ASSISTANT COMMISSIONER OF INCOME-TAX, BANGALORE vs. DR. KAMINI ARAVIND RAO, BANGALORE

Before Shri George George K, JM & Ms.Padmavathy S, AM The Assistant Commissioner of Dr.Kamini Aravind Rao Income-tax, Circle 2(3)(1) No.5, Santhana, 2nd Cross v. Bangalore. Kumara Cot, Madhavanagar Bangalore – 560 001. PAN : ABFPR4756E. (Appellant) (Respondent) Appellant by : Sri.Dilip, Standing Counsel for Dept. Respondent by : Sri.Narendra Sharma, Advocate Date of Pronouncement : 11.03.2022 Date of Hearing : 10.03.2022 O R D E R

Per George George K, JM :

“1. Learned CIT(A)-I is erred in assumption of appellate jurisdiction on the assessee, a doctor by profession whose case comes under the jurisdiction of CIT(A)-II, Bengaluru.

2. Learned CIT(A)-I ought to have observed the appellate jurisdiction before passing the order.

3. Learned CIT(A)-I ought to have perused the assessment order u/s 143(3) and Form No.35 filed by the assessee which are clearly showing the order is passed by Assistant Commissioner of Income-tax, Circle-2(3)(1), Bengaluru and CIT(A)-I is not having the jurisdiction over the orders passed by that officer.

4. Learned CIT(A)-I erred in passing the order without verifying the case of a professional which is not assigned to . Dr.Kamini Aravind Rao. the jurisdiction of CIT(A)-I on administrative grounds or order u/s 127 by notifying the jurisdiction of the case to any assessing officer whose orders falls under the CIT(A)-I appellate jurisdiction.

5. Learned CIT(A)-I erred in passing an appellate order in the case of an doctor who is assessed regularly in the professional range without noticing that he is not having appellate jurisdiction over professional Range cases .

7. Without prejudice to the grounds raised

above, on merits of the case the CIT(A)-I failed to distinguish the case laws relied on assessee to case on hand.

8. Learned CIT (A)-I failed to differentiate the terms of income u/s 64 and head of income by ignoring the intension of the Section 64, which is legislated for the purpose of not allowing the unintended benefits such as reducing the tax incidence by transferring the properties to the spouse and claiming the exemption of income in the hands of spouse otherwise the sale proceeds are taxable in the hands of assessee.

9. Learned CIT(A)-I failed to understand the fact that assessee is not eligible to claim exemption u/s 54F being the owner of more than two houses hence she has chosen a tax avoidance route to claim the exemption in the return of her husband.

10. Learned CIT(A)-I failed to notice the basic intention behind the transactions of gifting shares to her spouse and sale of the same in very short span of time is to avoid the substantial tax payment.

11. Learned CIT(A)-I is not correct in allowing the exemption in the hands of spouse of the assessee without appreciating that the exemption is only allowable in the hands of assessee's spouse if the assessee also eligible for the same exemption.

12. The learned CIT(A)-I failed to distinguish the difference between terms exemption claimed and deduction allowable under the provisions of clubbing of incomes.”

. Dr.Kamini Aravind Rao.

6. We have heard rival submissions and perused the material on record. The assessee, who is a practicing medical professional, falls under the jurisdiction of Assistant Commissioner of Income-tax, Circle 2(3)(1), Bangalore (hereinafter referred to as the `AO’). The A.O. falls under the administrative control of Pr.CIT-1, Bangalore. For the relevant assessment year, the assessment order was passed on 03.12.2015. The Pr.CCIT, vide Notification dated 15.11.2014 had passed jurisdictional allocation of CIT(A). A copy of the . Dr.Kamini Aravind Rao. same is enclosed from pages 1 to 5 of the paper book submitted by the learned DR. As per the aforesaid Notification, the Commissioner of Income-tax (Appeals) mentioned in Column (3) shall exercise the powers and perform functions in respect of any appeal filed by cases or class of persons specified in Column (5) and falling under the jurisdiction of the Income-tax Authorities specified in Column (4) of the Schedule. Further, as per the aforesaid Notification, vide Sl.No.2, it is clearly mentioned that the CIT(A), Bangalore-2 shall be the Commissioner (Appeals) for any appeal filed by cases falling under the jurisdiction of Pr.CIT-2, Bangalore. In the present case, the first appeal has been decided by the CIT(A), Bangalore-1, who did not have jurisdiction over the appeal filed by the cases falling under the jurisdiction of Pr.CIT-2, Bangalore. In view of the above, the CIT(A)’s order in the present case passed by the CIT(A)-1, Bangalore is without jurisdiction and hence void ab initio. The Hon’ble jurisdictional High Court in the case of Himalaya Drug Company v. DCIT in & Ors. (judgment dated 15th September, 2021) had held that notice issued by the A.O. is without jurisdiction and as such all further proceedings would render void ab initio. Further, the Hon’ble High Court in the case of Himalaya Drug Company (supra) vide para 20 of the said order had held that the notice issued without jurisdiction is a substantive illegality and not a procedural violation of the nature adverted to in section 292B and 292BB of the I.T.Act. Therefore, for the aforesaid reasons, the impugned order of the CIT(A) is set aside. The correct

. Dr.Kamini Aravind Rao. jurisdictional CIT(A) is directed to adjudicate the appeal of the assessee in accordance with law. It is ordered accordingly.