TaxTMI 
TaxTMI 
2025 (7) TMI 1105
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.....2014 issued by the Ld. JCIT, Range-1, Raipur, instead, the notice u/s 143(2) was issued by the Ld. Income Tax Officer, Ward-1(4), Raipur. Hence, the assessment order passed without jurisdiction deserves to be quashed. 2. On the facts and in the circumstances of the case, the Ld. AO has erred in making addition of Rs. 3,16,520/- on account of non-deduction of TDS u/s 194C of the Income Tax Act, 1961 and the Ld. Addl./ JCIT(A)-8, Delhi has erred in confirming the same inasmuch as the payment to the parties were made against purchase of material and not against works contract, moreover, as per Explanation (iv)(e) to Section 194C, work does not include manufacturing or supplying product by using material purchased from any other person, therefore, there was no obligation on the part of the appellant to deduct TDS. Hence, it is prayed that the disallowance of Rs. 3,16,520/- may kindly be deleted. 3. On the facts and in the circumstances of the case, the Ld. AO has erred on facts and in law in making the disallowance of Rs. 3,16,520/- u/s 40(a)(ia) of the Income Tax Act, 1961 on account of alleged non-deduction of tax at source (TDS) and the Ld. Addl./ JCIT(A)-8, Delhi....
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....ch limits the disallowance to 30% of the amount on which tax was deductible but not deducted, and therefore, even assuming without admitting that there was any liability to deduct TDS, the disallowance ought to have been restricted to Rs. 94,956/- (i.e. 30% of Rs. 3,16,520/- ). Hence, the disallowance of the entire amount of Rs. 3,16,520/- is bad in law and is liable to be deleted or at least reduced to Rs. 94,956/ - i.e. 30% of the payment. 6. Without prejudice to the above, on the facts and in the circumstances of the case, the Learned AO has erred on facts and in law in making the impugned disallowance of Rs. 27,26,731/- and the Ld. Addl./JCIT(A)-8, Delhi has erred in confirming the same without appreciating the fact that the said expenses were part of the opening WIP brought forward from the preceding previous year and were thus, part of the closing working in progress (WIP) and as such were not debited to the Profit and Loss Account of the year under consideration, therefore, in view of the decision of the Hon'ble Jurisdictional Chhattisgarh High Court, in the case of Hon'ble Jurisdictional High Court of Chhattisgarh in the case of Assistant Commissioner Of In....
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....llowance is liable to be deleted. Hence, it is prayed that the addition of Rs. 27,26,731/- confirmed by the Ld. Addl./JCIT(A)-8, Delhi may kindly be deleted. 9. The Appellant craves leave to add, amend, alter vary and / or withdraw any or all the above grounds of Appeal. (Tax effect Rs. 4,95,030/-) 2. At the time of hearing, learned counsel for the assessee submitted that though they have assailed both grounds on merit as well as legal ground, however, they would be first taking up the legal ground and it is the submission of the learned counsel that if such legal ground is answered in affirmative, in such a case, the other grounds shall become academic only. That, referring to the legal issue, learned counsel contended that they are challenging the pecuniary jurisdiction in respect of notice u/sec. 143(2) of the Act issued to the assessee and subsequent assessment order framed u/sec. 143(3) of the Act. Learned counsel placed reliance on the notification No.01/2014-15, dated 15/11/2014 and submitted that notice u/sec. 143(2) of the Act dated 29/07/2016 for A.Y. 2015-16 being issued by ITO, Ward-1(4), Raipur and subsequent framing of assessment also by him lacked inhe....
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....s :- 2. The assessee has also placed on record additional ground of appeal and relying on the judgment of the Hon'ble Supreme court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (1998) 229 ITR 383 (SC), has prayed before the Tribunal for admission of the same which goes to the root of the matter. The additional ground of appeal raised by the assessee reads as follows: "Assessment framed u/s. 143(3) by the Ld. ITO, Mahasamund is without jurisdiction as jurisdiction vested with the Ld. DCIT/ACIT-3(1), Raipur in view of Section 143(2) read with Section 2(7A) read with Section 120 read with Notification No.1/2014 dated 15.11.2014 issued by the Ld. JCIT, Range-3, Raipur, rendering entire assessment illegal and void-ab-initio being inconsistent with statutory prescription." That since the additional ground raised by the assessee is the ground challenging the validity of the jurisdiction of the A.O framing the impugned assessment, therefore, such ground goes to the root of the matter since inherent lack of jurisdiction is incurable and is covered by the aforesaid judgment of the Hon'ble Apex Court (supra) and therefore, the same is admitted....
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....aipur 2. ITO 3(2), Raipur 3. ITO 3(3), Raipur 4. ITO 3(4), Raipur 5. ITO Mahasamund Whose any one of the last three returns of income as on 1st April 2014 and as on 1st April of any subsequent F.Y shows total income /Loss of above Rs. 15 lakh. 2. The directors of the companies mentioned at (1) above. 3. All persons being other than companies deriving income from business or profession and whose principal place of business is within the territorial jurisdiction of the following Assessing Officers of Range-3, Raipur a. ITO 3(1), Raipur b. ITO 3(2), Raipur c. ITO 3(3), Raipur d. ITO 3(4), Raipur e. ITO Mahasamund And whose any one of the last three returns of income as on 1st April 2014 and as on 1st April of any subsequent F.Y shows total income /Loss of above Rs. 10 lakh. 4. All persons being other than companies deriving income from sources other than income from business or profession and residing within the territorial jurisdiction of the following Assessing Officers of Range-3, Raipur a. ITO 3(1), Raipur b. ITO 3(2), Raipur c. ITO 3(3), Raipur d. ITO 3(4), R....
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...., Avantibai Chowk, over bridge of Mova upto the Municipal limit towards Balodabazar covering Daldalseoni, Saddu, Shankarnagar etc. 9. All cases that may be assigned under section 127 of the IT.Act 1961. 10. All the Residual area of the Range-1, Raipur which is not assigned to any other ITO of Range-3, Raipur 3. ITO 3(2), Raipur 1. All cases of salaried employees of the Central Government Department and Public Sector Unit wholly or partly owned by the Central Government residing in Raipur district whose fifth letter of the PAN is from E to L. 2. All persons being other than companies deriving income from business or profession and other than those assessable by DCIT/ACIT 3(1), Raipur and whose principal place of business is within the territorial area detailed as under: i. Areas falling under the Right side of G.E Road starting from Ambedkar Statue opposite Collectarate upto the Municipal Limit towards Aarang passing through Bhagat singh chowk, Telibandha, 36 City Mall ii. Left side of the road starting from Ambedkar Statue opposite Collectorate up to Kali Mandir covering Raj Bhawan, Income tax Office. iii. Left side of the road....
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....ll cases that may be assigned under section 127 of the Income Tax Act, 1961. 5 ITO-3(4) Raipur 1. All cases of salaried employees of the Central Government and Public Sector Unit wholly or partly owned by the Central Government residing in Raipur district whose fifth letter of the PAN is from R to Z. 2. All persons being other than companies deriving income from business or profession and other than those assessable by DCIT/ACIT 3(1), Raipur and whose principal place of business is within the territorial area detailed as under: i. Areas falling under the Right side of Road starting from Jaistambh Chowk upto Dhamtari Narrow gauge railway track passing through Durga College, Moudhapara, fafadih Chowk. ii. Left side of the GE road starting from Jaistambh Chowk upto Shastri Chowk. iii. Left side of the road starting from Sashtri Chowk upto Katchari Chowk . iv. Left side of the road starting from Katchari Chowk passing through Jeevanbima Marg, upto Dhamtari Narrow gauge railway track at Pandri covering Pagaria Complex, Bus stand, Khalsa School, etc. v. Right side of the Dhamtari Narrow gauge railway track from Fafadih to Pandri. ....
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....1/ The CIT(A)-2/ The CIT(A), Bilaspur. 7. The CIT(CO)/ The CIT(Audit), Bhopal 8. The Addl./Jt. Commissioner of Income Tax, Range-1,2,3,4, Raipur, 1,2, Bhilai, Range- 1,2, Bilaspur, Range Korba. 9. All ACsIT, Raipur/Bhilai. 10. All ITOs/TROs in Raipur/Bhilai Charge. 11. The Chamber of Commerce Raipur/Bhilai-Durg. 12. The Income-tax Bar Association, Raipur/Bhilai/Rajnandgaon/Dhamtri/Jagdalpur. 13. Notice Board. Joint Commissioner of Income tax, Range-3, Raipur 4. That referring to Column 1 & 2 in the Schedule part of the Notification, the Ld. Counsel contended that all persons being other than companies whose income in any one of the last three returns of income as on 1^st April, 2014 and as on 1st April of any subsequent F.Y shows total income/loss of above Rs. 10 lacs, in such scenario, the appropriate jurisdiction for framing assessment is with the Dy./Asstt. Commissioner of Income Tax-3(1), Raipur. That further, providing further explanation to the contention raised by the Ld. Counsel, he demonstrated from the Income Tax Return acknowledgement for A.Y.2016-17 that the total income that has b....
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....ed that the return of income filed by the assessee was above Rs.10 lacs and to be more specific it was Rs. 10,27,640/-. That in spite of such return of income filed, the assessment was framed and completed not by the Dy/ACIT-3(1), Raipur but by the ITO, Ward-Mahasamund who inherently lacked valid jurisdiction with regard to the assessee. That in exercise of quasi-judicial power as per the Act sans valid jurisdiction such an act has to be struck down as arbitrary, bad in law and void ab initio. 7. I take guidance from the judgment of the Hon'ble High Court of Calcutta in the case of Pr. CIT-5, Kolkata Vs. Raghvendera Mohta, ITAT/51/2025, IA No.GA/1/2025, GA/2/2025, dated 05.05.2025 wherein the Hon'ble High Court of Calcutta held and observed as follows: "5. The assessee preferred appeal before the learned Tribunal challenging the order passed by the Commissioner of Income Tax (Appeals)-10, Kolkata [CIT(A)] dated 26.9.2017. One of the grounds urged before the learned Tribunal was that the Assessing Officer, who passed the assessment order did not have jurisdiction over the case of the assessee and, therefore, the notice as well as the assessment order are bad in law....
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.... Tribunal : "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 ereturn 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 and the same was lying with the DC....
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....ssessment in the case of the assessee had been framed by the ACIT, Circle-3(1), Raipur, who in light of the CBDT Instruction No.1/2011 (supra) r.w. CBDT Instruction No.6/2011 (supra )was not vested with any jurisdiction for framing of assessment in the case of the assessee who had declared Nil income; therefore, the order so passed by him cannot be sustained and is liable to be struck down on the said count itself. Thus, the Ground of Appeal No.1 raised by the assessee is allowed in terms of my aforesaid observations." Therefore, it is obvious and trite that any action by the revenue authority without jurisdiction is bad in law, void ab initio and hence, liable to be struck down on the said count itself. 11. The issue is no more res-integra as per the judicial precedents that any right and liabilities specifically in a case of imposing liability for that matter whether it is income tax or any other financial burden on the assessee through legal dictate, the said action can only be pronounced as legally valid if it is exercised within parameter of correct jurisdiction. 12. Reverting to the facts of the present case as examined aforesaid, it is clearly evidenced tha....