TaxTMI 
TaxTMI 
2025 (9) TMI 222
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....t Dibrugarh. The case was selected for scrutiny under CASS and notice under Section 143(2) was issued by the ITO, Dibrugarh. Subsequently, the case was transferred on request made by the assessee to the jurisdictional AO of Gurgaon and the file was received on transfer by office letter issued by ITO, Ward 1(4) Dibrugarh dated 29.03.2017. Notice under Section 142(1) was issued on 05.06.2017 requiring the assessee to file information relating to the claim of deduction under Section 54F of the Act whereupon the copy of the purchase and sale deeds of the property were furnished. The said assessment was finalized by the Ld. AO upon making addition of Rs. 105,67,271/- on account of long term capital gain rejecting the claim under Section 54F of the Act. The Ld.CIT(A) restricted the said addition to the tune of Rs. 15,63,566/-. 3. The case of the assessee before us is this that the order passed by the Ld. AO being ITO, Ward -2(3), Gurgaon under Section 143(3) is without appreciating the fact that the said AO never issued any notice under Section 143(2) of the Act and the assessment has been finalized on the basis of the notice issued by the non-jurisdictional officer i.e ITO, Dibrugarh....
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....0/2014 dated 22nd October, 2014 is to be taken into consideration as the guideline from Ministry of Finance, Department of Revenue in regard to the assumption of jurisdiction for assessment of the annual income of the assessee, then the ITO, Delhi is having no jurisdiction to issue such notice under Section 143(2) of the Act on the assessee at his residence at Haryana rather the ITO, Gurgaon can only having territorial jurisdiction and competent enough to issue such notice upon the assessee. However, the same admittedly has not been issued by the ITO, Gurgaon upon the assessee. As it is the trite law that issuance of notice u/s. 143 (2) is mandatory, being the first foremost statutory obligation to be complied with by the revenue officer in order to initiate the assessment proceedings under scrutiny, such omission is not curable and having regard this procedural irregularity requirement of issuance of notice under Section 143 (2) of the Act cannot be dispensed with. 12. Thus, having heard the Learned Counsel appearing for the respective parties and having regard to the facts and circumstances of the case, we are of the considered opinion that the notice issued under Sectio....
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....was filed on 04.08.2015. Thus, the Revenue was not having any record to know the change of address of the appellant/assessee prior to filing of the ITR of the relevant year. b. The appellant/assessee never challenged the jurisdiction and or the notice issued under section 143(2) of the Act by the ITO, Ward-1(4), Dibrugarh during the one month; the prescribed time limit under section 124(3) of the Act. c. The appellant/assessee participated in the assessment proceedings and never questioned the jurisdiction and validity of the notice issued under section 143(2) of the Act by the ITO, Ward-1(4), Dibrugarh. d. The appellant/assessee did not update her address in PAN and never informed the AO about change in address before filing the ITR of the Relevant year. e. The cases are transferred on the basis of jurisdiction under section 124 of the Act through the Officers using their user id and password. Such works have been assigned to various officers as per their hierarchy in the I. T. Department in accordance the role & functions as per the Act and also as per the business rules of the I. T. System/Computerization Scheme approved by the CBDT. ....
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....ing that period. ------------------Requirement for raising the objections regarding jurisdiction has been incorporated in Section 124(3)(a) because it is settled law that the issue of transfer is a administrative matter and if any question arises regarding jurisdiction the same can be determined by the Director General of Income Tax or the Chief Commissioner of Income Tax. This is specifically provided in subsection (2) of Section 124. Another aspect is that in Section 246A which gives right to assessee for filing of appeals, no appeal has been prescribed in respect of jurisdiction issues i.e. against Sections 120, 124 and 127 etc. The reason for not making a provision for filing of an appeal is that the issue of jurisdiction is an administrative act and that is why issue of jurisdiction has been left alone to be decided by the administrative authority u/s 124. Therefore, merely not mentioning sub-section (5) of Section 139 in Section 124(3)(a) cannot lead to the conclusion that objection is not required to be raised u/s 124(3)(a) if the assessee disputes the jurisdiction. If this interpretation is adopted then that would mean that first the assessee allows the assessing authority ....
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....ing assessment under section 148 of the Act. In view of the above cited decisions, whether the appellant/assessee, in the case in hand, can question after expiry of one month from date on which he was served with a notice for scrutiny assessment under section 143(2) of the Act. 5. From the perusal of the decision of the coordinate bench of the ITAT relied upon by the Ld. Ld. Counsel it is evident that the decisions of the Hon'ble High Courts cited above were not brought to the notice of the Tribunal. I find merit in the argument of the Ld. Sr. DR that the decisions of the Hon'ble Jurisdictional High Court/Punjab & Haryana High Court in the cases of Jaswinder Kaur Kooner and Subhash Chander (Supra), relied upon by the CIT(A) have to be followed being binding in nature in this case. Our attention was also drawn to the decision of the ITAT Chandigarh in the case of Punjab Urban Development Authority, Mohali (2014] 42 taxmann.com 160 (Chandigarh - Trib.) wherein the Tribunal has held that once a notice under section 143(2) of the Act is issued by a particular officer and if assessee wishes to object to such jurisdiction then objection has to be raised in terms of section 124(3)(a) w....
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....address of Gurgaon after more than one year as under:- "KusumDube F2484, PalamVihar, 122017, Haryana India" 3. I noted from the assessment order that the assessee has requested to transfer his file from ITO, Dibrugarh to the current jurisdiction of ITO at Gurgaon and CIT(A) also noted that the assessee also requested that she is residing in Gurgaon, Haryana and hence, her case may be transferred to Gurgaon for administrative convenience vide email sent to ITO, Ward-1(4), Dibrugarh vide her letter dated 19.01.2017. But, the factum of the case ascertained from order sheet entries (which are enclosed in assessee's paper book at page 5) that assessee sent documents in compliance to notice under Section 143(2) of the Act and this is noted by the AO vide order sheet entry dated 03.10.2016. In this very communication, it was also requested that the assessee is residing at Gurgaon and the assessment records can be transferred to the ITO at Gurgaon, where assessee is filing her returns of income. The AO also noted in the order sheet entry dated 22.09.2016, while issuing notice under Section 143(2) of the Act, that the copy of the notice is sent on her email ID mentioned in th....
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.... by the Assessing Officer on the basis of the notice issued by the AO, Dibrugarh under Section 143(2) dated 19.02.2017 is found to be non-est in the eyes of law; the entire proceeding is thus void-ab-initio and quashed." 5. Whereas, learned Accountant Member upheld the issuance of notice under Section 143(2) of the Act by upholding the findings of learned CIT(A) by observing in paragraphs 3 to 6 as under :- "3. In view of the facts and impugned order mentioned above in para-2, I am unable to persuade myself with the finding of the draft order holding the assessment order as non-est in the eyes of the law and the entire proceedings as void-ab-initio in view of the facts of the case highlighted in the impugned order and in light of the decisions of the Hon'ble Jurisdictional (P & H) High Court in the cases of Jaswinder Kaur Kooner, 291 ITR 80, SubhashChander 166 Taxmann 307 &Siri Paul Oswal 293 ITR 273 and the Hon'ble Delhi High Court in the cases of Mega Corporation Ltd; ITA No.128/2016 and Abhishek Jain (2018) 94 taxmann.com 355. 4. The Hon'ble Delhi High Court, in the case of Mega Corporation Ltd; ITA No.128/2016, has held that the ITAT fell into error....
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.... the same. 7. Learned Counsel for the assessee stated that when return of income under section 139 of the Act for the relevant assessment year 2015-16 was filed on 09.08.2015 with ITO, Ward 3(4), Gurgaon and assessee's residence from 2014 was same i.e., F-2484, PalamVihar, Gurgaon, Haryana having jurisdiction with ITO, Ward 3(4), Gurgaon. In such facts can ITO Ward 1(4), Dibrugarh issue notice u/s. 143(2) dated 22.09.2016.Ld. Counsel further argued that without any valid order u/s. 127(2) of the Act, the ITO Ward 1(4), Dibrugarh cannot transfer the file to the ITO, Ward 2(3), Gurgaon. Ld. Counsel further argued that how can revenue raise the issue of assessee not raising objection within 30 days of issuing of notice u/s. 143(2) of the Act by the ITO, Ward 1(4), Dibrugarh in terms of section 124(3)(a) of the Act. Ld. Counsel stated that in the return of income as well as the notice issued by the ITO, Ward 1(4), Dibrugarh u/s. 143(2) of the Act, the address declared of the assessee is "F.2483, Palam Vihar, Gurgaon, Haryana." The assessee was merely having PAN in the jurisdiction of ITO, Dibrugarh and merely on the basis of PAN lying in his jurisdiction cannot he issue notice u/s. ....
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.... Thus, in view of stated events, it is clear that case was transferred to ITO Ward-2(3), Gurgaon on request of the assessee and PAN was also transferred by passing order us 127 on system. As per provision of section 143(2); "Where a return has been made under section 139, or in response to a notice under section (1) of section 142, the Assessing Officer shall, if he considers it necessary expedient to ensure that the assessee has not understand the income or has not computed excessive loss or has not under-paid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce or cause to be produced there, any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished." Accordingly, upto 30.09.2016, the jurisdiction of the assessee's case lies with ITO Ward 1(4), Dibrugarh and notice us 143(2) was rightly issued on 22.09.2016 which was duly served and complied with by e-mail dated Oct....
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....in PAN. From such facts, the following two issues arises, which are as under:- (i) 1st issue is that where is the territorial jurisdiction for the purpose of assessment within the meaning of section 124 of the Act for which the AO has to issue a valid notice under Section 143(2) of the Act. (ii) 2nd issue is that whether the assessment farmed by the ITO, Ward 2(3), Gurgaon, Haryana will be a valid assessment when revenue claimed on the basis of issuance of notice under Section 143(2) of the Act, the ITO, Ward 1(4), Dibrugarh, in the absence of any order passed under Section 127 of the Act by the CIT(A) transferring the jurisdiction from ITO, Ward 1(4), Dibrugarh to ITO, Ward 2(3), Gurgaon. 7.2 Admittedly, there is no Transfer Order under Section 127 of the Act in the present case transferring the jurisdiction from ITO, Ward 1(4), Dibrugarh to ITO, Ward 2(3), Gurgaon. The provisions of Section 124 of the Act provide jurisdiction of the AO where the assessee is assessed. The provision of Section 124(1) defines the jurisdiction of the AO or any area within the limits of such area i.e., the territorial jurisdiction. The relevant provisions of Section 124(1) of the ....
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....ub-section (1) of section 153A or sub-section of section 153C or after the completion of the assessment, whichever is earlier.] 7.4 The above provisions of Section 124(3) explain that a person is entitled to call in any question and dispute the jurisdiction of the AO: (a) In case where he has furnished a return of income under Section 139(1) of the Act or his assessment has been completed, within one month from the date on which he was served with notice under Section 142(1) or 142(3) or completion of assessment, whichever is earlier. (b) In cases where he has not furnished a return under Section 139(1) of the Act, within the time allowed by the notice under Section 142(1) or under Section 148 of the Act for furnishing of the return or by the notice under the first proviso to Section 144 of the Act to show cause as to why the assessment should not be completed to the best of the judgment of the AO, whichever is earlier. 7.5 The above two conditions should be fulfilled and, in the present case, assessee has not filed return of income with ITO, Ward 1(4), Dibrugarh whereas she actually filed the return for Assessment year 2015-16 with ITO, Ward 3(4), Gurgaon, ....
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....estioned the jurisdiction of an Assessing Officer. It is only in those jurisdictions that the Assessing Office is to refer the matter for determination to the Director General or the Chief Commissioner or the Commissioner as per the provisions of section 124(2) of the Act. It is, thus, evident that before the expiry of the period of one month from the date of service of notice under sub-section (1) of section 142 of the Act, no right to question the jurisdiction of an Assessing Officer would survive. 7. In the present case, notice under section 142(1) of the Act was issued to the appellant-assessee on 25-2-1993 and the return was to be filed on or before 15-3-1993, which, in fact, has been filed on 1-3-1993. No objection to the jurisdiction till 6-9-1994 was raised when the appellant-assessee requested for transfer of the case to Delhi. Therefore, it is not possible to conclude that the Assessing Officer was under obligation to refer the question of jurisdiction to the Director General or Chief Commissioner as per the provisions of section 124(2) read with section 124(4) of the Act, as is contended by learned counsel for the appellant-assessee. 8. We are further o....
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....distinction has to be made between a situation when there is inherent lack of jurisdiction and a situation where jurisdiction is irregularly assumed and plea of want of jurisdiction can be waived by a party. In the latter situation, the question arises whether party who could waive the plea of jurisdiction, raised such a plea and whether such a party had been prejudiced on account of erroneous assumption of jurisdiction. The present case, in our view, falls in the second category. The assessee participated in assessment proceedings by the assessing officer to whom assessment proceedings under the Income Tax Act were transferred and who exercised jurisdiction to assess wealth-tax also with the participation of the assessee without any objection by the assessee. If the assessee had raised an objection, the proceedings could have been transferred back to the concerned Wealth-tax Officer. The assessing officer having proceeded further and assessment having been finalised, plea of lack of jurisdiction could not be raised for the first time in appeal, without showing error in the order on the merit and without showing any prejudice to the assessee by exercise of jurisdiction by the asses....
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....rea or where his business or profession is carried out in more places than one, if the principal place of his business or profession is situate within the area, and (b) in respect of any other person residing within the area. The assessee being a human being is not resident of Dibrugarh, rather, she is resident of Gurgaon. Section 124(3) of the act stops the assessee from raising objection about jurisdiction of an AO where the assessee has filed her return of income under Section 139 after the expiry of one month from the date on which she was served with notice under Section 143(2) of the Act or after the completion of the assessment, whichever is earlier. It is a fact that the assessee filed her returns of income with ITO, Ward-2(3), Gurgaon from AY 2014-15 on 17.03.2015, for AY 2013-14 on 18.03.2015 and for AY 2015-16 on 04.08.2015, which was revised under Section 139(5) on 09.08.2015. This fact is within the knowledge of the ITO, Ward-1(4), Dibrugarh and this is proved by the very order sheet entry recorded while issuing notice under Section 143(2) of the Act because he notes that the notice is being sent by speed post on the address available in the assessment records. The add....
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...., having jurisdiction on the date when notice under Section 143(2) of the Act was issued, the order passed by ITO, Ward-2(3), Gurgaon under Section 143(3) of the Act shall be without jurisdiction. Therefore, the ITO, Ward-1(4), Dibrugarh does not have any jurisdiction to transfer the file to ITO, Ward-2(3), Gurgaon. The file could have been transferred only by the Chief Commissioner or the Commissioner having jurisdiction over ITO, Ward-1(4), Dibrugarh after giving hearing to the assessee. In my view, ITO, Ward-1(4), Dibrugarh has not complied with mandatory requirement of Section 127 but suomoto transferred the file to ITO, Ward-2(3), Gurgaon as if he has entered into the shoes of Chief Commissioner or the Commissioner of Income Tax. The case relied upon by the learned Counsel of Hon'ble Delhi High Court in the case of ATS Promoters and Builders Pvt.Ltd. Vs. Chief CIT - 308 ITR 65 (Delhi) has set aside the transfer by taking the view that the transfer of assessee's case from Delhi to Meerut was without disclosing proper application of mind to the objections raised by the assessee. Hence, the impugned notice issued under Section 143(2) of the Act and thereafter transferring the sam....