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Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR
Before: SHRI RAVISH SOOD
आदेश / ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 14.03.2022, which in turn arises from the order passed by the A.O under Sec. 143(3) r.w.s. 147 of the Income-tax Act, 1961 (in short ‘the Act’) dated 30.12.2018 for the assessment year 2011-12. The assessee has assailed the impugned order on the following grounds of appeal before us: “1. On the facts & circumstances of the case and in law, ld AO & Id CIT(A) has erred in rejecting the books of account & applying sec145(3), in absence of multiple defects found in the regular books of account; in absence of valid rejection of books, any kind of estimation of disallowance on account of any expenditure claimed (i.e., purchases) is invalid. 2. On the facts & circumstances of the case and in law, ld AO & ld CIT(A) has erred in treating the purchases of Rs.7,58,800 from 'Goyal Jute Udyog' as 'bogus purchases'; disallowing of Rs.1,89,700, which is 25% of Rs.7,58,800; arbitrary/ baseless estimation of 25% is on mere presumption, surmises and without having any basis/ supporting corroborative evidence/ material brought on record, is invalid & is liable to be deleted.” Also the assessee has raised an additional ground before us which reads as under:
“3. On the facts and circumstances of the case and in law, notice issued u/s.148 dt.25-3-18 by ITO-1(3), Raipur is invalid, non- est, since he was not vested any jurisdiction over the assessee
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at the relevant point of time; assessment made by ITO-1(1), Raipur u/s147 rws.143(3) dt.30-12-18 in absence of a valid notice issued u/s.148 by the 'AO having jurisdiction' over the assessee; would be invalid, ab-initio-void & is liable to be quashed."
Succinctly stated, the assessee firm which is engaged in the business of manufacturing of rice and by-products had e-filed its return of income for A.Y.2011-12 on 24.08.2011, declaring an income of Rs. 36,430/-. On the basis of information received by the A.O from the Commercial Tax Department that the assessee as a beneficiary had procured bogus purchase bills of Rs. 7,58,800/- from an accommodation entry provider, viz. M/s. Goyal Jute Udyog, the A.O reopened the case of the assessee u/s.147 of the Act. Notice u/s.148 of the Act, dated 25.03.2018 was issued by the ITO-1(3), Raipur. Assessment was, thereafter, framed by the ITO-1(1), Raipur vide order passed u/s.143(3) r.w.s. 147 dated 30.12.2018, wherein after disallowing 25% of the impugned bogus purchases of Rs.7,58,800/-, the A.O determined the income of the assessee firm at Rs.2,26,130/-.
Aggrieved, the assessee carried the matter in appeal before the CIT(Appeal) but without any success.
The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before me.
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As the assessee by raising the aforesaid additional ground of appeal has assailed the validity of the jurisdiction that was assumed by the ITO-1(1), Raipur for framing the assessment u/s.143(3) r.w.s. 147, dated 30.12.2018, which being a purely legal issue would not require looking any further beyond the facts available on record, therefore, I have no hesitation in admitting the same. The aforesaid view that where an additional ground of appeal involving purely a question of law requiring no further verification of facts is raised before the Tribunal, though for the first time, then, the same merits admission is supported by the judgment of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Vs. CIT (1998) 229 ITR 383 (SC).
As the assessee has assailed before me the validity of the assessment framed by the A.O u/s. 143(3) r.w.s. 147 of the Act, dated 30.12.2018, therefore, I shall first deal with the same.
At the time of hearing of the appeal, it was submitted by the Ld. Authorized Representative (for short ‘AR’) for the assessee that as the ITO-1(1), Raipur had framed the impugned assessment u/s.143(3) r.w.s. 147, dated 30.12.2018 in absence of any valid notice issued u/s. 148 of the Act, therefore, the assessment therein framed was liable to be struck down on the said count itself. Elaborating on his aforesaid
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contention, it was the claim of the Ld. AR that the notice u/s.148, dated 25.03.2018 was issued by the ITO-1(3), Raipur, i.e., an A.O who at the relevant point of time was not vested with the jurisdiction over the case of the assessee. On the basis of his aforesaid contention, it was submitted by the Ld. AR that as the ITO-1(1), Raipur who was duly vested with the jurisdiction over the assessee’s case had on the basis of notice issued by the aforesaid ITO-1(3), Raipur, i.e., a non- jurisdictional officer proceeded with and framed the impugned assessment vide his order passed u/s.143(3) r.w.s. 147 of the Act, dated 30.12.2018, therefore, the assessment so framed being devoid and bereft of any force of law was liable to be quashed. The Ld. A.R on being queried as to on what basis it was being claimed that the ITO- 1(3), Raipur was not vested with jurisdiction over the assessee’s case took us through the copy of the return of income of the assessee for the year under consideration that was e-filed on 24.08.2011 with the ITO-1(3), Raipur. It was averred by the Ld. AR that as per the Notification No.1/2014-15, dated 15.11.2014 the Joint Commissioner of Income Tax, Range-1, Raipur had pursuant to the powers that were vested with him by the Commissioner of Income Tax-1, Raipur in exercise of powers conferred under sub-sections (1), (2) and (5) of Section 120 of the Act, had carried out a massive restructuring /reallocation of the territorial jurisdictions of the AOs. It was the claim
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of the Ld. AR that pursuant to the aforesaid restructuring/reallocation of the territorial jurisdictions of the AOs the ITO-1(3), Raipur was divested of his jurisdiction over the case of the assessee and, the same was thereafter vested with the ITO-1(1), Raipur. The Ld. A.R in order to drive home his aforesaid claim had taken us through a copy of the aforesaid Notification No.1/2014-15, dated 15.11.2014, Page 152 to 168 of APB. Taking us through the aforesaid Notification dated 15.11.2014 (supra) the Ld. AR drew our attention to the territorial jurisdiction of the ITO-1(1), Raipur, which, inter alia, stated that the said A.O was vested with the territorial jurisdiction over all such persons other than companies deriving income from business or procession, and other than those assessable by the DCIT/ACIT-1(1), Raipur and whose principal place of business was within the territorial area of Tehsil- Abhanpur.
7.1 It was submitted by the Ld. AR that as the assessee firm was carrying on its business of running a rice mill at “123, Jhanki, Abhanpur, Dist. Raipur”, therefore, the jurisdiction over its case w.e.f 15.11.2014 was beyond doubt vested with the ITO-1(1), Raipur. It was submitted by the Ld. AR that the fact that the ITO-1(1), Raipur was vested with jurisdiction over the case of the assessee could safely be gathered from the fact that the assessment u/s.143(3) r.w.s. 147, dated 30.12.2018 was framed by him. On the basis of the aforesaid
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facts, it was claimed by the Ld. AR that as pursuant to the Notification No.1/2014-15, dated 15.11.2014 as the jurisdiction over the case of the assessee at the time of issuance of notice u/s.148 of the Act, dated 25.03.2018 was vested with the ITO-1(1), Raipur, therefore, the assessment so framed by him on the basis of notice u/s.148 of the Act, dated 25.03.2018 issued by the ITO-1(3), Raipur, Page 2 of APB could not be sustained and was liable to be quashed. It was averred by the Ld. AR that the aforesaid Notification No.1/2014-15 dated 15.11.2014 issued by the Joint Commissioner of Income Tax, Range-I, Raipur pursuant to the power that was vested with him by the Commissioner of Income Tax-1, Raipur in exercise of power conferred under Sub- section (1), (2) and (5) of Section 120 of the Act, on the basis of which, restructuring/reallocation of the territorial jurisdiction of the AOs was carried out, was binding on the department and there could be no escape from the same. In support of his aforesaid contention, the Ld. AR had relied on the judgment of the Hon’ble Supreme Court in the case of UOI v. Azadi Bachao Andolan (2003) 263 ITR 706 (SC). Further, the Ld. AR in support of his contention that an assessment framed on the basis of a notice u/s.148 issued by a non-jurisdictional A.O would be devoid and bereft of any force of law had drawn support from the judgment of the Hon’ble High Court of Bombay in the case of Pavan Morarka Vs. ACIT-2 (2022) 136 taxmann.com 2 (Bombay). It was
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averred by the Ld. AR that in the aforesaid case as the A.O who had issued notice u/s.148 was not vested with the jurisdiction over the case of the assessee, therefore, the assessment framed by the A.O having jurisdiction over the case of the assessee by acting upon the aforesaid notice issued by the non-jurisdictional A.O was quashed by the Hon’ble High Court. Also, reliance was placed by the Ld. AR on the judgment of the Hon’ble High Court of Gujarat in the case of Pankajbhai Jaysukhlal Shah Vs. ACIT, Circle-2 & 1 (2019) 110 taxmann.com 51 (Gujarat). It was submitted by the Ld. AR that the aforesaid judgment of the Hon’ble High Court in the case of Pankajbhai Jaysukhlal Shah (supra) had thereafter been approved by the Hon’ble Supreme Court in the case of ACIT, Circle-2 & 1 Vs. Pankajbhai Jaysukhlal Shah (2020) 120 taxmann.com. 318 (SC). On the basis of his aforesaid contentions, it was the claim of the Ld. AR that as in the present case the jurisdiction was assumed on the basis of notice u/s.148 of the Act, dated 25.03.2018 issued by the ITO-1(3), Raipur, i.e., a non-jurisdictional officer, therefore, the consequential assessment framed by the ITO, Ward-1(1), Raipur vide his order passed u/s.143(3) r.w.s. 147, dated 30.12.2018 could not be sustained and was liable to be struck down. Also, it was the claim of the Ld. AR that it was a matter of fact borne from record that the ITO-1(1), Raipur, i.e.,
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the jurisdictional A.O had not issued any notice u/s.148 of the Act prior to framing of the impugned assessment.
Per contra, it was submitted by the Ld. Departmental Representative (for short ‘DR’) that as the assessee on receipt of notice u/s.148, dated 25.03.2018 from the ITO-1(3), Raipur had not called in question his jurisdiction within the stipulated time period of one month from the date of receipt of the said notice, therefore, as per the mandate of Section 124(3)(b) of the Act he was precluded from challenging the same in the course of the present proceedings. The Ld. D.R in support of his aforesaid contention had relied on the judgment of the Hon’ble High Court of Delhi in the case of Abhishek Jain Vs. ITO, Ward-55(1), New Delhi (2018) 94 taxmann.com 355 (Delhi) and that of the Hon’ble High Court of Allahabad in the case of Shivaaditiya Jems and Jewellery Private Limited Vs. ITO-2(1) and Ors 2022 (9) TMI 89 (Allahabad). It was, thus, the claim of the Ld. DR that as the ITO-1(1), Raipur had validly assumed jurisdiction and framed the assessment vide his order passed u/s.143(3) r.w.s. 147 of the Act, dated 30.12.2018, therefore, no infirmity did emerge therefrom.
I have heard the ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements
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that have been pressed into service by them to drive home their contentions.
Admittedly, it is a matter of fact borne from record that the notice u/s.148 of the Act, dated 25.03.2018 was issued by the ITO-1(3), Raipur. Also, it is a fact that the Joint Commissioner of Income Tax, Range-1, Raipur in exercise of the powers vested with him by the Commissioner of Income Tax-1, Raipur under sub-section (1), (2) and (5) of Section 120 of the Act had carried out restructuring/reallocation of the territorial jurisdictions of the AOs within his jurisdiction vide Notification No.1/2014-15, dated 15.11.2014. Ostensibly, as per the Notification No.1/2014-15, dated 15.11.2014, the territorial jurisdiction of the ITO, Ward-1(1), Raipur was, inter alia, to be exercised over all persons, other than companies, deriving income from business or procession and other than those assessable by DCIT/ACIT-1(1), Raipur and whose principal place of business was within the territorial area of the District Gariaband and Tehsil Abhanpur, Nawapara-Rajim and areas of District Raipur beyond the Municipal limits of Raipur towards Abhanpur and old Dhamtari Road. For the sake of clarity the relevant extract of the aforesaid Notification No.1/2014-15, dated 15.11.2014 is culled out as under:
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ITO,1(1), Raipur 1. All persons being companies registered under the Companies Act, 1956 and having their registered office falling within the territorial jurisdiction of the following Assessing Officers of Range-1, Raipur a. ITO 1(1), Raipur b. ITO 1(2), Raipur c. ITO 1(3), Raipur d. ITO 1(4), Raipur
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And whose none of the last three returns of income as on 1st April, 2014 and as on 1st April of any subsequent F.Y. shows total income/Loss of Rs.15 lakh or less. 2. The directors of the companies mentioned at (1) above. 3. All cases of salaried employees of the Central Government and Public Sector Unit wholly or partly owned by the Central Government residing in Raipur district and whose fifth letter of their PAN is from A to D. 4. All persons being other than companies deriving income from business or profession and other than those assessable by DCIT/ACIT 1(1), Raipur and whose principal place of business is within the territorial area of the District Gariaband and Tehsil Abhanpur, Nawapara-Rajim and areas of District Raipur beyond the Municipal limits of Raipur towards Abhanpur and old Dhamtari Road. 5. All persons being other than companies deriving income from sources other than income from business or profession and other than those assessable by DCIT/ACIT 1(1), Raipur and residing within the territorial area of the District Gariaband and Tehsil Abhanpur, Nawapara - Rajim and areas of District Raipur beyond the Municipal limits of Raipur towards Abhanpur and old Dhamtari Road. 6. All cases that may be assigned under section 127 of the Income Tax Act 1961. 7. All the Residual area of the Range-1, Raipur which is not assigned to any other ITO of Range-1, Raipur.
As the assessee firm in the case before me was carrying on its business at “123, Jhanki, Abhanpur, Dist. Raipur” and, had filed its return of income for the year under consideration, i.e., A.Y.2011-12 on 24.08.2022 declaring an income of Rs.36,430/, therefore, on the basis of the aforesaid facts, it can safely be gathered that the territorial
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jurisdiction over its case was vested with the ITO-1(1), Raipur. In fact, my aforesaid conviction is fortified by the fact that the assessment u/s.143(3) r.w.s. 147, dated 30.12.2018 had been framed by the ITO- 1(1), Raipur. Considering the aforesaid facts, it is clear beyond doubt that as on the date of issuance of notice u/s. 148, dated 25.03.2018 the territorial jurisdiction over the case of the assessee was vested with the ITO-1(1), Raipur. On the basis of the aforesaid facts, the issue that emerges and calls for my indulgence is as to whether the assessment order passed by the A.O u/s. 143(3) r.w.s 147, dated 30.12.2018 on the basis of notice u/s.148, dated 25.03.2018 issued by the ITO-1(3), Raipur, i.e., a non jurisdictional Officer can be sustained?
I find that involving identical facts a similar had come up before the Hon’ble High Court of Bombay in the case of Ashok Devichand Jain Vs. UOI in W.P. No.3489 of 2019, dated 08.03.2022. In the case before the Hon’ble High Court as the notice u/s.148, dated 30.03.2019 was issued by the ITO, Ward 12(3)(1), Mumbai, i.e., a non-jurisdictional Officer, therefore, the High Court on a writ petition filed by the assessee assailing the validity of the jurisdiction that was assumed by the A.O for reopening of its case on the basis of the aforesaid impugned notice, quashed the notice issued u/s.148 of the Act, 30.03.2019 for the reason that the same was issued by an A.O who at the relevant point of time had no jurisdiction over the assessee-petitioner. Also, I find that
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a similar view had been taken by the Hon’ble High Court of Bombay in the case of in the case of Pavan Morarka Vs. ACIT-2, (2022) 136 taxmann.com 2 (Bombay). It was observed by the Hon’ble High Court that as the A.O at Delhi who had issued notice u/s.148 of the Act had no jurisdiction over the case of the assessee who was being assessed at Mumbai, therefore, the subsequent reopening notice that was issued by the A.O at Mumbai after the case of the assessee was transferred to his jurisdiction could not be held to be in continuation of the proceedings which were initiated by the A.O at Delhi. To sum up, it was observed by the Hon’ble High Court that if an A.O who had issued notice u/s.148 was not vested with jurisdiction over the case of the assessee, then, the subsequent notice issued by the jurisdictional A.O could neither be construed as a notice issued in continuation of the earlier proceedings, nor any valid assessment u/ss. 143(3)/147 of the Act could be framed on the basis of such notice issued by the non- jurisdictional A.O. Also, a similar view had been taken by the Hon’ble High Court of Allahabad in the case of Pr. Commissioner of Income Tax-II Vs. Mohd. Rizwan, Prop. M/s. M.R Garments Moulviganj, Lucknow, ITA No. 100 of 2015 dated 30.03.2017. In the case before the Hon’ble High Court, notice u/s.148 was issued by the ITO-(IV)(1), Lucknow who at the relevant point of time had no jurisdiction over the case of the assessee, as the same was already transferred to ITO-V(2),
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Lucknow. Thereafter, as the ITO-V(2), Lucknow proceeded with and framed the assessment without issuing any notice u/s.148 of the Act, therefore, the Hon’ble High Court treating the notice u/s 148 issued by the ITO-(IV)(1), Lucknow as invalid upheld the view taken by the Tribunal which had quashed the assessment for want of valid assumption of jurisdiction by the jurisdictional A.O., i.e, ITO-(IV)(1), Lucknow. Apart from that, a similar view had earlier been taken by the Hon’ble High Court of Allahabad in the case of MI Builders (P) Ltd. (2014) 349 ITR 271 (Allahabad). It was observed by the Hon’ble High Court that as the jurisdiction of the A.O was transferred before issuance of notice u/s.148 of the Act by him, therefore, the notice so issued would be without jurisdiction.
Considering the aforesaid position of law, I find substance in the claim of the Ld. AR that the assessment framed in the case of the present assessee by the ITO-1(1), Raipur vide his order passed u/s.143(3) r.w.s. 147, dated 30.12.2018 on the basis of notice u/s.148 of the Act, dated 25.03.2018 issued by the ITO-1(3), Raipur ,i.e., a non jurisdictional A.O being devoid and bereft of any of force of law cannot be sustained and is liable to be vacated on the said count itself.
We shall now deal with the rejoinder of the ld. D.R to the challenge thrown by the assessee’s counsel as regards the validity of
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the jurisdiction assumed by the ITO-1(1), Raipur for framing the assessment vide his order passed u/s.143(3) r.w.s. 147, dated 30.12.2018 on the basis of notice u/s.148 of the Act, dated 25.03.2018 issued by the ITO-1(3), Raipur, i.e., a non jurisdictional A.O. Controverting the aforesaid claim of the assessee’s counsel, it was averred by the ld. D.R that now when the assessee on receipt of notice u/s.148 of the Act, dated 25.03.2018 from the ITO-1(3), Raipur had as per the mandate of Sec. 124(3) of the Act not called in question the jurisdiction of the ITO-1(3), Raipur within the stipulated time period of one month from the date of receipt of such notice, therefore, he was precluded from assailing the same in the course of the present proceedings.
Apropos the contention of the department that now when the assessee as per the mandate of sub-section (3) of Section 124 had not called in question the jurisdiction of the A.O within the stipulated time period of one month from the date of receipt of notice u/s.148, dated 25.03.2018 from the Income-Tax Officer, Ward-1(3), Raipur, therefore, he could not have assailed the same for the very first time in the course of the present proceedings, in our considered view does not merit acceptance. I, say so, for the reason that as stated by the Ld. AR and, rightly so, as the notice u/s.148, dated 25.03.2018 issued by the Income-Tax Officer, Ward-1(3), Raipur was not a notice issued by an
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authority falling within the meaning of “Assessing Officer”, i.e., either of the authorities contemplated in Section 2(7A) of the Act, viz. such authority who was vested with the relevant jurisdiction by virtue of any directions or orders issued under sub-section (1) or sub-section (2) of Section 120 of the Act or any other provision of the Act; or any such authority who was 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 the Act; therefore, no obligation was cast upon the assessee to call in question his jurisdiction on receipt of notice u/s. 148, dated 25.03.2018 from him. Our aforesaid conviction that where an assessee is in receipt of notice from an officer who was not vested with the jurisdiction over the case of the assessee either u/s.124(1) or u/s.127 or by notification or circular or instruction of CBDT, then, no obligation would be cast upon the assessee to call in question his jurisdiction as per the mandate of sub-section (3) of Section 124 of the Act is supported by the orders of the co-ordinate benches of the Tribunal, i.e, ITAT, Gauhati in the case of Balaji Enterprise Vs. ACIT (2021) 187 ITD 111 (Gau.) and the ITAT, Kolkata Bench in the case of OSL Developers (P) Ltd. Vs. ITO (2021) 211 TTJ (Kol) 621. I further find that a similar view had also been taken by the Hon’ble High Court of Gujarat in the case of CIT Vs. Ramesh D Patel (2014) 362 ITR 492 (Guj.). It was
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observed by the Hon’ble High Court that the provisions of sub-section (3) of Section 124 pertains to the dispute of the assessee with respect to the territorial jurisdiction of the A.O and have no relevance in so far the inherent jurisdiction is concerned.
Accordingly, on the basis of our aforesaid observations, I am of the considered view that as the Income-Tax Officer, Ward-1(3), Raipur was at the time of issuing notice u/s.148, dated 25.03.2018 not having jurisdiction over the case of the assessee, and thus, did not fall within the meaning of “Assessing Officer” as defined in Section 2(7A) of the Act, therefore, no obligation was cast upon the assessee to have called in question the assumption of jurisdiction by him to issue the said notice.
In so far the reliance placed by the Ld. DR on the judgment of the Hon’ble High Court of Allahabad in the case of Shivaaditiya Gems and Jewellery Private Limited Vs. ITO-2(1) and Ors. 2022 (9) TMI 89 (Allahabad) and that of the Hon’ble High Court of Delhi in the case of Abhishek Jain Vs. ITO, Ward-55(1), New Delhi (2018) 94 taxmann.com 355 (Delhi) is concerned, the same in my considered view being distinguishable on facts will not further the case of the department. I, say so, by referring to the facts involved in the respective cases, as under:
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(A) Shivaaditiya Gems and Jewellery Private Limited Vs. ITO-2(1) and Ors. 2022 (9) TMI 89 (Allahabad HC.):-
In the case before the Hon’ble High Court as the assessee company had filed its return of income declaring an income in excess of Rs.15 lacs, therefore, vide the CBDT Instruction No.1 of 2011, dated 31.01.2011 though the pecuniary jurisdiction over its case was vested with the ACIT, Range-1, Moradabad, but its case was reopened vide notice u/s.148 of the Act by the ITO-2(1), Moradabad. On the basis of the aforesaid facts, it was the claim of the assessee-petitioner that no valid jurisdiction on the basis of the impugned notice u/s.148 of the Act issued by the ITO-2(1), Moradabad, i.e., a non jurisdictional officer could have been assumed for reopening of its case u/s.147 of the Act.
Considering the aforesaid facts, it was observed by the Hon’ble High Court that though the assessee had admitted that the ITO, Ward- 2(1), Moradabad had the territorial jurisdiction over its case, but at the same time had objected to the assumption of jurisdiction by him, for the reason that as per the CBDT Instruction No.1 of 2011, dated 31.01.2011 the jurisdiction over the case for the year under consideration was exclusively vested with the ACIT-2, Moradabad. On the basis of the aforesaid facts involved in the case before them, the Hon’ble High Court after relying on the judgment of the Hon’ble High Court of Delhi in the case of Abhishek Jain Vs. ITO, Ward-55(1), New
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Delhi (2018) 94 taxmann.com 355 (Delhi) observed, that though the A.O i.e. ITO-2(1), Moradabad had the territorial jurisdiction over the case of the assessee, but as the same was challenged only for the reason that he pursuant to the pecuniary limit fixed for distribution of work between the officers vide CBDT Instruction No.1 of 2011, dated 31.01.2011 was divested of his power for framing the assessment for the year under consideration, therefore, it could not be said that the said officer i.e. ITO, Ward-2(1), Moradabad lacked inherent jurisdiction while issuing notice u/s.148 of the Act. It was, thus, on the basis of the aforesaid facts that the ITO-2(1), Moradabad was undeniably vested with the territorial jurisdiction over the case of the assessee, that the Hon’ble High Court had observed that as the assessee on receipt of notice u/s.148 from the ITO, Ward-2(1), Moradabad had not called in question the validity of his jurisdiction within the stipulated time period, therefore, the Writ Petition filed by him challenging the validity of jurisdiction assumed by the A.O was not maintainable.
Contrary to the facts involved in the aforesaid case relied upon by the department, I may herein observe that in the present case the ITO-1(3), Raipur who had issued notice u/s.148 dated 25.03.2018 was at the time of issuance of the said notice not vested with any jurisdiction over the case of the assessee. In sum and substance, as the ITO-1(3), Raipur in the present case before me at the time of issuing
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the notice u/s 148, dated 25.03.2018 was undeniably a non- jurisdictional officer, therefore, he as observed by me at length hereinabove could not have been brought within the meaning of “Assessing Officer” as defined in Section 2(7A) of the Act, which would have otherwise cast an obligation upon the assessee to have called in question his jurisdiction as per the mandate of Section 124(3) of the Act on receipt of notice u/s.148 of the Act, dated 25.03.2018.
Accordingly, as the facts involved in the case before me are distinguishable as against those in the case of Shivaaditiya Gems and Jewellery Private Limited Vs. ITO-2(1) and Ors. (supra), therefore, the reliance placed by the ld. D.R on the said judicial pronouncement would not assist the case of the department.
(B) Abhishek Jain Vs. ITO, Ward-55(1), New Delhi (2018) 94 taxmann.com 355 (Delhi) :-
In the case before the Hon’ble High Court the assessee-petitioner had, inter alia, filed his return of income with the ITO, Ward-36(1), Delhi and thereafter from the A.Y.2013-14 with the ITO, Ward-58(2) Delhi. On the basis of “Annual Information Return” (AIR) that the assessee had made cash deposits of Rs.12.89 lacs (approx.) in his SB account No. 628401512177 with ICICI Bank Ltd., Sector 27, Branch: Noida, Uttar Pradesh in A.Y. 2009-10, the A.O carried out necessary
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verifications and gathered that the communication address provided by the assessee as per bank record was “A-32, Sector-5, Noida-201 301”, while for his permanent address was “FF-50, 3rd floor, Laxmi Nagar New Delhi-110 092”. The assessee had not provided his PAN details to the bank. On the basis of the aforesaid details that were provided by the assessee to the bank the ITO, Ward-1(1), Noida issued notices u/s 133(6) of the Act on two occasions vide registered/speed post to the assessee-petitioner, which was followed by another notice addressed to his New Delhi address. Subsequently, the Income-Tax Inspector visited the assessee’s Laxmi Nagar, New Delhi address with the notice u/s.133(6) of the Act, but as the assessee-petitioner could not be located, therefore, the notice was affixed at the said address.
Considering the fact that the assessee was not responding to the notices which were issued to him u/s.133(6) of the Act, the ITO, Ward- 1(1), Noida after recording “reasons to believe” issued notice u/s.148 of the Act, dated 18.02.2016, which was sent through registered post at the assessee’s Noida address. Neither the assessee- petitioner in compliance thereto filed his return of income, nor came forward and stated that he had filed his return of income for assessment year 2009- 10 with the Income-Tax Officer, Ward No.36(1), Delhi and was being assessed with the said A.O. On 27th April, 2016, the Income-Tax officer, Ward No.1(1), Noida issued notice u/s.142(1) of the Act calling upon
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the assessee to file his return of income a/w. certain information and documents regarding cash deposits in his bank account. In reply, the assessee belatedly stated that he was regularly being assessed and had filed his return of income for the year in question, i.e, A.Y.2009-10 with the ITO, Ward-36(1), Delhi. On the basis of his aforesaid claim, the assessee assailed before the Hon’ble High Court the validity of the notice issued u/s.148 of the Act, dated 18.02.2016 that was issued by the ITO, Ward-1(1), Noida.
It was observed by the Hon’ble High Court, viz. (i). that the assessee-petitioner had accepted that he was holding SB account with ICICI Bank Ltd, Sector 27, Branch Noida, Uttar Pradesh with the communication address, viz. “A-32, Sector-5, Noida-201 301”, i.e., a factory where he was working; (ii). that the assessee had also furnished a copy of employees Identity card and a letter from the employer confirming his aforesaid Noida address; and (iii). that the KYC form of the assessee with the bank mentioned the address of the assessee- petitioner as “A-32, Sector-5, Noida”. Considering the aforesaid facts, it was observed by the Hon’ble High Court that it cannot be held that the ITO, Ward-1(1), Noida per-se lacked jurisdiction over the case of the assessee, albeit he had concurrent jurisdiction with the ITO, Ward 36(1)/58, Delhi. On the basis of the aforesaid facts, the Hon’ble High
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Court observing that the ITO, Ward 1(1), Noida was vested with concurrent jurisdiction over the case of the asseseee, thus, declined the quashing of the notice u/s.148 of the Act issued to him.
Admittedly, in the aforesaid case of Abhishek Jain Vs. ITO, Ward-55(1), New Delhi (supra), the Hon’ble High Court in context of the facts involved in the case before them, had observed, that as the assessee had not called in question the jurisdiction of the ITO, Ward- 1(1), Noida within the stipulated time period as contemplated under sub-section (3) of Section 124 of the Act, therefore, he had lost his right to question such jurisdiction. At this stage, it may be observed that the Hon’ble High Court had observed that in the case of the assessee before them the ITO, Ward-1(1), Noida did not per se lack jurisdiction, albeit he had concurrent jurisdiction with the ITO, Ward-36(1)/58(2), Delhi. Considering the aforesaid factual position, now when in the aforesaid case the ITO, Ward-1(1), Noida was held to be vested with the jurisdiction over the case of the assessee, therefore, it was in the backdrop of the said material fact that the Hon’ble High Court, had observed, that as the assessee had failed to call in question the jurisdiction of the said A.O, i.e., ITO, Ward-1(1), Noida within the stipulated time period as provided under sub-section (3) of Section 124
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of the Act, therefore, he had lost his right to subsequently call in question such jurisdiction.
As in the present case before me the ITO-1(3), Raipur at the time of issuance of notice u/s.148 of the Act dated 25.03.2018 was not vested with any jurisdiction over the case of the assessee, which as per the Notification No.1/2014-15 dated 15.11.2014 remained with the ITO-1(1), Raipur, therefore, as the notice u/s.148, dated 25.03.2018 issued by the ITO-1(3), Raipur was nothing short of a notice issued by an A.O who lacked inherent jurisdiction, thus, the provisions of Sec. 124(3) could not have been triggered to fasten an obligation upon the assessee to call in question the jurisdiction of the said officer, i.e., ITO- 1(3), Raipur.
I, thus in the backdrop of my aforesaid observations is of the considered view that the reliance placed by the Ld. DR on the judgment of the Hon’ble High Court of Delhi in the case of Abhishek Jain Vs. ITO, Ward-55(1), New Delhi (supra) being distinguishable on facts would also not assist its case.
On the basis of my aforesaid deliberations, I am of the considered view that as the ITO-1(1), Raipur had framed the impugned assessment u/s.143(3) r.w.s. 147 of the Act, dated 30.12.2018 on the
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basis of a notice u/s.148 of the Act, dated 25.03.2018 issued by the ITO-1(3), Raipur, i.e., an A.O who at the time of issuance of the aforesaid notice lacked inherent jurisdiction over the case of the assessee, therefore, the assessment so framed cannot be sustained and is liable to be quashed. Accordingly, I quash the assessment framed by the ITO-1(1), Raipur vide his order passed u/s.143(3) r.w.s. 147 of the Act, dated 30.12.2018 for want of valid assumption of jurisdiction on his part.
As I have quashed the assessment framed by the A.O for want of valid assumption of jurisdiction, therefore, I refrain from adverting to and therein adjudicating the other grounds that have been raised by the assessee as regards the sustainability of the addition on the merits of the case, which, thus, are left open.
In the result, appeal of the assessee is allowed in terms of the aforesaid observations.
Order pronounced in open court on 29th day of November, 2022. Sd/- (रवीश सूद /RAVISH SOOD) �या�यक सद�य/JUDICIAL MEMBER रायपुर / Raipur; �दनांक / Dated : 29th November, 2022 ***SB
27 M/s. Adarsh Rice Mill Vs. ITO, Ward-1(1) ITA No. 84/RPR/2022
आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals), Raipur (C.G.) 4. The Pr. CIT-1, Raipur (C.G) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य” ब�च, रायपुर / DR, ITAT, “SMC” Bench, Raipur. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy// �नजी स�चव /Private Secretary आयकर अपील�य अ�धकरण, रायपुर / ITAT, Raipur