INCOME TAX OFFICER, WARD-2(1), KOLKATA, KOLKATA vs. RAJ TRIMURTI INFRAPROJECTS PRIVATE LIMITED, KOLKATA

The Revenue has challenged the deletion of addition by learned CIT (A) on merits by raising three grounds whereas, the assessee by filing cross objection challenging the validity of the order passed by the learned AO u/s 143(3) of the Act dated 28.12.2019. Since the assessee has raised legal issue in the cross objection, therefore, we are inclined to decide the legal issue raised in the cross objection.

The first issue raised by the assessee in the cross objection is against the jurisdiction of the learned AO to pass the order u/s 143(3) of the Act on the ground of lack of inheritance jurisdiction.

After hearing the rival contentions and perusing the materials available on record, we find that the assessee declared total income of ₹2,15,57,650/- in the revised return filed on 15.11.2018. Thereafter, the case of the assessee was selected for scrutiny under CASS and statutory notices were duly issued and served upon the assessee. We note that the notice u/s 143(2) of the Act was issued by ITO Ward 2(3), Kolkata dated 10.08.2018, and accordingly, the assessment was also framed by the ITO Ward 2(3), Kolkata. Therefore, we find merit in the contention of the assessee that there is lack of inheritance jurisdiction of the learned AO in view of the income declared by the assessee in the return of income. In our opinion, the assessment should have been framed by the AC/DC, who has the inheritance jurisdiction in terms of circular of CBDT instruction no.1/2011

Therefore, in terms of the said CBDT instruction, the jurisdiction lies with the AC/DC in case of metro cities, where the income is above 30 lacs. Therefore, the learned AO who has passed the order lacked the jurisdiction. The case of the assessee find support from the decision of Raghvendra Mohta Vs. ACIT in for A.Y. 2014-15, which was affirmed by the Hon'ble Jurisdictional High Court in case of PCIT Vs. Raghvendra Mohta in ITAT/51/2025 in IA no. GA/1/2025, GA/2/2025, wherein the Hon'ble High Court has held as under: - The assessee preferred appeal before the learned Tribunal challenging the order passed by the Commissioner of Income Tax (Appeals)-10, Kolkata (CIT(A)] dated 26.9.2017. One of the grounds urged before the learned Tribunal was that the Assessing Officer, who passed the assessment order did not have jurisdiction over the case of the assessee and, therefore, the notice as well as the assessment order are bad in law. The learned Tribunal took note of the facts and circumstances of the case and found that the assessee filed its return of income declaring the income to be nil. Subsequently, notice under section 143(2) was issued on 10.9.2015 and notice under section 142(1) dated 13.6.2016 was issued along with the questionnaire. The assessee contended that the notices were without jurisdiction and relied upon section 120 of the Act. In this regard, the assessee referred to the notification issued by the CBDT in Instruction No.1 of 2011. The learned Tribunal took into consideration the facts of the case and found that the assessment has been framed by the Assessing Officer, who inherently lacks jurisdiction to do so. The learned Tribunal took note of the decision of a Co-ordinate Bench of the learned Tribunal in the case of Bhagyalaxmi Conclave (P) Ltd. us. DCIT dated 3.2.2021. Apart from other decisions and allowed the assessee's appeal, the revenue had challenged the order passed in the case of Bhagyalaxmi Conclave (P) Ltd. before this court in ITAT/221/2022 etc. and by a judgment reported in 2022 (12) TMI 1514, the appeal filed by the department was dismissed wherein one of the questions framed is identical to the substantial questions of law suggested by the revenue in the instant case. Thus, we find that the learned Tribunal was right in allowing the assessee' appeal and setting aside the order passed by the Assessing Officer on the ground of lack of inherent jurisdiction. For the above reason, the appeal is dismissed and the substantial questions of law are answered against the revenue.”

Therefore, following the decision of the Hon’ble Court, we quash the assessment framed by the learned AO on the ground of lack of inheritance jurisdiction. The ground no.1 of the CO of the assessee is allowed.

Since, we have allowed the appeal of the assessee on ground no.1, the second issue raised in ground no.2 is not adjudicated at this stage and is left open to be decided if need arises for the same in future.

In the result, the CO of the assessee is allowed and the appeal of the Revenue is dismissed.