INCOME TAX OFFICER, WARD-2(3)(8), SURAT vs. MAHAVEER SHANTILAL JAIN, SURAT

आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the Revenue, pertaining to Assessment Year (AY) 2013-14, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals)-1, Surat [in short “the ld. CIT(A)”], in Appeal No. CIT(A)-1/10690/2018-19, dated 01.07.2019, which in turn arises out of an assessment order passed by Assessing Officer, under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’), dated 23.03.2016.

, which is reproduced below: “1. On the facts and in the circumstances of the case as well as law on the subject, the learned commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in issuing notice u/s 143(2) of the Income Tax, 1961 on 02.09.2014 by the ITO, Wd., Kishengarh, Rajasthan without the Jurisdictional Authority, so the notice u/s 143(2) of the Income Tax Act, 1961 is invalid and void ab initio. Hence, the Assessment u/s 143(3) of the I.T. Act, 1961 is void ab initio.”

4. Succinctly, the factual panorama of the case is that assessee before us is an Individual and filed his return of income for assessment year (A.Y.) 2013-14, declaring total income at Rs.4,69,040/- on 29.09.2013. The notice u/s 143(2) of the Act was issued on the assessee, on 02.09.2014, which was duly served by Income Tax Officer (ITO) Wd. Kishengarh, Rajasthan. Subsequent to assignment of the case to the assessing officer, another notice, giving assessee fresh opportunity of being heard, was issued on 11.06.2015 and served upon the assessee. The notice u/s 142(1) of the Act, calling for various details, was issued on 17.08.2015 and served upon the assessee.

5. In response to the notices under sections 143(2) and 142(1) of the Act, the assessee furnished the details / explanation before the assessing officer.

6. The assessing officer observed that during the year under consideration, the assessee was engaged in the business of Import, export, and trading in all kinds of diamonds in the name and style of his proprietary concern viz. Divya Jewels. During the course of assessment

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain proceedings, it was noticed by the assessing officer that assessee has made transactions with the entities of Rajendra Jain and Bhanwarlal Jain Group. The assessing officer was in possession of information that a search and seizure action has been carried out by the Investigation Wing, Mumbai on the Rajendra Jain and Bhanwarlal Jain Group, who were indulged in providing of accommodation entries in the form of unsecured loans, bogus purchases / sales to the interested parties.

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain these diamond concerns are only on paper base with no real business activities. Findings of the search action on Shri Rajendra Jain and Shri Bhanwarlal Jain reveals that Shri Rajendra Jain and Shri Bhanwarlal Jain and their associates manage, control and operate numerous concerns in the name of various persons who are shown as name-sake directors, partners and proprietors through which they provide accommodation entries of loans and advances, purchase and sale and unsecured loans to various parties / beneficiaries. The name sake / dummy Directors / proprietors / Partner of all these concerns admitted on oath that they were merely employees of Rajendra Jain and Bhanwarlal Jain and were looking after miscellaneous office work like depositing cheques in banks, handling over parcels to clients, making data entry etc. All the concerns are shown to be engaged in import of diamonds. However, when these name-sake directors / Partners/ Proprietors were specifically asked to explain as to how they contacted the parties from whom the imports have been made in the respective concerns, they were unable to comment on the same. They all admitted of not having any personal contact with any of the importers either through phone or email. The facts mentioned above prove that these employees have never made any import on their own and all the imports in the concerns in which they are shown as directors, partners and proprietors and are made at the direction of Rajendra Jain and Bhanwaral Jain.

8. Shri Rajendra Jain and Shri Bhanwarlal Jain, in their statements recorded under section 132(4) of the Income Tax Act, 1961, has admitted that they manage and controls the business affairs of all the concerns in which the persons who were their employees are also shown as directors, partners and proprietors. The List of group concerns operated and managed by Shri Rajendra Jain and Shri Bhanwarlal Jain was obtained from him during the course of search. In the backdrop of the facts and Page | 4

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain circumstances discussed in earlier paragraphs, the assessing officer was of the view, that the assessee had only obtained bogus bill from the above mentioned group concerns of Shri Rajendra Jain and Shri Bhanwarlal Jain of Rs.7,37,44,213/- without actually getting the material. Thus, these bills issued by the said group concern is nothing but accommodation entry. Hence, the accommodation entry received from Shri Rajendra Jain and Bhanwarlal Jain group concerns to the tune of Rs.7,37,44,213/- was treated by the assessing officer, as bogus purchases and added to the total income of the assessee.

9. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the Ld. CIT(A), who has restricted the addition from 100% to 5% of bogus purchases, observing as follows: “10.1.7 It is further seen that the Honorable Gujarat High Court in the cases decided subsequent to N K Proteins ltd (supra) has not followed it, viz in the cases of Jagdish H. Patel, TA No.411 of 2017 dtd 01/08/2017 (8% disallowance) and TEJUA ROHITKUMAR KAPADIA, Surat in TA No. 691/2017 dated 18.09.2017 (0% disallowance). It is further seen that the Hon., Supreme Court has confirmed the decision of Hon Guj HC in Tejua R. Kapadia in SLP (C) Diary No(s). 12670/2018 dated 04.05.2018. This goes to show that the decision of Gujarat High Court in the case of N K Proteins (Industries) Ltd (supra) is specific to the facts of that case. 10.1.8 In the instant appeal, there is no such adverse finding as in the case of N. K. Proteins (supra). The facts in instant appeal are identical to Gangani Impex (supra) and the cases decided by the jurisdictional ITAT (supra). In view of this, respectfully following jurisdictional ITAT, the disallowance is restricted to 5%. The AR has furnished orders Hon'ble ITAT Mumbai , Delhi and Kolkata wherein, an identical circumstances & factual matrix involving the same accommodation entry providers the entire disallowance made by Ld. AO was deleted (Sanghvi Export International Ltd. 3375/Mum/2017 dated 21.08.2018, Karamchandra Rubber Industries ITA No.6599/Del/2014, 12.02.2018 M/s. Vaman International Pvt., ITA 1040 & 1041 /M/2017 dtd 27.09.2017, Fancy wear ITA No. 1596/M/2016 dtd. 20.09.2017, Surat Jewells Co. ITA No. 1581/Kol/2016 dated 05.05.2017. The AR also furnished copies of order of CIT(A) Valsad in the case of (1) Sahjanand Export CIT(A)/vls/236/2016-17 dtd. 24.08.2017, (2) Rushabh International No.CIT(A)/vls/ 102/2016-17 dtd. 14.02.2018, which in the disallowances is restricted to 2% of impugned purchases. However, since I have already taken a view of disallowing 5% of purchases and since it is confirmed by Hon'ble jurisdictional ITAT, Surat Bench as discussed in para above; the above decisions of ITAT Mumbai/ Kolkata are not followed.

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain 11. In view of above discussion the disallowance is restricted to 5% of the impugned purchases as under: A.Y. Unverified purchases Disallowance confirmed 2013-14 Rs.7,37,44,213/- Rs.36,87,210/- 12. In the result the appeal is partly allowed.”

10. Aggrieved by the order of Ld. CIT(A), the Revenue is in appeal before us and assessee has also filed additional ground under Rule 11 read with Rule 27 of the ITAT Rules, which is reproduced below for ready reference: “1. On the facts and in the circumstances of the case as well as law on the subject, the learned commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in issuing notice u/s 143(2) of the Income Tax, 1961 on 02.09.2014 by the ITO, Wd., Kishengarh, Rajasthan without the Jurisdictional Authority, so the notice u/s 143(2) of the Income Tax Act, 1961 is invalid and void ab initio. Hence, the Assessment u/s 143(3) of the I.T. Act, 1961 is void ab initio.”

11. Learned Counsel for the assessee, pleaded that above legal ground, should be admitted by the Tribunal as all the facts relating to above cited additional ground were before the assessing officer. However, ld DR for the Revenue opposed the plea taken by the ld Counsel for the assessee, and argued that at this stage the assessee cannot take this legal ground.

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain Ltd., vs. CIT (1998) 229 ITR 382 (SC), we admit the additional ground raised by the assessee.

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain by the assessing officer is not valid and hence it should be quashed. The ld Counsel also distinguished the order of Coordinate Bench of ITAT, Surat in the case of Base Indistries Ltd, for assessment year 2011-12, order dated 08.06.2022. The ld Counsel stated that in the case of Base Indistries Ltd(supra) it was mentioned in the order of CCIT- Surat under section 127 of Act, that the case was transferred considering the monetary limit of less than Rs. 20.00 lacs as per Board’s Instruction No.01/2011 [F No. 187/12/2010-IT(A-I)] dated 31/01/2011. The ld. Sr. DR furnished copy of letter for transferring the case of assessee from Assistant Commissioner of Income Tax (ACIT), Circle-Vapi to Income Tax Officer (ITO), Ward-1, Vapi. Thus due to monetary limit and as per CBDT instruction the case was transferred, which is not applicable to the assessee under consideration.

3. In the matter, it is submitted that the assessee's case for A.Y. 2013-14 has been selected for scrutiny under Computer Assisted Scrutiny selection (CASS). At that time the PAN of the assessee lies with ITO, Kishangadh. Therefore considering the time barring nature of the case, notice was issued by the ITO, Kishangadh and duly served to the assessee's current address situated at Office No. 401, 6-2259, 4th Floor, Santkrupa Appt, Havada Sheri Mahidharpura, Surat. Thereafter, vide order No. 16/2014-15 dated 20.01.2015 of the CIT, Ajmer has passed order u/s 127 of the Act and transferred the PAN and notice issued u/s 143(2) of the Act for further necessary action to the ITO, Ward-2(3X8), Surat. Subsequently, the ITO, Ward-2(3)(8) has passed order u/s 143(3) of the Act on 23.03.2016. Hence, the claim of the assessee is not justified.

17. The ld DR furnished before the Bench, the report submitted by Assessing Officer, which is reproduced below:

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain Apart from this, ld DR also relied on the order of the Coordinate Bench of ITAT, Surat in the case of Base Indistries Ltd, for assessment year 2011-12, order dated 08.06.2022 18. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. We note that the notice under section 143(2) of the Act was issued on the assessee, on dated 02.09.2014, which was duly served by Income Tax Officer (ITO) Wd. Kishengarh, Rajasthan. Whereas, the assessment was framed by the Income Tax Officer, ward 2(3)(8), Surat. It is undisputed fact that Income Tax Officer, ward 2(3)(8), Surat, has not issued notice under section 143(2) of the Act. In fact, notice under section 143(2) of the Act, was issued by the Income Tax Officer (ITO) Wd. Kishengarh, Rajasthan, who is not the assessing officer of the assessee under consideration, hence it will be deemed that no any notice under section 143(2) of the Act was issued to the assessee by the Income Tax Officer, ward 2(3)(8), Surat, who has framed the assessment order under section 143(3) of the Act, dated 23.03.2016.

19. On the other hand, ld DR stated by way of written submission that the assessee's case for assessment year (A.Y.) 2013-14 has been selected for scrutiny under Computer Assisted Scrutiny selection (CASS). At that time the PAN of the assessee lies with ITO, Kishangadh. Therefore, considering the time barring nature of the case, notice was issued by the ITO, Kishangadh and duly served to the assessee's current address situated at Office No. 401, 6-2259, 4th Floor, Santkrupa Appt, Havada Sheri Mahidharpura, Surat. Thereafter, vide order No. 16/2014-15 dated 20.01.2015 of the CIT, Ajmer has passed order u/s 127 of the Act and transferred the PAN and notice issued u/s 143(2) of the Act for further Page | 10 453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain necessary action to the ITO, Ward-2(3)(8), Surat. Subsequently, the ITO, Ward-2(3)(8) has passed order u/s 143(3) of the Act on 23.03.2016. Hence, the claim of the assessee is not justified.

21. We note that assessee`s scrutiny assessment was completed on 09.03.2015 under section 143(3) of the Act for assessment year 2012-13 by the Income Tax Officer-ward-2(3)(8), Surat ( vide paper book page no.2) and notice under section 143(2) of the Act, was also issued by the Income Tax Officer-ward-2(3)(8), Surat for assessment year 2012-13 and the assessee’s address in Surat is as follows: “Mahaveer Shantilal Jain, 401, 6-2259, 5th Floor, Sant Krupa Complex, Havara Shri, Mahidharpura, Surat” However, for subsequent assessment year 2013-14 (the assessment year under consideration) the notice under section 143(2) of the Act, was issued by the Income Tax Officer (ITO) Wd. Kishengarh, Rajasthan, Page | 11 453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain which is not acceptable, particularly when the assessee`s previous assessments were completed by the Income Tax Officer-ward-2(3)(8), Surat and notices under section 143(2) were also issued by the Income Tax Officer-ward-2(3)(8), Surat. Hence, we note that notice under section 143(2) of the Act, for assessment year 2013-14, issued by the Income Tax Officer (ITO) Wd. Kishengarh, Rajasthan, is without any jurisdiction. When the notice under section 143(2) of the Act, for assessment year 2013-14 was issued by the Income Tax Officer (ITO) Wd. Kishengarh, Rajasthan, who is not the assessing officer of the assessee, then in that circumstances the assessment framed by the assessing officer under section 143(3) of the Act, dated 23.03.2016 is not a valid assessment in the eye of law.

“4. This appeal by the revenue filed under section 260A of the Income-tax Act, 1961, (the Act, in brevity) is directed against the order dated 20-7-2016 passed by the Income-tax Appellate Tribunal, "C" Bench, Kolkata (Tribunal) in & 1301/Kol/2011 for the assessment year 2007-08. The revenue has raised the following substantial question of law for our consideration. a. Whether on the facts and in the circumstances of the case the Learned Income-tax Appellate Tribunal, "C" Bench, Kolkata is illegally justified to hold that since notice under section 143(2) was not issued by the ITO - Ward 56(4), Kolkata, the assessment order passed by him is a nullity and without jurisdiction ? 5. We have heard Mr. Mitra, learned senior standing counsel for the appellant and Mr. Ananda Sen, learned counsel assisted by Ms. Atasi Sarkar for the respondent/assessee.

6. The short issue which falls for consideration is whether the assessing officer, who had jurisdiction over the assessee at the relevant time had issued notice under section 143(2) of the Act before taking up the scrutiny assessment under section 143(3). Before we go into the facts, we take note of the legal position as laid down by the Hon'ble Supreme Court in Asstt. CIT v. Hotel Blue Moon [2010] 188 Taxman 113/321 ITR 362, wherein the Hon'ble Supreme Court held that omission on the part of the assessing officer to issue notice under section 143(2) cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under section 143(2) cannot be dispensed with. Further, we also take note of the decision in the case of CIT v. Gitsons Engineering Co. [2015] 53 taxmann.com 108/231 Taxman 506/370 ITR 87 (Mad.), wherein it was held that the word 'shall' employed in section 143(2) of the Act, contemplates that the assessing officer should issue notice to the assessee so as to ensure that the assessee has not understated income or has not computed excessive loss or has not under paid the tax in any manner. It was further held that when the assessing officer considers it necessary and expedient to ensure that tax is paid in accordance with law, he should call upon the assessee to produce evidence before him to ensure that the tax is paid in accordance with law. The section makes it clear that service of notice under section 143(2) of the Act within the time limit prescribed is mandatory and it is not a mere procedural requirement. At this juncture, it would be relevant to take note of the definition of assessing officer as defined in section 2(7A) of the Act. The said provision defines 'assessing officer' to mean the Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer, who is Page | 13

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of the Act, and the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director, who is directed under clause (b) of sub- section (4) of section 120 to exercise or perform all or any of the powers and functions conferred on, or assigned to, an assessing officer under this Act. In the instant case, the order of assessment was challenged on several grounds and, particularly, on the ground that no notice under section 143(2) of the Act was issued within the time prescribed by the assessing officer, who had jurisdiction over the assessment file of the assessee at the relevant time. The Commissioner of Income-tax (Appeals)-XXXVII, Kolkata, (CIT(A)) did not agree with the contentions raised by the assessee that there is failure to comply with the mandatory statutory requirement. The CIT(A) opined that the assessing officer, who originally dealt with the e-return filed by the assessee had issued notice under section 143(2) of the Act. With regard to the merits of the matter, the CIT(A) held it in favour of the assessee. Therefore, the revenue was on appeal before the Tribunal and cross-objection was filed by the assessee questioning that portion of the order of the CIT(A) which held that there is no procedural irregularity committed by the assessing officer. The Tribunal considered the correctness of the finding of the CIT(A) and, on facts, found that both the assessing officers, namely, the assessing officer, who had jurisdiction over the assessee till 6-4-2009 and the assessing officer, who had jurisdiction post the said date had not issued notice under section 143(2) of the Act within the prescribed period of six months from the end of the financial year in which the return was filed. This factual position could not be controverted by the revenue before us. As pointed out by the Hon'ble Supreme Court in the case of Hotel Blue Moon (supra), non-issuance of notice under section 143(2) is not a procedural irregularity and, therefore, it is not curable. Thus, on facts, it having been established that no notice was issued under section 143(2) of the Act, the order passed by the Tribunal was perfectly legal and valid. The revenue also sought to rely upon section 292BB of the Act to justify their stand that notice is deemed to be valid and sought to bring the assessee's case under the circumstances mentioned in section 292BB. This question was considered by the Tribunal and it was pointed out that section 292BB provides that where an assessee has appeared in any proceedings or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any of the provision of the Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of the Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under the Act that the notice was not served upon him or not served upon him in time or served upon him in an improper manner. This amendment to the Act was introduced with effect from 1-4-2008 and the assessment year under consideration is AY 2007-08. In any event, the Tribunal examined as to whether at all the revenue can rely upon section 292BB of the Act and noted that the assessee has filed an objection vide letter dated 16-11-2009 objecting to the issuance of notice under section 142(1) of the Act without valid service of notice under section 143(2) of the Act. Taking note of the said letter the Tribunal, in our view, rightly held that the proviso to section 292BB would not stand attracted and the said section cannot be made applicable to the assessee's case. The Tribunal, thereafter, analysed as to the correctness of the submission of the revenue seeking to sustain their stand by referring to a Page | 14 453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain notice issued by the assessing officer, who at the relevant point had no jurisdiction over the assessee and, on facts, found that there is no valid compliance of section 143(2) of the Act as the notice issued under section 143(2) of the Act by the assessing officer/Income Tax Officer, Ward-3(1) had no jurisdiction over the assessee at the relevant time. The Tribunal to support its conclusion placed reliance in the case of CIT v. Mukesh Kumar Agrawal [2012] 25 taxmann.com 112/345 ITR 29 (Allahabad), wherein it was held that the assessing officer did not have jurisdiction to proceed further and make assessment since notice under section 143(2) of the Act was admittedly not issued. As in the case on hand, the revenue sought to take coverage under section 292BB of the Act which was rejected on the ground that the very foundation of the jurisdiction of the assessing officer was on the issuance of notice under section 143(2) of the Act and the same having been complied with, the revenue cannot take shelter under the provisions of section 292BB of the Act.

7. Thus, we are of the clear view that the Tribunal was right in rejecting the revenue's appeal. In the result, this appeal is dismissed and the substantial question of law is answered against the revenue.”

“5. Aggrieved, Revenue filed an appeal. The Assessee filed cross-objection on the ground of jurisdiction of Assessment Officer regarding non-issue of notice under Section 143 (2) of the Act of 1961. The Tribunal vide impugned order upheld the cross-objection and quashed the entire reassessment proceedings on the finding that the same stood vitiated as the Assessment Officer lacked jurisdiction in absence of notice under Section 143 (2) of the Act of 1961. The Tribunal observed: "17. In conclusion, we find that there was no notice issued u/s 143 (2) prior to the completion of assessment under section 143 (3) of the Act by the AO; that the year under consideration was beyond the scope of the provisions of section 153 A of the Act, it being the search year and not covered in the six year to the year of search as as per the assessment scheme/procedure defined u/s section 153A; that the AO has passed regular assessment u/s 143 (3) of the Act; although the ld CIT has mentioned the section as 143 r.w.s. 153A and that the department had not controverted these facts at the stage of hearing. It is noted that issue of notice u/s 143 (2) for completion of regular assessment in the case of the assessee was a statutory requirement as per the provisions of the Act and non-issuance thereof is not a curable defect. Even in case of block assessment u/s 158 BC, it has been so held by the Apex court in the case of 'ACIT Vs. Hotel Blue Moon', (2010) 321 ITR 362 (SC) (Supra). Page | 15 453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain 18. Considering the facts, as discussed above, we note that the assessment order is passed without issue of notice u/s 143 (3) of the Act and this defect can not be cured by taking recourse to the provisions of section 292 BB of the Act.

19. In view of the above, we hold that the AO had no valid jurisdiction to pass the assessment order and the very foundation of the assessment proceedings is bad in law. Hence, these proceedings culminating in the assessment order, as well as the impugned order stand quashed. Nothing else remains to be adjudicated. In consequence, the revenue's appeal in is dismissed."

6. Sub-section (2) of Section 143 of the Act of 1961 envisages: "[(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished.]"

7. In Asstt. CIT v. Hotel Blue Moon [2010] 188 Taxman 113/321 ITR 362, on the question as to whether issue of notice under Section 143 (2) of the Act within the prescribed time for the purpose of block assessment under chapter- XIV B of the Act is mandatory for assessing undisclosed income detected during search conduct under Section 132 of the Act, their lordships were pleased to hold : "15 Omission on the part of the assessing authority to issue notice under Section 143(2) cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under Section 143(2) cannot be dispensed with......."

8. The impugned order when is adjudged in view of the law laid down by the Supreme Court in Hotel Blue Moon (Supra), no substantial question of law arises for consideration.

9. Consequently, Appeal fails and is dismissed.”

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain jurisdiction could not be said to be in continuation of proceedings initiated by AO at New Delhi. The findings of the Hon`ble Court is reproduced below:

“16. Respondent's stand that the Assessing Officer at New Delhi had issued a notice under section 148 of the said Act on petitioner on 22nd March 2013 before the limitation period expired and, therefore, the impugned notice issued by the Assessing Officer at Mumbai in continuation of the said proceedings must also be treated as valid and within time is misconceived. This is because we notice that the notice issued by the Assessing Officer at New Delhi itself was invalid and of no effect since it was issued by an officer who did not have jurisdiction over petitioner. We gather support from the case of CIT v. M.I. Builders (P.) Ltd. (supra), the assessee had raised the objection with regard to continuation of the proceedings by Income-tax Officer - 1(I), Lucknow on the ground that the said proceedings are illegal as the notice under section 148 of the said Act issued itself was devoid of proper jurisdiction and ab initio void. The Income-tax Officer - 1(I), Lucknow, however, without considering the objection continued to proceed in the matter and passed the assessment order and also directed to initiate penalty proceedings. The CIT(A) dismissed the appeal of the assessee but the ITAT in the appeal filed by the assessee allowed the appeal of the assessee on the ground that notice issued under section 148(1) of the said Act was without jurisdiction and, therefore, the subsequent proceedings are invalid. Feeling aggrieved, the Revenue preferred an appeal before the High Court. While dismissing the appeal of the Revenue, the Court held that when the notice under section 148 (1) of the said Act was issued, ACIT, Range-IV, Lucknow had no jurisdiction over the assessee as the jurisdiction over the assessee was transferred to the Additional CIT, Range-I, Lucknow. It was held that there cannot be situation where two Assessing Officer would have simultaneous jurisdiction over the assessee. Accordingly, it was held that the Tribunal had rightly held that the issuance of notice under section 148 (1) of the said Act by the non-jurisdictional Assessing Officer was without jurisdiction.

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain came to be transferred much later than transfer of jurisdiction. The findings of the Hon`ble Court is reproduced below:

“2. Briefly stated the material facts are as under: The assessee fled its return of income for the assessment year 2010-11 at Mumbai. The return of the assessee was processed under section 143(1) on 17 April 2017. Subsequently, the case was selected for scrutiny under CASS and since the assessee had entered into an international transactions during the relevant period, reference under section 92CA(1) was made to Transfer Pricing Officer by assessing officer to determine Arm's Length Price (ALP) of international transactions with AEs. The TPO vide Order dated 30 January 2014, made an adjustment of Rs. 6,36,13,021/-.

4. The assessee, in the meantime, had shifted its registered office from Mumbai to Pune and in that regard, the Registrar of Companies, Maharashtra had issued a certificate of transfer on 13 April 2011, which was brought to the notice of the concerned ITO. A request was also made to the assessing officer, Ward-3(1)(3), Mumbai for transferring the jurisdiction to Pune, which prayer was allowed by virtue of the Order dated 19 December 2014 passed by the Commissioner of Income Tax-3, Mumbai.

6. In our view, there is no illegality in the Order dated 9 August 2017, which has been passed by the Tribunal. No substantial question of law arises. The Appeal is accordingly dismissed.”

“8. We first take up the issue of jurisdiction. ITO, Ward-4(3), Kolkata issued notice u/s 143(2) of the Act on 12-8-2013 to the assessee. The assessee on 4-9- 2013 replied as follows: "Kindly refer to the above. A notice U/s 143(2) of the Income-tax Act, 1961 dated 12/08/2013 was served on for Asst year 2012-13. In this regard and as per our information you do not hold the charge and jurisdiction over our case. As per our understanding I.T.O. Ward 5(3) holds jurisdiction over this case. In view of the above, we submit that notice issued and proceeding undertaken by you in our case is not valid as per law and you are requested to kindly do the needful in this regards. Kindly note that compliance to your notice is without prejudice to our right to challenge the validity of the proceeding including the issue of jurisdiction or limitation. Accordingly, the provisions of section 292BB or any other provisions will not validate the proceeding." (Emphasis supplied) 8.1 Admittedly, no notice u/s 143(2) of the Act was issued to the assessee by ITO, Ward-5(3), Kolkata. This fact is admitted by the ITO, Ward-5(1), Kolkata in his letter addressed to the Pr. CIT-2, Kolkata in F. No. I.T.O./W-5(1)/KOL/2020- 21/165 dated 17-3-2021. We extract part of this for ready reference: "However from the Notice U/s. 143(2) dated 12/08/2013 attached with your above letter, it is observed that the said notice was issued by the then ITO, Ward 4(3), Kotkata as PAN was lying with him. Address of assessee Eversafe Securities, (P.)Ltd. was 41, N.S. Road, Kolkata 700001. Jurisdiction of 41 ,N.S. Road, KolKata 700001 were lying with ITO, Ward 5(3), Kolkata, and for this file was transferred to ITO, Ward 5(3), Kolkata. For notice issued by ITO, Ward 5(3), Kolhata, since file is not traceable, attempt was made to locate from the system. No such Notice was found in system." 8.2 The issue is whether the assessment order passed u/s 143(3) of the Act dated 14-3-2015 by the ITO, Ward-5(3), Kolkata is bad in law when a notice u/s 143(2) of the Act was not issued by the jurisdictional assessing officer.

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain 8.3 This Bench of the Tribunal in the case of Hillman Hosiery Mills (P.) Ltd. (supra) held as follows: "10. In this case, the ITO Ward-3(3), Kolkata, issued notice u/s 143(2) of the Act on 04/09/2014. In reply, on 22/09/2014, the assessee wrote to the ITO, Ward-3(3), Kolkata, stating that he has no jurisdiction over the assessee. Thereafter on 31/07/2015, the DCIT, Circle-11(1), Kolkata, had issued notice u/s 142(1) of the Act to the assessee. The DCIT, Circle-11(1), Kolkata, completed assessment u/s 143(3) of the Act on 14/03/2016. The issue is whether an assessment order passed by DCIT, Circle-11(1), Kolkata, is valid as admittedly, he did not issue a notice u/s 143(2) of the Act, to the assessee. This issue is no more res-integra. This Bench of the Tribunal in the case of Soma Roy v. ACIT in Assessment Year 2015-16, order dt. 8th January, 2020, under identical circumstances, held as under:— "5. After hearing rival contentions, I admit this additional ground as it is a legal ground, raising a jurisdictional issue and does not require any investigation into the facts. The ld. Counsel for the assessee submitted that as per Board Instruction No. 1/2011 [F. No. 187/12/2010-IT(A-I)], dt. 31/01/2011, the jurisdiction of the assessee is with the Assistant Commissioner of Income Tax, Circle-1, Durgapur, as the assessee is a non- corporate assessee and the income returned is above Rs. 15,00,000/- and whereas, the statutory notice u/s 143(2) of the Act, was issued on 29/09/2016, by the Income-tax Officer, ward-1(1), Durgapur, who had no jurisdiction of the case. He submitted that the assessment order was passed by the ACIT, Circle-1 (1), Durgapur, who had the jurisdiction over the assessee, but he had not issued the notice u/s 143(2) of the Act, within the statutory period prescribed under the Act. Thus, he submits that the assessment is bad in law. 5.1 On merits, he rebutted the findings of the lower authorities. The ld. Counsel for the assessee relied on certain case-law, which I would be referring to as and when necessary.

6. The ld. D/R, on the other hand, submitted that the concurrent jurisdiction vests with the ITO as well as the ACIT and hence the assessment cannot be annulled simply because the statutory notice u/s 143(2) of the Act, was issued by the ITO and the assessment was completed by the ACIT. He further submitted that the assessee did not object to the issue of notice before the jurisdictional Assessing Officer and even otherwise, section 292BB of the Act, comes into play and the assessment cannot be annulled. On merits, he relied on the orders of the lower authorities.

7. I 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 below as well as case law cited, I hold as follows:— 8. I find that there is no dispute in the fact that the notice u/s 143(2) of the Act dt. 29/09/2016 has been issued by the ITO, Wd-1(1), Durgapur. Later, the case was transferred to the jurisdiction of the ACIT on 11/08/2017. Thereafter, no notice u/s 143(2) of the Act was issued by the Assessing Officer having jurisdiction of this case and who had completed the assessment on 26/12/2017 i.e., ACIT, Circle-1(1), Durgapur. Under these 453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain circumstances, the question is whether the assessment is bad in law for want of issual of notice u/s 143(2) of the Act.

9. This Bench of the Tribunal in the case of Shri Sukumar Ch. Sahoo v. ACIT in order dt. 27-9-2017, held as follows:— "5. From a perusal of the above Instruction of the CBDT it is evident that the pecuniary jurisdiction conferred by the CBDT on ITOs is in respect to the 'non corporate returns' filed where income declared is only upto Rs. 15 lacs; and the ITO doesn't have the jurisdiction to conduct assessment if it is above Rs. 15 lakhs. Above Rs. 15 lacs income declared by a non-corporate person i.e. like assessee, the pecuniary jurisdiction lies before AC/DC. In this case, admittedly, the assessee an individual (non corporate person) who undisputedly declared income of Rs. 50,28,040/- in his return of income cannot be assessed by the ITO as per the CBDT circular (supra). From a perusal of the assessment order, it reveals that the statutory notice u/s. 143(2) of the Act was issued by the then ITO, Ward-1, Haldia on 6-9-2013 and the same was served on the assessee on 19-9-2013 as noted by the AO. The AO noted that since the returned income is more than Rs. 15 lacs the case was transferred from the ITO, Ward-1, Haldia to ACIT, Circle-27 and the same was received by the office of the ACIT, Circle-27, Haldia on 24-9- 2014 and immediately ACIT issued notice u/s. 142(1) of the Act on the same day. From the aforesaid facts the following facts emerged: (i) The assessee had filed return of income declaring Rs. 50,28,040/-. The ITO issued notice under section 143(2) of the Act on 6-9- 2013. (ii) The ITO, Ward-1, Haldia taking note that the income returned was above Rs. 15 lacs transferred the case to ACIT, Circle-27, Haldia on 24-9-2014. On 24-9-2014 statutory notices for scrutiny were (iii) issued by ACIT, Circle-27, Haldia.

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain did not have the pecuniary jurisdiction to assume jurisdiction and issue notice. Admittedly, when the ITO realized that he did not had the pecuniary jurisdiction to issue notice he duly transferred the file to the ACIT, Circle- 27, Haldia on 24.09.2014 when the ACIT issued statutory notice which was beyond the time limit prescribed for issuance of notice u/s. 143(2) of the Act. We note that the ACIT by assuming the jurisdiction after the time prescribed for issuance of notice u/s. 143(2) of the Act notice became qoarum non judice after the limitation prescribed by the statute was crossed by him. Therefore, the issuance of notice by the ACIT, Circle-27, Haldia after the limitation period for issuance of statutory notice u/s. 143(2) of the Act has set in, goes to the root of the case and makes the notice bad in the eyes of law and consequential assessment order passed u/s. 143(3) of the Act is not valid in the eyes of law and, therefore, is null and void in the eyes of law. Therefore, the legal issue raised by the assessee is allowed. Since we have quashed the assessment and the appeal of assessee is allowed on the legal issue, the other grounds raised by the assessee need not to be adjudicated because it is only academic. Therefore, the additional ground raised by the assessee is allowed.

7. In the result, appeal of assessee is allowed. 9.1 This Bench of the Tribunal in the case of Krishnendu Chowdhury v. ITO [2017] 78 taxmann.com 89 (Kolkata - Trib.) held as follows:— "Return of income of assessee was Rs. 12 lakhs - As per CBDT instruction, jurisdiction for scrutiny assessment vested in Income-tax Officer and notice under section 143(2) must be issued by Income-tax Officer, Ward-I, Haldia and none other - But, notice was issued by Asstt. Commissioner, Circle Haldia much after CBDT's instruction and knowing fully well that he had no jurisdiction over assessee - Whether, therefore, notice issued by Asstt. Commissioner was invalid and consequently assessment framed by Income- tax Officers becomes void since issue of notice under section 143(2) was not done by Income-tax Officers as specified in CBDT instruction No. 1/2011." 9.2 The Hon'ble High Court of Calcutta in the case of West Bengal State Electricity Board v. Deputy Commissioner of Income Tax, Special Range-I, reported in [2005] 278 ITR 218 (Cal.) has held as follows:— "Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Assessment years 1983-84 to 1987-88 - Whether a question of law arising out of facts found by authorities and which went to root of jurisdiction can be raised for first time before Tribunal - Held, yesWhether jurisdiction of Assessing Authority is not dependent on date of accrual of cause of action but on date when it is initiated - Held, yes - Whether once a particular jurisdiction is created, same must be prospective and cannot be retrospective and it has to be interpreted having regard to manner in which it has been sought to be created - Held, yes - Assessee" 9.3 The Hon'ble Supreme Court in the case of CIT v. Laxman Das Khandelwal [2019] 108 taxmann.com 183 (SC), held as follows:— "

7. A closer look at Section 292BB shows that if the assessee has participated in the proceedings it shall be deemed that any notice which is required to be served upon was duly served and the assessee would be precluded from taking any objections that the notice was (a) not served Page | 25 453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner. According to Mr. Mahabir Singh, learned Senior Advocate, since the Respondent had participated in the proceedings, the provisions of Section 292BB would be a complete answer. On the other hand, Mr. Ankit Vijaywargia, learned Advocate, appearing for the Respondent submitted that the notice under section 143(2) of the Act was never issued which was evident from the orders passed on record as well as the stand taken by the Appellant in the memo of appeal. It was further submitted that issuance of notice under section 143(2) of the Act being prerequisite, in the absence of such notice, the entire proceedings would be invalid.

8. The law on the point as regards applicability of the requirement of notice under section 143(2) of the Act is quite clear from the decision in Hotel Blue Moon's case (supra). The issue that however needs to be considered is the impact of Section 292BB of the Act.

9. According to section 292BB of the Act, if the assessee had participated in the proceedings, by way of legal fiction, notice would be deemed to be valid even if there be infractions as detailed in said Section. The scope of the provision is to make service of notice having certain infirmities to be proper and valid if there was requisite participation on part of the assessee. It is, however, to be noted that the Section does not save complete absence of notice. For Section 292BB to apply, the notice must have emanated from the department. It is only the infirmities in the manner of service of notice that the Section seeks to cure. The Section is not intended to cure complete absence of notice itself."

10. Respectfully following the propositions of law laid down in all these case-law and applying the same to the facts of the case, we hold that the assessment order is bad in law for the reason that the Assessing Officer having jurisdiction over the assessee, has not issued a notice u/s 143(2) of the Act as required by the statute. Notice issue by the officer having no jurisdiction of the assessee is null and void. When a notice is issued by an officer having no jurisdiction, Section 292BB of the Act, does not comes into play. Coming to the argument of the ld. D/R that objection u/s 124(3) of the Act has to be taken by the assessee on rectifying notice u/s 143(2) of the Act from a non-jurisdictional assessing officer, I am of the view that I need not adjudicate this issue, as I have held that non-issual of statutory notice/s 143(2) of the Act by the jurisdictional Assessing Officer makes the assessment bad in law. Under these circumstances, we allow this appeal of the assessee."

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain other provision of this Act, or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint Commissioner or Joint Director by whom the powers and functions are to be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the Joint Commissioner shall not apply. (5) The directions and orders referred to in sub-sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, require two or more Assessing Officers (whether or not of the same 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 cases or classes of cases; and, where such powers and functions are exercised and performed concurrently by the Assessing Officers of different classes, any authority lower in rank amongst them shall exercise the powers and perform the functions as any higher authority amongst them may direct, and, further, 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 and any provision of this Act requiring approval or sanction of any such authority shall not apply. (6) Notwithstanding anything contained in any direction or order issued under this section, or in section 124, the Board may, by notification in the Official 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 any person or class of persons, the income-tax authority exercising and 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. 8.2 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 jurisdiction conferred by the Board. 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 class of the cases. The CBDT under sec. 120(5) of the Act, can also confer jurisdiction on two or more Assessing Officers (concurrent jurisdiction). The CBDT can also by 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 only when CBDT confers such jurisdiction u/s 120(4) and 120(5) of the Act. 8.3 In accordance with the powers conferred u/s. 120 (1) and 120(2) of the Act, the CBDT issued notification on no. 191/2002(F.No.187/9/2002-ITA-1 Page | 29

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain dated 30-7-2002) whereby the CBDT conferred the jurisdiction by specifying the Designation of the specific Income-tax Authorities, its Head Quarters, Territorial Area, Persons or classes of persons and cases or class of cases. 8.4 As per the above referred notification, the assessee's being a company, the case fell under 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 Officer being ITO ward 8(3), Kolkata, who was under the charge of Commissioner of Income-tax -Kolkata III. 8.5 The Authorities under the Income Tax, after the jurisdiction is conferred in them 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. Section 124 of the Act, reads as under: 124. (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 jurisdiction over any area, within the limits of such area, he shall have jurisdiction- (a) 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 area, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situate within the area, and (b) in respect of any other person residing within the area. (2) Where a question arises under this section as to whether an Assessing Officer has jurisdiction to assess any person, the question shall be determined by the Principal Director General or Director General or the Principal Chief Commissioner or Chief Commissioner or the Principal Commissioner or Commissioner; or where the question is one relating to areas within the jurisdiction of different Principal Director General or Directors General or Principal Chief Commissioners or] Chief Commissioners or Principal Commissioners or Commissioners, by the Principal Director General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or] Commissioners concerned or, if they are not in agreement, by the Board or by such Principal Director General or] Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as the Board may, by notification in the Official Gazette, specify. (3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer—

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain (a) where he has made a return under sub-section (1) of section 115WD or under sub- section (1) of section 139, after the expiry of one month from the date on which he was served with a notice under sub- section (1) of section 142 or sub-section (2) of section 115WE or sub-section (2) of section 143 or after the completion of the assessment, whichever is earlier; (b) where he has made no such return, after the expiry of the time allowed by the notice under sub-section (2) of section 115WD or sub-section (1) of section 142 or under sub-section (1) of section 115WH or under section 148 for the making of the return or by the notice under the first proviso to section 115WF or under the first proviso to section 144 to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier. where an action has been taken under section 132 or section 132A, after the expiry of one month from the date on which he was served with a (c) notice under sub-section (1) of section 153A or sub-section (2) of section 153C or after the completion of the assessment, whichever is earlier. (4) Subject to the provisions of sub-section (3), where an assessee calls in question the jurisdiction of an Assessing Officer, then the Assessing Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub-section (2) before the assessment is made. (5) Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer shall have all the powers conferred 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 vested with jurisdiction by virtue of the directions or orders issued under sub-section (1) or sub-section (2) of section 120.

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain 8.6 The clear and unambiguous words used in section 124(1) of the Act, are that the 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) of the Act. Therefore, only 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) of the Act, since "he shall have jurisdiction" are the words as has been used in sec. 124(1) of the Act. 8.7 Even 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 u/s 124(1) of the Act, in the Assessing Officer. Such dispute can be raised u/s. 124(3) of the Act, within one month of the issue of notice u/s. 143(2) of the Act. This sub section, therefore, clearly stipulates that the assessee can dispute the jurisdiction of the Assessing Officer to issue notice even though such jurisdiction was vested in him by the direction or order issued u/s. 120(1) or 120(2) of the Act, for some reasons. 8.8 In this case, the jurisdiction of the assessee was never vested with the Assessing Officer, Ward 33(1), (non corporate assessee ward) who issued notice u/s. 143(2) of the Act. In fact, the assessee also filed return before ITO, Ward-8(3), KoIkata who was having jurisdiction over the assessee as per the Boards Notification, which fact is evident from the copy of acknowledgements of return of income for the last few years. 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. 8.9 Under the scheme of "e" 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- up by the assessee. If the Department's system fails to correctly transfer the return to the jurisdictional Assessing Officer and transfer the same to a Assessing Officer though who has no jurisdiction as per the CBDT's notification, such mistake cannot confer the jurisdiction on such an Assessing Officer. Jurisdiction can be conferred only by notification u/s 120(1) and 120(2) of the Act only. 8.10 The Ld DR submitted that there was transfer order of the assessee's case for the assessment year in question, from ITO Ward 33(1) to ITO Ward 8(3). There can be a valid transfer order from ITO Ward 33(1) only if he was vested with the jurisdiction over the assessee. As he was never vested with the jurisdiction either by the notification of the CBDT or by any order of the Commissioner of Income-tax earlier to the issue of notice u/s 143(2) of the Act, he could not have validly transferred the case to ITO, Ward-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 of notice u/s 143(2) of the Act, then the notice is bad in law. The transfer of the folder from ITO Ward 33(1) to ITO Ward 8(3) in fact establishes 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) of the Act, there can be concurrent jurisdiction. There is no dispute over that. However there is no direction or order or notification u/s 120(1) or 120(2) of the Act, conferring concurrent jurisdiction to the ITO Ward 33(1) along with ITO

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain 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) of the Act. 8.12 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 said decisions is in favour of the assessee. The Ld CIT(DR) has relied on para 19 which is in fact in favour the assessee. The Tribunal has fully analyzed the entire provisions of section 120, 124 and 127 of the Act, 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 non-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) of the Act and hence by not disputing the same, the right to challenge the jurisdiction is lost forever. This would have been so, had the ITO, Ward- 33(1), Kolkata, had original jurisdiction over the assessee. This is not the case. When an authority does not have jurisdiction, then the act done by such authority is bad in law and is void ab-initio 8.14 This issue came up for consideration in the following cases: (i) Rungta Irrigation Ltd. referred to above with relevant paragraphs and paragraph 36. (ii) Smriti Kedia Calcutta High Court 339ITR page 37 (iii) Indorama Software Solutions Ltd. Mumbai Bench ITA No. 5211 and 5290(Mum) of 2011 dated 7-9- 2012 8.15 In the case of Mahalchand Motilal Kothari & Co (ITA No. 1851/1852/Kolj2002, ITAT, D- Bench, Kol dated 28-7-2006 wherein the Tribunal considered the notification 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 CIT(A) was 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 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 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 Court but 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. 1768 and 1769/Kol/2006, B-Bench on 15-9-2014. The Revenue filed an appeal before the Hon'ble High Court which was dismissed with the following observations: "The appeal carried by theACIT-39 to 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 with the order of the Tribunal and the matter rested there without this Court's order being

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain challenged by the Revenue before the Supreme Court. In the present case, the matter pertains to the same assessment year when the ITO-44 has preferred an appeal where the initial assessment was not done by the ITO- 44 but such assessment 'was conducted by the ACIT-39 at a point of time when AC1T-39 lost jurisdiction over the assessee pursuant to the said CBOT Notification 2002 Since there was a fundamental error, the Appellate Tribunal dismissed the appeal as incompetent since the order of the Assessing Officer who had no jurisdiction to undertake the assessment qua the assessee could never have been found to be legal or resurrected. " 8.16 While deciding the issue in the case of Mahalchand Motilal Kothari & Co. (supra) the ITAT relied on the Judgement of Calcutta High Court in the case of "West Bengal State Electricity Board" 278ITR 218. In that case the Hon'ble Calcutta High Court held that jurisdiction cannot be conferred by default or by agreement and the decision without jurisdiction is a nullity. The Hon'ble High Court also relied on a number of Judgements while arriving at such a conclusion. 8.17 The Hon'ble Allahabad High Court in the case of V.P. Electronics Corporation Ltd in of 2015 dated 1-3-2017 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 the competent authority, i.e., an Assessing Officer having jurisdiction, then the assessment is a nullity. 8.18 In the case of Deepchand Kothari reported in 171 ITR 381(Raj) it was held that the Assessing Officer who was having no jurisdiction to initiate the proceedings then such proceedings are ab-intio- void. Further the Hon'ble High Court relying on the Judgement of the Hon'ble Supreme Court in the case of Kiran Singh v. Chaman Paswan, it was held that the Jurisdictional issue can be taken up at any stage of the proceedings, even at the time of execution of decree. 8.19 The ITAT, Kolkata in the case of 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 completion of assessment by such authority is illegal. 8.20 In the case of P.V. Doshi v. CIT the Gujarat High Court held that the jurisdictional issue can be taken up at any stage of the proceedings. 8.21 In the case of Rajmandir Estates (386 ITR 162) the Hon'ble Calcutta High Court 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. 8.22 The Lucknow Bench of the ITAT in ITA No. 89 and 90/LKW/2015 dated 16-4-2015 in the case of Md Rizwan held that notice u/s 143(2) issued by non-jurisdictional Assessing Officer is a nullity. 8.23 Same view have been taken a number of other cases some of which are under:— 1. A.L. Ahuja v. DCIT SOT If at the time of issue of notice (2003) page 475 at page u/s. 158BC the Assessing Page | 34 453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain 480 Officer had no jurisdiction the assessment is illegal.

8.24 The Hon'ble Gujarat High Court in the case of Jolly Fantasy World Ltd., Tax appeal no. 1254 of 2014, judgement dated 9-3-2015 held that there cannot be waiver of Jurisdiction, even if the assessee has participated in the proceedings.

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain 8.25 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. 8.26 The Hon'ble Bombay High Court in OF 2006 in the case of The Commissioner of Income Tax-I, Lalit Kumar Bardia, judgment dt. 11- 7-2017, held that the 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-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. In that case, there is no dispute that the assessing officer issuing notice had jurisdiction over the assessee. In that case the selection of the return for scrutiny was generated under automated system of the Income-tax Department which picks up the address of the assessee from the PAN database. The notice u/s 143(2) was sent at the assessee's address available as per the PAN database. Intimation for further hearing and three more notices were sent at the same address as available in the PAN. Finally, the assessee appeared before the tax authority but challenged the notices saying that these notices were not served upon him and that he never received notice u/s 143(2) of the Act and that further subsequent 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 new address was mentioned in the return of income filed for subsequent years. The assessee also submitted that he filed Form No. 18 with Registrar of Companies, regarding change of address. No separate intimation was given to the Assessing Officer by the assessee regarding change of address. The Court held that mere mentioning of the new address on subsequent return without specifically intimating the Assessing 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 to have 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 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 change of the name of the company and/or any change in the registered office of the corporate office of the assessee and the same has to be intimated to the Registrar of Companies in the prescribed format i.e., Form 18 and after completing the said requirement, the assessee is required to approach the Department with the copy of the said document and then the assessee is required to make an application for change of address in the departmental database of the PAN. In the present case the assessee has failed to do so. This judgment is on the issue of service of notice. It is not an issue as to whether the Assessing Officer has jurisdiction over the assessee. As already stated, it is not a case of notice being issued by a non-jurisdictional Assessing Officer. It is therefore clear that the issue in the case before the Hon'ble Supreme Court was not with regard to the jurisdiction of the officer in issuing the notice but was with regard to the service of notice on the proper address. The said judgement therefore does not help the department on this issue of Page | 36 453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain jurisdiction now before us. Jurisdiction has to be conferred u/s 120 of 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 over the assessee i.e., ITO Ward - 8(3), Kolkata had not issued the notice to the assessee u/s 143(2) of the Act as mandatorily required under the Act, the assessment framed u/s 143(3) of the Act, is bad in law as held by the Hon'ble Supreme Court in the case of ACIT & Anr. v. Hotel Blue Moon: 321 ITR 362 (SC) . Hence we quash the same.

9. As we 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 the assessee, we would not go into the merits of the case as it would be an academic exercise.

10. The assessment order passed by the AO, ITO, Ward-5(3), Kolkata u/s 143(3) of the Act on 14-3-2015 was without issuance of mandatory notice u/s 143(2) of the Act, by the AO having jurisdiction over the assessee. Thus the assessment order passed u/s 143(3) of the Act, without issuance of valid notice u/s 143(2) of the Act is bad in law as held by the Hon'ble Supreme Court in the case of Hotel Blue Moon (supra). Thus we allow the ground nos. 1-4 in favour of the assessee and quash the assessment order passed u/s 143(3) of the Act dated 14-3-2015. As we have quashed the assessment order on the ground of above discussion, we do not adjudicate the other grounds raised

by the assessee as it would be an academic issue.

11. In the result, the appeal filed by the assessee is allowed.”

27. We note that there cannot be situation where two Assessing Officer would have simultaneous jurisdiction over the assessee. We note that it is a settled position of law that when the statute mandates that the satisfaction of a particular authority for the exercise of powers is to be done in a particular manner then it has to be done in that manner only. The omission on the part of the assessing officer to issue notice under section 143(2) of the Act, cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under section 143(2) cannot be dispensed with. We note that ld DR for the Revenue sought to take coverage under section 292BB of the Act which is rejected by us on the ground that the very foundation of the jurisdiction

453/SRT/2019/AY.2013-14 Mahaveer Shantilal Jain of the assessing officer was on the issuance of notice under section 143(2) of the Act and the same having been complied with, the revenue cannot take shelter under the provisions of section 292BB of the Act. Considering the facts, as discussed above, we note that the assessment order is passed without issue of notice u/s 143 (2) of the Act and this defect cannot be cured by taking recourse to the provisions of section 292 BB of the Act. In view of the above, we hold that the AO had no valid jurisdiction to pass the assessment order and the very foundation of the assessment proceedings is bad in law. Hence, we quash the assessment order passed by the assessing officer under section 143(3) of the Act, dated 23.03.2016.

Order pronounced on 25/09/2023 in the open court.