MICKEY SHRIVASTVA,RAIPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX -3(1), RAIPUR

आयकर अपीलीय अधिकरण, रायपुर न्यायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR श्री रविश सूद, न्याधयक सदस्य एिं श्री अरुण खोड़वपया, लेखा सदस्य के समक्ष । BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM आयकर अपील सं./ITA No.122/RPR/2019 (Assessment Year: 2012-2013) Mickey Shrivastava, Vs ACIT, Circle-3(1), Raipur 2/299, Opp P. And T Colony, Near SBI Zonal Office, Byron Bazar, Raipur, Chattishgarh PAN No. :BCRPS 2023 R (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) : Shri Sunil Kumar Agrawal, CA धििााररती की ओर से /Assessee by राजस्ि की ओर से /Revenue by : Shri Piyush Tripathi, Sr. DR सुििाई की तारीख / Date of Hearing : 25/04/2023 घोषणा की तारीख/Date of Pronouncement : 12/07/2023 आदेश / O R D E R Per Arun Khodpia, AM : The assessee has filed this appeal against the order passed by the CIT(A)-1, Raipur, dated 02.06.2017 for the assessment year 2011-2012. 2. At the outset, we found that the appeal of the assessee is delayed by 668 days in filing the present appeal. In this regard, ld. AR has filed an application dated 30.12.2022 along with affidavit of the assessee stating therein that during the period, the assessee was suffering with business loss and the appeal could not be filed within the stipulated period before the Tribunal after passing the order of the ld. CIT(A) on 02.06.2017 because her aged parents were suffering from several ailments for which her father was getting treatment in the hospital for a long time, however, her mother died during the treatment, copy of death certificate of her mother has been enclosed along with the affidavit. It was also mentioned by the assessee that she was only concentrating with the above issues,

2 ITA No.122/RPR/19 resulting into the delay in filing of the present appeal and there was no malafide intention of the assessee for delay. Therefore, it was stated that the aforesaid delay may kindly be condoned and the appeal of the assessee may kindly be decided. 3. Though, the ld. Sr. DR objected to condone the delay and submitted his written submissions as under :- Sub:- Appeal filed under section 253 by the assessee in the case of Shri. Mickey Shrivastava for the A.Y. 2012-13 ITA 122/RPR/2019 with reference to form no 36 filed on 31-05-2019- request regarding: - 1. This is an appeal filed before ITAT on 31-05-2019 by the assessee against adverse appeal order of CIT appeal dated 02-06-2017. The delay in filing of form no 36 is more than 668 days. The assessee has filed two application, with different reasons on 31-05- 2019 and thereafter again on 30- 12-2022 for condonation of delay. He has also filed an application for raising additional ground on 26-12-2022. 2. It is first hearing and no adjournment found on records by either side. 3. The assessee paid Rs. Nil /- against demand of Rs. 19,30,510/-. The revenue involved is lower higher prescribed limit specified in CBDT Circular no 17/2019 dated 08-08- 2019 and does not fall under exceptional cases vide CBDT circular no 03/2018 dated 11-07-2018 4. Brief of AO,s observation:- Assessment was completed under section 143(3) of the Act for the A.Y 2012-13 on 23- 09-2013 by AO and income was assessed at Rs. 83,33,659/- on return income of Rs.40,63,900/ under head business and profession. Details of addition to the Income of the assessee, as under: I. Disallowances under section 40a(ia) of Rs. 38,00,000/- in view of section 194C(5) of the Act on account of material handling expenses.(Para-03 Page-02) ii. Dis allowances under section 40a(ia) of Rs,5,99,866/- was made in view of 194C of the act and on account of payment to various transporters. ( Para-04 Page-04) III. Dis allowed expenses of Rs. 66,142/- on various expenses debited to the account.Para- 05 Page-04 5. CIT appeal decision; - The CIT appeal dismissed the appeal of the assesee and confirmed the addition, as above of AO. 6. The application of condonation of delay in filling form -36 dated 31-05-2019 and 30-12- 2022, is not acceptable by the reasons discussed in paper book dated 06-03-2023.

3 ITA No.122/RPR/19 7. The additional ground of the assessee is not maintainable at this stage as the application of condonation of delay for filling of appeal of the assessee has not arrived at any finality. Hence, based on revenue submission dated 06-03-2023 it is prayed that, the delay in filing appeal by 668 days may not be entertained and appeal of the assessee may be rejected. 4. Further, vide letter dated 06.03.2023, the ld. DR has filed his written submissions challenging the condonation of delay as well as the additional ground filed by the assessee, which read as under :- Sub:- Appeal filed under section 253 by the assessee in the case of Shri. Mickey Shrivastava for the A.Y. 2012-13 ITA 122/RPR/2019 with reference to form no 36 filed on 31- 05-2019- request regarding: - 1. This is an appeal filed before ITAT on 31-05-2019 by the assessee against adverse appeal order of CIT appeal dated 02-06-2017. The delay in filing of form no 36 is more than 668 days. On issuing letter, the assessee replied on 02-07- 2019 and admitted that, there is delay in filing form no 36. The assessee has filed two application, with different reasons on 31-05-2019( 04 of Paper book) and thereafter again on 30-12-2022( Page-11 of paper book) for condonation of delay. 2. The application dated 31-05-2019; the assessee stated there is some family problem and unavoidable circumstances but has not mentioned death of her mother in the original application. He enclosed some evidences, not related with the reasons stated in his letter. The reasons explained in the matter is not matching with the evidences enclosed by the assessee. 3. The application of condonation of delay is under consideration hence, filling of fresh application on 30-12- 2022 is bad and law and procedure and not maintainable. 4. MMI Narayan, Raipur dated NIL vide certificate no 2505( Page-02) and confirm admission from 05-01-2019 and death of assessee mother, Smt. Rajbala Shrivastav on 12-01-2019. Death certificate issued by Municipal authority( Page-3) confirm the date of death of his mother. The due date of filing form no.36 was 02-08-2017 and Smt. Rajbala expired on 12- 09-2019. There is gape of more than 500 days and is enough to return back to normal life and also to attend legal issue.

4 ITA No.122/RPR/19 5. The abnormal delay without a reasonable cause is not acceptable. The Revenue relies on the decision held in the case of Shri. Shyam Sunder Agrawal in context with abnormal delay in filing appeal before ITAT. The Hon’ble ITAT Raipur, in order vide ITA170/&172/RPR/2022 ( Page- 20 to l6) in the case of Shyam Sunder Agrawal, considering abnormal delay in filing form no 36 and the non-cooperative attitudes and other factors declined to allow condone the delay and also to admit appeal of the assessee. 6. The application dated 31-05-2019, was not in accordance with procedure laid down by the Court. The assessee has failed to file affidavit and also failed to furnish evidences in support of the reasons given in the letter. The evidences i.e death certificate is not supporting reasons for delay. The application of the assessee dated 31-05-2019 is not maintainable in view of decision held in the case of Ishwar Chand Ramchandra Jangid vs ITO Ahamabad, ITANo241/Ahm/2021( Page-13-12) where for want of affidavit and evidences in support of reasons stated for delay in filing application found inadmissible. 7. Para-1, Page-2, the CIT appeal, confirm non cooperative attitude of the assessee and no appearance of the assessee at appellate stage. The Hon’ble ITAT order ( Page-15- 14) vide ITANoll3/Delhi/2019 in the case of Shri Abdul Hakim vs ITO have taken very stern view against the assessee where he has failed to attend before, Revenue authority and declined to give any relief to chronic defaulter. The Hon’ble ITAT declined to entertain the request of the assessee for condonation of delay and the appeal was dismissed at threshold as inadmissible. 8. The application dated 31-05-2019 to Condon delay of filling of appeal is under consideration and fresh application dated 30-12-2022, after lapse of more than two year is bad in law and procedure. In his fresh affidavit, Para-3, the assessee stated that he was facing decline in his trade from 2014-15 and health problems of his parents prevented him from his regular work. Frequent change in the ground to condone delay and multiple applications filed for condonation of delay not only wasting the time of the court, but also violating discipline of the court. Acceptance of fresh application without disposing the earlier application on same ground with different reasons and admittance of abnormal delay will make precedence and negatively affects roots of jurisprudence and working of the court. It will invite several litigations in the territory of Hon’ble court. 9. The assessee presumed that delay in filling appeal is condoned and his appeal is admitted by the Hon’ble ITAT. The attitude of the assessee is not fair and has interfered in

5 ITA No.122/RPR/19 freedom of judiciary. Filing additional ground of appeal, before disposal of condonation of delay application and also admittance of his appeal by the Hon’ble court, confirms that attitude of the assessee. 10. The assessee has taken additional ground of appeal and challenged the jurisdiction and notice, with a motive to prevent the court to adjudicate the merit of the case. It is to put on records that the assessee has not attended appellate proceedings and order was against the assessee. Additional ground of appeal never been raised before the AO and the CIT appeal. The motive of the assessee can also be verified from Para- 3 & 4 of AO orders, where he has violated various provisions of section XVII B by not deducting and depositing TDS and filing his TDS ITR, his statutory liability, under the Act. The assessee frustrated with no merit in his explanation, adverse AO and appeal order, he tried to frustrate the discipline of jurisprudences and discipline, to achieve his malafide result of not paying the tax. Motive of availing justice, is rights of the assessee and is universally accepted, but motive to frustrate the legislation by any hooks and crooks cannot be admitted as bonafide rights or intention. This type of tendency of the assessee may be opposed and rejected. Considering the above facts and decisions of Hon’ble court, the application of abnormal delay to a non-compliant assessee, is vehemently objected and strongly requested not condone the delay. 5. On careful perusal of the submissions of the ld. Sr. DR, it is discernible that the ld. Sr. DR has agitated the issue of condonation of delay and the additional ground filed by the assessee. First, we shall take into consideration the submissions of both the parties with regard to condonation of delay and submissions on additional ground will be decided later. 6. As per sub-section (5) of Section 253 of the Income Tax Act, 1961 empowers the Tribunal to admit an appeal after the expiry of the relevant period referred to in Sub-section (3) if it is satisfied that there was sufficient cause for not presenting the appeal within that period. On perusal of the application of the assessee for condonation of delay along

6 ITA No.122/RPR/19 with affidavit and supporting evidence, we found that there was sufficient cause that has prevented the assessee in filing the present appeal. Further, the Hon’ble Supreme Court in the case of N. Balakrishnan v. M. Krishnamurthy reported as (1998) 7 SCC 123 and Collector, Land Acquisition v. Mst. Katiji and Ors. 62 CTR 23 (SC), has observed that a litigant does not stand to benefit by lodging an appeal by late and it was directed that a meritorious matter should not be thrown out at the very threshold because by refusing the contention may cause defeat of justice. In view of the above, we condone the delay and appeal is admitted for hearing. 7. The assessee has raised the following grounds of appeal :- 1. That, the Order of the learned Assessing Officer is bad in law and facts, therefore, the additions/disallowances made to be deleted. 2. That the Order of the learned Assessing Officer is based on presumption & surmises, and therefore, the disallowances so made be deleted. 3. That the learned Assessing Officer erred in disallowing Rs.38,00,000/- u/s 40(a)(ia) being Material Handling Charges charges paid to various individual loaders. That CIT (A) could not appreciate the facts and erred in disallowing appeal on the basis of Assessment order passed by ACIT Circle 3(1) Raipur. As per principle of natural justice, opportunity of being heard not provided to the appellant. Prayed for one opportunity. 4. That the learned Assessing Officer further erred in charging interest u/s 234A, 234B and 234C at Rs. 8,50,565/- which is unjustified as the appellant never knew that above additions and disallowances will be made. 5. That the appellant craves leave to add, alter or modify the ground of appeal any time before or at the time of hearing of the appeal.

7 ITA No.122/RPR/19 8. Further the assessee has filed additional ground vide an application dated 26.12.2022, which reads as under :- The assessee wants to raise 'additional ground' of appeal, which is as under, may kindly be admitted for your kind judicious consideration: Additional Gr.No.1 "1. On the facts and circumstances of the case and in law, notice issued u/s!43(2) by ITO-2(4), Raipur on 23-9-13, who was not having pecuniary as well as territorial jurisdiction to issue such statutory notice, since 'returned income' was Rs.40,63,900 as per CBDT Instruction No.1/2011 dt.31-1-11 which is binding on IT authorities u/sl!9; in absence of a valid notice issued u/s143(2) by the 'Jurisdictional AO u/s.124(1), sec 120 & sec2(7A), within the time prescribed up to 30-9- 13; consequential assessment made u/sl43(3) would be invalid, bad in law and is liable to be quashed; The above 'additional ground' of appeal raised which is legal in nature raised before your Honors first time which goes to root of the matter; the assessee is entitled to urge legal issue on the basis of facts already available on record which though not raised before the Id AO & the Id CIT(A) which has direct bearing on tax liability of the assessee; relied on NTPC Ltd (1998) (SC); it may kindly be permitted & obliged. 9. Ld. AR before us submitted that the above 'additional ground' raised, is legal in nature and raised first time before the Tribunal, which goes to root of the matter and the assessee is entitled to urge legal issue on the basis of facts already available on record which though not raised before the Id AO & Id CIT(A), however, the same has direct bearing on tax liability of the assessee. In this regard, ld. AR relied on the decision of Hon’ble Suprme Court in the case of NTPC Ltd (1998) (SC); and submitted that the above additional ground of appeal may kindly be allowed and the appeal may kindly be decided on the legal ground.

8 ITA No.122/RPR/19 10. Ld. Sr.DR objected to the admissibility of additional ground raised by the assessee before the Tribunal as the same were never raised before the revenue authorities. 11. In view of the judgment of the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd., reported in (1998) 229 ITR 383 (SC), it is open to the assessee to raise the points of law even before the Tribunal which was not raised earlier. Therefore, the arguments advanced by the ld. Sr. DR objecting to the additional ground of assessee, is not accepted and the legal grounds raised in the form of additional ground is admitted and taken on record. 12. Brief facts of the case are that the assessee is a proprietorship firm and is a dealer/trader of iron ores & fines and filed its return of income electronically on 30.03.2013 declaring total income of Rs.40,63,900/- . The case of the assessee was selected for scrutiny and on being asked by the AO, the assessee filed his written submissions along with books of accounts, which was test checked by the AO. During the course of hearing the AO found that the assessee has shown the turnover at Rs.68,19,82,059/- and GP at Rs.10,66,20,209/- which comes to Rs.15.63%. The net profit has been shown at Rs.40,63,899/- which comes to 0.60%. Further the AO found that in the immediately preceding year, the assessee has shown GP at 25.55% and NP at 0.83% and both GP & NP ration is decreased as compared to that of immediate preceding year. Accordingly, the AO completed the assessment holding hat the assessee could not furnish the details to

9 ITA No.122/RPR/19 verify as to whether the assessee has followed the sub-section 5 of section 1954C of the Act or nor. Thus, the AO made addition u/s.40(a)(ia) of the Act. Further the AO made addition on account of travelling expenses and loading and unloading charges to the extent of 10% of the total expenses claimed by the assessee. 13. Against the above order of AO, the assessee preferred appeal before the ld. CIT(A) and the ld. CIT(A) dismissed the appeal of the assessee. 14. Now, the assessee is in further appeal before the Tribunal against the order of the ld.CIT(A). 15. Ld. AR before us, has argued first on the additional ground assailing the validity of jurisdiction of the ld. AO i.e. ITO-2(4), Raipur mentioning the reason that the AO was not having pecuniary jurisdiction over the assessee for issuing notice u/s.143(2) of the Act in the case of the assessee. It was submitted that the assessee declared its income at Rs.40,63,900/-, which was selected for scrutiny and notice u/s.143(2) was issued on 23.09.2013 by the ITO-2(4), Raipur, who was not having pecuniary jurisdiction over the assessee. Thereafter, in absence of valid notice u/s.143(2) of the Act, framing of assessment u/s.143(3) of the Act is invalid, bad in law, non-est and is liable to be quashed. Ld. AR drew our attention to the CBDT Instruction No.1/2011, dated 31.01.2011 placing the argument that the instruction of CBDT was binding on the revenue authorities u/s.119 of the Act and in contravention thereto issuing notice u/s.143(2) of the Act by the AO, who had not possessed valid jurisdiction

10 ITA No.122/RPR/19 over the assessee, is liable to be quashed. Instruction No.1/2011, dated

31.01.2011 issued by the CBDT reads as under :-

INSTRUCTION NO. 1/2011 [F. NO. 187/12/2010-IT(A-I)], ________________________________________________ SECTION 119 OF THE INCOME-TAX ACT, 1961 - INCOME-TAX AUTHORITIES - INSTRUCTIONS TO SUBORDINATE AUTHORITIES INSTRUCTION NO. 1/2011 [F. NO. 187/12/2010-IT(A-I)], DATED 31-1-2011 References have been received by the Board from a large number of taxpayers, especially from mofussil areas, that the existing monetary limits for assigning cases to ITOs and DCs/ACs is causing hardship to the taxpayers, as it results in transfer of their cases to a DC/AC who is located in a different station, which increases their cost of compliance. The Board had considered the matter and is of the opinion that the existing limits need to be revised to remove the abovementioned hardship. An increase in the monetary limits is also considered desirable in view of the increase in the scale of trade and industry since 2001, when the present income limits were introduced. It has therefore been decided to increase the monetary limits as under: Income Declared Income Declared (Mofussil areas) (Metro cities) ITOs ACs/DCs ITOs DCs/ACs Corporate Upto Rs.20 lacs Above Rs.20 lacs Upto Rs.30 lacs Above Rs. 30 lacs Returns Non- Upto Rs.15 lacs Above Rs.15 lacs Upto Rs.20 lacsq Above Rs.20 lacs corporate returns Metro charges for the purpose of above instructions shall be Ahmedabad, Bangalore, Chennai, Delhi, Kolkata, Hyderabad, Mumbai and Pune. The above instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1-4-2011.

dated 08.04.2011, wherein the Board has instructed the CCIT/DGIT to

adjust the limits by an amount upto Rs.5 lakhs to ensure that the

workload is equitably distributed amongst the Assessing Officers after

recording reasons in this regard. The said Instruction No.6/2011 is as

under :-

11 ITA No.122/RPR/19 INSTRUCTION NO. 6/2011 [F.NO.187/12/2010-ITA-I], ______________________________________________ SECTION 119 OF THE INCOME - TAX ACT, 1961 - CENTRAL BOARD OF DIRECT TAXES - INSTRUCTIONS TO SUBORDINATE AUTHORITIES INSTRUCTIONS - REGARDING INCOME LIMITS FOR ASSIGNING CASES TO DEPUTY COMMISSIONERS/ASSISTANT COMMISSIONERS/ITOS INSTRUCTION NO. 6/2011 [F.NO.187/12/2010-ITA-I], DATED 8-4-2011 Reference may kindly be made to Board's Instruction No. 1/11, dated 31-1-2011 which lays down revised monetary limit of cases to be assessed by DCsIT/ACsIT in metro cities and mofussil areas w.e.f. 1-4-2011. Some CCsIT have expressed the view that the limit fixed in the aforesaid Instruction, if strictly enforced would lead to unequal distribution of workload between the ACITs and the ITO in some of the charges. 2. In view of the above, the Instruction No. 1, dated 31-1-2011 has been reconsidered by the Board and it has been decided that if the application of above limits in any CIT charge leads to a substantially uneven distribution of workload between DCsIT/ACsIT am ITOs, the CCIT/DGIT may adjust the above limits by an amount of upto Rs. 5 lakhs to ensure that the workload is equitably distributed amongst the Assessing Officers after recording reasons in this regard. 3. It is further clarified that the mofussil areas referred to in the Instruction No. 1/2011 means all stations other than the metro cities. of Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Ahmedabad, Pune and Bangalore. 17. Based on the aforesaid instruction, the office of the Chief Commissioner Income Tax, Raipur issued a Notification dated 30.05.2011 to be followed by the revenue authorities for assigning case to ITO land ACITs/DCITs with monetary limit as prescribed therein, copy of the same is reproduced hereunder :-

12 ITA No.122/RPR/19 18. In view of the above CBDT Instructions and the Notification issued by the CCIT, Raipur, ld. AR submitted that the assessment framed by the AO on the basis of invalid notice issued u/s.143(2) of the Act, deserves to be quashed. To support his contentions, ld. AR relied on the following case laws :- i) Indian Oil Corporation Ltd., [21004] 267 ITR 272 (SC); ii) Amal Kumar Ghosh [2014] 361 ITR 458 (Cal HC); Crystal Phosphates Ltd. [2023] 332 CTR 215 (P&H HC); iii) iv) Sunita Finlease Ltd. [2011] 330 ITR 491 (Chhattisgarh HC); v) Ravi Sherwani, ITA No.64/RPR/2020, order dated 29.05.2023; vi) Sudhir Kumar Agrawal, ITA No.158/RPR/2017, order dated 17.10.2022/[2023] 221 TTJ 687 (Raipur-Trib); and vii) Durga Manikanta Traders, ITA No.59/RPR/2019, order dated 12.12.2022; 19. In view of the above submissions, it was the prayer of the ld. AR that since the notice u/s.143(2) of the Act itself was invalid, the assessment order u/s. 143(3) of the Act, dated 23.09.2013, is illegal, non- est, bad in law, and deserves to be quashed. 20. On the contrary, ld.Sr.DR vehemently supported the order of the authorities below and submitted that the assessee was non-cooperative before the ld. CIT(A). The assessee has taken additional ground of appeal and challenged the jurisdiction and notice, with a motive to prevent the court to adjudicate the merit of the case. It is to put on records that the assessee has not attended at the appellate proceedings and order was against the assessee. Additional ground of appeal never been raised before the AO and the CIT(A). The motive of the assessee can also be verified from Para- 3 & 4 of AO orders, where he has violated various provisions of section XVII B by not deducting and depositing TDS and filing his TDS ITR, his statutory liability, under the Act. Motive of availing

13 ITA No.122/RPR/19 justice, is rights of the assessee and is universally accepted, but motive to frustrate the legislation by any hooks and crooks cannot be admitted as bonfide rights or intention. This type of tendency of the assessee may be opposed and rejected. Accordingly, ld. Sr. DR submitted that additional ground raised by the assessee may not entrained and decision of the CIT(A) deserves to be upheld. 21. We have considered the rival submissions, perused the material available on record and the case laws pressed into our service. Regarding admissibility of additional legal ground of the assessee with respect to challenging the jurisdiction of the AO which was not challenged before the AO under the provisions of Section 124(3) of the Act within the stipulated time period of one month from the date of which the notice u/s.143(2) of the Act was served upon the assessee, as opposed by the ld.Sr. DR, we take guidance from the observation of the coordinate bench of this Tribunal in the case of Sudhir Kumar Agrawal, in ITA No.158/RPR/2017, order dated 17.10.2022/[2023] 221 TTJ 687 (Raipur-Trib), wherein it has been observed in para 14 as under :- 14. We shall now deal with the objection raised by the Ld. DR that as the assessee had not called in question the jurisdiction of the Income-Tax Officer, Ward-2(2), Bhilai within the stipulated time period of one month Shri Sudhir Kumar Agrawal, Durg Vs. ITO, Ward-2(2), Bhilai ITA No. 158/RPR/2017 from the date on which he was served with the notice(s) u/ss.143(2) and 142(1), dated 03.03.2015, therefore, it was not permissible for him to challenge the same for the first time in the course of the proceeding before the tribunal. Having given a thoughtful consideration to the aforesaid claim of the ld. DR we are unable to persuade ourselves to subscribe to the same. On a careful perusal of Section 124 of the Act, it transpires that the same deals with the issue of "territorial jurisdiction" of an Assessing Officer. Ostensibly, sub-section (1) of Section 124 contemplates vesting with the A.O jurisdiction over a specified area by virtue of any direction or order issued under sub-

14 ITA No.122/RPR/19 section (1) and sub-section (2) of Section 120 of the Act. On the other hand sub-section (2) of Section 124 contemplates the manner in which any controversy as regards the territorial jurisdiction of an A.O is to be resolved. Apropos, sub-section (3) of Section 124 of the Act, the same places an embargo upon an assessee to call in question the jurisdiction of the A.O where he had initially not raised such objection within a period 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 143. In sum and substance, the obligation cast upon an assessee to call in question the jurisdiction of the A.O as per the mandate of sub-section (3) of Section 124 is confined to a case where the assessee objects to the assumption of territorial jurisdiction by the A.O, and not otherwise. Our aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of Peter Vaz Vs. CIT, Tax Shri Sudhir Kumar Agrawal, Durg Vs. ITO, Ward-2(2), Bhilai ITA No. 158/RPR/2017 Appeal Nos. 19 to 30 of 2017, dated 05.04.2021 and that of the Hon'ble High Court of Gujarat in the case of CIT Vs. Ramesh D Patel (2014) 362 ITR492 (Guj.). In the aforesaid cases the Hon'ble High Courts have held that as Section 124 of the Act pertains to territorial jurisdiction vested with an AO under sub-section (1) or sub-section (2) of Section 120, therefore, the provisions of sub- section (3) of Section 124 which places an embargo on an assessee to raise an objection as regards the validity of the jurisdiction of an A.O would get triggered only in a case where the dispute of the assessee is with respect to the territorial jurisdiction and would have no relevance in so far his inherent jurisdiction for framing the assessment is concerned. Also, support is drawn from a recent judgment of the Hon'ble High Court of Calcutta in the case of Principal Commissioner of Income-tax Vs. Nopany & Sons (2022) 136 taxmann.com 414 (Cal). In the case before the Hon'ble High Court the case of the assessee was transferred from ITO, Ward-3 to ITO, Ward-4 and the impugned order was passed by the ITO, Ward-4 without issuing notice u/s 143(2) and only in pursuance to the notice that was issued by the ITO, Ward-3, who had no jurisdiction over the assessee at the relevant time. Considering the fact that as the assessment was framed on the basis of the notice issued under Sec. 143(2) by the assessing officer who had no jurisdiction to issue the same at the relevant point of time, the Hon'ble High Court quashed the assessment. Apart from that, the aforesaid view is also supported by the order of the ITAT, Kolkata 'B' Bench in the case Shri Sudhir Kumar Agrawal, Durg Vs. ITO, Ward-2(2), Bhilai ITA No. 158/RPR/2017 of OSL Developers (p) Ltd. Vs. ITO, (2021) 211 TTJ (Kol) 621 and that of ITAT, Gauhati Bench in the case of Balaji Enterprise Vs. ACIT (2021) 187 ITD 111 (Gau.). Accordingly, on the basis of our aforesaid observations, we are of the considered view that as the assessee's objection to the validity of the jurisdiction assumed by the Income-Tax Officer, Ward-2(2), Bhilai is by no means an objection to his territorial jurisdiction, but in fact an objection to the assumption of jurisdiction by him in contravention of the CBDT Instruction No.1/2011, dated

15 ITA No.122/RPR/19 31.01.2011, therefore, the provisions of sub- section (3) of Section 124 would not assist the case of the revenue. 22. Admittedly, the assessee has filed its return of income for the assessment year 2012-2013 with a returned income of Rs.40,63,900/-, which is above Rs.10 lakhs for non-corporate returns. As per the CBDT Instruction No.1/2011, dated 31.01.2011 and Instruction No.6/2011, dated 08.04.2011 and the Notification of the CCIT, Raipur, dated 30.05.2011, the jurisdiction over the case of the assessee located in mofussil areas i.e at Raipur, Chhattisgarh was vested with an officer in the rank of ACIT/DCIT, whereas the notice u/s.143(2) of the Act was issued by the ITO-2(4), Raipur. Though, subsequently the case was transferred to DCIT-2(4), Raipur, however, the jurisdiction assumed by the ITO-2(4), Raipur, who has issued notice u/s.143(2) of the Act was not in accordance with the CBDT Instruction No.01/2011, dated 31.01.2011 and 06/2011, dated 08.04.2011. Therefore, the notice issued u/s.143(2) of the Act was invalid in terms of non-following the binding instructions issued by the CBDT, consequently, the framing of assessment on the basis of such invalid notice was also void ab initio and needs to be struck down. This issue has already been settled by the coordinate bench of the Tribunal in the case of Mata Road Carriers, passed in ITA No.79/RPR/2016, vide order dated 10.07.2023, wherein the Tribunal following various judicial pronouncements, in para 18 has held that the Instructions/Circulars are binding on the revenue authorities. Further, the Tribunal in para 19 has quashed the assessment framed u/s.143(3) of the Act upon a notice

16 ITA No.122/RPR/19 issued u/s.143(2) of the Act by a non-jurisdictional officer. The relevant observations of the Tribunal are as under :- 19. The coordinate bench of the Tribunal under the similar facts and circumstances, in the case of Ravi Sherwani, passed in ITA No.64/RPR/2020, order dated 29.05.2023, observations of which have been reproduced in the foregoing paragraphs, which has already been followed in the case of Amarjeet Singh Bhatia (supra), considering the observations made in the case of Durga Manikanta Traders (supra), held that the assessment framed by the AO on the basis of notice issued u/s.143(2) of the Act by the non-jurisdictional officer is void ab initio. In the present case, the ITO-1(1), Raipur having no jurisdiction over the assessee issued notice u/s.143(2) of the Act, overlooking the binding Instructions of the CBDT as well as the Notification issued by the CCIT, Raipur, which is not sustainable in the eyes of law. Had the notice u/s.143(2) of the Act been issued by the jurisdictional AO, i.e. DCIT-1(1), who was having pecuniary jurisdiction over the assessee, there would have been no case for the assessee to raise the issue of wrong assumption of jurisdiction. When the notice issued u/s.143(2) of the Act is itself invalid owing to the wrong assumption of jurisdiction, the assessment framed thereafter has no legs to stand. Respectfully following the observations of the coordinate bench of the Tribunal in the case reproduced hereinabove, we set aside the order of the ld. CIT(A) and strike down the assessment order dated 27.03.2014. The legal ground raised by the assessee is allowed. 23. In the present case, notice u/s.143(2) of the Act was issued by the ITO-2(4), Raipur, who had no jurisdiction over the assessee as per the CBDT Instructions and the Notification issued by the CCIT, Raipur dated 30.05.2011, which is not sustainable and void ab initio. When the notice u/s.143(2) of the Act is not valid, the assessment so framed by the AO is also not maintainable and the same is hereby quashed. 24. Since, we have decided the legal ground for want of valid assumption of jurisdiction by the AO and have struck down the assessment order itself, we, therefore, refrain ourselves from adverting to and to adjudicate the other grounds raised in the present appeal by the

17 ITA No.122/RPR/19 assessee with regard to the additions made by the AO and confirmed by the ld. CIT(A). 25. In the result, appeal of the assessee is allowed.

Order pronounced in the court on 12/07/2023. Sd/- Sd/- (RAVISH SOOD) (ARUN KHODPIA) न्याधयक सदस्य / JUDICIAL MEMBER लेखा सदस्य / ACCOUNTANT MEMBER रायपुर/Raipur; ददिांक Dated 12/07/2023 Prakash Kumar Mishra, Sr.P.S(on tour) आदेश की प्रधतधलवप अग्रेवषत/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant- 2. प्रत्यर्थी / The Respondent- 3. आयकर आयुक्त(अपील) / The CIT(A), आयकर आयुक्त / CIT 4. 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, रायपुर/ DR, ITAT, Raipur गार्ा फाईल / Guard file. 6. सत्यावपत प्रधत //True Copy// आदेशािुसार/ BY ORDER,

(Assistant Registrar) आयकर अपीलीय अधिकरण, रायपुर/ITAT, Raipur