ITO, WARD-10(2), KOLKATA vs. M/S NPS COLD STORAGE PVT LTD, SILIGURI

The Revenue is aggrieved by the action of the CIT(A) in quashing the assessment order holding the same is null and void ab initio being passed by the Assessing Officer having no jurisdiction over the case.

At the outset, the ld. Counsel for the assessee has submitted that the address/registered office of the assessee since beginning is situated at Hakimpara, Siliguri, West Bengal. That the Assessing Assessment year: 2016-17 M/s NPS Cold Storage Pvt. Ltd Officer at Siliguri had jurisdiction to frame the assessment. However, the notice u/s 143(2) of the Act was issued by Income Tax Officer, Ward-10(2), Kolkata which was without jurisdiction. The assessee filed objections with the Assessing Officer objecting to the jurisdiction of the Assessing Officer at Kolkata, which was not taken into consideration by the Assessing Officer and the assessment order was passed.

In appeal before the CIT(A), the assessee again took the objection regarding the jurisdiction of the Assessing Officer to pass the assessment order in question. The ld. CIT(A) wrote as many as three letters/reminders asking for comments of the Assessing Officer in this respect. Since no reply was received from the Assessing Officer, the ld. CIT(A) considered the above objections relating to the jurisdiction in the light of various case laws and held the assessment order as null and void being passed by the Assessing Officer having no jurisdiction over the case.

Before us, the ld. DR has submitted that since the name of the assessee was lying in the PAN database of Income Tax Officer, Kolkata and the assessee never informed the Assessing Officer regarding its change of address, therefore, the Income Tax Officer, Kolkata was having jurisdiction to frame the assessment. He, in this respect, has relied upon the decision of the Hon’ble Supreme Court in the case of PCIT vs. M/s I-Ven Interactive Limited, Mumbai reported in (2019) 311 CTR 165.

The ld. AR, on the other hand, has invited our attention to the copy of the notice issued u/s 143(2) of the Act to submit that even the ITO, Ward-10(2), Kolkata had issued notice at the Siliguri address of the assessee. The ld. Counsel for the assessee has further submitted Assessment year: 2016-17 M/s NPS Cold Storage Pvt. Ltd that the assessee was incorporated with the address at Siliguri on 20.08.1997. The assessee has filed its return of income in circle-3, Siliguri for the past and subsequent years as is evident from the ITR-V enclosed in the paper book for the past three years and subsequent two years. Further that all the business activities of the assessee are in Siliguri itself and there was absolutely no business of the assessee in Kolkata. He has further submitted that the address of the assessee as specified by the A.O in the scrutiny notice and the assessment order is that of Siliguri and therefore, there is no possible reason as to why the ITO, Ward-10(2), Kolkata would issue the notice u/s 143(2) and complete the assessment in the case of the assessee.

We have considered the rival contentions. Before proceeding further, it will be appropriate to refer to section 120 of the Act which, for the sake of ready reference, is reproduced as under: “Jurisdiction of income- tax authorities (1) Income- tax authorities shall exercise all or any of the powers and perform all or any of the functions Conferred on, or, as the case may be, assigned to such authorities by or under this Act in accordance with such directions as the Board may issue for the exercise of the powers and performance of the functions by all or any of those authorities. [Explanation.- For the removal of doubts, it is hereby declared that any income-tax authority, being an authority higher in rank, may, if so directed by the Board, exercise the powers and perform the functions of the income-tax authority lower in rank and any such direction issued by the Board shall be deemed to be a direction issued under sub-section (1)]. (2) The directions of the Board under sub- section (1) may authorise any other income- tax authority to issue orders in writing for the exercise of the powers and performance of the functions by all or any of the other income- tax authorities who are subordinate to it.

Assessment year: 2016-17 M/s NPS Cold Storage Pvt. Ltd (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) persons or classes of persons; (c) incomes or classes of income; and (d) cases or classes of cases …… A perusal of the aforesaid statutory provisions would reveal that the jurisdiction of Income Tax Authorities may be fixed not only in respect of territorial area but also having regard to a person or classes of persons and income or classes of income also.

Since the assessee was incorporated at Siliguri and further carried on business at Siliguri only and there was never change of address, therefore, as notified by the CBDT, the jurisdiction in the case of the assessee lied with the ‘Income Tax Officer’ at Siliguri. There is no explanation put forth by the Department as to why the name of the assessee was lying in the PAN database of the Income Tax Officer, Ward-10(2), Kolkata. The assessee has been continuously assessed at Siliguri only. Even, when the Income Tax Officer, Ward-10(2), Kolkata issued notice u/s 143(2) of the Act, the assessee objected to his jurisdiction. Hence, the jurisdictional Assessing Officer in this case was Income Tax Officer, Siliguri. So far as the reliance of the ld. DR on the decision of the Hon’ble Supreme Court in the case of PCIT vs. M/s I-Ven Interactive Limited, Mumbai (supra) is concerned, it is to be noted that in the said case the dispute was not relating to the jurisdiction of the Assessing Officer rather the issue before the Hon’ble Supreme Court was that the notice u/s 143(2) of the Act was not Assessment year: 2016-17 M/s NPS Cold Storage Pvt. Ltd issued at the new/changed address of the assessee. The Hon’ble Supreme Court held that if the assessee would not intimate the Assessing Officer about the change of the address then under the circumstances, the Assessing Officer was justified in sending notice at the address as per PAN database. However, the case in hand is not of change of the address of the assessee. The assessee right from the very incorporation has carried on its business at Siliguri only. Even the notice has been issued to the assessee at its Siliguri address. Even the address of the assessee in the assessment order has also been mentioned of Siliguri. Therefore, the aforesaid case law cited by the ld. DR is not applicable to the facts of the present case. Rather the case is duly covered by the decision of the Jurisdictional Calcutta High Court in the case of PCIT vs. Mohan Chand Motilal Kothari & Co. in GA No.1497 of 2016, wherein, the Hon’ble High Court, in the identical facts and circumstances, has observed as under: