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Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy & Sri S.S. Godara
order : January 22nd, 2020 ORDER Per J. Sudhakar Reddy, AM :- This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals) – 3, Kolkata, (hereinafter the “ld.CIT(A)”), passed u/s. 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 23/04/2019, for the Assessment Year 2012-13.
2. The assessee is a company and is engaged in the business of zinc manufacturing. It filed its return of income electronically for the Assessment Year 2012-13 on 07/09/2012 declaring a loss of Rs.(-)Rs.37,99,257/-. The Assessing Officer completed the assessment u/s 143(3) of the Act on 30/03/2015 determining the total income of the assessee at Rs.1,02,00,743/- interalia making an addition u/s 68 of the Act being share capital and share premium received by the company from three (3) associate companies. Out of this Rs,1,40,00,000/- addition, the Assessing Officer states that a protective addition of Rs.40,00,000/- is made in the hands of the intermediary companies. Aggrieved the assessee carried the matter in appeal without success. The ld. First Appellate Authority, upheld the order of the Assessing Officer.
Further aggrieved, the assessee is before us.
Assessment Year: 2012-13 K.A. Wires Ltd 4. The assessee filed an application for admission of additional ground. The The assessee filed an application for admission of additional ground. The The assessee filed an application for admission of additional ground. The addition ground reads as follows: addition ground reads as follows:- “ For that the assessment is bad in law since no valid notice u/s “ For that the assessment is bad in law since no valid notice u/s “ For that the assessment is bad in law since no valid notice u/s 143(2) was issued by the Assessing Officer, who was vested with the jurisdiction to issue notice within by the Assessing Officer, who was vested with the jurisdiction to issue notice within by the Assessing Officer, who was vested with the jurisdiction to issue notice within due time allowed under the law and as such the entire proceedings are bad in law under the law and as such the entire proceedings are bad in law under the law and as such the entire proceedings are bad in law and the assessment in liable to be quashed. and the assessment in liable to be quashed.” On merits, grounds are rai On merits, grounds are raised against the addition made u/s 68 of the Act. u/s 68 of the Act. 4.1. The ld. Counsel for the assessee submitted that the jurisdiction of the assessee The ld. Counsel for the assessee submitted that the jurisdiction of the assessee The ld. Counsel for the assessee submitted that the jurisdiction of the assessee was with ITO, Ward-8(3), Kolkata and whereas ITO, Ward 8(3), Kolkata and whereas ITO, Ward-33(1), Kolkata, issued the 33(1), Kolkata, issued the notice u/s 143(2) of the Act on 06/08/2 notice u/s 143(2) of the Act on 06/08/2013 and thereafter on 03/02/2014, the file was 013 and thereafter on 03/02/2014, the file was transferred to ITO, Ward-8 8(3), Kolkata. He submitted that ITO Ward that ITO Ward-8(3), Kolkata should have issue notice u/s 143(2) of the Act, as required by law, as he was the officer should have issue notice u/s 143(2) of the Act, as required by law, as he was the officer should have issue notice u/s 143(2) of the Act, as required by law, as he was the officer having jurisdiction over the assessee the assessee company. He pointed out that there is no change in company. He pointed out that there is no change in the address of the company the address of the company during the previous years, as well as for the following years the following years and always remained the same and that the address on which the PAN Card was taken is remained the same and that the address on which the PAN Card was taken is remained the same and that the address on which the PAN Card was taken is also the same address and that that the jurisdiction of the assessee is and was always is and was always with ITO, Ward-8(3), Kolkata. He relied on a number of case 8(3), Kolkata. He relied on a number of case-law for the proposition that, law for the proposition that, non-issual of notice u/s 143(2) of the Act, by the officer having jurisdiction over the issual of notice u/s 143(2) of the Act, by the officer having jurisdiction over the issual of notice u/s 143(2) of the Act, by the officer having jurisdiction over the assessee, makes the assessment bad in law. He submitted that ment bad in law. He submitted that, the return of income the return of income for previous years as well as the subsequent Assessment Years previous years as well as the subsequent Assessment Years were filed before the ITO were filed before the ITO Ward-8(3), Kolkata. He relied on a number of case 8(3), Kolkata. He relied on a number of case-law in support of his contentions law in support of his contentions on the issue of jurisdiction, which we would be dealing as and when required. which we would be dealing as and when required. which we would be dealing as and when required. 4.2. On merits, he submitted that all the investments were made by Group Companies On merits, he submitted that all the investments were made by Group Companies On merits, he submitted that all the investments were made by Group Companies and that all documents required under law were filed before the Assessing Officer and that all documents required under law were filed before the Assessing Officer and that all documents required under law were filed before the Assessing Officer to prove the identity and creditworthin prove the identity and creditworthiness of the companies who applied for shares and ess of the companies who applied for shares and the genuineness of the transactions the genuineness of the transactions and that the assessee has discharged the burden of the assessee has discharged the burden of proof that lay on it on this issue proof that lay on it on this issue of addition made u/s 68 of the Act.
The ld. D/R, on the other hand, opposed the con The ld. D/R, on the other hand, opposed the contentions of the assessee and tentions of the assessee and submitted that notice u/s 143(2) of the Act was issued by ITO Ward submitted that notice u/s 143(2) of the Act was issued by ITO Ward-33(1), Kolkata 33(1), Kolkata, and Assessment Year: 2012-13 K.A. Wires Ltd that the assessee should have objected under law as requir that the assessee should have objected under law as required by Section 124(3) of the ed by Section 124(3) of the Act, within one month of receipt of this notice. Act, within one month of receipt of this notice. He pointed out that the assessee is inted out that the assessee is entitled to question the jurisdiction of the Assessing Officer within a period of one entitled to question the jurisdiction of the Assessing Officer within a period of one entitled to question the jurisdiction of the Assessing Officer within a period of one month from the date on which he was served month from the date on which he was served with a notice u/s 142(1) or 143(2) of the a notice u/s 142(1) or 143(2) of the Act. He further argued that order u/s 1 Act. He further argued that order u/s 127 of the Act was passed on 10/01/2014 as passed on 10/01/2014, and later the file was transferred to ITO, Ward the file was transferred to ITO, Ward-8(3), Kolkata. He distinguished the ), Kolkata. He distinguished the judgments relied upon by the assessee and also relied on certain decisions, judgments relied upon by the assessee and also relied on certain decisions, judgments relied upon by the assessee and also relied on certain decisions, of Courts which as per the ld. D/R, are in favour of the revenue. which as per the ld. D/R, are in favour of the revenue. We would be di uld be discussing as and when necessary these judgements which were cited. when necessary these judgements which were cited. 5.1. On merits, the ld. D/R submitted that on all such issues On merits, the ld. D/R submitted that on all such issues of addition made of share of addition made of share capital introduction u/s 68 of the Act capital introduction u/s 68 of the Act, the Bench has been consistently remanding , the Bench has been consistently remanding such matters back to the file of the Assessing Officer for fresh adjudication, in accordance back to the file of the Assessing Officer for fresh adjudication, in accordance back to the file of the Assessing Officer for fresh adjudication, in accordance with law. He pointed out that in this case, certain protective addition has also been with law. He pointed out that in this case, certain protective addition has also been with law. He pointed out that in this case, certain protective addition has also been made by the Assessing Officer by the Assessing Officer and hence the Bench may consider setting aside the and hence the Bench may consider setting aside the matter to the file of the Assessing Officer to the file of the Assessing Officer to verify as to what happened in the case of to verify as to what happened in the case of protective assessments. 5.2. In reply, the ld. Counsel for the assessee relied on certain case In reply, the ld. Counsel for the assessee relied on certain case-law and submitted law and submitted that Section 124(3) of the Act, comes into play, only when th that Section 124(3) of the Act, comes into play, only when the officer issuing a notice has e officer issuing a notice has jurisdiction and does not apply to a case where there is no inherent jurisdiction jurisdiction and does not apply to a case where there is no inherent jurisdiction jurisdiction and does not apply to a case where there is no inherent jurisdiction to a Assessing Officer. He argued that an He argued that any act by a non-jurisdictional Assessing Officer is jurisdictional Assessing Officer is void ab initio and cannot be rectified. and cannot be rectified.
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 circumstances of the case, perusal of the papers on record, orders of the authorities 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: below as well as case law cited, we hold as follows:- 7. The address of the assessee as giv The address of the assessee as given in the return of income and in the return of income and as given in the PAN Card, has not undergone any change PAN Card, has not undergone any change for the previous assessment previous assessment years, this year and for the subsequent assessment assessment years. A perusal of the copy of return of income field . A perusal of the copy of return of income field by the assessee for the Assessment Yea by the assessee for the Assessment Year 2010-11, 2011-12, 2012 12, 2012-13 & 2013-14, demonstrate that it was filed demonstrate that it was filed with the same address, before the ITO, Ward before the ITO, Ward-8(3), Kolkata.
Assessment Year: 2012-13 K.A. Wires Ltd There is no dispute that it was only the ITO, Ward is no dispute that it was only the ITO, Ward-8(3), Kolkata, who had 8(3), Kolkata, who had and continued to have the jurisdiction over the assess the jurisdiction over the assessee company. The PAN card also The PAN card also has the same address for all these years. T There is no change in address of the assessee company 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. Th 33(1), Kolkata. The assessee does not fall under the jurisdiction e assessee does not fall under the jurisdiction of this officer. A perusal of the order sheet entries demonstrate that, after issua of this officer. A perusal of the order sheet entries demonstrate that, after issua of 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 notice u/s 143(2) of the Act on 06/08/2013, the ITO, Ward- 33(1), Kolkata, transferred , Kolkata, transferred the file to ITO, Ward-8(3), Kolkata on 03/02/2014. Thereafter, ITO, Ward 8(3), Kolkata on 03/02/2014. Thereafter, ITO, Ward 8(3), Kolkata on 03/02/2014. Thereafter, ITO, Ward-8(3), Kolkata, issued notice u/s 143(1) on 10/10/2014 and completed the assessment issued notice u/s 143(1) on 10/10/2014 and completed the assessment issued 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 The ITO Ward-8(3), Kolkata, who had the jurisdiction over the 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 did not issue notice u/s 143(2) of the Act to the assessee. The issue before us did not issue notice u/s 143(2) of the Act to the assessee. The issue before us is whether the non-issual of notice issual of notice u/s 143(2) of the Act, by the Assessing Officer having by the Assessing Officer having jurisdiction over the assessee over the assessee makes the assessment bad in law.
We have heard rival contentions. On careful consideration of the facts and al contentions. On careful consideration of the facts and al contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities circumstances of the case, perusal of the papers on record, orders of the authorities 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: below as well as case law cited, we hold as follows:- 8.1. Jurisdiction of the Income Tax Authorities is conf Jurisdiction of the Income Tax Authorities is conferred by the Board (Central erred by the Board (Central Board of Direct Tax) u/s. 120(1) & (2) of the LT. Act, 1961. The Board of Direct Tax) u/s. 120(1) & (2) of the LT. Act, 1961. The Section ection 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 perform all or any of the functions conferred on, or, as the case may be, assigned 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. - For the removal o For the removal of doubts, it is hereby declared that any income f doubts, it is hereby declared that any income- tax authority, being an authority higher in rank, may, if so directed by the tax authority, being an authority higher in rank, may, if so directed by the 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 Board, exercise the powers and perform the functions of the income Board, exercise the powers and perform the functions of the income-tax authority lower in rank and any such direction issued by the authority lower in rank and any such direction issued by the authority lower in rank and any such direction issued by the Board shall be deemed to be a direction issued under sub deemed to be a 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 tax authority to issue orders in writing for the exercise of the powers tax authority to issue orders in writing for the exercise of the powers and performance of the func and performance of the functions by all or any of the other income- tax tions by all or any of the other income- tax authorities who are subordinate to it. authorities who are subordinate to it.
Assessment Year: 2012-13 K.A. Wires Ltd (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 tax authority authorised by it may have regard to anyone or more anyone 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 order, and subject to such conditions, restrictions or general or special order, and subject to such conditions, restrictions or general or special order, and subject to such conditions, restrictions or limitations as may be specified therein, limitations as may be specified therein, - (a) authorise any ) 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 [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 ) 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 [Principal Chief Commissioner or] Chief Commissioner or 14[Principal Commissioner or] Commissioner to issue orders in 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, 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 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 persons or classes of persons or incomes or classes of income or cases or classes of ca or classes of cases, shall be exercised or performed by ses, shall be exercised or performed by an Additional Commissioner or Commissioner or an Additional Director or a Joint Commissioner or a 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 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 reunder to the Assessing Officer shall be deemed to be references to reunder to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Commissioner or Additional Director or Additional Director or Joint Commissioner or Joint Director by whom the powers and functions are Commissioner or Joint Director by whom the powers and functions are Commissioner or Joint Director by whom the powers and functions are to be exercised or performed under such order, and any pro to be exercised or performed under such order, and any pro to be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the Joint Commissioner shall not Act requiring approval or sanction of the Joint Commissioner shall not Act requiring approval or sanction of the Joint Commissioner shall not apply. (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 wherever considered necessary or appropriate for the proper management of wherever considered necessary or appropriate for the proper management of the work, require two or more Assessing Officers (whether or not of the same ire two or more Assessing Officers (whether or not of the same ire two or more Assessing Officers (whether or not of the same class) to exercise and perform, concurrently, the powers and functions in respect class) to exercise and perform, concurrently, the powers and functions in respect class) to 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 of any area or persons or classes of persons or incomes or classes of income or of any area or persons or classes of persons or incomes or classes of income or cases or classes of cases; and, cases or classes of cases; and, where such powers and functions are exercised where such powers and functions are exercised and performed concurrently by the and 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 ma functions as any higher authority amongst them may direct, and, further, y direct, and, further, references in any other provision of this Act or in any rule made thereunder to references in any other provision of this Act or in any rule made thereunder to 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 the Assessing Officer shall be deemed to be references to such higher authority the 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 and any provision of this Act requiring approval or sanction of any such and any provision of this Act requiring approval or sanction of any such authority shall not apply. authority shall not apply.
Assessment Year: 2012-13 K.A. Wires Ltd (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 in Gazette, direct that for the purpose of furnishing of the return of in 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 doing of any other act or thing under this Act or any rule made thereunder by doing of any other act or thing under this Act or any rule made thereunder by any person or class of persons, the income any person or class of persons, the income-tax authority exercising and tax authority exercising and performing the powers and functions in relation to the said person or class of performing the powers and functions in relation to the said person or class of performing 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. e such authority as may be specified in the notification. e 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, the From a plain reading of the above, it is clear that u/s 120(1) of the Act, the 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 Income Tax Authorities will have to exercise Acts only in accordance with the Income Tax Authorities will have to exercise Acts only in accordance with the jurisdiction conferred by the Board. jurisdiction conferred by the Board. U/s 120(3) of the Act, such powers can be 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 conferred by the Board having regard to the territorial area, class of person, income or conferred by the Board having regard to the territorial area, class of person, income or class of the cases. The CBDT under sec. 120(5) The CBDT under sec. 120(5) of the Act, can also confer jurisdiction on can also confer jurisdiction on two or more Assessing Officers (c two or more Assessing Officers (concurrent jurisdiction). The CBDT can also by oncurrent jurisdiction). The CBDT can also by notification confer powers on the authorities for the purpose of assessment as may be notification confer powers on the authorities for the purpose of assessment as may be notification confer powers on the authorities for the purpose of assessment as may be notified in the notification. This shows that concurrent jurisdiction can be exercised notified in the notification. This shows that concurrent jurisdiction can be exercised notified in the notification. This shows that concurrent jurisdiction can be exercised only when CBDT confers such jurisdict only when CBDT confers such jurisdiction u/s 120(4) and 120(5) of the Act of the Act. 8.3. In accordance with the powers conferred In accordance with the powers conferred u/s. 120 (1) and 120(2) . 120 (1) and 120(2) of the Act, the CBDT issued notification on no. 191/2002(F.No.187/9/2002 CBDT issued 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 spec whereby the CBDT conferred the jurisdiction by specifying the Designation of the ifying the Designation of the specific Income Tax Authorities, its Head Quarters, Territorial Area, Persons or classes specific Income Tax Authorities, its Head Quarters, Territorial Area, Persons or classes specific Income Tax Authorities, its Head Quarters, Territorial Area, Persons or classes of persons and cases or class of cases. of persons and cases or class of cases. 8.4. As per the above referred above referred notification, the assessee's being a company, the case the assessee's being a company, the case fell under the jurisdiction of Commissioner of Income Tax, Kolkata the jurisdiction of Commissioner of Income Tax, Kolkata the jurisdiction of Commissioner of Income Tax, Kolkata-III, Kolkata vide serial no. 205 of the notification. The jurisdiction of the assessee fell with the Assessing serial no. 205 of the notification. The jurisdiction of the assessee fell with the Assessing serial no. 205 of the notification. The jurisdiction of the assessee fell with the Assessing Officer being ITO ward 8(3) Officer being ITO ward 8(3), Kolkata, who was under the charge of Commission who was under the charge of Commissioner of Income tax -Kolkata III. 8.5. The Authorities under the Income Tax, after the jurisdiction is The Authorities under the Income Tax, after the jurisdiction is The Authorities under the Income Tax, after the jurisdiction is conferred in them by virtue of notification u/s 120(1) and 120(2) by virtue of notification u/s 120(1) and 120(2) of the Act, have to perform their functions as per sec. 124 of the Act of the Act. Section 124 of the Act, reads as under 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 Assessing Officer has been vested with section (2) of section 120, the Assessing Officer has been vested with 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 jurisdiction over any area, within the limits of such area, he shall have jurisdiction jurisdiction over any area, within the limits of such area, he shall have jurisdiction- Assessment Year: 2012-13 K.A. Wires Ltd (a) in respect of any person carrying on a business or profession, if the ) in respect of any person carrying on a business or profession, if the ) 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 place at which he carries on his business or profession is situate within 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 area, or where his business or profession is carried on in more places than area, or where his business or profession is carried on in more places than one, if the princi one, if the principal place of his business or profession is situate within the of his business or profession is situate within the area, and area, and (b) in respect of any other person residing within the area. ) in respect of any other person residing within the area. ) in respect of any other person residing within the area. (2) Where a question arises under this section as to whether an Assessing Officer (2) Where a question arises under this section as to whether an Assessing Officer (2) Where a question arises under this section as to whether an Assessing Officer has jurisdiction to assess any person, the has jurisdiction to assess any person, the question shall be determined by the question shall be determined by the Principal Director General or Director General or the Principal Chief Commissioner Principal Director General or Director General or the Principal Chief Commissioner Principal Director General or Director General or the Principal Chief Commissioner or Chief Commissioner or the Principal Commissioner or Commissioner; or where or Chief Commissioner or the Principal Commissioner or Commissioner; or where or Chief Commissioner or the Principal Commissioner or Commissioner; or where the question is one relating to areas within the jurisdicti the question is one relating to areas within the jurisdiction of different Principal on of different Principal Director General or Directors General or Principal Chief Commissioners or] Chief Director General or Directors General or Principal Chief Commissioners or] Chief Director General or Directors General or Principal Chief Commissioners or] Chief Commissioners or Principal Commissioners or Commissioners, by the Principal Commissioners or Principal Commissioners or Commissioners, by the Principal Commissioners or Principal Commissioners or Commissioners, by the Principal Director General or Directors General or Principal Chief Commissioners or Director General or Directors General or Principal Chief Commissioners or Director General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or] Commissioners concerned or, if they Commissioners or Principal Commissioners or] Commissioners concerned or, if they Commissioners or Principal Commissioners or] Commissioners concerned or, if they are not in agreement, by the Board or by such Principal Director General or] are not in agreement, by the Board or by such Principal Director General or] are not in agreement, by the Board or by such Principal Director General or] Director General or Principal Chief Commissioner or Chief Commissioner or Director General or Principal Chief Commissioner or Chief Commissioner or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commiss Principal Commissioner or Commissioner as the Board may, by notification in the ioner or Commissioner as the Board may, by notification in the Official Gazette, specify. Official Gazette, specify. (3) No person shall be entitled to call in question the jurisdic (3) No person shall be entitled to call in question the jurisdic (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 ) 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 which , after the expiry of one month from the date on which he was served with he was served with a notice under sub-section (1) of section 142 section 142 or sub-section (2) of section 115WE or sub of section 115WE or sub-section (2) of section 143 or after the completion of t or after the completion of the assessment, whichever is earlier; assessment, whichever is earlier; (b) where he has made no such return, after the expiry of the time allowed by the ) where he has made no such return, after the expiry of the time allowed by the ) 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-section (1) of section (1) of section 115WH or under section 148 for the making of the n 148 for the making of the return or by the notice under the first proviso to return or by the notice under the first proviso to section 115WF section 115WF or under the first proviso to section 144 section 144 to show cause why the assessment should not be completed to show cause why the assessment should not be completed to the best of the judg to the best of the judgment of the Assessing Officer, whichever is earlier. is earlier. (c) where an action has been taken under (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 earlier. ion 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 the jurisdiction of an Assessing Officer, then the Assessing Officer shall, if not Assessing Officer, then the Assessing Officer shall, if not satisfied with the correctness of the c satisfied with the correctness of the claim, refer the matter for determination laim, refer the matter for determination under sub-section (2) before the assessment is made. section (2) before the assessment is made. (5) Notwithstanding anything contained in this section or in any direction or order (5) Notwithstanding anything contained in this section or in any direction or order (5) Notwithstanding anything contained in this section or in any direction or order issued under section 120 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 Assessing Officer in respect of the income nferred by or under this Act on an Assessing Officer in respect of the income nferred 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 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 Assessment Year: 2012-13 K.A. Wires Ltd 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) The clear and unambiguous words used in section 124(1) of the Act, of the Act, are that the Assessing Officer should be vested with the Jurisdiction by virtue of an order, Assessing Officer should be vested with the Jurisdiction by virtue of an order, 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) notification or directions issued u/s. 120(1) or u/s. 120(2) of the Act of the Act. Therefore, only the Officer who has been vested with the jurisdiction conferred u/s 120(1) and 120(2) the Officer who has been vested with the jurisdiction conferred u/s 120(1) and 120(2) the Officer who 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) can act as Assessing Officer and issue notice under sec. 143(2) can act as Assessing Officer and issue notice under sec. 143(2) of the Act, since “he shall have jurisdiction” are the words as ha “he shall have jurisdiction” are the words as has been used in sec. 124(1) s been used in sec. 124(1) of the Act. 8.7. Even though the Assessing Officer have been vested with the Jurisdiction u/ s. ven though the Assessing Officer have been vested with the Jurisdiction u/ s. ven 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 by the Board, yet the assessee may dispute such jurisdiction vested by the Board, yet the assessee may dispute such jurisdiction vested u/s 124(1) of the Act, in the Assessing Offic in the Assessing Officer. Such dispute can be raised u/s. 124(3) er. Such dispute can be raised u/s. 124(3) of the Act, within one month of the issue of notice within one month of the issue of notice u/s. 143(2) of the Act of the Act. This sub section, therefore, clearly stipulates that the assessee can dispute the jurisdiction of the therefore, clearly stipulates that the assessee can dispute the jurisdiction of the therefore, clearly stipulates that the assessee can dispute the jurisdiction of the Assessing Officer to issue notice e Assessing Officer to issue notice even though such jurisdiction was vested in him by the ven though such jurisdiction was vested in him by the direction or order issued u/ s. 120(1) or 120(2) direction or order issued u/ s. 120(1) or 120(2) of the Act, for some reasons. me reasons. 8.8. In this case, the jurisdiction the jurisdiction of the assessee was never vested with with the Assessing Officer, Ward 33(1) , (non corporate assesse (non corporate assessee ward) who issued notice u/s. e ward) who issued notice u/s. 143(2) of the Act. In fact, the assessee also filed return before ITO, Ward . In fact, the assessee also filed return before ITO, Ward-8(3), KoIkata who was 8(3), KoIkata who was having jurisdiction over the assessee as per the Boards Notification having jurisdiction over the assessee as per the Boards Notification having jurisdiction over the assessee as per the Boards Notification, which fact is evident from the copy of acknowledgement y of acknowledgements of return of income for the last the last few years. The notice under sec. 143(2), however, was issued in this case by ITO, Ward 33(1), Kol The notice under sec. 143(2), however, was issued in this case by ITO, Ward 33(1), Kol The notice under sec. 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 who has not been vested with the jurisdiction over the assessee company by CBDT who has not been vested with the jurisdiction over the assessee company by CBDT. 8.9. Under the scheme of of “e” filing of return, the assessee has to fill P 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 Department's system If the Department's system fails to correctly transfer the return to the jurisdictional correctly transfer the return to the jurisdictional Assessing Officer and transfer the same to ficer and transfer the same to a Assessing Officer though Assessing Officer though who has no jurisdiction as per the CBDT's jurisdiction as per the CBDT's notification, such mistake cannot confer the jurisdiction notification, such mistake cannot confer the jurisdiction on such an Assessing Officer. Jurisdiction on such an Assessing Officer. Jurisdiction can be conferred only by notification u/ s can be conferred only by notification u/ s 120(1) and 120(2) of the Act only of the Act only.
Assessment Year: 2012-13 K.A. Wires Ltd 8.10. The Ld DR submitted that there was transfer order of the The Ld DR submitted that there was transfer order of the assessee’s case assessee’s case for the assessment year in question assessment year in question, from ITO Ward 33(1) to ITO Ward 8(3 8(3). There can be a valid transfer order from ITO Ward 33(1) transfer order from ITO Ward 33(1) only if he was vested with the jurisdiction with the jurisdiction over the assessee. As he was never vested with the jurisdiction either by the notification he was never vested with the jurisdiction either by the notification he was never vested with the jurisdiction either by the notification of the CBDT or by any order of the Commissioner of the CBDT or by any order of the Commissioner of Income tax earlier to the issue of Income tax earlier to the issue of notice u/ s 143(2) of the Act of the Act, he could not have validly transferred the case to ITO, transferred the case to ITO, Ward-8(3), Kolkata. The file/case was restored to its jurisdictional area. 8(3), Kolkata. The file/case was restored to its jurisdictional area. 8(3), 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 ITO Ward 33(1) was not having valid jurisdiction at the time of issue ITO Ward 33(1) was not having valid jurisdiction at the time of issue of notice u/ s 143(2) of the Act, then the notice the notice is bad in law. The transfer of the folder from ITO Ward transfer of the folder from ITO Ward 33(1) to ITO Ward 8(3) in fact establishes that 33(1) to ITO Ward 8(3) in fact establishes that the revenue realised 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) The Ld DR also raised the issue that u/s 120(4) and 124(5) of the Act, of the Act, there can be concurrent jurisdiction. There is no dispute over that. However there is no direction risdiction. There is no dispute over that. However there is no direction risdiction. There is no dispute over that. However there is no direction or order or notification u/ s 120(1) or 120(2) or order or notification u/ s 120(1) or 120(2) of the Act, conferring 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) the ITO Ward 33(1) along with ITO Ward 8(3) u/ s 120(1) or u/ s 120(2) 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) ch is the condition mentioned in section 120(4) and 120(5) 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 dated 6.9.2019. The of Rungata Irrigation in ITA No 1224/K/2019 dated 6.9.2019. The 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 of the assessee. The Ld CIT(DR) has relied on para 19 which is of the assessee. The Ld CIT(DR) has relied on para 19 which is in fact in favour the assessee in fact in favour the assessee. The Tribunal has fully analyzed the entire provisions of has fully analyzed the entire provisions of section 120, 124 and 127 of the Act, of the Act, in para 13, 14,15,17, 18, 21 of the order with regar 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 vesting of jurisdiction and transfer etc and held that the issue of notice by 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) that the assessee did not dispute the jurisdiction u/ s 124(3) that the assessee did not dispute the jurisdiction u/ s 124(3) of the Act and hence by not disputi by not disputing the same, the right to challenge the jurisdiction is right to challenge the jurisdiction is lost forever. This would have been so, had the ITO, Ward . This would have been so, had the ITO, Ward-33(1), Kolkata, 33(1), Kolkata, had original jurisdiction over the assessee jurisdiction over the assessee. This is not the case. When an authority does n When an authority does not have jurisdiction, then the act done by such authority is bad in law and is jurisdiction, then the act done by such authority is bad in law and is void ab void ab-initio 8.14. This issue came up for consideration in the issue came up for consideration in the following cases:
Assessment Year: 2012-13 K.A. Wires Ltd (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 Smriti Kedia Calcutta High Court 339 ITR page 37 (iii) Indorama Software Solutions Ltd. Mumbai Bench 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, Mahalchand Motilal Kothari & Co (ITA No. 1851/1852/Kolj2002, Mahalchand Motilal Kothari & Co (ITA No. 1851/1852/Kolj2002, ITAT, D-Bench, Kol dated 28.7.2006 dated 28.7.2006 wherein the Tribunal considered the notification wherein the Tribunal considered the notification dated 30.7.2002 and held that after issue of the notification the Assessing Officer who dated 30.7.2002 and held that after issue of the notification the Assessing Officer who 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 was earlier vested the jurisdiction lost the jurisdiction and even though the order of the was 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 received by him at the time when he was having jurisdiction, yet the 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 Assessing Officer who has been divested of the jurisdiction on 30.7.2002 cannot file the Assessing Officer 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 appeal after the said date. In that case even the authorization was also granted for filing appeal after the said 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 XIII, Kolkata who lost the jurisdiction after the notification. In that 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 case after the dismissal of the appeal of the Department by the Tribunal on the aforesaid case after the 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 ground of jurisdiction, the Revenue filed an appeal before the Hon'ble High Co ground of jurisdiction, the Revenue filed an appeal before the Hon'ble High Court but the same was dismissed. The Revenue thereafter came up with condonation petition the same was dismissed. The Revenue thereafter came up with condonation petition the same was 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. and a filed fresh appeal before the ITAT but the same was also dismissed in ITA No. and a filed fresh appeal before the ITAT but the same was also dismissed in ITA No. 1768 and 1769/Kol/2006, B 1768 and 1769/Kol/2006, B-Bench on 15.9.2014. The Revenue filed an appeal before Bench on 15.9.2014. The Revenue filed an appeal before the Hon'ble High Court which was dismissed with the following observations: e Hon'ble High Court which was dismissed with the following observations: e Hon'ble High Court which was dismissed with the following observations: "The appeal carried by theACIT "The appeal carried by theACIT-39 to the Appellate Tribu 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 Court did not interfere challenged by the Revenue in this Court. This Court did not interfere challenged by the Revenue in this Court. This Court did not interfere with the order of the with the order of the Tribunal and the matter rested there atter rested there without this Court's order being challenged Court's order being challenged by the Revenue before th ue before the Supreme Court. In the present case, Court. In the present case, the matter pertains to the same the matter pertains to the same assessment year when the ITO year when the ITO-44 has preferred an appeal where the initial 44 has preferred an appeal where the initial assessment was not done was not done by the ITO-44 but such assessment 'was 44 but such assessment 'was conducted by the ACIT conducted by the ACIT-39 at a point of time when AC1T f time when AC1T-39 lost jurisdiction over the jurisdiction over the assessee pursuant to the said CBOT Notification pursuant to the said CBOT Notification 2002 Since there was a fundamental error, the Appellate Tribunal dismissed Since there was a fundamental error, the Appellate Tribunal dismissed Since there was a fundamental error, the Appellate Tribunal dismissed the appeal as incompetent since the order of the Assessing Officer who the appeal as incompetent since the order of the Assessing Officer who the appeal as incompetent since the order of the Assessing Officer who Assessment Year: 2012-13 K.A. Wires Ltd had no jurisdiction to ction to undertake the assessment qua the assessee could undertake the assessment qua the assessee could never have been found to be legal or resurrected." never have been found to be legal or resurrected." 8.16. While deciding the issue in the case of hile deciding the issue in the case of Mahalchand Motilal Kothari & Co., Mahalchand Motilal Kothari & Co., (supra) the ITAT relied on the Judgement of Calcutta High Court in the case of the ITAT relied on the Judgement of Calcutta High Court in the case of the ITAT relied on the Judgement of Calcutta High Court in the case of “West Bengal State Electricity Board” 278 ITR 21 278 ITR 218. In that case the Hon'ble Calcutta High Court held 8. In that case the Hon'ble Calcutta High Court held that jurisdiction cannot be conferred by default or that jurisdiction cannot be conferred by default or by agreement and the decision by agreement and the decision without jurisdiction is a nullity. The Hon'ble High Court also relied on a number of thout jurisdiction is a nullity. The Hon'ble High Court also relied on a number of thout 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 case of The Hon'ble Allahabad High Court in the case of V.P. Electronics Corporation Ltd V.P. Electronics Corporation Ltd in of 2015 dated 1.3.2017 in ITA No. 79 of 2015 dated 1.3.2017 has also taken similar view wherein the provisions 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 of sec. 124(3) were also referred to. It was held that when the notice was not issued by of sec. 124(3) were also referred to. It was held that when the notice was not issued by the competent authority, i.e the competent authority, i.e an Assessing Officer having jurisdiction Assessing Officer having jurisdiction, then the assessment is a nullity. 8.18. In the case of Deepchand Kothari reported in 171 ITR 381(Raj) Deepchand Kothari reported in 171 ITR 381(Raj) Deepchand Kothari reported in 171 ITR 381(Raj) it was held that the Assessing Officer who was having no jurisdiction to initiate the proceedings the Assessing Officer who was having no jurisdiction to initiate the proceedings the Assessing Officer who was having no jurisdiction to initiate the proceedings then such proceedings are ab-intio- void intio- void. Further the Hon’ble High Court Further the Hon’ble High Court relying on the Judgement of the Hon'ble Supreme Court in the case of Judgement of the Hon'ble Supreme Court in the case of Kiran Singh Vs Chaman Paswan Kiran Singh Vs Chaman Paswan, it was held that the Jurisdictional issue can be taken up at any stage of the proceedings, held that the Jurisdictional issue can be taken up at any stage of the proceedings, held that the Jurisdictional issue can be taken up at any stage of the proceedings, even at the time of execution of decree. even at the time of execution of decree. 8.19. The ITAT, Kolkata in the case of in the case of Ganesh Reality and Mall in ITA No. 581/Kol/2017 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 illegal. completion of assessment by such authority is illegal. 8.20. In the case of P.V. Doshi Vs CIT P.V. Doshi Vs CIT the Gujarat High Court held that the jurisdictional ujarat 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) Rajmandir Estates (386 ITR 162) the Hon'ble Calcutta High Court the Hon'ble Calcutta High Court held that if the Commissioner Income tax issuing notice u/ s. 263 has lost the held that if the Commissioner Income tax issuing notice u/ s. 263 has lost the held that if the Commissioner Income tax issuing notice u/ s. 263 has lost the Jurisdiction then the notice and order issued by him is a nullity. Jurisdiction then the notice and order issued by him is a nullity.
Assessment Year: 2012-13 K.A. Wires Ltd 8.22. The Lucknow Bench of the ITAT in he Lucknow Bench of the ITAT in and 90/LKW /2015 dated 16 ITA No. 89 and 90/LKW /2015 dated 16.4.2015 in the case of Md Rizwan h held that notice u/ s 143(2) issued by non that notice 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:-
A.L. Ahuja v/s. DCIT If at the time of issue of notice u/s. 158BC If at the time of issue of notice u/s. 158BC SOT (2003) page 475 at pa SOT (2003) page 475 at page 480 the Assessing Officer had no jurisdiction the the Assessing Officer had no jurisdiction the assessment is illegal.
Income Tax officer vs. Sarkar & Co. 1954 2. Income Tax officer vs. Sarkar & Co. 1954 If at the time of filing, of the appeal the ITO of the appeal the ITO AIR 613 Calcutta. had no seisin over he assessee’s case and case is transferred by the Commissioner of case is transferred by the Commissioner of Income Tax from ITO Ward Income Tax from ITO Ward-III(2) to some other Officer, on the date of other Officer, on the date of filing of the Appeal, the ITO Ward III(2) cannot file the Appeal, the ITO Ward III(2) cannot file the Appeal and the appeal of the department he appeal of the department rightly dismissed by the ITAT. 3. Ram Krishna Ramnath vs. Commissioner 3. Ram Krishna Ramnath vs. Commissioner When by notification dated 28 notification dated 28th March, of Income Tax AIR 1932 Page 65 Nagpur of Income Tax AIR 1932 Page 65 Nagpur 1923 the powers conferred on the ITO 1923 the powers conferred on the ITO should be exercised by the ACIT the Notice should be exercised by the ACIT the Notice issued by the ITO was illegal issued by the ITO was illegal 4. CIT West Bengal and another vs. Anil and another vs. Anil The decision of the Calcutta High Court in The decision of the Calcutta High Court in Kumar Roy Choudhury and another Kumar Roy Choudhury and another Sarkar & Co. 1954 AIR 613 Calcutta Sarkar & Co. 1954 AIR 613 Calcutta was reported in 66 ITR page 367 reported in 66 ITR page 367 approved and held that if the case is approved and held that if the case is transferred by the commissioner or The transferred by the commissioner or The board then the income tax officer from ncome tax officer from whom the file is transferred shall have no whom the file is transferred shall have no concern with the appeal concern with the appeal. 5. Commercial Enterprises vs. State of Orissa 5. Commercial Enterprises vs. State of Orissa Annulment of assessment is permissible Annulment of assessment is permissible 81 sales tax cases page 84 81 sales tax cases page 84 where where the the taxing taxing authority authority had had no 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 Proceedings taken by an authority who lacked jurisdiction is ab initio void. lacked jurisdiction is ab initio void. 7. Rajeevkumar Donerria v. Asst. 7. Rajeevkumar Donerria v. Asst. Only the assessing officer who at the Only the assessing officer who at the Commissioner of Income Tax 94 ITD page Commissioner of Income Tax 94 ITD page relevant time of filing of the appeal has the filing of the appeal has the 344 jurisdiction can file the appeal. An appeal jurisdiction can file the appeal. An appeal filed by an officer who has no jurisdiction to filed by an officer who has no jurisdiction to file the appeal is non est. file the appeal is non est.
8.24. The Hon’ble Gujarat High Court in the case of The Hon’ble Gujarat High Court in the case of Jolly Fantasy World Ltd., Tax appeal Jolly Fantasy World Ltd., Tax appeal no. 1254 of 2014,judgement dated 9.3.2015 judgement dated 9.3.2015 held that there cannot be waiver of here cannot be waiver of Jurisdiction, even if the assessee has participated in the proceedings Jurisdiction, even if the assessee has participated in the proceedings.
Assessment Year: 2012-13 K.A. Wires Ltd 8.25. Consent cannot confer jurisdiction and if the notice issued is with Consent cannot confer jurisdiction and if the notice issued is with Consent cannot confer jurisdiction and if the notice issued is without jurisdiction it is invalid as was held in Resham Petrotech Ltd. ITA O. 2777/ Ahd/2011 dated 10.2.2012 Resham Petrotech Ltd. ITA O. 2777/ Ahd/2011 dated 10.2.2012 Resham Petrotech Ltd. ITA O. 2777/ Ahd/2011 dated 10.2.2012 8.26. The Hon'ble Bombay High Court in he Hon'ble Bombay High Court in OF 2006 in the case of in the case of The Commissioner of Income Tax- Commissioner of Income Tax-I, Lalit Kumar Bardia, judgement dt. 11.7.2017 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 18.10.2019). Ven Interactive Limited (Civil Appeal No. 8132 of 2019 dated 18.10.2019). Ven Interactive Limited (Civil Appeal No. 8132 of 2019 dated 18.10.2019). This judgement is not on the issue of jurisdiction of the Assessing Officer. judgement is not on the issue of jurisdiction of the Assessing Officer. In that case, there is no dispute that the assessing assessing officer issuing notice had jurisdiction over the assessee. officer issuing notice had jurisdiction over the assessee. In that case the selection of the return for scrutiny was generated selection of the return for scrutiny was generated selection of the return for scrutiny was generated under automated system of the Income Tax Department which picks up the address of the assessee fro of the Income Tax Department which picks up the address of the assessee fro of the Income Tax Department which picks up the address of the assessee from the PAN database. The notice u/ the PAN database. The notice u/ s 143(2) was sent at the assessee's address available as s 143(2) was sent at the assessee's address available as per the PAN database. Intimation for further hearing and three more ntimation for further hearing and three more notices were sent at the same address as available in the PAN as available in the PAN. Finally, the assessee appeared before the . Finally, the assessee appeared before the tax authority but challenged the notices saying that these tax authority but challenged the notices saying that these notices were not served upon were not served upon him and that he never received he never received notice u/s 143(2) of the Act and that further subsequent further subsequent notices served and received by the assessee were beyond the period of limitation notices served and received by the assessee were beyond the period of limitation notices served 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 prescribed under the law. The assessee submitted that he changed his address and the prescribed under the law. The assessee submitted that he changed his address and the new address was mentioned in the return of income filed for subs new address was mentioned in the return of income filed for subsequent years. The equent years. The assessee also submitted that he filed assessee also submitted that he filed Form No.18 with Registrar of Companies, Form No.18 with Registrar of Companies, regarding change of address. regarding change of address. No separate intimation was given to the Assessing Officer No separate intimation was given to the Assessing Officer by the assessee regarding change of address. by the assessee regarding change of address. The Court held that mere men The Court held that mere mentioning of the new address on subsequent return without specifically intimating the Assessing the new address on subsequent return without specifically intimating the Assessing the new address on subsequent return without specifically intimating the Assessing Officer with respect to change of address and without getting the PAN database Officer with respect to change of address and without getting the PAN database Officer with respect to change of address and without getting the PAN database changed, is not enough and sufficient. The court found that the assessee claimed changed, is not enough and sufficient. The court found that the assessee claimed 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 never produced before any of the filed a letter for change of address but such letter was never produced before any of the 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 notice issued on the address authorities. It was held that on the facts of the case, the notice issued on the address 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 service of notice u available on the PAN data base was proper and valid service of notice u 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 PAN is must, in case of . The court held that the change of address in the database of PAN is must, in case of . 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 registered office of the change of the name of the company and/ or any change in the registered office of the change of the name of the company and/ or any change in the registered office of the Assessment Year: 2012-13 K.A. Wires Ltd corporate office of the assessee of the assessee and the same has to be intimated to the Registrar of and the same has to be intimated to the Registrar of Companies in the prescribed format Companies in the prescribed format i.e., Form 18 and after completing the said and after completing the said requirement, the assessee is required to approach the Department with the copy of the requirement, the assessee is required to approach the Department with the copy of the requirement, the assessee is required to approach the Department with the copy of the said document and then the assessee i the assessee is required to make an application for change of s required to make an application for change of address in the departmental database of the PAN. epartmental database of the PAN. In the present case the assessee has the present case the assessee has failed to do so. This judgment is on the issue of service of notice. his judgment is on the issue of service of notice. It is not an issue as to It is not an issue as to whether the Assessing Office whether the Assessing Officer has jurisdiction over the assessee. As already stated, it is As already stated, it is not a case of notice being issued by a non not a case of notice being issued by a non-jurisdictional Assessing Officer. 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 jurisdi was not with regard to the jurisdiction of the officer in issuing the notice but was with issuing the notice but was with regard to the service of notice on the proper address. The said judgement therefore regard to the service of notice on the proper address. The said judgement therefore regard to the service of notice on the proper address. The said judgement therefore does not help the department on does not help the department on this issue of jurisdiction now before of jurisdiction now before us. Jurisdiction has to be conferred u/s 120 o has to be conferred u/s 120 of the Act. Any act by an authority without jurisdiction is f the Act. Any act by an authority without jurisdiction is ab-initio void. 8.28. In view of the above discussion, as the Assessing Officer who had jurisdiction In view of the above discussion, as the Assessing Officer who had jurisdiction In view of the above discussion, as the Assessing Officer who had jurisdiction over the assessee i.e., ITO Ward over the assessee i.e., ITO Ward – 8(3), Kolkata had not issued the notice to the assessee notice to the assessee u/s 143(2) of the Act as mandatorily required under the Act, the assessment framed u/s Act as mandatorily required under the Act, the assessment framed u/s Act as mandatorily required under the Act, the assessment framed u/s 143(3) of the Act, is bad in law 143(3) of the Act, is bad in law as held by the Hon’ble Supreme Court in the case of as held by the Hon’ble Supreme Court in the case of ACIT & Anr. Vs. Hotel Blue Moon: 321 ITR 362 321 ITR 362 (SC) . Hence we quash the same. . Hence we quash the same.
As we have held that the assessment is bad in law, in view of the non have held that the assessment is bad in law, in view of the non have held that the assessment 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 statutory notice u/s 143(2) of the Act by the Assessing Officer, having jurisdiction over 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 the assessee, we would not go into the merits of the case as it would be an academic the 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. In the result, appeal of the assessee is allowed. Kolkata, the Kolkata, the 22nd day of January, 2020 20. Sd/- Sd/- [S.S. Godara] [J. Sudhakar Reddy J. Sudhakar Reddy] Judicial Member Accountant Member Accountant Member Dated : 22.01.2020 {SC SPS} Assessment Year: 2012-13 K.A. Wires Ltd Copy of the order forwarded to:
1. 1. K.A. Wires Ltd Chatterjee Intl Centre 11th Floor Room No. 11 33A, Chowringhee Road Kolkata – 700 071 2. Income Tax Officer, ward – – 8(3), Kolkata 3.CIT(A)- 4. CIT- , 5. CIT(DR), Kolkata Benches, Kolkata.
5. CIT(DR), Kolkata Benches, Kolkata.