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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC-1’, NEW DELHI
Before: Sh. N. K. Saini
ORDER This is an appeal by the assessee against the order dated 21.01.2016 of ld. CIT(A)-XII, New Delhi.
Following grounds have been raised in this appeal:
“1. Whether the Ld. CIT(A) was justified in law and facts by suo-moto holding that since the appellant has not objected to the jurisdiction exercised by ward 19(1), admittedly the appellant is a regular assessee with ward 20(4), and there are no any accord of the higher officer to the effect for transfer order.
2. Whether the Ld. CIT (A) was justified in law and facts by holding that the jurisdiction u/s 147/148 has rightly been exercised by the Assessing Officer after recording the reasons and proper approval obtained as per section 151(2) and there are no requirement 2 Amit Kumar for exercise the same on a single day and no need to serve the reasons on the same date.
3. Whether the Ld. CIT (A) was justified by holding that section 147/148, was not wrongly invoked, and it is based on complete information and the reasons were recorded and approval obtained as per the law as well as by holding that the exercise of jurisdiction are not for roving and fishing enquiry.
Whether the Ld. CIT(A) was justified in law and facts by holding that the A.O. made the addition of Rs. 5,00,000/- as unexplained credit based on the reasons but the Ld. CIT (A) as well as the Ld. A.O. has not disputed the evidence paced on the records even in his remand report.
5. Whether the Ld. CIT (A) was justified in law and facts by ignoring the various submissions/ Rebuttal of Remand Report, as well as remand report and particularly in the remand report the Ld. AO has not disputed the submissions on the legal issues as well as no dispute on the material in support of Rs. 5,00,000/- placed on the records. That the appellant craves leaves to amend, alter or to raise any other ground at the time of the hearing.”
Vide Ground No. 1, the grievance of the assessee relates to the jurisdiction exercised by the AO of Ward-19(1), when the assessee was regularly assessed with Ward-20(4).
3 Amit Kumar 4. Facts of the case in brief are that the AO issued the notice u/s 148 of the Income Tax, 1961 (hereinafter referred to as the Act) on 31.03.2010 after recording the reasons of reopening the case. The assessee submitted that its original return filed on 28.11.2003 declaring an income of Rs.1,49,175/- may be treated as return filed in response to the notice u/s 148 of the Act. The AO completed the assessment u/s 147 r.w.s. 143(3) of the Act vide order dated 29.12.2010 at an income of Rs.6,49,175/- by making an addition of Rs.5,00,000/- u/s 68 of the Act.
Being aggrieved the assessee carried the matter to the ld. CIT(A) and questioned the jurisdiction of the AO by stating that the assessee had been filing his return in Ward-20(4), New Delhi, which was regular in nature and there was no intimation from the department for the transfer of the assessee’s case to Ward-19(1) nor was any approval of higher authorities with respect to the transfer. Therefore, the AO of Ward-19(1) wrongly assumed jurisdiction of the assessee’s case.
The ld. CIT(A) after considering the submissions of the assessee observed that as per the provisions of Section 124(3) of the Act, if the assessee had any objection to the jurisdiction, he was required to raise the same within one month of the 4 Amit Kumar receipt of notice. However, the assessee had not raised any objection before the AO. He was of the view that the ground of territorial jurisdiction was not maintainable before the ld. CIT(A) as the appeal to him lie only on the grounds enumerated in Section 246 of the Act. The reliance was placed on the decision of the Hon’ble Allahabad High Court in the case of British India Corporation Ltd. reported at 337 ITR 64.
7. Being aggrieved the assessee is in appeal. The ld. Counsel for the assessee reiterated the submission made before the authorities below and further submitted that this issue is squarely covered vide order dated 16.05.2016 in for the assessment year 2009-10 in the case of ACIT, Circle, Saharanpur Vs M/s Abhay Pigments (P) Ltd., Dehradun (copy of the said order was furnished which is placed on record).
8. In his rival submissions the ld. DR strongly supported the impugned order and reiterated the observations made by the ld. CIT(A).
I have considered the submissions of both the parties and carefully gone through the material available on the record. It is noticed that an identical issue having similar facts has been 5 Amit Kumar adjudicated by the ITAT Delhi Bench ‘A’, in the case of ACIT, Circule, Saharanpur Vs M/s Abhay Pigments (P) Ltd., Dehradun (supra) wherein relevant findings have been given in paras 6 to 8 which read as under:
6. The Hon'ble Supreme Court in the case of Dasa Muni Reddy v Appa Rao AIR 1974 SC 2089 has pointed out that want of Jurisdiction must be distinguished from irregular or erroneous exercise of jurisdiction. If there is want of jurisdiction the whole proceeding is coram-non judice. The absence of a condition necessary to find the jurisdiction to make an order or give a decision deprives the order or decision of any conclusive effect. The distinction between invalidity and nullity is well established in Dhirendra Nath Gorai v. Sudhir Chandra Ghosh AIR 1964 SC 1300. It was pointed out that whether a provision fell under one category or the other was not easy of discernment as, in the ultimate analysis, it depended upon the nature, scope and object of the particular provision. The workable test propounded in the case of Holmes v. Russel (1841) 9 Dowl 487 extracted below, was approved:-
It is difficult sometimes to distinguish between an irregularity and a nullity; but the safest rule to determine what is an irregularity and what is a nullity is to see whether the party can waive the objections; if he can waive it, it amounts to an irregularity, if he cannot, it is nullity."
This test involves a distinction being drawn between provisions which confer jurisdiction and 6 Amit Kumar provisions which merely regulate the procedure. Provisions which confer jurisdiction or such mandatory provisions as are enacted in public interest or on grounds of public policy cannot be waived, because of the underlying principle that jurisdiction could neither be waived nor created by consent. The Hon'ble Allahabad High Court in the case of Sant Baba Mohan Singh vs. CIT (1973) 90 ITR 197 (All.) has held that a proceeding is a nullity where the AO has no jurisdiction ab initio to take up the proceeding. A proceeding is a nullity when the authority taking it up has no jurisdiction either because of want of pecuniary jurisdiction or of territorial jurisdiction or of jurisdiction over the subject matter of the proceeding. A proceeding is a nullity when the authority taking it has no power to assess the case. Thus the jurisdiction assumed by the AO has rendered the assessment proceedings to nullity and in any case it is not an irregularity.
The clear scheme of Income-tax Act provides that when an Officer has jurisdiction over the assessee, the same cannot be transferred and assumed by another Officer unless there is an appropriate order passed by the Competent Authority transferring the jurisdiction from one city to other after giving an opportunity of hearing to assessee. In the assessee's case no order u/s 127 of the Act has been passed by the Competent Authority, Therefore, the entire assessment proceedings are rendered to nullity. Hence, in light of the facts and circumstances of the case we find no reason to interfere with the findings of the Ld. CIT (A) and we uphold the same.”
7 Amit Kumar 10. In the present case also nothing was brought on record to substantiate that any order u/s 127 of the Act was passed by the competent authority for change of the jurisdiction. Therefore, the notice issued u/s 148 of the Act by the AO of Ward-19(1) was without jurisdiction since the assessee was regularly filing the return of income which were also accepted by the department in Ward-20(4), New Delhi.
In that view of the matter the impugned order is set aside and the assessment framed on the basis of notice issued u/s 148 of the Act by the AO who was not having the jurisdiction over the assessee is held to be invalid.
In the result, appeal of the assessee is allowed. (Order Pronounced in the Court on 29/09/2016)