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2016 (5) TMI 17 - CALCUTTA HIGH COURT

2016 (5) TMI 17 - CALCUTTA HIGH COURT - [2016] 383 ITR 546 - Validity of revision orders - jurisdiction - Assessment after transfer of a case u/s 127 - Held that:- Reading the order dated 3rd September, 2012 as a whole, it does not appear that any restricted transfer was sought to be made for any particular year or years or otherwise. The order of transfer, as we have already indicated, was passed in the interest of revenue for better coordination, effective investigative and meaningful assessme .....

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ction 263 and the consequent order dated 26th March, 2013 passed under Section 263 of the Income Tax Act were acts without jurisdiction and therefore a nullity. - GA NO. 3929 OF 2015, ITAT NO. 181 OF 2015 - Dated:- 8-3-2016 - Girish Chandra Gupta and Justice Asha Arora, JJ. For The Appellant : Mr. N. K. Poddar, Sr. Adv. Mr. Vineet Tibrewal, Adv, Mr. Siddharth Das, Adv. For The Respondent : Mr. Animesh Kanti Ghosal, Sr. Adv. Mr. Siddhartha Bhattacharyya. Adv. GIRISH CHANDRA GUPTA, J. The subject .....

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ly restricted to the appellant before us. The relevant assessment year was 2008-2009. Return was filed on 6th November, 2008 showing loss of a sum of ₹ 4053/- and seeking refund of a sum of ₹ 39,546/-. From the profit and loss account it appears that a sum of ₹ 27,232/- was written off allegedly incurred on account of preliminary expenses. A sum of ₹ 92,000/-, on the asset side, on account of preliminary expenses, was shown in the balance-sheet. From the balance-sheet, it .....

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e additional papers submitted by Mr. Poddar. On 12th April, 2010 a notice under section 148 was issued to the assessee, a copy whereof is at page 192 of the additional papers filed by Mr. Poddar. Assessment under Section 147/143(3) was completed on 21st May, 2010 by disallowing a sum of ₹ 23,000/- under Section 35D by which the profit and loss account had been debited on account of preliminary expenses. A notice under Section 263 was issued on 18th March, 2013, which, it is claimed by the .....

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to show cause as to why the assessment made under Section 147/143(3) on 21st May, 2010 should not be revised under Section 263 of the Income Tax Act. An order under Section 263 was passed ex parte by the CIT on 26th March, 2013 setting aside the order dated 21st May, 2010 passed under Section 147/143(3) and remitting the matter to the Assessing Officer with the following directions:- i] Examine the genuineness and source of share capital, not on a test check basis but in respect of each and ever .....

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i] The A.O. is directed to examine the source of realization from the liquidation of assets shown in the balance sheet after the change of Directors, if any. After conducting the inquiries & verification as directed above, the A.O. should pass a speaking order, providing adequate opportunity of being heard to the assessee. Challenging the aforesaid order of the CIT, the assessee unsuccessfully approached the learned Tribunal. The learned Tribunal dismissed the appeal. The assessee is, theref .....

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entral Circle, Kolkata vide an order dated 3rd September, 2012 under section 127 (2)(a) of the said Act and its purported findings in that behalf are arbitrary, unreasonable and perverse? (b) Whether and in any event, the order under section 263 was passed without granting any opportunity to the appellant and the purported findings of the Tribunal regarding service of notice and grant of opportunity are arbitrary, unreasonable and perverse? Mr. Poddar submitted that the assessee had already chan .....

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is provided by Section 282 of the Income Tax Act. According to him, clauses (a) and (b) are material for our purpose, but we would like to quote sub-Section 1 of Section 282 in extenso, which reads as follows:- 282. Service of notice generally.-(1) The service of a notice or summons or requisition or order or any other communication under this Act (hereinafter in this section referred to as communication ) may be made by delivering or transmitting a copy thereof, to the person therein named:- (a .....

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y post. He added that where service has been sought to be effected by both the modes of service and any one of them is successful, service can be deemed to have been completed. He contended that the CIT did not follow the procedure for service of notices. He did not even try to serve by post or by courier. It may, according to him, be due to an ulterior motive. Because that would have shown with some amount of certainty as to when was the notice dated 18th March, 2013 actually posted by him. Thi .....

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appear that the Inspector did not make any attempt whatsoever to try to find out the correct address of the assessee. Even assuming that the Inspector served by affixation, it was a perfunctory piece of job performed by him and by no means is in accordance with the law laid down by various Courts including the Supreme Court. He in support of his submission relied upon the judgement in the case of Rameshwar Sirkar -Vs- Income Tax Officer reported in (1973) 88 ITR 374 wherein the following views .....

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to find the assessee is not a proper notice. He also drew our attention to the statutory Form of an application for allotment of Permanent Account Number, which is provided in the Income Tax Rules in Form 49A, which requires of the assessee to give both his residential and office address, and column 8 of the Form requires the assessee to specify the address for communication whether residence or office. He submitted that all changes in the address of the assessee are also required to be notifie .....

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the CIT tried to steal a march by keeping the assessee in the dark. He passed an order under Section 263 setting aside the order passed under Section 147/143(3) without giving any opportunity of hearing to the assessee and therefore, the order is patently bad. The learned Tribunal without any evidence arrived at the following erroneous finding:- 26.s. Coming back to the language of section 263(1) requiring the passing of order after giving the assessee an opportunity of being heard , it transpi .....

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opportunity as erroneously opined by the learned Tribunal. Mr. Ghosal, learned senior advocate, appearing for the revenue drew our attention to paragraph 26.m of the impugned judgment, which reads as follows:- As far as service of notice in the case of Ramshila Enterprises Pvt. Ltd. is concerned, we find that the assessee has been shifting its address from time to time, as has been pointed out by the learned DR. When such frequent change in the address is seen in the background of the factual po .....

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r, room no.405, Mukti Chamber, 4 Clive Row, Kolkata. Same is the address appearing in another document issued by the Income-tax department appearing at page 191A. He then drew our attention to the notice under section 148 of the Income-tax Act dated 12th April, 2010, which was admittedly received by the assessee in pursuance whereof, he also filed his response and this letter was served upon the assessee at 14 Princep Street, 3rd Floor, Kolkata-700012. He also drew our attention to a letter date .....

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d that there are thus four addresses available; a) Ganesh Chandra Avenue b) Clive Row c) Princep Street d) Brabourne Road He contended that if contention of Mr. Poddar is to be believed that the assessee had shifted to Narayani Building at Brabourne Road from his office at Ganesh Chandra Avenue then in that case the notice under section 148 dated 12th April, 2010 could not have been served upon the assessee at 14, Princep Street. The assessee does not dispute the fact that the notice was duly re .....

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nd in the facts of the case so that this Court can arrive at any independent finding. Therefore, the question no.(b) should be answered in the negative and in favour of the revenue. We have considered the rival submissions. Considering that the assessee admittedly received the notice dated 12th April, 2010 under Section 148 at a place other than 4,Ganesh Chandra Avenue where the assessee admittedly was carrying on business and considering that the assessee had simultaneously been operating from .....

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which is an order passed under section 127 of the Income Tax Act by no other than the CIT, Kolkata-II, Kolkata, who passed the impugned order under Section 263, transferring the jurisdiction over five assessees including the appellant before us to the ACIT/DCIT, Central Circle XIX, Kolkata in the interest of revenue for better coordination, effective investigation and meaningful assessment consequent to a search conducted on 17th November, 2011 against the business concern of Atha Mines. Mr. Pod .....

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spect of the return or returns filed by the assessee or assessments made. He submitted that the exercise of power was not only ex parte, without notice, but was also without jurisdiction. He drew our attention to the letter dated 18th March, 2013 received by his client from the Deputy Commissioner of Income-tax, which is a notice under section 143(2) pertaining to the assessment year 2012-2013. He submitted that the order dated 3rd September, 2012 transferring jurisdiction to a ACIT/DCIT, Centra .....

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Lordship held as follows:- 4. When a matter required to be decided by a Division Bench of the High Court is decided by a learned Single Judge, the judgment would be a nullity, the matter having been heard by a court which had no competence to hear the matter, it being a matter of total lack of jurisdiction. The accused was entitled to be heard by at least two learned Judges constituting a Division Bench and had a right to claim a verdict as regards his guilt or innocence at the hands of the two .....

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ne learned Judge. Even if the decision is right on merits, it is by a forum which is lacking in competence with regard to the subject matter. Even a right decision by a wrong forum is no decision. It is non-existent in the eye of law. And hence a nullity. The judgment under appeal is therefore no judgment in the eye of law. This Court in State of M.P. v. Dewadas has taken a view which reinforces our view. We, therefore, allow the appeal, set aside the order passed by the learned Single Judge, an .....

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etent authority under the provisions of a statute, the original court or any Tribunal or authority in such event will be incompetent, as having ceased to have jurisdiction, to proceed further with the pending proceeding or proceeding which may be instituted after such removal of jurisdiction. Mr. Ghosal, learned senior advocate appearing for the revenue submitted that the transfer order itself indicates that jurisdiction of ITO, WD- 4(1), Kolkata was transferred to SCIT/DCIT Central Circle XIX, .....

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name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date or such order or direction in respect of any year. He submitted that the transfer of a case would mean all pending and future proceedings. He submitted that even the learne .....

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oper co-ordination of search cases. The Commissioner transferring jurisdiction has power to transfer all proceedings under the Act, which are pending, completed or which may be commenced after the date of transfer, but that does not mean that he does not have powers to restrict his order of transfer only to a particular case for which request was made, thereby, leaving the jurisdiction in respect of other cases pertaining to an assessee to be exercised by the AO/CIT who already had it. The power .....

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of jurisdiction in respect of search matters, we have absolutely no doubt in our mind that only the CIT Kolkata II, Kolkata had the jurisdiction to revise the assessment order passed u/s147 as has been done in this case. The contention of the learned AR in this regard is held to be without substance and not unacceptable. We have considered the rival submissions. It is not necessary for us to consider whether the Commissioner had jurisdiction to restrict the order of transfer, for the simple rea .....

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is that a notice under Section 143(2) by the transfereeassessing officer was issued on 18th March, 2013. The existence of files does not confer the jurisdiction when the same has validly been transferred and also acted upon. The jurisdiction over the subject-matter has to be conferred by law. The jurisdiction in this case had been transferred by the order dated 3rd September, 2012 by no other than the CIT Kolkata- II, Kolkata himself. Once that was done CIT Kolkata - II, Kolkata lost the seisin .....

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d, he is functus officio, and neither he nor any other judge of equal jurisdiction has jurisdiction to vary the terms of such stay (Re V.G.M. Holding Ltd [1941] 3 All E.R. 417). An arbitrator or umpire who has made his award is functus officio, and could not by common law alter it in any way whatsoever; he could not even correct an obvious clerical mistake. See Mordue v Palmer, 6 Ch. App. 22; Henfree v Bromley, 6 East, 309; Brooke v Mitchell, 6 M. & W.473. See now Arbitration Act 1950 (c.27) .....

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order, is to go to the Court of Appeal… A special bench in the case of Komal Chand -Vs- The State of Madhya Pradesh, reported in AIR 1966 Madhya Pradesh 20 opined in this regard as follows:- Section 35 of the Stamp Act, inter alia, says that no instrument chargeable with duty shall be registered by any public officer unless such instrument is duly stamped. This provision thus casts a duty on the registering officer to examine whether an instrument presented for registration is duly stamp .....

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any provision giving to the registering officer any power to examine whether an instrument already registered was or was not duly stamped and to impound it. As soon as the registering officer registers a document presented to him for registration, the function in the performance of which the document was produced before him is over and thereafter becomes functus officio having no power under section 33 to impound the instrument. The matter is really concluded by the decision of the Supreme Cour .....

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e Collector he became functus officio. It was observed by the Supreme Court that the power to impound only exists when an instrument is produced before judicial officers or other officers performing judicial functions as evidence of any fact to be proved, or before other public officers who have to perform any function in regard to those instruments as, for example, registration. The Supreme Court also approved the decisions in Collector, Ahmednagar v. Rambhau, AIR 1930 Bom 392 (FB); Paiku v. Ga .....

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uestion on 31st October, 1950 he became functus officio on that date and thereafter he had no power to impound the same. In the present case, the Sub-Registrar purported to act under paragraph 232 of the Registration Manual when he made a report to the Collector that the Takseemnama was not duly stamped. But on reading paragraphs 231 and 232 it is clear that they do not say that after a document is admitted to registration, the registering officer can make a report to the Collector that it was n .....

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iciency of stamp after the document has been admitted to registration. In the case of SBI -vs- S. N. Goyal reported in 2009 (8) SCC 92 the following views were expressed:- It is true that once an authority exercising quasi-judicial power takes a final decision, it cannot review its decision unless the relevant statute or rules permit such review. But the question is as to at what stage an authority becomes functus officio in regard to an order made by him. P. Ramanatha Aiyar's Advanced Law L .....

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courts. Order 20 of the Code of Civil Procedure deals with judgment and decree. Rule 1 explains when a judgment is pronounced. Sub-rule (1) provides that the court, after the case has been heard, shall pronounce judgment in an open court either at once, or as soon thereafter as may be practicable, and when the judgment is to be pronounced on some future day, the court shall fix a day for that purpose of which due notice shall be given to the parties or their pleaders. Sub-rule (3) provides that .....

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ted and signed by the Judge in open court at the time of pronouncing it and when once signed, shall not afterwards be altered or added to save as provided by Section 152 or on review. Thus, where a judgment is reserved, mere dictation does not amount to pronouncement, but where the judgment is dictated in open court, that itself amounts to pronouncement. But even after such pronouncement by open court dictation, the Judge can make corrections before signing and dating the judgment. Therefore, a .....

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