TMI Blog2015 (5) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... it is apparent that u/s 127(2) if the AO from whom the case is to be transferred and the AO to whom the case is to be transferred are not under the jurisdiction of same Chief Commissioner or Commissioner, the Chief Commissioner or Commissioner to whom such AO are subordinate are in agreement, then, the Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred has to give a reasonable opportunity of being heard to the Assessee before passing the order for transfer. It is not denied in the case of the Assessee that the AO at Agra and the AO at New Delhi were under the jurisdiction of different CCIT as well as different Commissioners. Therefore, the AO, Agra does not have any jurisdiction to transfer the file to AO at New Delhi. The filed could have been transferred only by the Chief Commissioner or the Commissioner of the AO, Agra after giving hearing to the Assessee. In this case, we noted that the AO, Agra has not complied with the mandatory requirement of Sec. 127 but suo moto transferred the file from Agra to AO, New Delhi as if he has entered into the shoes of the Chief Commissioner or Commissioner of Income Tax. A transfer can be made by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing officer Ward 5 (3), New Delhi and its registered office is also situated in Delhi since inception of the company. The company had also received 143(1) intimation for the assessment year 2006 -- 2007 in March 2008 from, ITO Ward 5 (3), New Delhi. And as such jurisdiction over the appellant vested in the assessing officer, Delhi and ITO Agra has had no jurisdiction over the appellant. 4. That before completion of the assessment U/s 143 (3) of the act the appellant raised objection that no proceedings u/s 143 (2) of the act can be initiated on the appellant in the absence of service of notice u/s 143 (2) of the act after the statutory period had expired and thus proviso to sec 292 BB of the act will apply. The completion of Assessment u/s 143 (2) of the act is thus void abinitio and liable to be annulled. 5. That the learned assessing officer erred in computing the income of the appellant at ₹ 28,13,834/- as against the returned income of ₹ 4,53,512/-, making an addition of ₹ 23,60,322/- following revenue receipt basis while the company followed revenue recognition accounting policy consistently as per which profit on its activities could be recognise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2), Agra on 13.8.2009 which was sent as per the address given in the return of income i.e. C-208, A/6, Savitra Nagar, Nr. Shekh Sarai, Phase-I, New Delhi 110 077. Simultaneously, notice u/s 143(2) was also sent and served upon one of the Directors, Shri Mohan Khandelwal at 30-A, Munro Road, Agra Cantt. Agra on 23.9.2009.The Assessee on 15.12.2010 for the first time through written objection challenged the service of the notice issued u/s 143(2) by the ITO, Ward-4(2), Agra namely on the ground that the Assessee company is a regular Assessee and assessed at Delhi and is filing its return of income from A.Y 2006-07 till date with the ITO, Ward-5(3), New Delhi. The company was incorporated on 2.6.2005. ITO, Ward-5(3), New Delhi did not issue any notice u/s 143(2) within the prescribed time u/s 143(2) i.e. one year from the date of filing of the return of income for the assessment year under consideration i.e. 30.9.2009. Alternately, even if the AO at agra has the jurisdiction, there is no valid transfer of jurisdiction from Agra to Delhi. The AO disposed off the objection in the following manner : - Return for the A. Y. 2008-09 was e-filed videAck No, 44775850300908 on30.09.2008 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he return of income due to which the addition of ₹ 13,68,582/- was made on account of net profit estimated @ 5% on gross contractual receipt amounting to ₹ 2,73,71,630/- and interest income of ₹ 14,45,252/- being interest paid by the Bank of Baroda, Hardwar as per TDS certificate filed by the Assessee company. The AO rejected the plea of the Assessee. The Assessee went in appeal against the jurisdiction as well as service of the notice u/s 143(2). CIT(A) took the view that the notice u/s 143(2) has been duly issued and served upon the Assessee within the time limit stipulated u/s 143(2). In respect of the jurisdiction, the CIT(A) noted that the Assessee has given address in Form 49A for allotment of PAN as Integrated Registry Service Ltd., 103, Puneet Vrindawan, Sanjay Place, Agra (U.P) 282005 and accordingly, the jurisdiction mentioned by the Assessee is KNP/W/80/2. The residential address of the Assessee is shown as 72-80, Industrial Estate, Nunihai, Agra (U.P) 208206. The Assessee has enclosed copy of passport as a proof with Form 49A. Ultimately, CIT(A) took the view that the jurisdiction lies with the Income Tax Officer, Ward-4(2), Agra. The ITO, Agra transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, ITO Ward 4(2), did not have the jurisdiction and as such the notice issued is bad in law. The facts were also bought to the notice of the ITO Ward 5(3) New Delhi. The ITO Ward 5(3) New Delhi realizing the mistake asked the ITO Ward 4(2) Agra to send the notices issued to him and thereafter took up the assessment proceedings and issued a questionnaire which has been replied to by the assessee. These facts raise two issues. (i) The first issue is that of the jurisdiction on the assessee company. As per the assessment order and the order of the CIT(A), the allegation is that the jurisdiction of the assessee company was with the ITO Ward 4(2), Agra and hence the issue of notice under section 143(2) on 13thAugust, 2009 is well within time. (ii) The second issue is that in case ITO Ward 4(2), Agra was having jurisdiction, whether the assessment framed by the ITO Ward 5(3), New Delhi will be a valid assessment in the absence of any order passed under section 127 of the Act by the Commissioner of Income Tax transferring the jurisdiction from ITO Ward 4(2), Agra to ITO Ward 5(3), New Delhi. 4. As regards the first issue it was vehemently submitted that it is an admitted fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee company in the address for communication as office address . The application form for PAN cannot be a basis for jurisdiction and in any case the assessee has been rightly filing the return with ITO Ward 5(3), New Delhi and there is no denial to the fact that these returns have been processed by ITO Ward 5(3), New Delhi. Thus It was vehemently contended that the notice issued by the ITO Ward 4(2), Agra was without jurisdiction. 5. In the alternative it was submitted that even if it is assumed that ITO Ward 4(2) Agra has the jurisdiction and he has rightly issued the notice under section143(2) of the Act, then the assessment need to be framed by the ITO Ward 4(2), Agra only and the assessment order passed by ITO Ward 5(3), New Delhi will be nullity having been passed without jurisdiction. Further in case the ITO Ward 4(2) Agra was having valid jurisdiction over the assessee, there was no need on his part to transfer the file to ITO Ward 5(3), Delhi without having any order of transfer of the jurisdiction passed by any competent authority in pursuance with the provisions of section 127. The action of the ITO Ward 4(2) Agra transferring the notices to ITO Ward 5(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i without any order of jurisdiction transferring the file from his ward to ITO, Ward 23(2) by the competent authority, makes it clear that the ITO, Ward 25(4) had actually no jurisdiction over the assessee and thus the notice issued by him under s. 147 of the Act was beyond his jurisdiction. It is further clear that the ITO, Ward 33(2) did not issue any fresh notice under s. 148 of the Act to the assessee, but completed the assessment on the basis of the notice issued under s. 148 by the ITO, Ward 25(4) which is not valid and within the jurisdiction inasmuch as no valid proceedings under s. 147 were initiated by the AO, Ward 25(4), having valid jurisdiction over the present assessee. The fact that the present assessee filed his return of income for the asst. yr. 1995-96 before the ITO, Ward 24(1) is not in dispute. In the assessment for the asst. yr. 1995-96, the AO charged interest under s. 234Aagainst which the assesseefiled an application under s. 154 on 5th May, 2003 before the ITO, Ward 24(1), who completed the assessment for the asst. yr. 1995-96. The ITO, Ward 24(1) then passed an order under s. 154 on 9thMay, 2003 and reduced the interest under s. 234A to ₹ 17,040. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suance of impugned notice under s. 148 on 28thMarch, 2003, when the notice under s. 142(1) was issued to the assessee in December, 2003, the assessee by her reply dt. 21stJan., 2004 indicated that her AO was not located in Ludhiana, but was at New Delhi. The Tribunal has come to the conclusion on the basis of the facts available on the record and, no substantial question of law arises in the present case. No interference with the impugned order is called for.The appeal is dismissed. (iv) Dr. (Mrs.) K.B. Kumarvs. ITO (2010)41 DTR 423 (Del) In this case the Court has observed as under: 7. In this view of the matter and respectfully following the decisions (supra), it is held that notice under s. 148 issued by ITO, Ghaziabad was without jurisdiction and consequent upon the same reassessment framed by the AO, Delhi is invalid and the same is accordingly quashed. Consequently, the order of the learned CIT(A) is set aside on the legal issue raised by the assessee in her appeal. 6. The ld. DR on the other hand vehemently contended that the controversy to be resolved in these grounds are (a) whether notice u/s 143(2) issued by the ITO, Ward-4(2), Agra was served upon the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any in his application in Form 49A for issuance of PAN number had filled in the particulars in the manner as detailed in the CIT(A) order, the jurisdiction vested with ITO, Ward-4(2), Agra. This is also an admitted fact that the application for PAN was filed in Agra through NSDL. The AO called for the response from NSDL and stated in the Remand report dt. 20.9.2011 that NSDL mentioned that the residential address of the Assessee shown in Form 49A is 72-80, Industrial Estate, Noonihai, Agra, U.P. CIT(A) also has given a categorical finding that the Assessee company made request for allotment of PAN through the office of ITO, Ward-4(2), Agra. On the basis of the address given in Form 49A the jurisdiction of the Assessee got assigned to Agra. In case of e-filing of the return, the return will automatically go to the AO who exercises jurisdiction in connection with the PAN allotted to the Assessee. Thus, the jurisdiction to issue notice u/s 143(2) was vested with ITO, Ward-4(2), Agra. Reliance was placed on the decision of Hon'ble Punjab Haryana High Court in the case of Amarjit Singh Tut vs. Union of India, 347 ITR 585. In this case it was contended that the Assessee challenged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial address of the company instead of writing N.A. But subsequent to this, the person who filled up form 49A has given office address as C-208, Esteem Complex, Savitri Nagar, Nr. Sheikh Sarai, Phase-I, New Delhi. The revenue which is supposed to know the Income Tax as they have to deal with the Income tax, could also not be able to fill up the office address and ignored it and generated the PAN number on the basis of residential address when a company cannot have residential address and under the Income tax act in the case of the company, the jurisdiction of the assessing officer depends on the principal office/registered office of the company as per Sec. 120 vis- -vis Sec. 124. The assessee once has submitted the information; the correct legal inference has to be drawn by the revenue authorities. In the case of the company, jurisdiction cannot be determined on the basis of the residential address. We therefore reject the plea of the Ld. DR that since the assessee has shown residential address at Agra, therefore, the assessing officer at Agra has the valid jurisdiction over the assessee. We also noted that generally whenever there is deficiency in form 49A, the revenue does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice was received issued by the AO, Agra. Where the assessee claims that he has not received the notice, it is for revenue to prove such service. Mere fact, that notice was sent by registered post, is not sufficient, when there was no acknowledgement of such service, so that the Tribunal s order setting aside the assessment on the basis of an affidavit from the assessee, that he has not received the same within the prescribed time limit was upheld by the Delhi High Court in CIT vs. Lunar Diamonds Ltd., 281 ITR 1 (Del.). This decision will not assist the Assessee as the Assessee did not file any Affidavit. 9. We noted that the Supreme Court in L.N. Hota and Company vs. CIT, 301 ITR 184 (SC) has held that a notice under section 142(1) is not a substitute for section 143(2), so that non-issue of notice under section 143(2) would invalidate the assessment reversing the decision of the High Court on this point. 10. The Hon'ble Delhi High Court in the case of CIT vs. Yamu Industries Ltd., 306 ITR 309 (Delhi) has taken the view that if notice sent by registered post and such notice was not returned, there is a presumption of service of the notice. Similar view has been taken by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) in respect of any such person residing within the area. In the case of the Assessee, it is not denied that the principal place of the business of the Assessee was situated at Sheikh Sarai, New Delhi. The principal place of business of the Assessee was not situated at Agra. It is also not denied that the Assessee company was engaged in carrying on business. It was not resident of Agra as it is not a human being. Sec. 124(3) stops the Assessee from raising objection about jurisdiction of an AO where the Assessee has filed the return u/s 139 after the expiry of one month from the date on which he was served with notice u/s 142(1) or u/s 143(2) or after the completion of the assessment, whichever is earlier. It is not denied that in the case of the Assessee the return for the impugned assessment year was filed on 30.9.2008. Therefore, the earliest the Assessee can object the jurisdiction is by 30.10.2008. Notice in the case of the Assessee has been issued on 13.8.2009 u/s 143(2) by the AO, Agra. Sec. 124(3) uses the word service of the notice , not issuing of the notice but since the Assessee has not rebutted this fact by filing Affidavit, therefore, we have held in the preceding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he subsequent order of transfer was held to be vitiated and was quashed. 13. A transfer can be made by the Commissioner from one officer to another under section 127 of the Income Tax Act, 1961. But it should be for good reason after a show-cause notice to the assessee, where transfer is from one station to another. Where no reasons were assigned for the transfer and a writ petition was filed against the same before the High Court, it was explained that the Commissioner had recorded his reasons, though he did not communicate the same. The High Court in Deep Malhotra vs. Chief CIT, 334 ITR 232 (P H) pointed out that there are a number of decisions of the High Court and that of the Supreme Court in Ajantha Industries vs. CBDT, 102 ITR 281 (SC) as to the need for a speaking order. Since the alleged reasons recorded were not part of the order, the orders were held to be invalid, while leaving it open to the Commissioner to pass a fresh order. 14. In the impugned case there is a violation of the provisions of Sec. 127 and in view of there being no transfer order being passed by the Chief Commissioner or Commissioner, we hold that the order passed by the AO, Ward-5(3), New Delhi fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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