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2015 (5) TMI 152 - ITAT DELHI

2015 (5) TMI 152 - ITAT DELHI - TMI - Service of notice u/s 143(2) - jurisdiction of the assessing officer to issue notice - Held that:- Notice in the case of the Assessee has been issued on 13.8.2009 u/s 143(2) by the AO, Agra. Sec. 143(2) 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 paragraphs that this is a case where it would be deemed that the notice has been d .....

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s of change of address in the PAN.

There is a separate provision made u/s 127 in this regard. On perusal of this section 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 .....

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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 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 assesse .....

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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. 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 for the impugned assessment year is invalid and void ab initio .....

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icant by holding that notice u/s 143(2) of the Act was duly served on the appellant company while no such notice was served on the appellant / received by the appellant company and as such no assessment u/s 143 of the Act could be framed and the assessment framed is bad in the eyes of law, illegal and unjustified, and deserves to be annulled. 2. That no notice u/s 143 (2) of the Act was ever served on any of the directors of the company including Shri Shrimohan Khandelwal, on whom the notice u/s .....

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ested 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 .....

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of Delhi in the case of CIT V/s TriveniEngg& Industries Ltd (2011) 196 Taxman 94 is fully applicable in the case of the appellant. The addition is illegal, unjustified and contrary to accounting policies and liable to be deleted. 6. That the learned AO failed to appreciate the that the income from business has been declared by the assessee in the previous year relevant to the assessment year 2009 -2010 on the basis of revenue recognition accounting policy and taxing the same in the assessme .....

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same were never confronted to the appellant during the assessment proceedings. The fact that no notice u/s 143 (2) of the Act has been served on the appellant was brought to the knowledge of the assessing officer with prayer that issue of service of notice be first settled / decided but the learned assessing officer choose to frame the assessment totally ignoring the law and as such assessment framed is bad in the eyes of law and is liable to be quashed / cancelled / annulled. 9. That the Hon .....

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rom the assessment are that the Assessee company is engaged in construction and other infrastructure and project development business. Return for the impugned assessment year was filed on 30.9.2008 with the ITO, Ward-4(2), Agra through e-filing. Notice u/s 143(2) was issued by the ITO, Ward-4(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 .....

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. 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 with ITO, 4( .....

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risdiction/service of the notice till 06.12.2010. As per section 124 of the I T Act in which jurisdiction of the Assessing Officer is defined, the assessee can call in question jurisdiction of an Assessing Officer. He can do by making a representation to the Assessing Officer. However, the challenge to the jurisdiction should be done before the expiry of the time given in the notice, where the assessee has not furnished a return of fringe benefits under section l15WD(l) or a return of income und .....

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ut taken from the e-file return of income shows that the assessee has itself mentioned the jurisdiction of the company ITO 4(2), Agra. The PAN allotted on the basis of the information submitted by the assessee which includes the evidence of place and address of the business. The jurisdiction of the A.O. is decided on the basis information filled by the assessee. The PAN of the assessee company was migrated on 23.03.2010 to ITO Ward-5(3), New Delhi from ITO. 4(2). Agra as the refund for the A. Y. .....

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tractual 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 .....

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es with the Income Tax Officer, Ward-4(2), Agra. The ITO, Agra transferred the case to New Delhi when the request was made to migrate the PAN number as per the address of registered office given in the return. CIT(A) ultimately dismissed the plea of the Assessee by taking the view that the correct jurisdiction over the Assessee was with ITO, Ward-4(2), Agra at the time when the case was selected for scrutiny and he was only competent to issue notice u/s 143(2) of the Income Tax Act which was dul .....

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7 was filed with ITO, Ward 5(3), New Delhi (Paper Book page36). This was processed by ITO, Ward 5(3), New Delhi on 29thMarch, 2008 (Paper Book page 37). Return for assessment year 2007-08 was also filed with ITO, Ward 5(3), New Delhi (Paper Book page 38), processed by Ward 5(3) on 30thMarch, 2009(Paper Book page 39). Return for the assessment year under consideration i.e.2008-09 was also filed with ITO Ward 5(3), New Delhi by which a refund of ₹ 20,30,968 was claimed for the year 2008-09. .....

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he appellant company is with the ITO Ward 4(2), Agra. The appellant company immediately thereafter contacted ITO Ward 4(2), Agra and it was informed to it that a notice under section 143(2) was issued by ITO Ward 4(2), Agra on 13thAugust, 2009. It was at this stage that the appellant company came to know that a notice under section 143(2) has been issued. The assessee contended before ITO Ward 4(2), Agra that this notice has not been received. Further, in any case, ITO Ward 4(2), did not have th .....

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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 th .....

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ification SO 732(E) dated 31stJuly, 2001. As per this notification the jurisdiction of the company is where the registered office is situated. It was pointed out that the Central Board of Direct Taxes, after restructuring carried out in the year 2001, has issued a Notification No. 255 dated 31stJuly, 2001 [(SO-732(E)]. As per this notification, in exercise of the power conferred under section 120(1) & (2) and in supersession of the earlier notification, it has notified that the jurisdiction .....

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. Firstly in view of the notification issued by the CBDT the jurisdiction of a company has to be as per its registered office and there is no option or choice. Further PAN cannot be the basis of jurisdiction. PAN is universal and it does not change with change of place, city, State of the assessee. In this regard it may also be important that CIT(A) has referred to the residential address rather than the office address stated in the PAN application. There is a common application form No. 49A for .....

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ress given in the PAN application and also the tick marked 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 jurisdic .....

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er 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) makes it clear that ITO Ward 4(2) Agra had actually no jurisdiction over the assessee and thus the notices issued by him under section 143(2) was beyond his jurisdiction. The jurisdiction of an assessee having been acquired by one AO can be tran .....

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the following judgments: (i) ITO vs. Krishan Kumar Gupta 16 DTR (Del)(Trib) 1 In this case the Court has observed as under: 12. We have heard both the parties and have gone through the orders of the authorities below. It is not in dispute that the notice under s. 147 issued by the ITO, Ward 25(4) on the basis of the address mentioned in the bank account of the assessee with the SBI, Rohtak Road, DSIDC, Delhi. Having received the notice under s. 148 issued by the ITO, Ward 25(4) the assessee rais .....

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age of issuing the notice of hearing under s. 142(1) or 143(2) of the Act. 13. From the aforesaid facts discussed above, it is clear that the ITO, Ward 25(4) had accepted the assessee s objection and then transferred the file to the ITO, Ward 33(2), New Delhi. Had the ITO, Ward 25(4) had valid jurisdiction over the assessee and validly issued the notice under s. 147 of the Act, there was no need on his part to transfer the file to ITO, Ward 33(2), New Delhi without having any order of transfer o .....

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sh 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. .....

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by the assessee under s. 154 on 5thMay, 2003 with reference to the return of income for the asst. yr. 1995-96. The present notice has been issued under s. 147 by the ITO, Ward 25(4) on 28th March, 2002, when the jurisdiction over the assessee s case was with ITO, Ward 24(1), New Delhi. Thus, from this aspect of the matter also, the notice under s. 147 issued by ITO, Ward 25(4) was without jurisdiction. 14. Moreover, the ITO, Ward 33(2) who passed the present assessment order without issuing any .....

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IT (2008) 10 DTR 181 wherein the Tribunal held that notice under s. 148 issued by the ITO at Ghaziabad to the assessee who was assessed to tax in Delhi was without jurisdiction and, therefore, assessment framed on the basis of said notice is bad in law; impugned notice was not in substance and effect in conformity with the provisions of s. 120 r/w s. 147 and thus, the provisions of s. 292B are not applicable. (iii) CIT vs. Smt. Anjali Dua (2008) 11 DTR (Del) 93 Wherein their Lordships of Delhi H .....

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ed, after the said transfer, it is only Revenue authorities at New Delhi who had jurisdiction over the assessee s cases and who were competent to issue a notice in terms of s. 148. It may also be pointed that pursuant to the issuance 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 c .....

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pon 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 Assessee before the last date prescribed for issuing the notice under the Income tax Act an .....

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i 110 077. Simultaneously, notice u/s 143(2) was also sent and served upon one of the Directors, namely Shri Mohan Khandelwal residing at 30-A, Munro Road, Agra Cantt. Agra on 23.9.2009. In the meantime, PAN of the Assessee company was migrated from ITO, Ward-4(2), Agra to ITO, Ward-5(3), Delhi on 23.3.2010 and thereafter the assessment proceedings continued before ITO, Ward-5(3), New Delhi. As regard the submission of the Assessee that there was no valid service of the notice u/s 143(2) before .....

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l, one of the Directors residing at 30-A, Munro Road, Agra Cantt. Agra. The validity of the assessment proceedings continued by ITO, Ward-5(3), New Delhi depends upon the validation of the initiation of the proceedings for assessment by notice issued u/s 143(2) on 13.8.2009 by ITO, Ward-4(2), Agra. If the issuance of notice u/s 143(2) on 13.8.2009 is valid, the order dt. 29.12.2010 passed by ITO, Ward-5(3), New Delhi would not get vitiated and therefore would remain valid. Our attention was draw .....

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. 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 Fo .....

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ssee challenged the validity of the notice dt. 17.9.2008 issued by the ACIT, Jalandhar u/s 143(2) contending that vide notification dt. 28.9.2007 issued u/s 120 the jurisdiction lies with the revenue authorities at Chandigarh. The contention of the Assessee in this case was rejected by the Hon'ble High Court. One of the grounds for rejection was that the objection regarding territorial jurisdiction has to be raised at the earliest otherwise it would be deemed to have been waived. On the same .....

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w Delhi. 7. We heard the rival submissions along with the order of the tax authorities below and pursued the documents and evidences referred to us during the course of hearing filed in the paper book. We have also gone through the case laws as relied on and cited before us. It is an admitted fact that in this case the assessee has filed return through e filing. On the basis of the PAN no. allotted to the assessee, the assessing officer Ward 4 ,Agra assumed jurisdiction and issued notice u/s 143 .....

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hether the assessee is an individual or HUF or firm or AOP or an incorporated company. The company being artificial judicial person cannot have residence. It is not a human being. It quite natural that a person who is not aware of technicalities may presume that all the columns given in form 49A have to be filled up and accordingly, he might have filled that residential address of the director to be the residential address of the company instead of writing N.A. But subsequent to this, the person .....

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r depends on the principal office/registered office of the company as per Sec. 120 vis-à-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 juris .....

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tion will be on the basis of the address generated in PAN or residential address of the company. We, therefore reject this plea of Ld. DR. 8. It is not denied by the Ld. AR that the Director of the company Shri Mohan Khandelwal was putting up Agra at the residential address given in Form 49A. Even no affidavit in this regard was filed either before us or before the authorities below. In the impugned case AO Agra has issued notice on 13.8.2009 i.e. prior the substitution of new provisions of sect .....

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cer in the case of the company until and unless the case falls u/s 2(35)(b) and for which the assessing officer should have served a notice of his intention to treat him as the principal officer in order that he may be brought under sub clause (b) of section 2(35). The notice issued u/s 143(2) dt. 13.8.2009 has not been produced before us. Subsequent notice u/s 143(2) dt. 14.9.2010 was issued by the AO, Ward-5(3) at New Delhi address but it is barred by limitation. This is a threshold requiremen .....

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hat no such notice 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. .....

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ndustries 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 the Hon'ble Delhi High Court in the case of CIT vs. Madhsy Films P. Ltd., 301 ITR 69 (Delhi) in which the Hon'ble High Court took the view that where a notice was sent by speed post but was not returned undelivered, there is a presumption of service within the reasonable time of thre .....

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he Assessee company residing at 30-A, Munro Road, Agra Cantt. Agra. In view of this fact, the CIT(A) took the view that notice u/s 143(2) has been duly issued and served upon the Assessee company within the time prescribed u/s 143(2). The ld. AR before us no doubt vehemently contended but has not filed any Affidavit that this notice has not been received by the Assessee company or any of its Directors. It is also denied that the notice was not addressed to the company. In view of these facts, we .....

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of one or more of the following criteria viz. (a) territorial area, (b) persons or class of persons, (c) income or classes of income, (d) cases or class of cases. U/s 124(1) the AO has been vested with jurisdiction over any area. Within the limits of said area, he shall have jurisdiction (a) in respect of any person carrying on a business or profession if the place at which he carries on his business or profession is situate within the area or where his business or profession is carried out in .....

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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 jurisd .....

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bjection about the jurisdiction within 30 days i.e. upto 15.9.2009 but the Assessee has not filed any such objection. Therefore, we do not find any illegality or infirmity in the order of CIT(A) in this regard but the remote question before is if the AO, Agra was having jurisdiction on the Assessee how can he himself transfer the file to the AO, Ward 5(3), New Delhi merely on the basis of change of address in the PAN. There is a separate provision made u/s 127 in this regard. On perusal of this .....

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ansfer. 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 requi .....

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