SUNIL RAM & CO,NEW DELHI vs. ACIT, CIRCLE-2, GHAZIABAD

The appeal by the assessee is directed against the order dated 31.08.2018 of the Ld. Commissioner of Income Tax (Appeals), Muzaffrnagar (“CIT(A)”) pertaining to the Assessment Year (“AY”) 2014-15.

The assessee has taken the following grounds :-

2. “1. “The Ld. CIT(A) has erred in law in not specifically adjudicating ground No. 1 and 2 raised before him which pertains to the jurisdiction of the Assessing Officer of passing the assessment order.

2. The Ld. CIT(A) has erred in law in not appreciating that the Assessing Officer at Ghaziabad, has no jurisdiction to pass the assessment order, this is a nullity in the eyes of the law.”

3. Briefly stated, the assessee is an individual. He is a Chartered Accountant and proprietor of M/s. Sunil Ram & Co. For the AY 2014-15 he filed his return on 06.10.2014 declaring total income of Rs.31,62,230/-. His case was selected under complete scrutiny through CASS. The statutory notices issued by the Ld. Assessing Officer (“AO”) Ghaziabad were not complied with as the assessee submitted that the notices were without jurisdiction because the assessee is being regularly assessed with ITO Ward 37(1), New Delhi. The Ld. AO, however, was of the opinion that he had the jurisdiction over the assessee and proceeded to pass ex-parte assessment order under section 144 of the Income Tax Act, 1961 (the “Act”) on 22.12.2016 on total income of Rs. 56,44,310/- including therein addition of Rs. 18,19,547/- under section 68 and disallowance of Rs. 6,62,529/- out of expenses claimed in P & L Account.

3.1 The assessee appealed before the Ld. CIT(A) challenging the jurisdiction of Ld. AO Ghaziabad over his case as also the said addition under section 68 and disallowance out of expenses. The Ld. CIT(A) deleted the addition of Rs. 18,19,547/- made by the Ld. AO under section 68 and held that the Ld. AO was not justified in making disallowance out of expenses and deleted the disallowance.

3.2 As regards assessee’s challenge to exercise jurisdiction over his case by the Ld. AO Ghaziabad, the Ld. CIT(A) dealt with the issue in para 9 and 10 of his order as under :-

“9. Grounds of appeal

Nos. 1 & 2 are against the validity of proceedings u/s 144 of the Act being out of jurisdiction.

10. In these grounds of appeal the appellant has stated that the order passed by the AO was without jurisdiction. It has been stated that the appellant has been filing its return of income regularly with ITO Ward-37(1), Delhi and therefore, the ACIT, Circle-2, Ghaziabad was not having any jurisdiction over the case. The appellant has challenged the jurisdiction during the course of the assessment proceedings itself. The AR furnished a copy of letter dated 06-03- 2 2018 written by the ACIT Circle-2, Ghaziabad to the Principal CIT, Ghaziabad in which he has mentioned that as per the data available on ITD, the territorial jurisdiction of the appellant lies with ITO Ward 37(1), Delhi. The AR also argued that the business place of appellant was at 22, KG Marg, New Delhi which was not under the jurisdiction of ACIT, Circle-2, Ghaziabad. The AR furnished copies of the said letters sent by appellant to the AO during the assessment proceedings, copies of returns of income furnished for AYs 2013- 14, 2014-15 and the said letter sent by ACIT, Circle-2, Ghaziabad to support the claim. However, in the proceeding paras the addition/disallowance have already been deleted, therefore these grounds of appeal lose their relevance and are not adjudicated upon separately. Thus grounds of appeal Nos. 1 & 2 are accordingly disposed off.”