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Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR
Before: SHRI N.K.SAINI & SHRI N.K. CHOUDHRY
PER N.K.CHOUDHRY
The instant appeal has been preferred by the Assessee/Appellant against the order dated 15.02.2018 impugned herein passed by the Ld. CIT(A), Bikaner u/s 250(6) of the Income Tax Act 1961 (hereinafter called as the 'Act') whereby the Ld. CIT(A) has affirmed the assessment order dated 29.12.2016 passed by the ITO, Ward-1, Sri Ganganagar u/s 143(3) of the Act.
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The brief facts of the case are that the assessment proceedings u/s 147 of the Act have been initiated against the assessee and statutory notice u/s 148 was issued, in response to which the assessee neither comply with the notice nor filed its return of income thereafter statutory notices u/s 142(1) have been issued, however the same could not be served upon the assessee due to one or the other reason. The AO also issued a show cause notice along with notice u/s 142(1) on 19.12.2016 requiring the assessee to attend the proceedings on 23.12.2016 and dispatched the notice through speed post and simultaneously got served by affixture, however the assessee failed to appear on the stipulated date. It reflects from record as well as from Assessment Order that during the course of assessment proceedings, the appellant sent a letter to the AO to the effect, since he came to know about the affixture of notice only on 21.12.2016 therefore within such a short span, he could not prepare and attend the hearing on 23.12.2016. However, the Assessing Officer did not accede to the request of the assessee and considering the case as time barring, ultimately framed the assessment u/s 144 of the Act on dated 29.12.2016 by making the addition of Rs.18,58,780/-. The assessee challenged the assessment order before the Ld. CIT(A) on various grounds which for the sake of brevity and ready reference are reproduced herein below. "1. That the Notice Issued U/s 148 and the Order Passed by the Ld. AO U/s 144 R.W. 147 are illegal, bad in law and without jurisdiction and Ld. CIT(A) was not Justified in Confirming the Assessment. 2. That the Ld. A.O. had make an Error and Ld. CIT(A) Justified in Confirming the Assessment U/s 144 R.W. 147 When all the Notices were Issued & Served on the Old Address was not a valid Issuance of Notice when Assessee had given information many times about change his address to the Income Tax Department even very well even before the Issuance of Notice U/s 148 and completion of Assessment. 3. That the Ld. A.O. had error in Passing the Assessment and CIT(A) had erred in confirming the Assessment when the Ld. A.O. of Sri
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Ganganagar (Rajasthan) had no Jurisdiction over the Assessee. Assessee proper Jurisdiction comes under the Punjab State Assessee Officer. Moreover when this fact was admitted by Ld. A.O. himself during the Assessment proceedings. 4. That the Ld. A.O. had error in issuance of Notice U/s 148 on the basis of report of another Ld. A.O. without having any Tangible material, On Non Speaking Reasons, Without any independent satisfaction, on the Basis of surmises or conjectures or for making investigation or more enquiries. 5. That the Ld. A.O. had error in Recording Non Speaking Reasons, irrelevant, inapplicable, vague, non germane to facts, reasons which were non confirming the requirements of law and wrong reasons for issuance of Notice U/s 148 . 6. That the Ld. CIT had also made an error in giving Approval when the Reasons are irrelevant, inapplicable, vague, non germane to facts and wrong and non Speaking, without having any evidence and Ld. A.O. had not having any Tangible Material For Escapement of Income. Approval Given by the Ld. CIT only an Mechanical Approval. 7. That the Ld. A.O. Failed to Established / Prove that the Amount invested by the Property is From his Undisclosed Income and Making the Addition U/s 69 of the Income Tax Act. No Information whatsoever in Nature Regarding Source of Unexplained Investment had been given in Reasons or not mentioned in Assessment. So Addition cannot be upheld on this Ground.
That the Ld. A.O. had failed to made the addition on the basis of recorded reasons. If no Addition had been made out on the Basis of recorded reasons then no independent addition can be made. 9. The appellant craves leave and sanction of the Hon’ble ITAT to file additional evidence, if so required for proper prosecution of the case, based on facts and circumstances, which has not been or could not be produced or filed before lower authorities either because proper and sufficient opportunity was not provided or because it was not solicited or its need was not appreciated. 10. That the assessee craves leave to alter, amend or withdraw all or any of the grounds of appeal herein or add any further grounds as may be considered necessary and to submit such statements, documents and papers as may be considered necessary either before or during the appeal hearing."
The Ld. CIT(A), without deciding the appeal on merits, affirmed the assessment order by confirming the validity of notices u/s 148 and 142(1) of the Act as well as the jurisdiction of the AO at Bikaner.
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The assessee, being aggrieved, preferred the instant appeal.
Having heard the parties at length and perused the material available on record. At the outset, it was emphasized by Sh. Vikash Chhabra, the Ld. AR that the Assessing Officer had no jurisdiction to frame the assessment in this case because the assessee being an agriculturist living in Village Bakainwala, Distt. Fazilka (Punjab), whereas the statutory notices have been issued at the parental house at Village,3-Y, Sri Ganganagar (Rajsthan) and affixture of notice was also made at 3-Y, Sriganganagar only. It is an admitted case that the Assessing Officer himself had written a letter dated 12.09.2016 to the ITO, Ward-1, (2), Abhor for transferring the jurisdiction of the cases pertaining to assessee and his father Sh. Jagdev Singh for appropriate actions but the same were returned by the Assessing Officer, Ward- 2(4), Abhor on the pretext that order for transfer of jurisdiction as per Sec. 127 of the Act is not available on record therefore appropriate proceedings cannot be possible. It was further reasoned that notice u/s 148 has been issued by the ITO, Ward-1, Sriganganagar, therefore, the original records of the assessee have been returned to the ITO, Ward-1, Sriganganagar.
4.1 From the record, it is clear that property against which the assessment proceedings u/s 147 have been initiated indisputably situates at Punjab, transactions have also been completed at Punjab and the assessee vide its letter (PB page-3) duly informed the ITO, Ward-1, Sri Ganganagar about his shifting at village, Bakeinwala, Distt: Fazilka (Punjab). Further from the assessee’s letter sent on dated 24.12.2016 to the Assessing Officer, Ward-1, Sri Ganganagar (PB page-46), it clearly reflects that the assessee again and again apprised about the jurisdiction to the Assessing Officer and submitted
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that his Income Tax Jurisdiction falls within the State of Punjab and further also asked the details of information against him. The said letter has been mentioned as duly received on 27.12.2016 by the Assessing Officer in the assessment order itself, however, the Assessing Officer still framed the assessment against the assessee and made an addition of Rs.18,58,780/-, so question emerges as to whether the Assessing officer had the jurisdiction to initiate the Assessment proceedings and to frame the assessment.
4.2 Let us to peruse the relevant provisions of law, which deals with the jurisdiction of Assessing Officer. "[Jurisdiction of Assessing Officers.]
(1) Where by virtue of any direction or order issued under sub-section (1) or sub-section (2) of section 120, the Assessing Officer has been vested with jurisdiction over any area, within the limits of such area, he shall have jurisdiction—
(a) in respect of any person carrying on a business or profession, if the place at which he carries on his business or profession is situate within the area, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situate within the area, and
(b) in respect of any other person residing within the area.
(2) Where a question arises under this section as to whether an Assessing Officer has jurisdiction to assess any person, the question shall be determined by the [Principal Director General or] Director General or the [Principal Chief Commissioner or] Chief Commissioner or the [Principal Commissioner or] Commissioner; or where the question is one relating to areas within the jurisdiction of different [Principal Directors General or] Directors General or [Principal Chief Commissioners or] Chief Commissioners or [Principal Commissioners or] Commissioners, by the [Principal Directors General or] Directors General or [Principal Chief Commissioners or] Chief Commissioners or
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[Principal Commissioners or] Commissioners concerned or, if they are not in agreement, by the Board or by 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, specify.
(3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer—
(a) where he has made a return [under sub-section (1) of section 115WD or] under sub-section (1) of section 139, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 142 or [sub-section (2) of section 115WE or] sub-section (2) of section 143 or after the completion of the assessment, whichever is earlier;
(b) where he has made no such return, after the expiry of the time allowed by the notice under [subsection (2) of section 115WD or sub-section (1) of section 142 or under sub-section (1) of section 115WH or under section 148 for the making of the return or by the notice under the first proviso to section 115WF or under the first proviso to section 144] to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier. (4) Subject to the provisions of sub-section (3), where an assessee calls in question the jurisdiction of an Assessing Officer, then the Assessing Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub-section (2) before the assessment is made. (5) Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer shall have all the powers conferred by or under this Act on an Assessing Officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under sub-section (1) or sub-section (2) of section 120.]" From the provisions, it is clear that the Assessing Officer has the jurisdiction of the area where any person is carrying on a business or profession. Further at the principal place of business or profession situates within area, if the person is carrying on business or profession
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in more places than one. The provision further prescribed that the Assessing Officer has been vested with the jurisdiction over any area of other person residing within the area. There is nothing on record to show that the notice dated 31.03.2016 u/s 148 has ever been served upon the assessee at his proper address at Punjab.
4.3 We have again perused the assessment order and realized that though the Assessing Officer vide its letter dated 12.09.2016 transferred the assessee's and his father case to the ITO, Ward-1(2), Abhor (Punjab), which were returned back by the ITO, Ward-2(4), Abhor. However, the Assessing Officer did not mention the said facts in the assessment order. In our considered view once it was accepted by the Assessing Officer itself that he had no jurisdiction and therefore transferred the assessee's case for appropriate actions to the ITO, Ward-1, Abhor, however on returning the assessment proceedings on technical ground, the Assessing Officer again assumed jurisdiction without disclosing as to how and under what circumstances, he has jurisdiction to frame the assessment against the assessee. Considering the peculiar facts and circumstances that the properties against which the Assessing Officer has initiated the proceedings u/s 147 of the Act situates in Punjab, transactions have also been held at Punjab and admittedly the assessee is also residing in Punjab, we are of the considered view that the Ld. Assessing Officer, Ward-1, Sri Ganganagar, had no jurisdiction to frame the subjected assessment, consequently the assessment order cannot stands in the eyes of law for want of jurisdiction.
4.4 Though the assessee has also challenged the order of the authorities below on the basis of reasons recorded u/s 147 of the Act, however as we are inclined to quash the assessment order for the lack
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of jurisdiction hence would not feel it appropriate to dwell upon the other aspects such as reasons recorded u/s 147 and other grounds of appeal raised by the assessee.
Stay Application No.06/JODH/2018 6. As we have already decided the appeal of the assessee in his favour and quashed the assessment order itself, therefore, in view of the decision of assessee's appeal, the Stay Application becomes infructuous, hence needs no adjudication and stands dismissed.
In the result, the appeal filed by the assessee stands allowed and Stay Application No.06/JODH/2018 , stands dismissed.
Order pronounced in the Open Court on 01.05.2019.
Sd/- Sd/- (N.K.SAINI) (N.K.CHOUDHRY) VICE PRESIDENT JUDICIAL MEMBER Dated:01/05/2019 PK/PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT
ASSISTANT REGISTRAR