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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy, Hon’ble
Appearances by: Shri Somnath Ghosh, Advocate, appeared on behalf of the assessee. Shri Jayanta Khanra, JCIT Sr. D/R, appearing on behalf of the Revenue. Date of concluding the hearing : March 19th, 2020 Date of pronouncing the order : May 29th, 2020 ORDER Per J. Sudhakar Reddy, AM :-
Both these appeals filed by the assessee are directed against separate but identical orders of the Learned Commissioner of Income Tax (Appeals) – 6, Kolkata, (hereinafter the “ld.CIT(A)”), passed u/s. 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 18/07/2019 for Assessment Year 2015-16.
As the issues arising in both these appeals are common, they are heard together and disposed off by way of this common order.
In both these appeals the assessee has raised a common additional ground of appeal
, which reads as follows:- “1. For that, in the facts and circumstances of the instant case, the Ld. Commissioner of Income Tax (Appeals)-6, Kolkata acted unlawfully in not appreciating that the conditions precedent for framing the assessment order u/s 2. Assessment Years: 2015-16 Sanat Kumar Sahana Assessment Years: 2015-16 Dipti Kumar Sahana 143(3) of the Income Tax Act, 143(3) of the Income Tax Act, 1961 was not complied with and/or fulfilled by 1961 was not complied with and/or fulfilled by the Ld. Assistant Commissioner of Income Tax, Circle the Ld. Assistant Commissioner of Income Tax, Circle-23(1), Hooghly in the 23(1), Hooghly in the present case and the assessment order so framed is absolutely ab initio void, present case and the assessment order so framed is absolutely ab initio void, present case and the assessment order so framed is absolutely ab initio void, ultra vires and null in law.” ultra vires and null in law.”
The ld. Counsel for the assessee submitted that this is a legal ground challenging The ld. Counsel for the assessee submitted that this is a legal ground challenging The ld. Counsel for the assessee submitted that this is a legal ground challenging the jurisdiction of the Assessing Officer and that all the facts are on record and hence the the jurisdiction of the Assessing Officer and that all the facts are on record and hence the the jurisdiction of the Assessing Officer and that all the facts are on record and hence the same may be admitted as it is a pure legal ground. The ld. D/R could not dispute as it is a pure legal ground. The ld. D/R could not dispute as it is a pure legal ground. The ld. D/R could not dispute the fact that this is a legal issue. Under these circumstances, we admit this legal ground raised
by Under these circumstances, we admit this legal ground raised by Under these circumstances, we admit this legal ground raised by the assessee as this goes to the root of the matter and as all the facts are on record by as this goes to the root of the matter and as all the facts are on record by as this goes to the root of the matter and as all the facts are on record by relying on the judgment of the Hon’ble Supreme Court in the case relying on the judgment of the Hon’ble Supreme Court in the case of of National Thermal Power Company Ltd v CIT (1998) 229 ITR 383 (SC) Power Company Ltd v CIT (1998) 229 ITR 383 (SC).
5. We have heard both the parties on this legal ground of the jurisdiction of the We have heard both the parties on this legal ground of the jurisdiction of the We have heard both the parties on this legal ground of the jurisdiction of the Assessing Officer.
6. The undisputed facts in both the cases is that the jurisdiction of the assessee li The undisputed facts in both the cases is that the jurisdiction of the assessee li The undisputed facts in both the cases is that the jurisdiction of the assessee lies with the ITO, Ward-23(4), Hooghly. The return of income was filed within his 23(4), Hooghly. The return of income was filed within his 23(4), Hooghly. The return of income was filed within his jurisdiction. In both the cases, in the jurisdiction. In both the cases, in the return of income filed, the gross total income is , the gross total income is below Rs.15,00,000/- i.e., Rs.10,07,510/ i.e., Rs.10,07,510/-, in the case of Shri Sanat Kumar Sahana and Shri Sanat Kumar Sahana and Rs. 13,51,310/- in the case of Smt. Dipti Sahana. in the case of Smt. Dipti Sahana. CBDT Instruction No. 1/2011 [F. No. 187/12/2010 CBDT Instruction No. 1/2011 [F. No. 187/12/2010-IT(A-I)], dated 31/01/2011, I)], dated 31/01/2011, reads as follows:-
“Reference have been received by the Board from a large number of taxpayers, especially Reference have been received by the Board from a large number of taxpayers, especially Reference have been received by the Board from a large number of taxpayers, especially from mofussil areas, that the existing monetary limits for assigning cases to ITOs and that the existing monetary limits for assigning cases to ITOs and that the existing monetary limits for assigning cases to ITOs and DCs/ACs is causing hardship o the taxpayers, as it results in transfer of their cases to a DCs/ACs is causing hardship o the taxpayers, as it results in transfer of their cases to a DCs/ACs is causing hardship o the taxpayers, as it results in transfer of their cases to a DC/AC who is located in a different station, which increases their cost of compliance. The DC/AC who is located in a different station, which increases their cost of compliance. The DC/AC who is located in a different station, which increases their cost of compliance. The Board had considered the matter and is of the opinion that the existing limits need to be d considered the matter and is of the opinion that the existing limits need to be d considered the matter and is of the opinion that the existing limits need to be revised to remove the abovementioned hardship. revised to remove the abovementioned hardship. An increase in the monetary limits is also considered desirable in view of the increase in the An increase in the monetary limits is also considered desirable in view of the increase in the An increase in the monetary limits is also considered desirable in view of the increase in the scale of trade and industry sinc scale of trade and industry since 2001, when the present income limits were introduced. It e 2001, when the present income limits were introduced. It has therefore been decided to increase the monetary limits as under: has therefore been decided to increase the monetary limits as under: Income Declared (Mofussil areas) ITOs ACs/DCs ACs/DCs Corporate returns Upto Rs. 20 lacs Above Rs. 20 lacs Above Rs. 20 lacs Non-corporate returns Upto Rs. 10 lacs Above Rs. 15 lacs Above Rs. 15 lacs Metro charges for the purpose of above instructions shall be Ahmedabad, Banagalore, Metro charges for the purpose of above instructions shall be Ahmedabad, Banagalore, Metro charges for the purpose of above instructions shall be Ahmedabad, Banagalore, Chennai, Delhi, Kolkata, Hyderabad, Mumbai and Pune. Chennai, Delhi, Kolkata, Hyderabad, Mumbai and Pune.
3 Assessment Years: 2015-16 Sanat Kumar Sahana Assessment Years: 2015-16 Dipti Kumar Sahana The above instructions are issued in supersession of the earlier instructio The above instructions are issued in supersession of the earlier instructio The above instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1 applicable with effect from 1-4-2011.”
6.1. It is clear from the above circular that the jurisdiction of both the assessees is It is clear from the above circular that the jurisdiction of both the assessees is It is clear from the above circular that the jurisdiction of both the assessees is with the ITO, Ward-23(4), Hooghly. The ITO,Ward 23(4), Hooghly. The ITO,Ward-23(4), Hooghly, has issued a notice 23(4), Hooghly, has issued a notice u/s 143(2) of the Act on 29/07/2016 in the case of Smt. Dipti Sahana and u/s 143(2) of the Act on 29/07/2016 in the case of Smt. Dipti Sahana and u/s 143(2) of the Act on 29/07/2016 in the case of Smt. Dipti Sahana and on 01/08/2016 in the case of Shri Sanat Sahana, as the jurisdiction lied with him. But the 01/08/2016 in the case of Shri Sanat Sahana, as the jurisdiction lied with him. But the 01/08/2016 in the case of Shri Sanat Sahana, as the jurisdiction lied with him. But the assessment in question in both the cases was completed assessment in question in both the cases was completed by the ACIT, Circle by the ACIT, Circle-23(1), Hooghly. The issue is whether the ACIT, Circle Hooghly. The issue is whether the ACIT, Circle-23(1), Hooghly, has jurisdiction to passed 23(1), Hooghly, has jurisdiction to passed the assessment order in question or not. the assessment order in question or not.
The ld. D/R could not produce any order The ld. D/R could not produce any order or circular to prove that there was or circular to prove that there was change in jurisdiction of the officers. Despite being given opportunity, he could not ion of the officers. Despite being given opportunity, he could not ion of the officers. Despite being given opportunity, he could not demonstrate that the ACIT, Circle demonstrate that the ACIT, Circle-23(1), Hooghly, had jurisdiction.
This Bench of the Tribunal in the case of This Bench of the Tribunal in the case of K.A. Wires Ltd. vs. ITO in ITA No. K.A. Wires Ltd. vs. ITO in order dt. 22/01/2020, 1149/Kol/2019, order dt. 22/01/2020, while adjudicating and identical issue on le adjudicating and identical issue on jurisdiction, held as follows: jurisdiction, held as follows:- “6. We have heard rival contentions. On careful consideration of the facts and We have heard rival contentions. On careful consideration of the facts and We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below circumstances of the case, perusal of the papers on record, orders of the authorities below circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows: as well as case law cited, we hold as follows:- 7. The address of the assessee as given The address of the assessee as given in the return of income and as given in the in the return of income and as given in the PAN Card, has not undergone any change for the previous assessment years, this year and PAN Card, has not undergone any change for the previous assessment years, this year and PAN Card, has not undergone any change for the previous assessment years, this year and for the subsequent assessment years. A perusal of the copy of return of income field by the for the subsequent assessment years. A perusal of the copy of return of income field by the for the subsequent assessment years. A perusal of the copy of return of income field by the assessee for the Assessment Yea assessee for the Assessment Year 2010-11, 2011-12, 2012-13 & 2013-14, demonstrate that 14, demonstrate that it was filed with the same address, before the ITO, Ward it was filed with the same address, before the ITO, Ward-8(3), Kolkata. There is no dispute 8(3), Kolkata. There is no dispute that it was only the ITO, Ward that it was only the ITO, Ward-8(3), Kolkata, who had and continued to have the 8(3), Kolkata, who had and continued to have the jurisdiction over the assess jurisdiction over the assessee company. The PAN card also has the same address for all ee company. The PAN card also has the same address for all these years. There is no change in address of the assessee company. these years. There is no change in address of the assessee company. 7.1. It is also not in dispute that the notice u/s 143(2) of the Act dt. 06/08/2013 was It is also not in dispute that the notice u/s 143(2) of the Act dt. 06/08/2013 was It is also not in dispute that the notice u/s 143(2) of the Act dt. 06/08/2013 was issued by the ITO Ward- -33(1), Kolkata. The assessee does not fall under the jurisdiction of e assessee does not fall under the jurisdiction of this officer. A perusal of the order sheet entries demonstrate that, after issuance of notice this officer. A perusal of the order sheet entries demonstrate that, after issuance of notice this officer. A perusal of the order sheet entries demonstrate that, after issuance of notice u/s 143(2) of the Act on 06/08/2013, the ITO, Ward u/s 143(2) of the Act on 06/08/2013, the ITO, Ward- 33(1), Kolkata, transferred the file 33(1), Kolkata, transferred the file to ITO, Ward-8(3), Kolkata on 03/02/2014. Thereafter, ITO, Ward lkata on 03/02/2014. Thereafter, ITO, Ward-8(3), Kolkata, issued 8(3), Kolkata, issued notice u/s 143(1) on 10/10/2014 and completed the assessment u/s 143(3) of the Act on notice u/s 143(1) on 10/10/2014 and completed the assessment u/s 143(3) of the Act on notice u/s 143(1) on 10/10/2014 and completed the assessment u/s 143(3) of the Act on 30/03/2015. The ITO Ward 30/03/2015. The ITO Ward-8(3), Kolkata, who had the jurisdiction over the assessee, did 8(3), Kolkata, who had the jurisdiction over the assessee, did not issue notice u/s 143(2) of the Act to the assessee. The issue before us is whether the u/s 143(2) of the Act to the assessee. The issue before us is whether the u/s 143(2) of the Act to the assessee. The issue before us is whether the non-issual of notice u/s 143(2) of the Act, by the Assessing Officer having jurisdiction over issual of notice u/s 143(2) of the Act, by the Assessing Officer having jurisdiction over issual of notice u/s 143(2) of the Act, by the Assessing Officer having jurisdiction over the assessee makes the assessment bad in law. the assessee makes the assessment bad in law.
4 Assessment Years: 2015-16 Sanat Kumar Sahana Assessment Years: 2015-16 Dipti Kumar Sahana 8. We have heard rival contentions. On car We have heard rival contentions. On careful consideration of the facts and eful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below circumstances of the case, perusal of the papers on record, orders of the authorities below circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows: as well as case law cited, we hold as follows:- 8.1. Jurisdiction of the Income Tax Authorities is conferred by the Board (Ce Jurisdiction of the Income Tax Authorities is conferred by the Board (Ce Jurisdiction of the Income Tax Authorities is conferred by the Board (Central Board of Direct Tax) u/s. 120(1) & (2) of the LT. Act, 1961. The Section reads as follows: Board of Direct Tax) u/s. 120(1) & (2) of the LT. Act, 1961. The Section reads as follows: Board of Direct Tax) u/s. 120(1) & (2) of the LT. Act, 1961. The Section reads as follows: 120. (1) income 120. (1) income-tax authorities shall exercise all or any of the powers and 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 perform all or any of the functions conferred on, or, as the case may be, assigned 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 to such authorities by or under this Act in accordance with such directions as the 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 Board may issue for the exercise' of the powers and performance of the functions Board may issue for the exercise' of the powers and performance of the functions by all or any of those authorities. by all or any of those authorities. Explanation. Explanation. - For the removal of doubts, it is hereby declared that any income declared that any income- tax authority, being an authority higher in rank, may, if so directed by the Board, tax authority, being an authority higher in rank, may, if so directed by the Board, 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 exercise the powers and perform the functions of the income 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 in rank and any such direction issued by the Board shall be deemed in rank and any such direction issued by the Board shall be deemed to be a direction issued under sub direction issued under sub-section (1). (2) The directions of the Board under sub (2) The directions of the Board under sub-section (1) may authorise any other section (1) may authorise any other income-tax authority to issue orders in writing for the exercise of the powers and tax authority to issue orders in writing for the exercise of the powers and tax authority to issue orders in writing for the exercise of the powers and performance of the functions by all or any of performance of the functions by all or any of the other income- tax authorities the other income- tax authorities who are subordinate to it. who are subordinate to it. (3) In issuing the directions or orders referred to in sub (3) In issuing the directions or orders referred to in sub-sections (1) and (2), the sections (1) and (2), the Board or other income Board or other income-tax authority authorised by it may have regard to anyone tax authority authorised by it may have regard to anyone or more of the following crit or more of the following criteria, namely:- (a) territorial area; (a) territorial area; (b) persons or classes of persons; (b) persons or classes of persons; (c) incomes or classes of income; and (c) incomes or classes of income; and (d) cases or classes of cases. (d) cases or classes of cases. (4) Without prejudice to the provisions of sub (4) Without prejudice to the provisions of sub-sections (1) and (2), the Board sections (1) and (2), the Board may, by general or special orde may, by general or special order, and subject to such conditions, restrictions or r, and subject to such conditions, restrictions or limitations as may be specified therein, limitations as may be specified therein, - (a) authorise any 1[Principal Director General or] Director General or [Principal Director General or] Director General or 14[Principal Director or] Director to perform such functions [Principal Director or] Director to perform such functions of any other income-tax authority as may be assigned to him by the Board; signed to him by the Board; (b) empower the 1[Principal Director General or] Director General or [Principal Director General or] Director General or 14[Principal Chief Commissioner or] Chief Commissioner or [Principal Chief Commissioner or] Chief Commissioner or 14[Principal Commissioner or] Commissioner to issue orders in writing that the Commissioner or] Commissioner to issue orders in writing that the powers and functions conferred on, or as the case may be, assigned to, powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in respect of any speci the Assessing Officer by or under this Act in respect of any specified area or persons or classes of persons or incomes or classes of income or cases or persons or classes of persons or incomes or classes of income or cases or classes of cases, shall be exercised or performed by rcised or performed by an Additional Commissioner or an Additional Director or a Joint Commissioner or a Commissioner or an Additional Director or a Joint Commissioner or a Joint Director, and, where any order is made under this clause, Joint Director, and, where any order is made under this clause, Joint Director, and, where any order is made under this clause, references in any other provision of this Act, or in any rule made references in any other provision of this Act, or in any rule made thereunder to the Assessing Officer shall be deemed to be references to sessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint such Additional Commissioner or Additional Director or Joint Commissioner or Joint Director by whom the powers and functions are to Commissioner or Joint Director by whom the powers and functions are to be exercised or performed under such order, and any provision of this be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the Joint Commissioner shall not t requiring approval or sanction of the Joint Commissioner shall not apply.
5 Assessment Years: 2015-16 Sanat Kumar Sahana Assessment Years: 2015-16 Dipti Kumar Sahana (5) The directions and orders referred to in sub (5) The directions and orders referred to in sub-sections (1) and (2) may, sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the wherever considered necessary or appropriate for the proper management of the wherever considered necessary or appropriate for the proper management of the work, require two or more A work, require two or more Assessing Officers (whether or not of the same class) to ssessing Officers (whether or not of the same class) to exercise and perform, concurrently, the powers and functions in respect of any exercise and perform, concurrently, the powers and functions in respect of any exercise and perform, concurrently, the powers and functions in respect of any area or persons or classes of persons or incomes or classes of income or cases or area or persons or classes of persons or incomes or classes of income or cases or area or persons or classes of persons or incomes or classes of income or cases or classes of cases; and, where such power classes of cases; and, where such powers and functions are exercised and s and functions are exercised and performed concurrently by the performed concurrently by the Assessing Officers of different classes, any sessing Officers of different classes, any authority lower in rank amongst them shall exercise the powers and perform the authority lower in rank amongst them shall exercise the powers and perform the authority lower in rank amongst them shall exercise the powers and perform the functions as any higher authority amongst them may direct, and, fu functions as any higher authority amongst them may direct, and, fu functions as any higher authority amongst them may direct, and, further, references in any other provision of this Act or in any rule made thereunder to the references in any other provision of this Act or in any rule made thereunder to the references in any other provision of this Act or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such higher authority and Assessing Officer shall be deemed to be references to such higher authority and Assessing Officer shall be deemed to be references to such higher authority and any provision of this Act requiring approval or sanction of any such authority any provision of this Act requiring approval or sanction of any such authority any provision of this Act requiring approval or sanction of any such authority shall not apply. not apply. (6) Notwithstanding anything contained in any direction or order issued under (6) Notwithstanding anything contained in any direction or order issued under (6) Notwithstanding anything contained in any direction or order issued under this section, or in this section, or in section 124, the Board may, by notification in the Official , the Board may, by notification in the Official Gazette, direct that for the purpose of furnishing of the return of income or the Gazette, direct that for the purpose of furnishing of the return of income or the Gazette, direct that for the purpose of furnishing of the return of income or the doing of any other act or thing under this Act or any rule made thereunder by any doing of any other act or thing under this Act or any rule made thereunder by any doing of any other act or thing under this Act or any rule made thereunder by any person or class of persons, the income person or class of persons, the income-tax authority exercising and performing authority exercising and performing the powers and functions in relation to the said person or class of persons shall be the powers and functions in relation to the said person or class of persons shall be the powers and functions in relation to the said person or class of persons shall be such authority as may be specified in the notification. such authority as may be specified in the notification. 8.2. From a plain reading of the above, it is clear that u/s 120(1) of the Act, From a plain reading of the above, it is clear that u/s 120(1) of the Act, From a plain reading of the above, it is clear that u/s 120(1) of the Act, the Income Tax Authorities will have to exercise Acts only in accordance with the jurisdiction Income Tax Authorities will have to exercise Acts only in accordance with the jurisdiction Income Tax Authorities will have to exercise Acts only in accordance with the jurisdiction conferred by the Board. U/s 120(3) of the Act, such powers can be conferred by the Board conferred by the Board. U/s 120(3) of the Act, such powers can be conferred by the Board conferred by the Board. U/s 120(3) of the Act, such powers can be conferred by the Board having regard to the territorial area, class of person, income or class having regard to the territorial area, class of person, income or class having regard to the territorial area, class of person, income or class of the cases. The CBDT under sec. 120(5) of the Act, can also confer jurisdiction on two or more Assessing CBDT under sec. 120(5) of the Act, can also confer jurisdiction on two or more Assessing CBDT under sec. 120(5) of the Act, can also confer jurisdiction on two or more Assessing Officers (concurrent jurisdiction). The CBDT can also by notification confer powers on the Officers (concurrent jurisdiction). The CBDT can also by notification confer powers on the Officers (concurrent jurisdiction). The CBDT can also by notification confer powers on the authorities for the purpose of assessment as may be notif authorities for the purpose of assessment as may be notified in the notification. This shows ied in the notification. This shows that concurrent jurisdiction can be exercised only when CBDT confers such jurisdiction that concurrent jurisdiction can be exercised only when CBDT confers such jurisdiction that concurrent jurisdiction can be exercised only when CBDT confers such jurisdiction u/s 120(4) and 120(5) of the Act. u/s 120(4) and 120(5) of the Act. 8.3. In accordance with the powers conferred u/s. 120 (1) and 120(2) of the Act, the In accordance with the powers conferred u/s. 120 (1) and 120(2) of the Act, the In accordance with the powers conferred u/s. 120 (1) and 120(2) of the Act, the CBDT issued notification on no. 191/2002(F.No.187/9/2002 notification on no. 191/2002(F.No.187/9/2002-ITA-1 dated 30.7.2002) 1 dated 30.7.2002) whereby the CBDT conferred the jurisdiction by specifying the Designation of the specific whereby the CBDT conferred the jurisdiction by specifying the Designation of the specific whereby the CBDT conferred the jurisdiction by specifying the Designation of the specific Income Tax Authorities, its Head Quarters, Territorial Area, Persons or classes of persons Income Tax Authorities, its Head Quarters, Territorial Area, Persons or classes of persons Income Tax Authorities, its Head Quarters, Territorial Area, Persons or classes of persons and cases or class of cases. es or class of cases. 8.4. As per the above referred notification, the assessee's being a company, the case As per the above referred notification, the assessee's being a company, the case As per the above referred notification, the assessee's being a company, the case fell under the jurisdiction of Commissioner of Income Tax, Kolkata fell under the jurisdiction of Commissioner of Income Tax, Kolkata-III, Kolkata vide serial III, Kolkata vide serial no. 205 of the notification. The jurisdiction of the as no. 205 of the notification. The jurisdiction of the assessee fell with the Assessing Officer sessee fell with the Assessing Officer being ITO ward 8(3), Kolkata, who was under the charge of Commissioner of Income tax being ITO ward 8(3), Kolkata, who was under the charge of Commissioner of Income tax being ITO ward 8(3), Kolkata, who was under the charge of Commissioner of Income tax - Kolkata III. 8.5. The Authorities under the Income Tax, after the jurisdiction is conferred in them The Authorities under the Income Tax, after the jurisdiction is conferred in them The Authorities under the Income Tax, after the jurisdiction is conferred in them by virtue of notification u/s 1 by virtue of notification u/s 120(1) and 120(2) of the Act, have to perform their functions 20(1) and 120(2) of the Act, have to perform their functions as per sec. 124 of the Act. Section 124 of the Act, reads as under: as per sec. 124 of the Act. Section 124 of the Act, reads as under: 124. (1) Where by virtue of any direction or order issued under sub (1) Where by virtue of any direction or order issued under sub (1) Where by virtue of any direction or order issued under sub-section (1) or sub-section (2) of section 120, the Assessin section (2) of section 120, the Assessing Officer has been vested with g Officer has been vested with jurisdiction over any area, within the limits of such area, he shall have jurisdiction over any area, within the limits of such area, he shall have jurisdiction over any area, within the limits of such area, he shall have jurisdiction jurisdiction- (a) in respect of any person carrying on a business or profession, if the (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 situ 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 the area, or where his business or profession is carried on in more places 6 Assessment Years: 2015-16 Sanat Kumar Sahana Assessment Years: 2015-16 Dipti Kumar Sahana than one, if the principal place of his business or profession is situate pal place of his business or profession is situate within the area, and (b) in respect of any other person residing within the area. (b) in respect of any other person residing within the area. (2) Where a q (2) Where a question arises under this section as to whether an Assessing Officer uestion arises under this section as to whether an Assessing Officer has jurisdiction to assess any person, the question shall be determined by the has jurisdiction to assess any person, the question shall be determined by the has jurisdiction to assess any person, the question shall be determined by the Principal Director General or Director General or the Principal Chief Principal Director General or Director General or the Principal Chief Principal Director General or Director General or the Principal Chief Commissioner or Chief Commissioner or Commissioner or Chief Commissioner or the Principal Commissioner or the Principal Commissioner or Commissioner; or where the question is one relating to areas within the Commissioner; or where the question is one relating to areas within the Commissioner; or where the question is one relating to areas within the jurisdiction of different Principal Director General or Directors General or jurisdiction of different Principal Director General or Directors General or jurisdiction of different Principal Director General or Directors General or Principal Principal Principal Chief Chief Chief Commissioners Commissioners Commissioners or] or] or] Chief Chief Chief Commissioners Commissioners Commissioners or or or Principal Principal Principal Commission Commissioners or Commissioners, by the Principal Director General or Directors ers or Commissioners, by the Principal Director General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal General or Principal Chief Commissioners or Chief Commissioners or Principal General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or] Commissioners concerned or, if they are not in agreement, by Commissioners or] Commissioners concerned or, if they are not in agreement, by Commissioners or] Commissioners concerned or, if they are not in agreement, by the Board or by such Principal the Board or by such Principal Director General or] Director General or Principal Director General or] Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Chief Commissioner or Chief Commissioner or Principal Commissioner or Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as the Board may, by notification in the Official Gazette, specify. Commissioner as the Board may, by notification in the Official Gazette, specify. Commissioner as the Board may, by notification in the Official Gazette, specify. (3) No person shall be entitled to call in question th (3) No person shall be entitled to call in question the jurisdic e jurisdiction of an Assessing Officer- (a) where he has made a return under sub (a) where he has made a return under sub-section (1) of section 115WD section 115WD or under sub-section (1) of section (1) of section 139, after the expiry of one month from the date on , after the expiry of one month from the date on which he was served with which he was served with a notice under sub-section (1) of f section 142 or sub- section (2) of section 115WE or sub section (2) of section 115WE or sub-section (2) of section 143 section 143 or after the completion of the assessment, whichever is earlier; completion of the assessment, whichever is earlier; (b) where he has made no such return, after the expiry of the time allowed by the (b) where he has made no such return, after the expiry of the time allowed by the (b) where he has made no such return, after the expiry of the time allowed by the notice under sub notice under sub-section (2) of section 115WD or sub-section (1) of section (1) of section 142 or under sub under sub-section (1) of section 115WH or under section 148 for the making of or under section 148 for the making of the return or the return or by the notice under the first proviso to section 115WF section 115WF or under the first proviso to first proviso to section 144 to show cause why the assessment should not be to show cause why the assessment should not be completed to the best of the judg completed to the best of the judgment of the Assessing Officer, whichever is ment of the Assessing Officer, whichever is earlier. (c) where an action has (c) where an action has been taken under section 132 or section 132A section 132A, after the expiry of one month from the date on which he was served with a notice under expiry of one month from the date on which he was served with a notice under expiry of one month from the date on which he was served with a notice under subsection (1) of subsection (1) of section 153A or sub-section (2) of section 153C section 153C or after the completion of the assessment, whichever is e completion of the assessment, whichever is earlier. (4) Subject to the provisions of sub (4) Subject to the provisions of sub-section (3), where an asses section (3), where an assessee calls in question the jurisdiction of an question the jurisdiction of an Assessing Officer, then the Assessing Officer shall, if Assessing Officer, then the Assessing Officer shall, if not satisfied with the correctness of the claim, refer the matter for determinat not satisfied with the correctness of the claim, refer the matter for determinat not satisfied with the correctness of the claim, refer the matter for determination under sub under sub-section (2) before the assessment is made. (5) Notwithstanding anything contained in this section or in any direction or (5) Notwithstanding anything contained in this section or in any direction or (5) Notwithstanding anything contained in this section or in any direction or order issued under order issued under section 120, every Assessing Officer shall have all the powers , every Assessing Officer shall have all the powers conferred by or under this Act on an As conferred by or under this Act on an Assessing Officer in respect of the income sessing Officer in respect of the income accruing or arising or received within the area, if any, over which he has been accruing or arising or received within the area, if any, over which he has been 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 vested with jurisdiction by virtue of the directions or orders issued under sub vested with jurisdiction by virtue of the directions or orders issued under sub- section (1) or sub section (1) or sub-section (2) of section 120.. 8.6. The clear and unambiguous words used in section 124(1) of the Act, are that the e clear and unambiguous words used in section 124(1) of the Act, are that the e clear and unambiguous words used in section 124(1) of the Act, are that the Assessing Officer should be vested with the Jurisdiction by virtue of an order, notification Assessing Officer should be vested with the Jurisdiction by virtue of an order, notification Assessing Officer should be vested with the Jurisdiction by virtue of an order, notification or directions issued u/s. 120(1) or u/s. 120(2) of the Act. Therefore, only the Offic or directions issued u/s. 120(1) or u/s. 120(2) of the Act. Therefore, only the Offic or directions issued u/s. 120(1) or u/s. 120(2) of the Act. Therefore, only the Officer who has been vested with the jurisdiction conferred u/s 120(1) and 120(2) of the Act can act has been vested with the jurisdiction conferred u/s 120(1) and 120(2) of the Act can act has been vested with the jurisdiction conferred u/s 120(1) and 120(2) of the Act can act as Assessing Officer and issue notice under sec. 143(2) of the Act, since “he shall have as Assessing Officer and issue notice under sec. 143(2) of the Act, since “he shall have as Assessing Officer and issue notice under sec. 143(2) of the Act, since “he shall have jurisdiction” are the words as has been used in sec. 124(1) of the Act. jurisdiction” are the words as has been used in sec. 124(1) of the Act.
7 Assessment Years: 2015-16 Sanat Kumar Sahana Assessment Years: 2015-16 Dipti Kumar Sahana 8.7. Even though the Assessing Officer have been vested with the Jurisdiction u/ s. Even though the Assessing Officer have been vested with the Jurisdiction u/ s. Even though the Assessing Officer have been vested with the Jurisdiction u/ s. 124(1) of the Act, by the Board, yet the assessee may dispute such jurisdiction vested u/s 124(1) of the Act, by the Board, yet the assessee may dispute such jurisdiction vested u/s 124(1) of the Act, by the Board, yet the assessee may dispute such jurisdiction vested u/s 124(1) of the Act, in the Assessing Officer. Such dispute can be raised u/s. 12 124(1) of the Act, in the Assessing Officer. Such dispute can be raised u/s. 12 124(1) of the Act, in the Assessing Officer. Such dispute can be raised u/s. 124(3) of the Act, within one month of the issue of notice u/s. 143(2) of the Act. This sub section, Act, within one month of the issue of notice u/s. 143(2) of the Act. This sub section, Act, within one month of the issue of notice u/s. 143(2) of the Act. This sub section, therefore, clearly stipulates that the assessee can dispute the jurisdiction of the Assessing therefore, clearly stipulates that the assessee can dispute the jurisdiction of the Assessing therefore, clearly stipulates that the assessee can dispute the jurisdiction of the Assessing Officer to issue notice even though such jurisdiction was veste Officer to issue notice even though such jurisdiction was vested in him by the direction or d in him by the direction or order issued u/ s. 120(1) or 120(2) of the Act, for some reasons. order issued u/ s. 120(1) or 120(2) of the Act, for some reasons. 8.8. In this case, the jurisdiction of the assessee was never vested with the Assessing In this case, the jurisdiction of the assessee was never vested with the Assessing In this case, the jurisdiction of the assessee was never vested with the Assessing Officer, Ward 33(1) , (non corporate assessee ward) who issued notice u/s. 143(2) of the (non corporate assessee ward) who issued notice u/s. 143(2) of the (non corporate assessee ward) who issued notice u/s. 143(2) of the Act. In fact, the assessee also filed return before ITO, Ward Act. In fact, the assessee also filed return before ITO, Ward-8(3), KoIkata who was having 8(3), KoIkata who was having jurisdiction over the assessee as per the Boards Notification, which fact is evident from the jurisdiction over the assessee as per the Boards Notification, which fact is evident from the jurisdiction over the assessee as per the Boards Notification, which fact is evident from the copy of acknowledgements of return of income for the last few years. The notice under sec. y of acknowledgements of return of income for the last few years. The notice under sec. y of acknowledgements of return of income for the last few years. The notice under sec. 143(2), however, was issued in this case by ITO, Ward 33(1), Kol who has not been vested 143(2), however, was issued in this case by ITO, Ward 33(1), Kol who has not been vested 143(2), however, was issued in this case by ITO, Ward 33(1), Kol who has not been vested with the jurisdiction over the assessee company by CBDT. with the jurisdiction over the assessee company by CBDT. 8.9. Under the scheme Under the scheme of “e” filing of return, the assessee has to fill PAN on the return. of “e” filing of return, the assessee has to fill PAN on the return. It has to also fill its address and some of the details are picked It has to also fill its address and some of the details are picked-up by the assesse. If the up by the assesse. If the Department's system fails to correctly transfer the return to the jurisdictional Assessing Department's system fails to correctly transfer the return to the jurisdictional Assessing Department's system fails to correctly transfer the return to the jurisdictional Assessing Officer and transfer the same to a Assessing Officer though who has no jurisdiction as per ficer and transfer the same to a Assessing Officer though who has no jurisdiction as per ficer and transfer the same to a Assessing Officer though who has no jurisdiction as per the CBDT's notification, such mistake cannot confer the jurisdiction on such an Assessing the CBDT's notification, such mistake cannot confer the jurisdiction on such an Assessing the CBDT's notification, such mistake cannot confer the jurisdiction on such an Assessing Officer. Jurisdiction can be conferred only by notification u/ s 120(1) and 1 Officer. Jurisdiction can be conferred only by notification u/ s 120(1) and 1 Officer. Jurisdiction can be conferred only by notification u/ s 120(1) and 120(2) of the Act only. 8.10. The Ld DR submitted that there was transfer order of the assessee’s case for the The Ld DR submitted that there was transfer order of the assessee’s case for the The Ld DR submitted that there was transfer order of the assessee’s case for the assessment year in question, from ITO Ward 33(1) to ITO Ward 8(3). There can be a valid assessment year in question, from ITO Ward 33(1) to ITO Ward 8(3). There can be a valid assessment year in question, from ITO Ward 33(1) to ITO Ward 8(3). There can be a valid transfer order from ITO Ward 33(1) only if he was vested transfer order from ITO Ward 33(1) only if he was vested with the jurisdiction over the with the jurisdiction over the assessee. As he was never vested with the jurisdiction either by the notification of the assessee. As he was never vested with the jurisdiction either by the notification of the assessee. As he was never vested with the jurisdiction either by the notification of the CBDT or by any order of the Commissioner of Income tax earlier to the issue of notice u/ s CBDT or by any order of the Commissioner of Income tax earlier to the issue of notice u/ s CBDT or by any order of the Commissioner of Income tax earlier to the issue of notice u/ s 143(2) of the Act, he could not have validly 143(2) of the Act, he could not have validly transferred the case to ITO, Ward transferred the case to ITO, Ward-8(3), Kolkata. The file/case was restored to its jurisdictional area. When the said ITO Ward Kolkata. The file/case was restored to its jurisdictional area. When the said ITO Ward Kolkata. The file/case was restored to its jurisdictional area. When the said ITO Ward 33(1) was not having valid jurisdiction at the time of issue of notice u/ s 143(2) of the Act, 33(1) was not having valid jurisdiction at the time of issue of notice u/ s 143(2) of the Act, 33(1) was not having valid jurisdiction at the time of issue of notice u/ s 143(2) of the Act, then the notice is bad in law. The then the notice is bad in law. The transfer of the folder from ITO Ward 33(1) to ITO Ward transfer of the folder from ITO Ward 33(1) to ITO Ward 8(3) in fact establishes that the revenue realised that the ITO Ward 33(1) had no 8(3) in fact establishes that the revenue realised that the ITO Ward 33(1) had no 8(3) in fact establishes that the revenue realised that the ITO Ward 33(1) had no jurisdiction. 8.11. The Ld DR also raised the issue that u/s 120(4) and 124(5) of the Act, there can be The Ld DR also raised the issue that u/s 120(4) and 124(5) of the Act, there can be The Ld DR also raised the issue that u/s 120(4) and 124(5) of the Act, there can be concurrent jurisdiction. There is no dispute over that. However there is no direction or risdiction. There is no dispute over that. However there is no direction or risdiction. There is no dispute over that. However there is no direction or order or notification u/ s 120(1) or 120(2) of the Act, conferring concurrent jurisdiction order or notification u/ s 120(1) or 120(2) of the Act, conferring concurrent jurisdiction order or notification u/ s 120(1) or 120(2) of the Act, conferring concurrent jurisdiction to the ITO Ward 33(1) along with ITO Ward 8(3) u/ s 120(1) or u/ s 120(2) of the Act, to the ITO Ward 33(1) along with ITO Ward 8(3) u/ s 120(1) or u/ s 120(2) of the Act, to the ITO Ward 33(1) along with ITO Ward 8(3) u/ s 120(1) or u/ s 120(2) of the Act, which is the condition mentioned in section 120(4) and 120(5) of the Act. ch is the condition mentioned in section 120(4) and 120(5) of the Act. ch is the condition mentioned in section 120(4) and 120(5) of the Act. 8.12. The Ld DR for the purpose of his submission also read out para 19 of the decision The Ld DR for the purpose of his submission also read out para 19 of the decision The Ld DR for the purpose of his submission also read out para 19 of the decision of ITAT in the case of Rungata Irrigation in ITA No 1224/K/2019 dated 6.9.2019. The said of ITAT in the case of Rungata Irrigation in ITA No 1224/K/2019 dated 6.9.2019. The said of ITAT in the case of Rungata Irrigation in ITA No 1224/K/2019 dated 6.9.2019. The said decisions is in favour of the assessee. The Ld CIT(DR) has relied on para 19 which is in fact s is in favour of the assessee. The Ld CIT(DR) has relied on para 19 which is in fact s is in favour of the assessee. The Ld CIT(DR) has relied on para 19 which is in fact in favour the assessee. The Tribunal has fully analyzed the entire provisions of section in favour the assessee. The Tribunal has fully analyzed the entire provisions of section in favour the assessee. The Tribunal has fully analyzed the entire provisions of section 120, 124 and 127 of the Act, in para 13, 14,15,17, 18, 21 of the order with regar 120, 124 and 127 of the Act, in para 13, 14,15,17, 18, 21 of the order with regar 120, 124 and 127 of the Act, in para 13, 14,15,17, 18, 21 of the order with regard to the issue of vesting of jurisdiction and transfer etc and held that the issue of notice by non issue of vesting of jurisdiction and transfer etc and held that the issue of notice by non issue of vesting of jurisdiction and transfer etc and held that the issue of notice by non- jurisdictional AO was bad in law and without jurisdiction. jurisdictional AO was bad in law and without jurisdiction. 8.13. The Ld DR argued that the assessee did not dispute the jurisdiction u/ s 124(3) of The Ld DR argued that the assessee did not dispute the jurisdiction u/ s 124(3) of The Ld DR argued that the assessee did not dispute the jurisdiction u/ s 124(3) of the Act and hence by not disputing the same, the right to challenge the jurisdiction is lost and hence by not disputing the same, the right to challenge the jurisdiction is lost and hence by not disputing the same, the right to challenge the jurisdiction is lost forever. This would have been so, had the ITO, Ward forever. This would have been so, had the ITO, Ward-33(1), Kolkata, had original 33(1), Kolkata, had original 8 Assessment Years: 2015-16 Sanat Kumar Sahana Assessment Years: 2015-16 Dipti Kumar Sahana jurisdiction over the assessee. This is not the case. When an authority does not have jurisdiction over the assessee. This is not the case. When an authority does not have jurisdiction over the assessee. This is not the case. When an authority does not have jurisdiction, then the act done by such authority is bad in law and is void ab isdiction, then the act done by such authority is bad in law and is void ab isdiction, then the act done by such authority is bad in law and is void ab-initio 8.14. This issue came up for consideration in the following cases: This issue came up for consideration in the following cases: (i) Rungta Irrigation Ltd. referred to above with relevant paragraphs and (i) Rungta Irrigation Ltd. referred to above with relevant paragraphs and (i) Rungta Irrigation Ltd. referred to above with relevant paragraphs and paragraph 36. (ii) Smriti Kedia Calcutta High Court 339 ITR page 37 a Calcutta High Court 339 ITR page 37 (iii) Indorama Software Solutions Ltd. Mumbai Bench ITA No. 5211 and (iii) Indorama Software Solutions Ltd. Mumbai Bench ITA No. 5211 and (iii) Indorama Software Solutions Ltd. Mumbai Bench ITA No. 5211 and 5290(Mum) of 2011 dated 7.9.2012 5290(Mum) of 2011 dated 7.9.2012 8.15. In the case of Mahalchand Motilal Kothari & Co (ITA No. 1851/1852/Kolj2002, In the case of Mahalchand Motilal Kothari & Co (ITA No. 1851/1852/Kolj2002, In the case of Mahalchand Motilal Kothari & Co (ITA No. 1851/1852/Kolj2002, ITAT, D-Bench, Kol dated 28.7.2006 wherein the Tribunal considered the notification dated 28.7.2006 wherein the Tribunal considered the notification dated 28.7.2006 wherein the Tribunal considered the notification dated 30.7.2002 and held that after issue of the notification the Assessing Officer who was dated 30.7.2002 and held that after issue of the notification the Assessing Officer who was dated 30.7.2002 and held that after issue of the notification the Assessing Officer who was earlier vested the jurisdiction lost the jurisdiction and even though the order of the CIT(A) earlier vested the jurisdiction lost the jurisdiction and even though the order of the CIT(A) earlier vested the jurisdiction lost the jurisdiction and even though the order of the CIT(A) was received by him at the time when he was having jurisdiction, yet the Assessing Officer received by him at the time when he was having jurisdiction, yet the Assessing Officer received by him at the time when he was having jurisdiction, yet the Assessing Officer who has been divested of the jurisdiction on 30.7.2002 cannot file the appeal after the said who has been divested of the jurisdiction on 30.7.2002 cannot file the appeal after the said who has been divested of the jurisdiction on 30.7.2002 cannot file the appeal after the said date. In that case even the authorization was also granted for filing the ap date. In that case even the authorization was also granted for filing the ap date. In that case even the authorization was also granted for filing the appeal by the CIT- XIII, Kolkata who lost the jurisdiction after the notification. In that case after the XIII, Kolkata who lost the jurisdiction after the notification. In that case after the XIII, Kolkata who lost the jurisdiction after the notification. In that case after the dismissal of the appeal of the Department by the Tribunal on the aforesaid ground of dismissal of the appeal of the Department by the Tribunal on the aforesaid ground of dismissal of the appeal of the Department by the Tribunal on the aforesaid ground of jurisdiction, the Revenue filed an appeal before the Hon'ble High Co jurisdiction, the Revenue filed an appeal before the Hon'ble High Court but the same was urt but the same was dismissed. The Revenue thereafter came up with condonation petition and a filed fresh dismissed. The Revenue thereafter came up with condonation petition and a filed fresh dismissed. The Revenue thereafter came up with condonation petition and a filed fresh appeal before the ITAT but the same was also dismissed in ITA No. 1768 and appeal before the ITAT but the same was also dismissed in ITA No. 1768 and appeal before the ITAT but the same was also dismissed in ITA No. 1768 and 1769/Kol/2006, B-Bench on 15.9.2014. The Revenue filed an appeal before th Bench on 15.9.2014. The Revenue filed an appeal before th Bench on 15.9.2014. The Revenue filed an appeal before the Hon'ble High Court which was dismissed with the following observations: High Court which was dismissed with the following observations: "The appeal carried by theACIT "The appeal carried by theACIT-39 to the Appellate Tribunal was 39 to the Appellate Tribunal was dismissed as not competent. The order of the Appellate Tribunal was dismissed as not competent. The order of the Appellate Tribunal was dismissed as not competent. The order of the Appellate Tribunal was challenged by the Revenue in this Court. This Cou challenged by the Revenue in this Court. This Court did not interfere with rt did not interfere with the order of the Tribunal and the matter rested there without this Court's the order of the Tribunal and the matter rested there without this Court's the order of the Tribunal and the matter rested there without this Court's order being challenged by the Revenue before the Supreme Court. In the order being challenged by the Revenue before the Supreme Court. In the order being challenged by the Revenue before the Supreme Court. In the present case, the matter pertains to the same assessment year when the present case, the matter pertains to the same assessment year when the present case, the matter pertains to the same assessment year when the ITO-44 has pr 44 has preferred an appeal where the initial assessment was not done eferred an appeal where the initial assessment was not done by the ITO by the ITO-44 but such assessment 'was conducted by the ACIT 44 but such assessment 'was conducted by the ACIT-39 at a point of time when AC1T point of time when AC1T-39 lost jurisdiction over the assessee pursuant to 39 lost jurisdiction over the assessee pursuant to the said CBOT Notification 2002 the said CBOT Notification 2002 Since there was a f Since there was a fundamental error, the Appellate Tribunal dismissed the undamental error, the Appellate Tribunal dismissed the appeal as incompetent since the order of the Assessing Officer who had no appeal as incompetent since the order of the Assessing Officer who had no appeal as incompetent since the order of the Assessing Officer who had no jurisdiction to undertake the assessment qua the assessee could never jurisdiction to undertake the assessment qua the assessee could never jurisdiction to undertake the assessment qua the assessee could never have been found to be legal or resurrected." have been found to be legal or resurrected." 8.16. While deciding the issue in the case of Mahalchand Motilal Kothari & Co., (supra) e deciding the issue in the case of Mahalchand Motilal Kothari & Co., (supra) e deciding the issue in the case of Mahalchand Motilal Kothari & Co., (supra) the ITAT relied on the Judgement of Calcutta High Court in the case of “West Bengal State the ITAT relied on the Judgement of Calcutta High Court in the case of “West Bengal State the ITAT relied on the Judgement of Calcutta High Court in the case of “West Bengal State Electricity Board” 278 ITR 218. In that case the Hon'ble Calcutta High Court held that Electricity Board” 278 ITR 218. In that case the Hon'ble Calcutta High Court held that Electricity Board” 278 ITR 218. In that case the Hon'ble Calcutta High Court held that jurisdiction cannot be conferred by default or by agreement and the decision without urisdiction cannot be conferred by default or by agreement and the decision without urisdiction cannot be conferred by default or by agreement and the decision without jurisdiction is a nullity. The Hon'ble High Court also relied on a number of Judgements jurisdiction is a nullity. The Hon'ble High Court also relied on a number of Judgements jurisdiction is a nullity. The Hon'ble High Court also relied on a number of Judgements while arriving at such a conclusion. while arriving at such a conclusion. 8.17. The Hon'ble Allahabad High Court in the The Hon'ble Allahabad High Court in the case of V.P. Electronics Corporation Ltd case of V.P. Electronics Corporation Ltd in ITA No. 79 of 2015 dated 1.3.2017 has also taken similar view wherein the provisions of in ITA No. 79 of 2015 dated 1.3.2017 has also taken similar view wherein the provisions of in ITA No. 79 of 2015 dated 1.3.2017 has also taken similar view wherein the provisions of sec. 124(3) were also referred to. It was held that when the notice was not issued by the sec. 124(3) were also referred to. It was held that when the notice was not issued by the sec. 124(3) were also referred to. It was held that when the notice was not issued by the 9 Assessment Years: 2015-16 Sanat Kumar Sahana Assessment Years: 2015-16 Dipti Kumar Sahana competent authority, i.e an Assess competent authority, i.e an Assessing Officer having jurisdiction, then the assessment is a ing Officer having jurisdiction, then the assessment is a nullity. 8.18. In the case of Deepchand Kothari reported in 171 ITR 381(Raj) it was held that In the case of Deepchand Kothari reported in 171 ITR 381(Raj) it was held that In the case of Deepchand Kothari reported in 171 ITR 381(Raj) it was held that the Assessing Officer who was having no jurisdiction to initiate the proceedings then such the Assessing Officer who was having no jurisdiction to initiate the proceedings then such the Assessing Officer who was having no jurisdiction to initiate the proceedings then such proceedings are ab-intio- void. Further the Hon’ble High Court relying on the Judgement intio- void. Further the Hon’ble High Court relying on the Judgement intio- void. Further the Hon’ble High Court relying on the Judgement of the Hon'ble Supreme Court in the case of Kiran Singh Vs Chaman Paswan, it was held of the Hon'ble Supreme Court in the case of Kiran Singh Vs Chaman Paswan, it was held of the Hon'ble Supreme Court in the case of Kiran Singh Vs Chaman Paswan, it was held that the Jurisdictional issue can be taken up at any stage of the proceedings, even at the that the Jurisdictional issue can be taken up at any stage of the proceedings, even at the that the Jurisdictional issue can be taken up at any stage of the proceedings, even at the time of execution of decree. me of execution of decree. 8.19. The ITAT, Kolkata in the case of Ganesh Reality and Mall in ITA No. 581/Kol/2017 The ITAT, Kolkata in the case of Ganesh Reality and Mall in ITA No. 581/Kol/2017 The ITAT, Kolkata in the case of Ganesh Reality and Mall in ITA No. 581/Kol/2017 held that if no jurisdiction was conferred on a particular authority the issue of notice or held that if no jurisdiction was conferred on a particular authority the issue of notice or held that if no jurisdiction was conferred on a particular authority the issue of notice or completion of assessment by such authority is ill completion of assessment by such authority is illegal. 8.20. In the case of P.V. Doshi Vs CIT the Gujarat High Court held that the jurisdictional In the case of P.V. Doshi Vs CIT the Gujarat High Court held that the jurisdictional In the case of P.V. Doshi Vs CIT the Gujarat High Court held that the jurisdictional issue can be taken up at any stage of the proceedings. issue can be taken up at any stage of the proceedings. 8.21. In the case of Rajmandir Estates (386 ITR 162) the Hon'ble Calcutta High Court In the case of Rajmandir Estates (386 ITR 162) the Hon'ble Calcutta High Court In the case of Rajmandir Estates (386 ITR 162) the Hon'ble Calcutta High Court held that if the Commissioner Income tax issuing notice u/ s. 263 has lost the Jurisdiction Commissioner Income tax issuing notice u/ s. 263 has lost the Jurisdiction Commissioner Income tax issuing notice u/ s. 263 has lost the Jurisdiction then the notice and order issued by him is a nullity. then the notice and order issued by him is a nullity. 8.22. The Lucknow Bench of the ITAT in ITA No. 89 and 90/LKW /2015 dated 16.4.2015 The Lucknow Bench of the ITAT in ITA No. 89 and 90/LKW /2015 dated 16.4.2015 The Lucknow Bench of the ITAT in ITA No. 89 and 90/LKW /2015 dated 16.4.2015 in the case of Md Rizwan held that notice in the case of Md Rizwan held that notice u/ s 143(2) issued by non u/ s 143(2) issued by non-jurisdictional Assessing Officer is a nullity. Assessing Officer is a nullity. 8.23. Same view have been taken a number of other cases some of which are under: Same view have been taken a number of other cases some of which are under: Same view have been taken a number of other cases some of which are under:-
1. 1. A.L. Ahuja v/s. DCIT 1. A.L. Ahuja v/s. DCIT If at the time of issue of notice u/s. If at the time of issue of notice u/s. 158BC the SOT (2003) page 475 at page 480 SOT (2003) page 475 at page 480 Assessing Officer had no jurisdiction the Assessing Officer had no jurisdiction the assessment is illegal. assessment is illegal.
2. Income Tax officer vs. Sarkar & Co. 1954 AIR 2. Income Tax officer vs. Sarkar & Co. 1954 AIR If at the time of filing, of the appeal the ITO had If at the time of filing, of the appeal the ITO had 613 Calcutta. no seisin over he assessee’s case and case is no seisin over he assessee’s case and case is transferred by the transferred by the Commissioner of Income Tax from ITO Ward-III(2) to some other Officer, on III(2) to some other Officer, on the date of filing of the Appeal, the ITO Ward the date of filing of the Appeal, the ITO Ward III(2) cannot file the Appeal and the appeal of III(2) cannot file the Appeal and the appeal of the department rightly dismissed by the ITAT. the department rightly dismissed by the ITAT.
3. Ram Krishna Ramnath vs. Commissioner 3. Ram Krishna Ramnath vs. Commissioner of When by notification dated 28 When by notification dated 28th March, 1923 Income Tax AIR 1932 Page 65 Nagpur Income Tax AIR 1932 Page 65 Nagpur the powers conferred on the ITO should be the powers conferred on the ITO should be exercised by the ACIT the Notice issued by the exercised by the ACIT the Notice issued by the ITO was illegal 4. CIT West Bengal and another vs. Anil Kumar 4. CIT West Bengal and another vs. Anil Kumar The decision of the Calcutta High Court in The decision of the Calcutta High Court in Roy Choudhury and ano Roy Choudhury and another reported in 66 ITR Sarkar & Co. 1954 AIR 613 Calcutta was Sarkar & Co. 1954 AIR 613 Calcutta was page 367 approved and held that if the case is approved and held that if the case is transferred by the commissioner or The board transferred by the commissioner or The board then the income tax officer from whom the file then the income tax officer from whom the file is transferred shall have no concern with the red shall have no concern with the appeal.
5. Commercial Enterprises vs. State of Orissa 81 5. Commercial Enterprises vs. State of Orissa 81 Annulment of assessment is permissible where Annulment of assessment is permissible where sales tax cases page 84 sales tax cases page 84 the taxing authority had no jurisdiction to the taxing authority had no jurisdiction to assessee.
6. Sain Baba Mohansing 90 ITR page 197 6. Sain Baba Mohansing 90 ITR page 197 Proceedings taken by an authority who lacked Proceedings taken by an authority who lacked jurisdiction is ab initio void. jurisdiction is ab initio void.
7. Rajeevkumar Donerria v. Asst. Commissioner 7. Rajeevkumar Donerria v. Asst. Commissioner Only the assessing officer who at the relevant Only the assessing officer who at the relevant of Income Tax 94 ITD page 344 of Income Tax 94 ITD page 344 time of filing of the appeal has the jurisdiction time of filing of the appeal has the jurisdiction can file the appeal. An appeal filed by an officer can file the appeal. An appeal filed by an officer who has no jurisdiction to file the appeal is non who has no jurisdiction to file the appeal is non 8.24. The Hon’ble Gujarat High Court in the The Hon’ble Gujarat High Court in the case of Jolly Fantasy World Ltd., Tax appeal case of Jolly Fantasy World Ltd., Tax appeal no. 1254 of 2014,judgement dated 9.3.2015 held that there cannot be waiver of no. 1254 of 2014,judgement dated 9.3.2015 held that there cannot be waiver of no. 1254 of 2014,judgement dated 9.3.2015 held that there cannot be waiver of Jurisdiction, even if the assessee has participated in the proceedings. Jurisdiction, even if the assessee has participated in the proceedings. 8.25. Consent cannot confer jurisdiction and if the notice is Consent cannot confer jurisdiction and if the notice issued is without jurisdiction sued is without jurisdiction it is invalid as was held in Resham Petrotech Ltd. ITA O. 2777/ Ahd/2011 dated 10.2.2012 it is invalid as was held in Resham Petrotech Ltd. ITA O. 2777/ Ahd/2011 dated 10.2.2012 it is invalid as was held in Resham Petrotech Ltd. ITA O. 2777/ Ahd/2011 dated 10.2.2012 8.26. The Hon'ble Bombay High Court in OF 2006 in the case of The The Hon'ble Bombay High Court in ITA No.127 OF 2006 in the case of The The Hon'ble Bombay High Court in ITA No.127 OF 2006 in the case of The Commissioner of Income Tax Commissioner of Income Tax-I, Lalit Kumar Bardia, judgement dt. 11.7.2017, held that the dt. 11.7.2017, held that the transfer of jurisdiction subsequently cannot validate the action already taken. transfer of jurisdiction subsequently cannot validate the action already taken. transfer of jurisdiction subsequently cannot validate the action already taken. 8.27. The Ld. DR cited the judgement of the Hon'ble Supreme Court in the case of I The Ld. DR cited the judgement of the Hon'ble Supreme Court in the case of I The Ld. DR cited the judgement of the Hon'ble Supreme Court in the case of I -Ven Interactive Limited (Civil Appeal No. 8132 of 2019 dated Interactive Limited (Civil Appeal No. 8132 of 2019 dated 18.10.2019). This judgement is 18.10.2019). This judgement is not on the issue of jurisdiction of the Assessing Officer. In that case, there is no dispute not on the issue of jurisdiction of the Assessing Officer. In that case, there is no dispute not on the issue of jurisdiction of the Assessing Officer. In that case, there is no dispute that the assessing officer issuing notice had jurisdiction over the assessee. In that case the that the assessing officer issuing notice had jurisdiction over the assessee. In that case the that the assessing officer issuing notice had jurisdiction over the assessee. In that case the selection of the return for scrutiny selection of the return for scrutiny was generated under automated system of the Income was generated under automated system of the Income Tax Department which picks up the address of the assessee from the PAN database. The Tax Department which picks up the address of the assessee from the PAN database. The Tax Department which picks up the address of the assessee from the PAN database. The notice u/ s 143(2) was sent at the assessee's address available as per the PAN database. notice u/ s 143(2) was sent at the assessee's address available as per the PAN database. notice u/ s 143(2) was sent at the assessee's address available as per the PAN database. Intimation for further hearing Intimation for further hearing and three more notices were sent at the same address as and three more notices were sent at the same address as available in the PAN. Finally, the assessee appeared before the tax authority but available in the PAN. Finally, the assessee appeared before the tax authority but available in the PAN. Finally, the assessee appeared before the tax authority but challenged the notices saying that these notices were not served upon him and that he challenged the notices saying that these notices were not served upon him and that he challenged the notices saying that these notices were not served upon him and that he never received notice u/s 143(2) never received notice u/s 143(2) of the Act and that further subsequent notices served of the Act and that further subsequent notices served and received by the assessee were beyond the period of limitation prescribed under the and received by the assessee were beyond the period of limitation prescribed under the and received by the assessee were beyond the period of limitation prescribed under the law. The assessee submitted that he changed his address and the new address was law. The assessee submitted that he changed his address and the new address was law. The assessee submitted that he changed his address and the new address was mentioned in the return of income mentioned in the return of income filed for subsequent years. The assessee also submitted filed for subsequent years. The assessee also submitted that he filed Form No.18 with Registrar of Companies, regarding change of address. No that he filed Form No.18 with Registrar of Companies, regarding change of address. No that he filed Form No.18 with Registrar of Companies, regarding change of address. No separate intimation was given to the Assessing Officer by the assessee regarding change separate intimation was given to the Assessing Officer by the assessee regarding change separate intimation was given to the Assessing Officer by the assessee regarding change of address. The Court held of address. The Court held that mere mentioning of the new address on subsequent return that mere mentioning of the new address on subsequent return without specifically intimating the Assessing Officer with respect to change of address and without specifically intimating the Assessing Officer with respect to change of address and without specifically intimating the Assessing Officer with respect to change of address and without getting the PAN database changed, is not enough and sufficient. The court found without getting the PAN database changed, is not enough and sufficient. The court found without getting the PAN database changed, is not enough and sufficient. The court found that the assessee claimed to have filed a letter for change of address but such letter was see claimed to have filed a letter for change of address but such letter was see claimed to have filed a letter for change of address but such letter was never produced before any of the authorities. It was held that on the facts of the case, the never produced before any of the authorities. It was held that on the facts of the case, the never produced before any of the authorities. It was held that on the facts of the case, the notice issued on the address available on the PAN data base was proper and valid servi notice issued on the address available on the PAN data base was proper and valid servi notice issued on the address available on the PAN data base was proper and valid service of notice u/s 143(2) of the Act. The court held that the change of address in the database of notice u/s 143(2) of the Act. The court held that the change of address in the database of notice u/s 143(2) of the Act. The court held that the change of address in the database of PAN is must, in case of change of the name of the company and/ or any change in the of PAN is must, in case of change of the name of the company and/ or any change in the of PAN is must, in case of change of the name of the company and/ or any change in the registered office of the corporate office of the assessee and the same has registered office of the corporate office of the assessee and the same has registered office of the corporate office of the assessee and the same has to be intimated to the Registrar of Companies in the prescribed format i.e., Form 18 and after completing to the Registrar of Companies in the prescribed format i.e., Form 18 and after completing to the Registrar of Companies in the prescribed format i.e., Form 18 and after completing the said requirement, the assessee is required to approach the Department with the copy the said requirement, the assessee is required to approach the Department with the copy the said requirement, the assessee is required to approach the Department with the copy of the said document and then the assessee is required to make of the said document and then the assessee is required to make an application for change an application for change of address in the departmental database of the PAN. In the present case the assessee has of address in the departmental database of the PAN. In the present case the assessee has of address in the departmental database of the PAN. In the present case the assessee has failed to do so. This judgment is on the issue of service of notice. It is not an issue as to failed to do so. This judgment is on the issue of service of notice. It is not an issue as to failed to do so. This judgment is on the issue of service of notice. It is not an issue as to whether the Assessing Officer has jurisdiction whether the Assessing Officer has jurisdiction over the assessee. As already stated, it is not over the assessee. As already stated, it is not a case of notice being issued by a non a case of notice being issued by a non-jurisdictional Assessing Officer. It is therefore clear that the issue in the case before the Hon'ble Supreme Court It is therefore clear that the issue in the case before the Hon'ble Supreme Court It is therefore clear that the issue in the case before the Hon'ble Supreme Court was not with regard to the jurisdiction of the offic was not with regard to the jurisdiction of the officer in issuing the notice but was with er in issuing the notice but was with regard to the service of notice on the proper address. The said judgement therefore does regard to the service of notice on the proper address. The said judgement therefore does regard to the service of notice on the proper address. The said judgement therefore does not help the department on this issue of jurisdiction now before us. Jurisdiction has to be not help the department on this issue of jurisdiction now before us. Jurisdiction has to be not help the department on this issue of jurisdiction now before us. Jurisdiction has to be conferred u/s 120 of the Act. Any act conferred u/s 120 of the Act. Any act by an authority without jurisdiction is ab by an authority without jurisdiction is ab-initio void.
11 Assessment Years: 2015-16 Sanat Kumar Sahana Assessment Years: 2015-16 Dipti Kumar Sahana 8.28. In view of the above discussion, as the Assessing Officer who had jurisdiction over In view of the above discussion, as the Assessing Officer who had jurisdiction over In view of the above discussion, as the Assessing Officer who had jurisdiction over the assessee i.e., ITO Ward the assessee i.e., ITO Ward – 8(3), Kolkata had not issued the notice to the assessee u/s 8(3), Kolkata had not issued the notice to the assessee u/s 143(2) of the Act as mandatorily required under the Act, the assessment framed u/s s mandatorily required under the Act, the assessment framed u/s s mandatorily required under the Act, the assessment framed u/s 143(3) of the Act, is bad in law as held by the Hon’ble Supreme Court in the case of ACIT & 143(3) of the Act, is bad in law as held by the Hon’ble Supreme Court in the case of ACIT & 143(3) of the Act, is bad in law as held by the Hon’ble Supreme Court in the case of ACIT & Anr. Vs. Hotel Blue Moon: 321 ITR 362 (SC) . Hence we quash the same. Anr. Vs. Hotel Blue Moon: 321 ITR 362 (SC) . Hence we quash the same. Anr. Vs. Hotel Blue Moon: 321 ITR 362 (SC) . Hence we quash the same.
9. As we have held that the a As we have held that the assessment is bad in law, in view of the non ssessment is bad in law, in view of the non-issual of the statutory notice u/s 143(2) of the Act by the Assessing Officer, having jurisdiction over the statutory notice u/s 143(2) of the Act by the Assessing Officer, having jurisdiction over the statutory notice u/s 143(2) of the Act by the Assessing Officer, having jurisdiction over the assessee, we would not go into the merits of the case as it would be an academic exercise. assessee, we would not go into the merits of the case as it would be an academic exercise. assessee, we would not go into the merits of the case as it would be an academic exercise.
In the result, appeal of the assessee is allowed. sult, appeal of the assessee is allowed.”
Consistent with the view taken Consistent with the view taken in the above case, as the facts are identical, as the facts are identical, we uphold the contentions of the assessee that the assessment orders passed in both these uphold the contentions of the assessee that the assessment orders passed in both these uphold the contentions of the assessee that the assessment orders passed in both these cases by the ACIT, Circle-23(1), Hooghly, w 23(1), Hooghly, were without jurisdiction. Hence we quash the without jurisdiction. Hence we quash the same for both the assessment years. same for both the assessment years.
10. In the result, both the appeals of the assessee are allowed. In the result, both the appeals of the assessee are allowed. Kolkata, the Kolkata, the 29th day of May, 2020.