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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: SHRI WASEEM AHMED, & SHRI SIDDHARTHA NAUTIYAL
Assessee by : Shri M.N. Manvar, A.R Revenue by : Shri B.D. Gupta, Sr. D.R सुनवाई क� तारीख/Date of Hearing : 04/07/2022 घोषणा क� तारीख /Date of Pronouncement: 14/09/2022 आदेश/O R D E R PER BENCH:
The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax(Appeals)-1, Rajkot, dated 28/02/2020 arising in the matter of assessment order passed under s.263 of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2007-08.
The assessee has raised the following grounds of appeal:
1. The assessment order of Ld. Income Tax Officer, Ward - 16(1)(1), Mumbai u/s 144 for A.Y. 2007-08 in so far as the assessment the total income of Rs. 11,65,954 is totally bad in law and in facts, ignoring the fact that the accountant, appeared and submitted the details called for vide notice dated: 17/09/2009 u/s 142(1) of I.T. Act, 1961 and passed the assessment order u/s 144 of the act without issuing show cause notice for alleged addition.
2. The Ld. assessing officer has passed assessment order without jurisdiction and also ab initio invalid. Therefore, it is required to be quashed.
3. The Ld. assessing officer has erred in law and on facts in disallowance of interest on building loan Rs. 2,23,086 on account of absence of any details of term loan and interest claim Rs. 1,10,401 on alleged ground that no interest is charged on loan advances made to family members and associate concerns.
4. The Ld. assessing officer has erred in law and on facts in disallowance of depreciation Rs. 8,97,770 on alleged ground that W.D.V. as on 31/03/2007 as per Balance Sheet and as per depreciation chart is different and depreciation provided in Profit & Loss A/c is Rs. 5,39,952 and further, Note - 1 under depreciation chart reads as "During the year until has not started it's commercial activity, hence no depreciation is claimed. "
5. The Ld. C1T(A) - 1, Rajkot dismissed the request for additional evidences under Rule 46A of IT. Rules, 1962 on alleged finding that none of the conditions under Rule 46A is satisfied and dismissed the appeal.
At the outset, we note that there was a delay in filing the appeal by the assessee for 73 days. However, it was noticed that the delay has occurred by the assessee in filing the appeal during the Covid-19 period. Therefore, we condone the delay and proceed to adjudicate the issue raised by the assessee on merit.
The assessee in ground No. 2 has challenged the validity of the assessment framed under section 144 of the Act on the reasoning that the AO Mumbai had no jurisdiction over the assessee during the relevant time.
At the outset it was submitted by the learned AR, along with the paper book running from pages 1 to 96, that the assessee filed the return of income for the year under consideration dated 31 October 2007 at the Mumbai address. Subsequently the assessee vide letter dated 18 January 2008 requested to the AO of the Mumbai that the assessee has shifted from Mumbai to Rajkot and therefore his jurisdiction lies in Rajkot only. To this effect the learned AR drew our attention on the request letter of the assessee dated 18 January 2008 for transferring the records from Mumbai to the Rajkot which is placed on page 23 of the paper book.
The AO Mumbai, subsequently served all the notices including the notices under section 143(2) of the Act at the Rajkot address of the assessee. To this effect the relevant submission filed by the assessee are placed on page 4 of the paper book.
6.1 However, the AO Mumbai did not transfer the records of the assessee to Rajkot on the reasoning that there was some technical difficulty and thus framed the assessment under section 144 of the Act after making addition of various items. The assessee also challenged the validity of the assessment framed under section 144 of the Act on the issue of jurisdiction before the learned CIT-A but the same was disposed off by the learned CIT-A by rejecting the ground of appeal of the assessee. The learned CIT-A was of the view that the application for transfer of PAN to Rajkot was approved on 10. August 2011 whereas the assessment has been frame under section 144 of the Act dated
31. October 2009. As such, according to the learned CIT-A, the jurisdiction over the assessee was of the Mumbai AO till the transfer of PAN.
Being aggrieved by the order of the learned CIT-A, the assessee is in appeal before us.
The learned AR before us reiterated the submissions as discussed in the preceding paragraph.
On the other hand, the learned DR vehemently supported the order of the authorities below.
We have heard the rival contentions of both the parties and perused the materials available on records. The controversy arises for adjudication with respect to the jurisdiction of the AO over the assessee whether it was with the Mumbai office or Rajkot office. There is no dispute to the fact that the intimation for the change of the address was duly communicated by the assessee to the AO of Mumbai and therefore the AO Mumbai made all correspondences including the notice issued under section 143(2) of the Act at the address of Rajkot. Thus it is transpired that for all practical purposes the address of the assessee was shifted from Mumbai to Rajkot and this fact has also not been controverted by the revenue. In such facts and circumstances the Hon’ble Allahabad High Court has decided the issue in favour of the assessee in the case of Shri Prashant Chandra Vs. CIT reported in 387 ITR 88 wherein it was held as under: 24. In the instant case, admittedly, on receiving the notice under section 143(2) of the Act, the petitioner tendered his reply, contained in annexure No. SA 1 to the supplementary affidavit, and the same has not been controverted by the Department by filing an affidavit. In the reply, it has been specifically stated by the petitioner that he has shifted his place of business to Delhi and as such, the assessing authority at Lucknow, has no jurisdiction to issue notice under section 143(2) of the Act at Lucknow. In case, the Assessing Officer was not satisfied with the reply then he should have referred the matter as required under section 124(2) of the Act.
10.1 From the above judgment, there remains no ambiguity to the fact that jurisdiction over the assessee was vested with the income tax office of Rajkot and therefore the AO Mumbai has exceeded his jurisdiction by framing the assessment under section 144 of the Act. At the time of hearing the learned DR has not brought anything on record contrary to the arguments advanced by the learned AR for the assessee. As such no other judgment favouring the revenue was brought to our notice by the learned DR at the time of hearing. Thus, in view of the above and after considering the facts in totality, we hold that the assessment has been framed by the AO having no jurisdiction over the assessee and therefore such assessment is not sustainable. Accordingly, we quash the same. Hence, the technical issue raised by the assessee is allowed.
10.2 As we have decided the issue in favour of the assessee on technicality, we do not find any reason to adjudicate the issue raised by the assessee on merit. As such, the grounds raised by the assessee on merit becomes infructuous and therefore no separate adjudication is required. Hence, the grounds raised by the assessee on merit are dismissed as infructuous.
In the result the appeal filed by the assessee is partly allowed Order pronounced in the Court on 14/09/2022 at Ahmedabad.