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Income Tax Appellate Tribunal, “A” BENCH: KOLKATA
Before: Shri A. T. Varkey, JM & Dr. A. L. Saini, AM]
This appeal preferred by the revenue is against the order of Ld. CIT(A)-1, Kolkata dated 12.07.2016 for AY 2011-12.
The revenue by preferring this appeal has challenged the action of Ld. CIT(A) annulling the assessment order passed by ITO, Ward-2(1), Kolkata.
We note that the assessee is a corporate assessee regular in filing of return. For the Asst. Yr.2011-12, the case of the assessee was selected for scrutiny at Central Circle- 5, New Delhi. The assessee was scrutinized u/s. 153C/143(3) of the IT Act, 1961 for A.Y. 2005-06 to 2009-10 . Subsequently, the assessee was scrutinized u/s. 143(3) for preceding years including A. Y. 2011-12. Simultaneously, the case of the assessee was selected for scrutiny u/s.143(3) by AO Ward - 2(1), Kolkata.
Qualitron Commodities Pvt. Ltd., AY 2011-12 4. Since, the jurisdiction of the assessee was passed on to Central Circle-5, New Delhi pursuant to search conducted at the group company of the assessee in New Delhi and as such assessee had its ongoing scrutiny at Central Circle-5, New Del. However, since an assessment order u/s. 144 was passed by ITO, ward-2(1), Kolkata against the assessee, the same was challenged before the Ld. CIT(A), who was pleased to annul the assessment order passed by ITO, Ward-2(1), Kolkata by observing as under:
“After considering the AO's finding and written submissions, remand report of the A 0 and rejoinder filed by A R of the appellant, it is observed that the assessment proceedings were initiated by the A 0, i. e. ITO, Ward-2(1), Kolkata on the basis of information for selection of the case for scrutiny under CASS for AY. 2011-12 and jurisdiction was assumed on the basis of PAN of the appellant. As regards the issue of challenge of the validity of Jurisdiction with ITO, Ward-2(1),Kolkata the appellant has stated that its case was centralized with A0, Central Circle -51 New Delhi pursuant to search and seizure in the "Rajdarbar Group of Cases" on 31.07.2008. It was further averred that the assessments in the appellant's case were completed U/s 153C/143(3) for Asst years 2005-06 to 2008-09 on 21.12.2010 and U/s 143(3) for Asst year 2009-10 on 21.12.2010 (In total 4+1 = 5 years assessment at Central Circle - 51 New Delhi on 21.12.2010). It is observed that the I. T.O, Ward-2(1),Kolkata although he observed that efforts were made for serving statutory notices at the available addresses of the appellant company in New Delhi through the Inspector, however there admittedly A.O has not commented upon whether any efforts was made to serve the statutory notices by locating the correct current registered address of the company or the Principal Officer/directors from the R.O.C web-site 6r Department's database in New Delhi. It is noted that the mention of efforts to transfer the PAN made by the A.O by writing to the CIT, Kolkata-1, indicates that the A.O was aware of transfer of jurisdiction over the appellant’s case from Kolkata to New Delhi, but since the assessment was getting time-barred the proceedings were finalized hurriedly by serving notices through affixture at the last available Kolkata address and notices to Director through mail/speed post. There is substance in the appellant's argument that the jurisdiction over the appellant's case was being exercised continuously by the A.0,Central Circle-5, New Delhi after centralization. of the case, evidenced from copies of relevant assessment orders placed on record. It is also pertinent that, "all the orders U/s 153C/143(3) were passed after obtaining approval of Addl. CIT, Central Range - II, New Delhi." The appellant has also argued that "It is dear from Para (4) and (5) that Ld. A. O. also had in mind to transfer the file but he tried with wrong address. Otherwise same ITO ward 14(4),New Delhi who was vested with the jurisdiction on decentralization of file vide order U/s 127 of the I. T. Act, 1961 dated 30/05/2014 passed by CIT, (Central) - 1, New Delhi. 12) Thus, Ld. A. O. of Kolkata has issued notices at wrong address, approach ITO, Delhi giving wrong address, thus, has came to a wrong conclusion." The appellant's A. R has further argued that it cannot be held responsible for the A. O's default in transfer/Migration of the PAN to Delhi A. 0., which was the responsibility of I. T. Department at Kolkata and not of the appellant. It was reiterated that after search, appellant was regularly assessed with Ld. A. O. CC-5, New Delhi and appellant was having no occasion to peruse the matter of transfer of PAN to New Delhi. A.O. The appellant's A.R has referred to several CBDT Circulars on the subject of migration of PAN as admitted by the Department Qualitron Commodities Pvt. Ltd., AY 2011-12 itself, including the following: Circular No. F.No. DGIT(S)/DIT(S)-l/AIS Dated 16.07.2015 by DIT (System); Circular No. F. No. DIT(S)- DIT (System); Circular No. F. No. DIT(S)-1/AIS/NODAL/1213 dated 08/10/2012 by DIT (System); Instruction No. 80[F. No. SW/3] dated 30.01.2012 by DIT (System) vide 25/98/01- DIT(S) -19744-88]; Instruction No. 97(F. No. CIT/OSD/, dated 28/09/2011 by DIT (System) vide AIS/2011-12]. On the issue of' appellant’s contention regarding lack of valid jurisdiction exercised by the A. 0 in passing order u/s 144 of the Act, reliance was placed upon the decision of Kerala High Court in the case of P.A. Ahammed v. Chief CIT & Ard (2006) 282 ITR 334 (Ker), wherein on similar facts, the Hon'ble Court observed as under: "The main contention raised by the petitioner against transfer of file is that only "case" tan be transferred under section 127 from one officer to another officer by the Chief CIT and the same does not approve (sic-include) transfer of jurisdiction in respect of an assessee. However, Explanation to section 127 clarifies that "case”means the entire proceedings under the Act. Therefore, this argument does not entitle the petitioner to retain assessments with the previous officer even after transfer of the raid file to another officer. This court has taken a similar view in Redwood Hotel Ltd. v. Chief CIT & Ors. (2003) 259 ITR 191 (Ker). The next contention raised by counsel for the petitioner is that even if the raid cases were transferred to Central Circle, regular assessment should be retained with the previous assessing officer. I do not find any provision in the Act whereunder two assessing officers retain 'concurrent jurisdiction over the same assessee. At any given point of time only one assessing officer can have regular jurisdiction over an assessee for assessment is the scheme of the Act. Therefore, when transfer is effected, the entire files old, pending and the returns to be filed will get transferred to the officer to whom the file is transferred by the Chief Commissioner of Income Tax. Therefore, challenge against Ext. P14 is without any justification. The original petition is devoid of any merit and is dismissed.” In view of the above discussion and considering the ratio of the cited case law in P.A. Anemmed v. Chief CIT & Ard (2006) 282 ITR 334 (Ker), which is found to be squarely applicable to the facts of the appellant's case, it is found that admittedly the appellant's case was being assessed continuously with the A. 0, Central Circle-5, New Delhi as, assessments in the appellant's case were completed U/s 153C/143(3) for Asst years 2005-06 to 2008-09 on 21.12.2010 and U/s 143(3) for Asst year 2009-10 on 21.12.2010 after centralization of the jurisdiction over the appellant company's case. Thus, the assumption of jurisdiction over the appellant company by the I. T. 0, Ward-2( 1), Kolkata on the basis of PAN awaiting transfer, is found to be not justified. Therefore, the impugned assessment order u/s 144 is found be passed without valid jurisdiction and was thus bad in law and is annulled. Since the assessment has been held to be invalid and bad in law as discussed above, there is no need to adjudicate Ground no. 4 relating toi addition of the share capital to the total income by the AO on merits. Therefore, the ground no. 1, 2, 3 & 5 of the appellant are allowed.”
5. Aggrieved by the aforesaid order of Ld. CIT(A), the revenue is before us.
We have heard both the parties and gone through the facts and circumstances of the case. We note that the assessee has filed its return of income electronically for the assessment year 2011-12 on 07.07.2012 vide acknowledgment No. 40634147107712.
Qualitron Commodities Pvt. Ltd., AY 2011-12 Pursuant to search and seizure in “Rajdarbar Group of cases” on 31.07.2008, the assessee’s assessment was centralized to the file of Central Circle-5, New Delhi, we note that in the case of assessee’s assessments for AYs 2005-06 to 2008-09 were completed u/s. 153C/143(3) on 21.12.2010 and u/s. 143(3) for AY 2009-10 on 21.12.2010 by AO (DCIT) of Central Circle-5, New Delhi after obtaining approval of Additional CIT, Central Range- 11, New Delhi. Further, we note that in the assessment order for AY 2011-12 the AO has mentioned the addresses as under:
“13B, 3rd floor, Netaji Subhas Marg, Daryaganj, New Delhi-400002”
And the assessment order for this relevant assessment year was scrutinized u/s. 143(3) of the Act and was passed by Deputy Commissioner of Income-tax on 28.03.2014. We also note the CIT (Central-1), New Delhi by order u/s. 127 of the Act dated 30.05.2014 has transferred the jurisdiction of assessee company from Central circle-5, New Delhi to Ward-14(4), New Delhi from which it is clearly inferred that Central Circle-5 AO (DCIT) had jurisdiction of assessee AY 2011-12 and as per the Hon’ble Kerala High Court order in P.A. Ahmed (supra), the ITO, Ward-2(1) did not enjoy jurisdiction. So the Ld. CIT(A) has rightly annulled the assessment passed u/s. 144 of the Act. Moreover, it was brought to our notice by Ld. AR that on merits also no addition could have been made u/s. 68 of the Act because the money in question was received in earlier years and not in the relevant assessment year under consideration. So, in any view of the matter, the order impugned is upheld and appeal of revenue is dismissed.
In the result, the appeal of revenue is dismissed.
Order is pronounced in the open court on 21st August, 2018 Sd/- Sd/- (Dr. A. L. Saini) (Aby. T. Varkey) Accountant Member Judicial Member
Dated : 21st August, 2018 Jd.(Sr.P.S.)
Qualitron Commodities Pvt. Ltd., AY 2011-12 Copy of the order forwarded to: 1. Appellant – ITO, Ward-2(1), Kolkata. Respondent – M/s. Qualitron Commodities Pvt. Ltd., 4th Floor, 7, 2 Ganhelsh Chandra Avenue, Kolkata-700 013.
3. CIT(A)-1, Kolkata. (sent through e-mail) CIT – , Kolkata. 4.
5. DR, ITAT, Kolkata. (sent through e-mail)