2023 (5) TMI 1297 - AT - Income Tax

Validity of assessment order framed by non-jurisdictional officer - sustainability of the assessment framed by the ACIT Circle 4(1) Raipur which in turn was based on a notice u/s 143(2) issued by the ITO-1(3) Raipur i.e a non-jurisdictional officer - HELD THAT - As the facts and the issue involved in the present appeal remains the same as were involved in the aforementioned orders of the Tribunal in the case of Durga Manikanta Traders 2023 (1) TMI 1099 - ITAT RAIPUR and Chowaram Dhiwar 2022 (12) TMI 1492 - ITAT RAIPUR therefore respectfully following the same parity of reasoning we are of the considered view that as the assessment framed in the case of the present assessee by the ACIT Circle-4(1) Raipur vide order u/s. 143(3) on the basis of notice issued by the ITO-1(3) Raipur i.e. a non-jurisdictional A.O is devoid and bereft of any force of law thus the same cannot be sustained and is liable to be struck down on the said count itself. Accordingly the impugned assessment framed by the ACIT Circle 4(1) Raipur u/s. 143(3) dated 29.03.2016 is quashed for want of valid assumption of jurisdiction on his part. Decided in favour of assessee.

Issues Involved:
1. Whether the CIT(A) erred in passing the order without providing a valid opportunity of being heard, violating the principles of natural justice.
2. Whether the CIT(A) was correct in making an addition of Rs. 1,00,00,000 deposited in Punjab National Bank.
3. Whether the CIT(A) was correct in disallowing the cost of improvement of Rs. 1,11,02,013 without considering the actual facts and circumstances.
4. Validity of the assessment made under section 143(3) due to jurisdictional issues regarding the notice issued under section 143(2).

Summary:

1. Opportunity of Being Heard:
The assessee contended that the CIT(A) passed the order without providing a valid opportunity of being heard, which is against the principles of natural justice. The Tribunal did not explicitly address this issue in the provided excerpt.

2. Addition of Rs. 1,00,00,000:
The CIT(A) sustained the addition made by the AO of Rs. 1,00,00,000 deposited in Punjab National Bank. The Tribunal did not explicitly address this issue in the provided excerpt.

3. Disallowance of Cost of Improvement:
The CIT(A) disallowed the cost of improvement of Rs. 1,11,02,013 without going through the actual facts and circumstances. The Tribunal did not explicitly address this issue in the provided excerpt.

4. Jurisdictional Validity of the Assessment:
The assessee raised an additional ground challenging the validity of the assessment made under section 143(3) on the basis that the notice issued under section 143(2) by the ITO-1(3), Raipur was invalid due to lack of pecuniary jurisdiction as per CBDT Instruction No. 1/2011. The Tribunal admitted this additional ground, citing that it involved a pure question of law.

The Tribunal found that the assessment framed by the ACIT, Circle 4(1), Raipur, based on a notice issued under section 143(2) by the ITO-1(3), Raipur, was not sustainable. The Tribunal relied on several judicial pronouncements, including the Hon'ble Supreme Court's judgment in National Thermal Power Company Ltd. Vs. CIT, which supports admitting additional grounds involving pure questions of law.

The Tribunal observed that the CBDT Instruction No. 1/2011 revised the monetary limits for assigning cases to ITOs and ACs/DCs, and the ITO-1(3), Raipur did not have pecuniary jurisdiction over the assessee's case. Consequently, the assessment framed by the ACIT, Circle 4(1), Raipur, was quashed for want of valid assumption of jurisdiction.

Conclusion:
The Tribunal quashed the assessment framed by the ACIT, Circle 4(1), Raipur, under section 143(3) dated 29.03.2016, for want of valid assumption of jurisdiction. As a result, the Tribunal refrained from adjudicating the other contentions regarding the sustainability of the additions made by the AO. The appeal of the assessee was allowed on the grounds of jurisdictional invalidity.

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