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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
आयकर अपीलीय अधिकरण “A” न्यायपीठ म ुंबई में। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI श्री महावीर स ुंह, न्याययक दस्य एवुं श्री एन. के. प्रिान लेखा दस्य के मक्ष । BEFORE SRI MAHAVIR SINGH, JM AND SRI NK PRADHAN, AM Aayakr ApIla saM./ (inaQa-arNa baYa- / Assessment Year 2015-16) Shri Ashish B. Sanghvi The Income Tax Officer, B-39, C-1, Mahavir Nagar, Ward 33(1)-1, Shankar Lane, Kandivali The Pratykshkar Bhavan, Vs. (West) 705, C-12, BKC, Bandra Mumbai-400 067 (E), Mumbai-400 051 .. (ApIlaaqaI- / Appellant) (p`%yaqaaI- / Respondent) स्थायी लेखा सं./PAN No. AVKPS0725R अपीलाथी की ओर से / Appellant by : Shri Ashwin Chhag, AR प्रत्यथी की ओर से / Respondent by : Shri Satischandra Rajore, DR सुनवाई की तारीख / Date of hearing: 13-05-2019 घोषणा की तारीख / Date of pronouncement : 21-05-2019 AadoSa / O R D E R महावीर स ुंह, न्याययक दस्य/ PER MAHAVIR SINGH, JM:
This appeal filed by the assessee is arising out of the order of Commissioner of Income Tax (Appeals)-45, Mumbai [in short CIT(A)], in appeal No. CIT(A)-45/ITO-33(1)(1)/ITA-39/2017-18, dated 24.09.2018. The Assessment was framed by the Income Tax Officer, Ward-33(1)(1), Mumbai (in short ITO/ AO) for AY 2015-16 vide order dated 29.11.2013 under section 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’).
2 2. The first issue in this appeal of assessee is against the assessment made by the AO is without jurisdiction. For this assessee has raised the following ground No.1:-
1. That the assessment completed is without authority of the law for want of the jurisdictional as the territorial jurisdiction lies with the ITO Ward 33(1)(1).
Briefly stated facts are that the assessee has filed its return of income for AY 2015-16 by e-filing on 06.02.2017, declaring the total income of Rs. 2,78,540/- with ITO Ward 33(3)(1). The return of income was filed after demonetization of cash deposit amounting to Rs. 10,05,000/-. The AO issued notice under section 143(2) of the Act dated 18.09.2017 and case was selected for scrutiny under Computer Aided Scrutiny Selection (CASS). The notice under section 143(2) of the Act dated 18.09.2017 was originally served to assessee by ITO ward 33(3)(1), Mumbai. The copy of notice is enclosed by assessee in its paper book at page 8. According to the learned Counsel, the assessee’s ward for assessment is ITO-Ward 33(1)(1), Mumbai but notice under section 143(2) was issued by ITO-ward 33(3)(1). Subsequently, the assessment proceedings were transferred to ITO Ward 33(1)(1), who issued show cause notice for scrutiny assessment proceedings framing assessment under section 143(3) read with section 147 of the Act. The relevant subject mentioned in the notice dated 20.11.2017 vide show cause notice No.ITO-33(1)(1)/show cause/101/2017-18 refers as following subject: - “Sub: Scrutiny assessment proceedings under section 143(3) r.w.s 147 of the I.T. Act AY 2015-16 relevant to FY 2014-15 Show cause-Reg..”
3 Subsequently also, while notice dated 15.12.2017 vide notice No ITO- 33(1)(1)/Corrigendum Show cause/110/2017-18, the ITO ward 33(1)(1) Mumbai issued similar show cause notice vide following subject: - “Sub: Scrutiny assessment proceedings under section 143(3) r.ws 147 of the IT Act AY 2015-16 relevant to FY 2014-15 – Revised show cause/ corrigendum of show cause – reg.-.”
According to the learned Counsel for the assessee, there is no notice issued by the jurisdictional AO of the assessee i.e. ITO Ward 33(1)(1), Mumbai and hence, the very assessment proceedings initiated by the ITO Ward 33(3)(1) by issuing notice under section 143(2) is without any jurisdiction and liable to be quashed.
On the other hand, the learned Sr. DR argued that notice under section 142(1) of the Act was issued and served to the assessee within the prescribed time limit by the ITO Ward 33(3)(1) of the Act as the assessee case was selected for scrutiny under CASS. The learned Sr. DR argued that it came to notice of the Revenue that the assessee has actual jurisdiction on this case with ITO ward 33(1)(1) Mumbai and thereto, case was transferred to the concern AO i.e. ITO Ward 33(1)(1). It was contended that the range was same and both the AOs’ were having concurrent jurisdiction, which was lying with the range head. In any case, according to the learned Sr. DR in view of the provisions of section 124(3)(a) of the Act if in case the assessee has any objection with regard to the territorial jurisdiction, the objection against territorial jurisdiction shall be filed within 30 days, which is not done by the assessee. In support of the same, the learned Sr. DR relied on the decision of Hon’ble Allahabad High Court in the case of Hindustan Transport Co. vs. 4 Inspecting Assistant Commissioner [1991] 189 ITR 326 (Allahabad), wherein it is held as under: - “In this case it is held that as per section 292BB of the IT Act which is applicable with effect from 01.04.2008 and as per the deeming provisions contained in the aforesaid section 292BB of the IT Act where an assessee has appeared in any proceedings or co-operated in any enquiry relating to an assessment, it shall be deemed that any notice under any provisions of this Ac, which is required to the served upon him, has been duly served. It is observed that in the present case as the assessee participated in assessment proceedings. It is to be presumed that the notice under section 143(2) has been served upon the assessee.”
The learned Sr. DR also relied on the decision of Hon’ble Delhi High Court in the case of Abhishek Jain vs. ITO (2018 94 taxmann.com 355 (Delhi).
We have heard the rival contentions and gone through the facts and circumstances of the case. We noted from the admitted position that the notice under section 143(2) was issued to the assessee by ITO Ward 33(3)(1), Mumbai. It is also admitted position that jurisdictional ITO in the case of assessee is ITO Ward 33(1)(1). It is also admitted fact that this case was not transferred under section 127 of the Act. We find that this issue has been dealt extensively in the case of co-ordinate Bench decision of this Tribunal in the case of Tata Sons Ltd. vs. ACIT in & 3745/Mum/2006 for AY 2002-03 vide order dated 27.11.2007. We find that the co-ordinate Bench of this Tribunal in the case of Tata sons Ltd. in ITA No. 2519/Mum/2009 & 2639/Mum/2009 for AY 2004-05 has 5 considered this issue and finally quashed the assessment as without jurisdiction by observing in Para 3.34 to 3.40 as under: - “3.34. It is further noted that similar view has been expressed by Jodhpur Bench of ITA in the case City Garden v, ITO [20121 21 taxmann.com 373/51 SOT 195 (URG) wherein it has been held that in the absence of a specific order issued in pursuance to Section 120(4)(6) specifically authorizing Joint Commissioner of Income Tax to exercise the powers and perform the function as conferred on or assigned to an Assessing Officer by or under the Act or a notification under section 120 of the Act, he is not competent to act as an Assessing Officer and pass an assessment order.
3.35. Similar view has been taken by Lucknow Bench of IT AT in the case of Microfin Security (P.) Ltd. v. Addl. CIT [2005] 3 SOT 302 wherein it was held that in absence of any allocation being made in favour of Additional Commissioner to make an assessment, he cannot assume for himself such an authority so as to pass an assessment order.
3.36. Similar view has been taken recently in another judgment by the Delhi bench of the IT AT in the case of Harvinder Singh Jaggi v. Asstt. CIT [2016] 157 ITD 869/67 taxmann.com 109. Relevant part of observations of the Bench is reproduced below:— .......As regard the contention of the assessee that no order under section 127 was passed by the Commissioner of Income-tax, the 6 revenue has submitted that the Addl. Commissioner of Income Tax was provided concurrent jurisdiction over the cases through the order of the Commissioner of Income tax and, therefore, no separate order under section 127 was required to be passed by the Commissioner of Income tax. However, no such order of the Commissioner of income tax conferring the concurrent jurisdiction to the Addl. Commissioner of Income Tax over the cases of the Income tax officer is either available on assessment record, or was produced by the revenue. Thus, in absence of any such order, it can't be established that said assessment order passed was within the jurisdiction of the Addl. Commissioner of Income Tax. Thus, the assessment completed, by Additional Commissioner of Income Tax in the case being without jurisdiction, is void ab initio. Accordingly, the ground of appeal of the assessee is allowed.
3.37. In the case ofBindal Apparels Ltd. (supra), Delhi Bench of IT AT took a similar view and held that in view of definition of Assessing Officer contained u/s 2(7A), an Additional Commissioner cannot be an authority to exercise and perform all or any of the powers of the functions of the Assessing Officer to make assessment of Income. The Bench analysed the provisions of Section 2(7A) as it existed prior to amendment made by Finance Act, 2007. 7 3.38. During the course of hearing, it was also submitted by Ld. CIT-DR to defend the impugned assessment order that in any case the assessment order has been passed by an officer of the rank of Additional Commissioner which is much superior to the rank of Assistant Commissioner and thus no prejudice can be presumed to have been done to the assessee. We find that reasoning given by the Ld. CIT-DR to defend the impugned assessment order does not have any legal force. It is well settled law that jurisdictional conditions required to be fulfilled by the assessing officer must be performed strictly in the manner as have been prescribed and if it has not been done in the manner as prescribed under the law, then it becomes nullity in the eyes of law. Hon'ble Supreme Court in the case of CIT v. Anjum M. H. Ghaswala [20011 252 ITR 1/119 Taxman 352 observed that it is a normal rule of construction that when a statue vests certain powers in an authority to be exercised in a particular manner, then that authority is bound to exercise it only in the manner provided in the statue only.
3.39. Hon'ble Bombay High Court dealt with a similar situation hi the case of Ghanshyam K. Khabrani (supra} wherein the said assessee raised an issue that requisite sanction prescribed u/s 151 for reopening of an assessment was required to be obtained by the AO from Joint Commissioner of Income tax whereas the same was granted by Commissioner of Income tax and therefore the same was nullity in the eyes of law. Revenue took a 8 stand that sanction was granted by an officer superior in rank and therefore, no prejudice was caused to the assessee. But Hon'ble High Court did not agree with the contention of the Revenue and observed that:—........The expression "Joint Commissioner" is defined in section 2(28C) to mean a person appointed to be a Joint Commissioner of Income Tax or an Additional Commissioner of Income-tax under section 117(1). Section 151(2) mandates that the satisfaction has to be of the Joint Commissioner. The expression has a distinct meaning by virtue of the definition in section 2(28C). The Commissioner of Income tax is not a Joint Commissioner within the meaning of section 2(28C). There is no statutory provision under which power to be exercised by an officer can be~ exercised by a superior officer. When the statute mandates the satisfaction of a particular functionary for the exercise of a power, the satisfaction must be of that authority. Where a statute requires something to be done in a particular manner, it has to be done in that manner only............
3.40. Thus, in view of the legal discussion made above and facts of the case, it is clear that impugned assessment order has been passed without authority of law hi as much as Revenue has not been able to demonstrate that the Additional Commissioner of Income tax who had passed the assessment order had valid authority to perform and exercise the powers and functions of an Assessing Officer of the assessee and to pass the impugned 9 assessment order. Under these circumstances, we have no other option but to hold the same as nullity and, therefore, the impugned assessment order is quashed having been passed without authority of law. "
As the issue is squarely covered, respectfully following the decision of co-ordinate Bench in the case of Tata sons Ltd. (supra), we hold that the notice under section 143(2) is issued without jurisdiction and hence, assessment framed is invalid and notice issued under section 143(2) of the Act and consequent assessment framed is quashed.
Since we have quashed the assessment framed, we need not to go into the merits of the case.
In the result, the appeal of assessee is allowed.
Order pronounced in the open court on 21.05.2019. (एन. के. प्रधान/ NK PRADHAN) (महावीर ससंह /MAHAVIR SINGH) (लेखा सदस्य / ACCOUNTANT MEMBER) (न्याययक सदस्य/ JUDICIAL MEMBER) मुंबई, ददनांक/ Mumbai, Dated: 21.05.2019. दीप रकार, व.यनजी धिव / Sudip Sarkar, Sr.PS