruction No. 1/2011 (supra) revised the monetary limit for issuing notice by ITO/DCs/ACs. Through this instruction it stated that in case of metro cities in case of corporates declare income above Rs. 30 lakh the jurisdiction of such corporate assessee will lie with the DCs/ACs. It is not in dispute that as on the date of selecting the case for scrutiny, the very basis for having jurisdiction over the assessee is the returned income which was more than Rs. 30 lakhs a....
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....s 'assessing officer' to mean the Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer, who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of the Act, and the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director, who is directed under clause (b) of sub-section (4) of section 120 to exercise or perform all or any of the powers and functions conferred on, or assigned to, an assessing officer under this Act. In the instant case, the order of assessment was challenged on several grounds and, particularly, on the ground that no notice under section 143(2) of the Act was issued within the time prescribed by the assessing officer, who had jurisdiction over the assessment file of the assessee at the relevant time. The Commissioner of Income-tax (Appeals)-XXXVII, Kolkata, (CIT(A)) did not agree with the contentions raised by the assessee that there is failure to comply with the mandatory statutory requirement. The CIT(A) opined that the assessing officer, who originally dealt wi....
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....t the assessee has filed an objection vide letter dated 16-11-2009 objecting to the issuance of notice under section 142(1) of the Act without valid service of notice under section 143(2) of the Act. Taking note of the said letter the Tribunal, in our view, rightly held that the proviso to section 292BB would not stand attracted and the said section cannot be made applicable to the assessee's case. The Tribunal, thereafter, analysed as to the correctness of the submission of the revenue seeking to sustain their stand by referring to a notice issued by the assessing officer, who at the relevant point had no jurisdiction over the assessee and, on facts, found that there is no valid compliance of section 143(2) of the Act as the notice issued under section 143(2) of the Act by the assessing officer/Income Tax Officer, Ward-3(1) had no jurisdiction over the assessee at the relevant time. The Tribunal to support its conclusion placed reliance in the case of CIT v. Mukesh Kumar Agrawal [2012] 25 taxmann.com 112/345 ITR 29 (Allahabad), wherein it was held that the assessing officer did not have jurisdiction to proceed further and make assessment since notice under section 143(2) of th....
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.... enough to justify the share premium charged on each share. Now coming to the details of investor company i.e. M/s. Kaushal Holdings Private Limited, which has invested in the equity share of the assessee company towards share application and share premium of Rs. 5,91,00,000/- which has been treated as unexplained cash credit u/s. 68 of the Act by both the lower authorities. We observe that M/s. KHPL is a non-banking finance company registered with Reserve Bank of India vide certificate dated 16.05.2011 which is issued during the year under appeal itself. For AY 2012-13 M/s. KHPL has declared income of Rs.11,21,767/- and earning per share is Rs.5.67. M/s. KHPL is regularly assessed to tax and is filing income tax return. Books of accounts are audited and the alleged transactions have been carried out through banking channel. We also note that assessment proceedings u/s. 143(3) of the Act were also carried out in the case of investor company also i.e the alleged cash creditor M/s. KHPL and on perusal of the assessment order placed at pages 170 to 171 of the paper book we find that the assessment has been framed by ITO, Ward-14(2), New Delhi on 22.01.2015 assessing income at Rs.11,27....