TaxTMI 
TaxTMI 
2025 (11) TMI 89
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....ng 20% of the advance received by the appellant from the applicant customers during the year. 2. That the Ld. CIT (A) was not justified in law and on facts in confirming the action of the Ld. AO making the ad hoc addition of Rs. 62,43,351 out of the application money received from the intending customers as participation amount to acquire plot in the appellant's proposed project in spite of their complete details provided by the appellant during the course of the assessment as well as the appeal proceedings, e.g. name, address, PAN, amount received from each applicant customer, indicating the mode of payment along with their Application Forms and such advance being duly reflected in the audited financial statements of the appellant. 3. That the Ld. CIT (A) was not justified in law and on facts in confirming the action of the Ld. AO in passing the impugned assessment order making an ad hoc addition of Rs. 62,43,351 without any basis and merely on suspicion, surmises and conjectures and without even making proper investigations by exercising his powers under section 131/133 of theAct to call for information from the applicant customers to satisfy himself and wit....
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....on to make assessment the Ld. Commissioner of Income Tax (Appeals) erred on facts and in law in not noticing that he had failed to serve mandatory notice required to be issued u/s 143(2) of the Act within the statutory time provided and hence the consequential assessment was bad in law and that notice dated 28- 09-2018 as mentioned in para I of the assessment order was never ever served on the Appellant. 10. That without prejudice to the aforesaid grounds L.d. Commissioner of Income Tax (Appeals) erred in law in not appreciating that the the assessment proceedings completed u/s 143(3) were bad in law as the notices referred as issued u/s 143(2) were not addressed to the Principal Officer of the Appellant Company. 11. That in the facts and circumstances of the case Ld. Commissioner of Income Tax (Appeals) failed to appreciate that the the assessment order passed on 29-12-2019 bearing pressed DIN No. ITBA/AST/S/143(3)/2019-20/1023384026(1) was unsustainable in law for non-compliance of para 2 2 of Department's own binding Instruction F.No. System/ITD/Instruction/ASTDIN/ 2019-20 dated 25-10-2019 which mandate the 'User to mention system generated DIN in the r....
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....the company, proposed to be developed and constructed at Zone L of the Master Plan of Delhi-2021 in South West Delhi for which land has been acquired by the Company in the said area. The applicants were fully aware that their participation in the aforesaid project was prospective in nature and contingent upon the notification or issuance of the applicable legal framework/ policy for implementation of the Land Pooling Policy notified by the Ministry of Urban Development, Government of India. Thus, in case the aforesaid project is shelved due to any reason, the applicants shall only be entitled to seek refund of the amount/ advance paid to the Company. Presently only the participation amount for the purchase of agriculture land for participating in land pooling policy (FSI Cost) has been received. The appellant received an aggregate participation amount of Rs. 3,12,16,754 and refunded an aggregate amount of Rs. 1,47,25,500 to the outgoing participants during the AY 17-18 resulting in a net increase of Rs. 1,64,91,254 under the head Participation against Agriculture Land' reflected under Other Long Term Liabilities in the Balance Sheet as on 31.3.2017. The appellant's case was sel....
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....ts and sought for allowing the additional Grounds No. 7 to 9. 6. Per contra, the Ld. Departmental Representative apart from arguing orally filed Factual Report of the A.O. which reads as under:- Ground No. 7 The assessee in its Income Tax Return (ITR) for AY 2017-18 had declared the address P-8/14. DLF Phase-II, Gurgaon, Haryana which clearly places the assessee under the jurisdiction of the Income Tax Officer, Ward-3(4). Gurgaon. It is evident that the initial notice u/s 143(2) was issued by ITO Ward 2(2)(2), Ghaziabad. However, since the assessee's declared address was in Gurgaon, the jurisdiction was rightly transferred to ITO Ward 3(4), Gurgaon as per PAN jurisdiction norms. It is further submitted that the assessee never raised any objection to jurisdiction during the course of assessment proceedings before the AO. As per Section 124(3) of the Income Tax Act, no challenge to jurisdiction is maintainable after one month from the date of service of the first notice u/s 143(2), if not objected to in writing.. In view of the above. the jurisdiction of the AO at Gurgaon was validly exercised and the contention raised by the assessee in this ground is factua....
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....e would be in doubt whether the said notice is meant for him or not. If the recipient of notice was not in doubt that it was meant for him, the misnomer or misdescription is not fatal. Thus failure to mention the words "Principal Officer" on the notices is not fatal" In this case the assessee responded to the notice and participated in proceedings. Therefore, the objective of service was fulfilled, and no prejudice was caused. The notice u/s 143(2) was validly issued in the name of the assessee company, and the absence of the words "Principal Officer" does not render the notice defective. The proceedings are valid in law and the ground raised is without merit, both factually and legally unsustainable. 7. The Ld. Departmental Representative relying on the orders of the Lower Authorities and also Factual Report of the A.O. reproduced above, sought for dismissal of Ground No. 7 to 10 of the Assessee. 8. We have heard both the parties and perused the material available on record. In the present case, originally a notice u/s 143(2) of the Act was issued by ITO-Ward-2 (2)(2), Ghaziabad. Thereafter, as Assessee's declared address was in Gurgaon, the Jurisdiction was transfe....
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.... 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." (emphasis supplied by us) As stated by the Ld. AR, and, rightly so, the CBDT vide its aforesaid Instruction No.1/2011, dated 31.01.2011 had, inter alia, revised the earlier existing monetary limit for assigning the cases to ITOs/ACs/DCs w.e.f. 01.04.2011. On the basis of the aforesaid CBDT Instruction No.1/2011 (supra) w.e.f 01.04.2011, the case of a non-corporate assessee located in a mofussil area having declared an income above Rs. 15 lacs in his return of income is to be assigned to the ACs/DCs. As the case of the present assessee for the A.Y.2012-13 was 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....
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.... 2011, dated 31.01.2011, had observed, that as the pecuniary jurisdiction over the case of the assessee before them who had returned an income of Rs. 64.34 lacs was vested with the DCs/ACs, therefore, the notice issued u/s. 148 of the Act by the ITO who during the year under consideration had no pecuniary jurisdiction over the assessee's case was bad in the eyes of law. Considering the aforesaid lapse in the assumption of jurisdiction the Hon'ble High Court had quashed the notice that was issued by the ITO u/s. 148 of the Act. Also, a similar view had been taken by the Hon'ble High Court of Gujarat in the case of PankajbhaiJaysukhlal Shah Vs. ACIT, Circle-2 (2019) 110 taxmann.com 51 (Guj.). In the said case, though the A.O who had jurisdiction over the case of the assessee had recorded the 'reasons to believe' but notice u/s. 148 of the Act was issued by another officer, therefore, the notice so issued u/s. 148 of the Act was quashed by the Hon'ble High Court. At this stage, we may herein observe, that the 15 M/s. DurgaManikanta Traders, Vs. ITO, Ward-1(1) aforesaid order of the Hon'ble High Court had thereafter, been upheld by the Hon'ble Supreme Court in the case of ACIT, Circle-....
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....o be in contravention of the CBDT Instruction No.1/2011, dated 31.01.2011, therefore, the same cannot be justified. 14. We shall now deal with the objection raised by the Ld. DR that as the assessee had not called in question the jurisdiction of the Income-Tax Officer, Ward-2(2), Bhilai within the stipulated time period of one month from the date on which he was served with the notice(s) u/ss.143(2) and 142(1), dated 03.03.2015, therefore, it was not permissible for him to challenge the same for the first time in the course of the proceeding before the tribunal. Having given a thoughtful consideration to the aforesaid claim of the ld. DR we are unable to persuade ourselves to subscribe to the same. On a careful perusal of Section 124 of the Act, it transpires that the same deals with the issue of "territorial jurisdiction" of an Assessing Officer. Ostensibly, sub-section (1) of Section 124 contemplates vesting with the A.O jurisdiction over a specified area by virtue of any direction or order issued under sub-section (1) 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 regard....
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....rom that, the aforesaid view is also supported by the order of the ITAT, Kolkata 'B' Bench in the case of OSL Developers (p) Ltd. Vs. ITO, (2021) 211 TTJ (Kol) 621 and that of ITAT, Gauhati Bench in the case of Balaji Enterprise Vs. ACIT (2021) 187 ITD 111 (Gau.). Accordingly, on the basis of our aforesaid observations, we are of the considered view that as the assessee's objection to the validity of the jurisdiction assumed by the IncomeTax Officer, Ward-2(2), Bhilai is by no means an objection to his territorial jurisdiction, but in fact an objection to the assumption of jurisdiction by him in contravention of the CBDT Instruction No.1/2011, dated 31.01.2011, therefore, the provisions of subsection (3) of Section 124 would not assist the case of the revenue. 15. We shall now deal with the contention of the Ld. DR that as both the officers in question i.e. Dy. CIT, Circle-1, Bhilaiand the Income Tax Officer, Ward-2(2), Bhilai as per sub-section (5) of Section 120 were vested with concurrent jurisdiction over the assessee, therefore, initiation of the assessment proceedings by the Dy. CIT, Circle-1, Bhilai vide notice issued u/s. 143(2) dated 24.09.2013, which thereafter h....
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....andate of law, it transpires, that even in a case where jurisdiction over the case of an assessee that is vested with one A.O (having concurrent jurisdiction over the case of the assessee) is to be transferred to another A.O (having concurrent jurisdiction over the case of the assessee), even then the authority specified under sub-section (1) of Section 127 is obligated to record his reasons for doing so. Considering the aforesaid position of law, we are of the considered view that now when in the present case the assessment proceedings were initiated by the Dy. CIT, Circle-1, Bhilai vide notice u/s. 143(2), dated 24.09.2013, which thereafter were taken up and culminated by the Income-Tax Officer, Ward-2(2), Bhilai vide his order passed u/s. 143(3) dated 30.03.2015, then, as per the mandate of sub-section (1) of Section 127 of the Act, the specified authority i.e. Commissioner or above was obligated to have recorded his reasons for transferring the case from the aforesaid Dy. CIT, Circle-1, Bhilai to the Income-Tax Officer, Ward-2(2), Bhilai. However, nothing has been brought to our notice which would justify the transfer of jurisdiction over the assessee's case from the Dy. CIT, C....
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....pon the CBDT Instruction No.1/2011 [F.No.187/12/2010-IT(A-I), for the sake of convenience is reproduced as under: "Instruction No.1/2011 [F.No.187/12/2010-IT(A-I), DATED 31-1-2011 References have been received by the Board from a large number of taxpayers, especially from mofussil areas, that the existing monetary limits for assigning cases to ITOs and DCs/ACs is causing hardship to the taxpayers, as it results in transfer of their cases to a DC/AC who is located in a different station, which increases their cost of compliance. The Board had considered the matter and is of the opinion that the existing limits need to be revised to remove the abovementioned hardship. An increase in the monetary limits is also considered desirable in view of the increase in the scale of trade and industry since 2001, when the present income limits were introduced. It has therefore been decided to increase the monetary limits as under: Income Declared (MofussilAraeas) Income Declared (Metro cities) ITOs ACs/DCs ITOs DCs/ ACs Corporate returns Upto Rs. 20 lacs Above Rs. 30 lacs Upto Rs. 30 lacs Above Rs. 30 lacs Non-co....
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....elied on the recent decision of this Tribunal in the case of Hillman Hosiery Mills Pvt. Ltd. vs. DCIT, in ITA No. 2634/Kol/2019, order dated 12.01.2021. We find that the issues that arise in this appeal are clearly covered in favour of the assessee. This order followed the principles of law laid down in a number of other decisions of the ITAT, Kolkata Bench on this issue. 5.3. Kolkata "B" Bench of the Tribunal in the case of Hillman Hosiery Mills Pvt. Ltd.(supra) held as follows: "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 a notice u/s 143(2) of the Act, to the assessee. This issue is no more res-integra. This Bench of the Tribunal in the case of Soma Roy vs. A....
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....sing 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 noncorporate 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). From a perusal of the assessment order, it reveals that the statutory notice u/s. 143(2) of the Act....
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....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." Apart from that, we find that a similar view had been taken by the ITAT, Cuttack Bench, Cuttack in the case of Kshirod Kumar Pattanaik Vs. ITO, Angul Ward, Angul, ITA No.380/CTK/2019 dated 10.12.2020. 17. Consequent to our aforesaid deliberations, we are of the considered view that as in the present case before us the assessment had been framed by the Income Tax Office....