TaxTMI 
TaxTMI 
2023 (10) TMI 1360
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat the assessment order passed by the ACIT 3(1) Raipur who did not have jurisdiction over the assessee in view of monetary threshold limit laid down vide CBDT Instruction No. 1/2011 [F. No. 187/12/2010-IT(A-I)] dated 31.01.2011 read together with instruction No. 6/2011 dated 08.04.2011, therefore, the assessment order passed by non-jurisdictional income tax authority may kindly be held to be illegal, bad in law and the entire proceedings may kindly be quashed and consequential addition of Rs. 21,75,000/- made to the total income may kindly be directed to be deleted. 2. On the facts and in the circumstances of the case, the assessment order passed by the Learned ACIT-3(1), Raipur u/s. 147 r.w.s. 143(3) is bad in law inasmuch as the assessment ought to have been framed under Section 153C of the Income Tax Act, 1961 inasmuch as Section 153C overrides the provisions of Section 147 and 148, hence, the assessment order passed u/s 147 r.w.s. 143(3) is bad in law, illegal and void ab initio. Hence it is prayed that the assessment order passed u/s 147 r.w.s. 143(3) may kindly be declared as illegal, bad in law and consequential enhancement of Rs. 21,75,000/- made to the total inco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....papers) revealed certain cash loans that the assessee and Shri Shyam Sundar Sharma had advanced. Observing that the cash transactions aggregating to Rs. 21.75 lacs were not accounted for by the assessee in his books of accounts, the A.O. held the same as the assessee's deemed income u/s. 69 of the Act. Accordingly, the A.O. vide his order passed u/s. 147 r.w.s. 143(3) of the Act, dated 28.10.2016 assessed the income of the assessee at Rs. 21,26,700/-. 4. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without success. 5. The assessee, being aggrieved with the order of the CIT(Appeals), has carried the matter in appeal before me. 6. At the threshold of hearing of the appeal, it was submitted by the Ld. Authorized Representative (for short 'AR') for the assessee that the A.O, i.e., ACIT, Circle-3(1), Raipur, had wrongly assumed jurisdiction and framed the impugned assessment in the case of the assessee. Elaborating on his aforesaid contention, it was averred by the Ld. AR that as the assessee had e-filed his return of income on 15.10.2010, declaring an income of Rs. Nil, therefore, the ACIT, Circle-3(1), Raipur had wrongly assumed jurisdiction....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r Section 153C of the Act. The Ld. A.R submitted that as the assessment in the case of the assessee had wrongly been framed u/s. 147 r.w.s. 143(3) of the Act dated 28.10.2016, i.e., by invoking a wrong statutory provision, the same, thus, could not be sustained and was liable to be quashed. 6.2 On being queried by the Bench that as the document that was seized in the course of the search proceeding conducted on 'Sharma Group", viz. LPS-1/1, Page 41 did not "belong" to the assessee but to the most contents of the same "pertained" to him, therefore, as per the pre-amended section 153C of the Act, i.e., prior to the amendment vide Finance Act, 2015 w.e.f. 01.06.2015 how any infirmity could be attributed to the assumption of jurisdiction by the A.O. for framing the assessment, vide his order passed u/s. 147 r.w.w. 143(3) of the Act dated 28.10.2016, Shri Veekaas S Sharma, the Ld. AR submitted that the aforementioned amendment to Section 153C vide the Finance Act, 2015 shall be applicable to the searches conducted u/s. 132 of the Act before 01.06.2015, i.e., the date of the amendment. Ld. AR, to fortify his aforesaid claim, had drawn my attention to the judgment of the Hon'ble Suprem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the said transactions were neither related to him nor done by him, but he never challenged the jurisdiction. e) Section 124(3)(a) precludes the assessee from questioning the jurisdiction of the Assessing Officer, if he does not do so within 30 days of receipt of notice under section 142(1). f) Reliance is placed on the following judgements : (i) In the case of Abhishek Jain Vs. ITO, It is held by Hon'ble Delhi HC that "In terms of section 124(3)(b) jurisdiction of an Assessing Officer cannot be called in question by an assessee after expiry of one month from date on which he was served with a notice for reopening assessment under section 148." [2018] 94 taxmann.com 355 (Delhi) (ii) In the vase of Vaishal Builders & Colonizers Vs. Addl CIT, it is held by Hon'ble ITAT, Jodhpur that "Where assessee did not raise objection relating to jurisdiction of AO to pass assessment order in course of assessment proceedings within specified time period, such an objection could not be raised for first time in appellate proceedings." [2012] 25 taxmann.com 464 (Jodh.) (ii) In the case of Subhash Chander Vs. CIT, Rohtak, it is held by Hon'ble....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hich suggest the escapement of income. Once the conditions precedent for assumption of jurisdiction to commence the reassessment proceedings, he has to cross the hurdles attached with reassessment by way reasons for reopening of assessment, time limit for issue of notice and provision for obtaining sanction of higher authority in certain circumstances. d) The AO had supplied the reasons recorded and the evidences collected during the search enquiries to the Ld. AR of the assessee during the assessment proceedings. The completion of assessment under the provisions of sec. 147 instead of sec. 153C does not disentitle the AO to forgo the powers vested u/s 147 and 148 and therefore the AO rightly invoked the jurisdiction u/s 147 for reopening the assessment. e) The assessee during assessment proceedings complied but had not challenged the section under which the assessment proceedings were carrying on. f) Reliance is placed on the following judgements : (i) In the case of Raymond Woolen Mills Vs. ITO & Others, Hon'ble SC held that "In determining whether commencement of reassessment proceedings was valid it has only to be seen whether there was p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....10. As stated by the Ld. AR and, rightly so, I find that the multi-facet issues pertaining to the assumption of jurisdiction by an A.O. in light of the pecuniary/monetary limits contemplated in CBDT Instruction No. 1/2011 (supra) r.w. CBDT Instruction No. 6/2011 (supra) had been looked into at length by the "Division bench" of the ITAT, Raipur, in the case of Durga Manikanta Traders Vs. ITO, ITA No. 59/RPR/2019 dated 12.12.2022. Also, the objections that have been raised by the A.O as regards the validity of the jurisdiction assumed by the A.O, i.e., ACIT, Circle-3(1), Raipur, without raising of any objection by the assessee within the stipulated time period contemplated in Section 124(3)(a) of the Act had also been looked into at length in the aforementioned order. For the sake of clarity, the relevant observations of the Tribunal are culled out as follows: "13. We have heard the ld. authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 14. Admittedly, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....selected for scrutiny assessment vide notice issued u/s. 143(2), dated 24.09.2015, therefore, the aforesaid CBDT Instruction No. 1/2011, dated 31.01.2011 that was applicable w.e.f. 01.04.2011 duly applied to his case. Also, as per the areas earmarked in the aforesaid Instruction No. 1/2011, dated 31.01.2011 as the assessee is not located in any of those cities/stations which have been held to be metro cities, therefore, his case would be as that of a non-corporate assessee who is located in a mofussil area. Also, as is borne from the record the assessee had filed his return of income for the A.Y. 2014-15 declaring an income of Rs. 6,57,380/-. 15. On the basis of the aforesaid facts, we are of the considered view, that as stated by the Ld. AR, and, rightly so, as per the CBDT Instruction No. 1/2011, dated 31.01.2011 the jurisdiction over the case of the assessee who is located in a mofussil area i.e. Bhilai and had filed a non-corporate return for the year under consideration, i.e., A.Y. 2014-15 declaring an income of Rs. 6,57,380/- was vested with the ITO, Ward 1(1), Bhilai. Although notice u/s. 143(2), dated 24.09.2015 had been issued within the stipulated time period, i.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Hon'ble High Court. At this stage, we may herein observe, that the aforesaid order of the Hon'ble High Court had thereafter, been upheld by the Hon'ble Supreme Court in the case of ACIT, Circle-1 Vs. Pankajbhai Jaysukhlal Shah [2020] 120 taxmann.com 318 (SC). Also, we find that the similar view had been taken by this Tribunal in its recent order passed in the case of Shri Sudhir Kumar Agrawal, Durg Vs. ITO, Ward-2(2), Bhilai in ITA No. 158/RPR/2017 dated 17.10.2022, wherein dealing with the multi-facet contentions that were raised by the department, the Tribunal had observed as under: "13. On the basis of our aforesaid deliberations, we are in agreement with the Ld. AR that though the assessment proceedings were rightly initiated and initially embarked upon by Dy. CIT, Circle1, Bhilai i.e. the officer who was vested with the jurisdiction over the case of the assessee, but the same thereafter had wrongly been framed by an officer who as observed by us hereinabove did not have jurisdiction over the case of the assessee in so far the year under consideration was concerned. As the criteria laid down vide the CBDT Instruction No. 1/2011, dated 31.01.2011 for conferring the va....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and sub-section (2) of Section 120 of the Act. On the other hand sub-section (2) of Section 124 contemplates the manner in which any controversy as regards the territorial jurisdiction of an A.O is to be resolved. Apropos, subsection (3) of Section 124 of the Act, the same places an embargo upon an assessee to call in question the jurisdiction of the A.O where he had initially not raised such objection within a period 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 143. In sum and substance, the obligation cast upon an assessee to call in question the jurisdiction of the A.O as per the mandate of sub-section (3) of Section 124 is confined to a case where the assessee objects to the assumption of territorial jurisdiction by the A.O, and not otherwise. Our aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of Peter Vaz Vs. CIT, Tax Appeal Nos. 19 to 30 of 2017, dated 05.04.2021 and that of the Hon'ble High Court of Gujarat in the case of CIT Vs. Ramesh D Patel (2014) 362 ITR492 (Guj.). In the aforesaid cases the Hon'ble High Courts have held that as Section 124 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....edings by the Dy. CIT, Circle-1, Bhilai vide notice issued u/s. 143(2) dated 24.09.2013, which thereafter had culminated into an assessment framed by the Income-Tax Officer, Ward-2(2), Bhilai vide his order passed u/s. 143(3), dated 30.03.2015 does not suffer from any infirmity. In our considered view the aforesaid contention of the Ld. DR is absolutely misplaced and in fact devoid and bereft of any merit. As the aforesaid CBDT Instruction No. 1/2011, dated 31.01.2011 exclusively vests the pecuniary jurisdiction over the case of the assessee for the year under consideration i.e. A.Y. 2012-13 with the ACs/DCs, therefore, in our considered view despite vesting of concurrent jurisdiction with the Income- Tax Officer, Ward-2(2), Bhilai and the Dy. CIT, Circle-1, Bhilai the assessment in his case for the year under consideration could only have been framed by the Dy. CIT, Circle-1, Bhilai. Neither is there any reason discernible from the orders of the lower authorities nor demonstrated before us by the ld. DR which would by any means justify framing of the assessment vide impugned order u/s 143(3), dated 30.03.2015 by the Income-Tax Officer, Ward-2(2), Bhilai. Apart from that, we find t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of jurisdiction over the assessee's case from the Dy. CIT, Circle-1, Bhilai to Income-Tax Officer, Ward-2(2), Bhilai. 16. Be that as it may, we are of the considered view that as in the case of the assessee the assessment order u/s. 143(3), dated 30.03.2015 had been passed by a non-jurisdictional officer i.e. the Income-Tax Officer, Ward-2(2), Bhilai, which is in clear contravention of the CBDT Instruction No. 1/2011 dated 31.01.2011, therefore, the same cannot be sustained and is liable to be struck down on the said count itself. Before parting, we may herein observe that a similar issue as regards the validity of an assessment framed by an A.O who had invalidly assumed jurisdiction in contravention to the CBDT Instruction No. 1/2011, dated 31.01.2011 had came up in a host of cases before the various benches of the Tribunal, wherein the respective assessments framed were struck down, for the reason that the same were passed by officers who were not vested with the requisite jurisdiction as per the CBDT Instruction No. 1/2011, dated 31.01.2011. Our aforesaid view is fortified by the order of the ITAT, Kolkata Bench 'SMC' in the case of Anderson Printing House (P) Ltd. Vs. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 30 Lacs Noncorporate returns Upto Rs. 15 lacs Above Rs. 15 lacs Upto Rs. 20 lacs Above Rs. 20 lacs Metro charges for the purpose of above instructions shall be Ahmedabad, Bangalore, Chennai, Delhi, Kolkata, Hyderabad, Mumbai and Pune. The above instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1-4-2011. 6. Now, in this case, the assessment has been framed by the ACIT. At this stage, it will be appropriate to refer to the provisions of section 127 of the Act as under: Power to transfer cases (1) The [Principal Director General or] Director General or [Principal Chief Commissioner or] Commissioner 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, 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. 7. A perusal of the above statutory provisions would reveal ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the case of Soma Roy vs. ACIT in ITA No. 462/Kol/2019; Assessment Year 201516, 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, Circle1, 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 rebutted the findings of the lower author....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 fall....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Officer, Ward-2(2), Bhilai u/s. 143(3), dated 30.03.2015 in clear contravention of the CBDT Instruction No. 1/2011, dated 31.01.2011, which divested him of his jurisdiction over the case of the assessee for the year under consideration i.e. AY 2012-13, therefore, the same cannot be sustained and is liable to be struck down in terms of our aforesaid observations. We, thus, in terms of our aforesaid observations quash the order passed by the Income-Tax Officer, Ward-2(2), Bhilai for want of jurisdiction on his part." 17. On the basis of our aforesaid observations, we are of the considered view that as in the case of the present assessee before us the impugned assessment had been framed by the ITO-1(1), Bhilai vide his order passed u/s. 143(3) dated 29.12.2016 on the basis of a notice u/s. 143(2), dated 24.09.2015 that was issued by the DCIT1(1), Bhilai, i.e., an A.O who at the relevant point of time was not vested with jurisdiction over the case of the assessee, therefore, the assessment so framed cannot be sustained and is liable to be struck down on the said count itself. Apropos the notice issued u/s. 143(2) of the Act, dated 05.05.2016 by the ITO-Ward 1(1), Bhilai, we ar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ansferred from one Range to another pursuant to order u/s 120 of the Act, therefore, there was no need for the passing of an order u/s 127 of the Act. 13. At the very threshold, I am unable to comprehend on what basis the case of the assessee de-hors any order as per the mandate of Section 127 of the Act was initially transferred by the ITO, Ward-1(2), Raipur on 05/02/2014 to the DCIT, Circle-1(1), Raipur. At this stage, it would be relevant to observe that as per sub-section (3) of Section 127 of the Act, even in case there is a transfer of any case from any A.O or AOs (whether with or without concurrent jurisdiction) to any other A.O or AOs (whether with or without concurrent jurisdiction), the requirement of passing an order of transfer under the aforesaid statutory provision is required and the same cannot be dispensed with. I may further observe that the order of transfer of the assessee's case by the ITO-Ward 1(2), Raipur to DCIT-Circle 1(1), Raipur on 05.02.104 was much prior to Notifications No. 1/2014-15, dated 15.11.2014 and Notification No. 1/2014-15, dated 15.11.2014, based on which jurisdiction over the case of the assessee was vested with the DCIT/ACIT-3(1), Raipur....