TaxTMI 
TaxTMI 
2022 (7) TMI 1609
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.... u/s 132 was conducted at the premises of the Oriental Group, Bhopal on 12.01.2018 and all cases of Oriental Group including the assessee were centralized for the purpose of coordinated assessment u/s 153A of the act for assessment years 2012-13 to 2018-19. 3. During the course of proceeding, the authorities came to know that there were financial irregularities being committed by the assessee and, therefore, the activities of the assessee were neither genuine nor being carried out in accordance with its objects. Hence the Ld. PCIT(Central) issued notices u/s 10(23C)(vi) and u/s 12AA(3) read with section 13(1)(c) of the act on 15.11.2019, followed by another letter dated 02.12.2019, wherein the assessee was given opportunity of being heard on the issues. The assessee responded to the notices and made a detailed submission. However, the Ld. PCIT(Central) did not accept the submission of assessee and concluded that the activities of the assessee were neither genuine nor being carried out in accordance with its objects. With these findings the Ld. PCIT(Central) observed that the approval u/s 10(23C)(vi) and registration u/s 12AA being enjoyed by the assessee were liable to be withdr....
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....in law and, therefore, be quashed. (6) That on the facts & in the circumstances of the case and in law, the learned PCIT erred in law and on facts in withdrawing the approval of the institution granted u/s. 10(23C)(vi) w.e.f. 01.04.2011, hence the order of the learned PCIT u/s 12AA dated 26.12.2019 be kindly cancelled. (7) That on the facts & in the circumstances of the case and in law, the findings of the learned PCIT that the income of the institution was being applied directly/indirectly for the benefit of trustees are wholly wrong, opposed to facts, injudicious and unlawful, hence such findings be quashed and it be held that no part of the income of the trust/institution have been applied directly or indirectly for the benefit of trustees and the order passed by the learned PCIT U/s.12AA be kindly quashed." ITA No. 116/Ind/2020 "(1) That on the facts & in the circumstances of the case and in law, the order passed by the learned PCIT u/s. 12AA is bad in law and without jurisdiction and, therefore, the same be kindly cancelled. (2) That on the facts & in the circumstances of the case and in law, the findings of the learned PCIT and his decis....
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....i) of the Income-tax Act, 1961 is contrary to the provisions of law and facts of the case and the order so passed by quashed." Additional Ground for 12AA: "On the facts and in the circumstances of the case and in law, impugned order dated 26.12.2019 passed by Ld. Pr. CIT(Central), Bhopal and the show cause notice dated 15.11.2019 issued by the Ld. Pr. CIT(Central), Bhopal both are bad in law, invalid, illegal and without jurisdiction. The Registration so cancelled u/s 12AA of the Income Tax Act 1961 is contrary to the provisions of law and fact of the case and the order so passed be quashed. 6. At the start of hearing, the Ld. AR made a request to admit the Additional Grounds. Ld. AR submitted that the Additional Grounds are purely legal grounds and go to the root of the matter. Therefore, these Additional Grounds may be admitted in view of decision of Hon'ble Supreme Court in National Thermal Power Co. Ltd. (1998) 229 ITR 383 (SC). We confronted the Ld. DR on admissibility of the Additional Grounds, whereupon the Ld. DR did not express any objection. Therefore, the Additional Grounds were admitted. 7. On a careful consideration of various Grounds raised....
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....ioners of Income-tax or Joint Commissioners of Incometax and Tax Recovery Officers, who are subordinate to them, in respect of cases or classes of cases specified in column (5) in such territorial areas specified in the corresponding entries in column (4) of the said Schedule in accordance with the orders issued by the respective Commissioners of Income-tax; (c) authorises the Additional Commissioners of Income-tax or Joint Commissioners of Income-tax referred to in clause (b) above, to issue orders in writing for the exercise of the powers and performance of the functions by the Assessing Officers, who are subordinate to the said Additional Commissioners of Income-tax or Joint Commissioners of Income-tax in respect of cases or classes of cases, in respect of which such Additional Commissioners of Income-tax or Joint Commissioners of Incometax are authorised by the Commissioners of Income-tax under clause (b) above. SCHEDULE (Relevant portion reproduced) S.NO. Designation Headquarters Territorial Area Cases or classes of cases (1) (2) (3) (4) (5) 3. Commissioner of Income-tax (Exemption), Bhopal Bhopal States of Madhya Prades....
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....n or assignment to Ld. PCIT(Central) is also not possible. 12. Ld. AR heavily relied upon the decision of Hon'ble ITAT, Jaipur Bench, in the case of M/s Wholesale Cloth Merchant Association, New Cloth Market, Kota Vs. PCIT(Central), Jaipur, ITA No. 688/JP/2019 dated 06.01.2021, the relevant paras are reproduced below: "11. First of all, we would like to deal with legal objection raised by the assessee with regard to the jurisdiction of Pr. CIT(Central) in issuance of show cause notice and in passing of consequent order. In this respect, our attention was drawn towards Section 120(3) and CBDT Circular No. 52/2014 and 53/2014 both dated 22/10/2014. As per provisions of Section 120(3) of the Act, the criteria of Jurisdictions of Income Tax Authorities has been provided by the CBDT and as per provisions of Sec.120(3) of the Act, there are four criteria for deciding the jurisdiction and the same are reproduced below: (3) In issuing the directions or orders referred to in sub-sections (1) and (2), the Board or other income-tax authority authorised by it may have regard to any one or more of the following criteria, namely: -- (a) territorial area; (b....
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....asis of proposal from DCIT(CC) Kota, the ld. Pr. CIT has issued the show cause notice to the assessee u/s 12AA(3)/(4) dated 22.02.2019. In response, the assessee appeared and filed details and submissions before the Pr. CIT(Jaipur) on 18.03.2019 and the ld. Pr. CIT(C) has passed the impugned order on 22.03.2019 u/s 12AA(3) and 12AA(4) of the Act. 14. We found that the above facts and proceedings of power of transfer U/s 127 was only for a limited purpose of Co-Ordinate Assessment. Neither any search & Seizure action nor any notice u/s 153A or 153C of the Act or assessment u/s 153A or 153C of the Act in the case of assessee were initiated and there was only a survey u/s 133A of the Act in the case of assessee. The assessment has been completed u/s 148/143(3) of the act vide order dated 19.12.2018. As the assessment has been completed, the purpose of transfer u/s 127A has also been completed. Although No notices regarding the transfer of the cases u/s 127 have been sent to the assessee for the purpose of Co-ordinate assessment and the purpose of transfer was only Co-Ordinate Assessment as clearly mentioned in the transfer letter 19.08.2016. The assessment was completed u/s 1....
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....transferred 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, pass the order; (b) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf. (3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or ....
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....ferred to in sub-sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, require two or more Assessing Officers (whether or not of the same class) to exercise and perform, concurrently, the powers and functions in respect of any area or persons or classes of persons or incomes or classes of income or cases or classes of cases; and, where such powers and functions are exercised and performed concurrently by the Assessing Officers of different classes, any authority lower in rank amongst them shall exercise the powers and perform the functions as any higher authority amongst them may direct, and, further, references in any other provision of this Act or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such higher authority and any provision of this Act requiring approval or sanction of any such authority shall not apply. (6) Notwithstanding anything contained in any direction or order issued under this section, or in section 124, the Board may, by notification in the Official Gazette, direct that for the purpose of furnishing of the return of income or the doing of any other act or ....
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....ceeding has been transferred to the Pr. CIT(Central) Automatically, when both the proceedings are separately or independent and also has to be done or conducted by the different rank Authorities. More particularly when for the purpose of Exemption cases or 12A registration a Separate Commissioner of Income Tax has been Authorized for whole of Rajasthan by the CBDT by its Notification dated 22.10.2014. In support of the above contention, the ld AR has relied on the decision in the case of Dilip Tanaji Kashid vs. M.l. Karmakar PR. CIT& ANR. (2018) 304 CTR 0436 (Bom) wherein it has been held: Transfer of jurisdiction--Power of competent officers-- Centralization of case--Dissenting note--Assessee was issued notice enshrining proposal for transfer of his case from Kolhapur to Mumbai, so as to centralise cases relating to D.Y. Patil Group-- Assessee objected that such notice did not referred to any agreement being reached by officers of equal rank at Mumbai and Kolhapur--These objections were however overruled and assessee's case was transferred--High Court quashed purported transfer u/s 127--Held, "Centralisation Committee" which took decision for transfer of jurisdiction,....
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....ry-- Counter affidavit filed on behalf of Revenue did not disclose that there was any such agreement--In fact, it had been consistently and repeatedly stated in said counter affidavit that there was no disagreement between two Commissioners--Existence of agreement between two jurisdictional Commissioners was condition precedent for passing order of transfer--Clause (b) of sub-section (2) of section 127 provides for consequences when there was no such agreement--When jurisdiction to pass order of transfer under clause (a) of sub-section (2) of Section 127 could be exercised only when there was such agreement, fact that such agreement exists ought to had been stated in show cause notice as same was jurisdictional fact--It was on basis of written document that finding was recorded that there was agreement between Jurisdictional Commissioners of Ranchi and Delhi--Even going by case made out by revenue, no such agreement was spelt out. 8. The Apex Court has categorically held that the absence of disagreement will not be tantamount to an agreement as visualized under section 127(2)(a) which contemplates positive state of mind of the two jurisdictional Principal Commissioners of ....
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.... (Exhibit-H to the petition) is hereby quashed and set aside. Rule is made absolute on above terms with no order as to costs. The Hon'ble Supreme Court in the case of Ajantha Industries & Ors. vs. Central Board of Direct Taxes & Ors. (1976) 102 ITR 0281 has been held that: "The CBDT sent a notice to the appellants under s. 127 proposing to transfer their case files "for facility of investigation" from the respective at Nellore to the ITO, B Ward, Special Circle II, Hyderabad. By this notice they were also asked to submit in writing if they had any objection to the proposed transfer within 15 days of receipt of the notice. The appellants made their representation objecting to the transfer and on 26th July, 1973, the Central Board passed the impugned order transferring the cases from Nellore to Hyderabad. The short question that arises for consideration is whether failure to record the reasons in the order which was communicated to the appellants is violative of the principles of natural justice for which the order should be held to be invalid. Held: The requirement of recording reasons under s. 127(1) is a mandatory direction under the law and....
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....fferent. Hence, the said judgment is of no help to the Revenue on the facts of the present case. Thus, keeping in view our above discussions, we are of the view that the ld. PCIT had no jurisdiction to pass order U/s 12AA(3) & 12AA(4) of the Act and the same is not sustainable in the eyes of law and accordingly stands quashed." 13. Ld. AR submitted that the both on the facts and in law, the case of assessee is squarely covered by this decision of Hon'ble Jaipur Bench of ITAT. 14. With these submissions, Ld. AR strongly contended that the Ld. PCIT(Circle) had no authority to withdraw the approval u/s 10(23C)(vi) / cancel the registration u/s 12AA of the assessee. Hence the order dated 26.12.2019 passed by Ld. PCIT(Circle) is bad, illegal, without jurisdiction and must be quashed. 15. Ld. DR appearing on behalf of revenue could not controvert these submissions of the assessee. However, Ld. DR made some submissions which we would like to address. Ld. DR submitted that the Income-Tax Department is having different authorities and the cases are transferred from one authority to another authority because of necessity or in the special circumstances like search u/s 132. According....