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Income Tax Appellate Tribunal, DELHI BENCH ‘B’ NEW DELHI
Before: SHRI N.K. SAINI & SHRI SUDHANSHU SRIVASTAVA
against a common order dated 23.04.2014 passed by the ld. CIT (A) Bareilly and pertain to assessment year 2008-09. The issue involved is common; therefore, both the appeals are being disposed of through this common order.
The issue in both the appeals is that the assessee is of district Raebareli and has been filing its returns of TDS there.
Due to error in the system of the Income Tax Department, the Assessing Officer at Bareilly/Moradabad treated the assessee as assessee in default for the purposes of deduction of tax at source & 4103/Del/2014 Assessment year 2008-09 and raised a demand for the first quarter and the fourth quarter of FY 2007-08. This order was passed by the Office of the JCIT (TDS) Bareilly.
Aggrieved, the assessee preferred an appeal before the ld. CIT (A), Bareilly who made subsequent inquiries and concluded that jurisdiction over District Raebareli on the date of passing of the impugned orders was not lying with ITO (TDS)
Bareilly/Moradabad. Ld. CIT (A) relying on the decision of the Hon'ble Bombay High Court in the case of the Newspaper Society vs ITO and Anr (2012) 247 ITR 193 (Bombay) held that the ITO TDS at Bareilly/Moradabad could not have passed the orders as there was a lack of jurisdiction. Ld. CIT(A) was of the view that the appellant’s territorial district fell within the jurisdiction of CIT Faizabad and therefore the impugned order as passed by the ITO (TDS), Bareilly/Moradabad were not maintainable for lack of jurisdiction.
Now, the aggrieved revenue has approached the ITAT and has raised the following grounds of appeal:- & 4103/Del/2014 Assessment year 2008-09 ITA No. 4102/Del/14 “1. The Ld. CIT (Appeal), Bareilly has erred in facts and law by quashing the orders of the ITO (TDS) Moradabad u/s 201(1)/201(1A) and allowed relief of Rs.8,99,050/-, 7,20,070/- & 2,12,950/- on the ground that he had no territorial jurisdiction over the assessee. TAN of the deductor was lying on the code of ITO (TDS) Moradabad who passed the order in this case. The orders are passed online on the ITD Application, and only the person having TAN on his code can pass such order.
2. While doing so the Ld. CIT (A) has erred further in overlooking the fact that order u/s 201 (1) was printed out of the system (automatic ITD Software) and once order is processed by Computerized System, the A.O. has no option but to sign it and send to the deductor.
3. While doing so in (1) above the Ld. CIT (A) has further erred in overlooking the fact that no order on this is passed by any other A.O. and the shortfall in TDS was therefore rightly brought to tax by ITO(TDS) Moradabad.
4. That while doing so in (1) the CIT (A) has further more erred in directing the Assessing Officer of the correct jurisdiction to raise demand and bring default, overlooking the fact that no fresh order can be passed by any other AO u/s 201(3) (1) of the IT Act beyond the period of two years.
5. That the applicant craves leave to amend/add any one or more of the grounds of appeal as stated above as and when need for doing so may arise.”
“1. The Ld. CIT (Appeal), Bareilly has erred in facts and law by quashing the orders of the ITO (TDS) Moradabad u/s 201(1)/201(1A) and allowed relief of Rs.39,73,360/-, 12,09,920/- & 42,41,130/- on the ground that he had no territorial jurisdiction over the assessee. TAN of the deductor was lying on the code of ITO (TDS) Moradabad who passed the order in this case. The orders are passed online on the ITD Application, and only the person having TAN on his code can pass such order. & 4103/Del/2014 Assessment year 2008-09 2. While doing so the Ld. CIT (A) has erred further in overlooking the fact that order u/s 201 (1) was printed out of the system (automatic ITD Software) and once order is processed by Computerized System, the A.O. has no option but to sign it and send to the deductor.
3. While doing so in (1) above the Ld. CIT (A) has further erred in overlooking the fact that no order on this is passed by any other A.O. and the shortfall in TDS was therefore rightly brought to tax by ITO(TDS) Moradabad.
4. That while doing so in (1) the CIT (A) has further more erred in directing the Assessing Officer of the correct jurisdiction to raise demand and bring default, overlooking the fact that no fresh order can be passed by any other AO u/s 201(3) (1) of the IT Act beyond the period of two years.
That the applicant craves leave to amend/add any one or more of the grounds of appeal as stated above as and when need for doing so may arise.”
5. Learned Departmental Representative placed reliance on the orders of the Assessing Officer and submitted that the Ld. CIT (A) had erred in quashing the orders of the ITO (TDS) on the ground that he had no territorial jurisdiction over the assessee. It was also submitted that the Ld. CIT(A) overlooked the fact that order u/s 201 (1) was printed out of the system (automatic ITD Software) and once an order is processed by Computerized System, the A.O. has no option but to sign it and send to the deductor. It was also submitted that the Ld. CIT (A) had further erred in overlooking the fact that no order in this case was passed by any other A.O. and, therefore, the shortfall in TDS had to be brought to tax. 4 & 4103/Del/2014 Assessment year 2008-09 6. Nine was present for the assessee.
We have heard the submissions of the Ld. DR and carefully perused the impugned order. It is undisputed that the jurisdiction over district Raebareli on the date of passing the impugned orders was not lying with the ITO (TDS)
Bareilly/Moradabad. Even at the time of hearing, the department could not bring anything on record to contradict the findings of the Ld. CIT (A). On the facts and circumstances of the case, we agree with the findings of the Ld. CIT (A) and find no error in holding that since the territorial jurisdiction did not lie with the ITO (TDS) Bareilly/Moradabad, the impugned orders suffered from lack of jurisdiction and were not maintainable. We also note that the Ld. CIT (A) has mentioned in the impugned orders that the ITO (TDS) Moradabad is directed to bring the defaults, if any, of the assessee to the Assessing Officer concerned who rightly holds the jurisdiction over the assessee and the competent Assessing Officer may adopt and initiate proceedings as were available in law. Accordingly, we decline to interfere and uphold the order of the Ld. CIT (A) in both the appeals and dismiss the appeals of the department. & 4103/Del/2014 Assessment year 2008-09 8. In the final result, both the appeals of the department are dismissed.
Order pronounced in the open court on 06.04.2017.