TMI Blog2016 (2) TMI 1226X X X X Extracts X X X X X X X X Extracts X X X X ..... e same as that applicable to yearly regular assessment. In the present case, the AO holding jurisdiction over the case never issued notice u/s 143(2) of the Act to the assessee. As such, the said AO did not have jurisdiction to proceed further and to make assessment. The Hon ble Supreme Court in Hotel Blue Moon (supra), held that the omission on the part of the assessing authority to issue notice u/s 143(2) of the Act cannot be a mere procedural irregularity and the same is not curable. Thus, in keeping with Hotel Blue Moon (supra), since the assessment order was passed in the absence of statutory notice u/s 143(2) of the Act by the AO by holding jurisdiction over the case, the said assessment order is invalid in law. Regarding the CIT(A) s objection to the assessee not having raised any objection u/s 124(3) of the Act within 30 days of the service of notice u/s 143(2) firstly, nowhere has the assessee challenged the jurisdiction of the AO who passed the assessment order, i.e., ACIT, Circle-IV, Jalandhar. This has also not been disputed by the Department. The grievance of the assessee, rather, is that the notice issued u/s 143(2) was not issued by the AO passing the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision in the case of M/s. Atam Valves Pvt. Ltd. Jalandhar in ITA No. 442(Asr)/2008 and 452(Asr)/2008 and has failed to appreciate that facts of the case of M/s. Atam Valves Pvt. Ltd. (supra) are quite distinguishable as in that case the addition was made on the basis of certain loose papers found at the time of survey u/s 133A of the Income Tax Act, 1961. 2. In the assessee s Cross Objections, the following Objections have been raised: 1. That the ld. CIT(A) fell into grave error in not holding the impugned order as bad in law for non issue and non service of statutory notice u/s 143(2) by the AO holding jurisdiction over this case. 2. That the ld. CIT(A) s arbitrary observation and no objection was raised within the meaning of section 124(3), to reject the assessee s contention, is grossly misconceived and contextually misplaced. 3. That while deleting all the additions made by the AO, the ld. CIT(A) should have held the rejection of books u/s 145(3) also as bad. 3. Since they involve a jurisdictional issue, the Cross Objections of the assessee are being taken up first. 4. Apropos Cross Objections 1 2, it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 143(2) within the prescribed period, the impugned notice issued u/s 142(1) was without jurisdiction. This, however, was responded to by the AO vide letter dated 19.8.2009 intimating that the mandatory notice u/s 143(2) had already been served on 27.09.2009 (wrongly typed as 27.9.2009) and accordingly, he required the assessee to furnish requisite intimation as called for vide his earlier letter dated 22.07.2009 supra. Thereafter, the AO proceeded in the matter and completed the assessment by passing the order, which was appealed against by the assessee before the CIT(A). 6. The ld. CIT(A), by virtue of the impugned order, observed as follows: 2.4. I have considered the submissions of the appellant carefully. During the course of the appellate proceedings, the appellant was requested to state as to when the objection to notice u/s 143(2) issued by the AO in the year 2008 was taken. It is the appellant s contention vide the rejoinder reproduced above that the DCIT, Range-1, Jalandhar was informed on 29.08.2008 about the assessment of the assessee pending with the ACIT, Range-IV, Jalandhar. The notice u/s 143(2) issued by the DCIT, Range-1, Jalandhar was date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... called in question by an assessee after the expiry of one month from the date on which notice was served u/s 142(1) or after completion of assessment whichever was earlier. In the present case, there is no evidence on record that any such objection was taken within 30 days by the assessee after the service of notice u/s 143(2) upon him by the DCIT, Range-I,Jal. In the case of CIT Vs. Sohan Lai Sewaram Jaggi 222 CTR (All) 412, the Hon ble High Court have held that since the assessee had failed to raise objection as regard jurisdiction of AO within 30 days of receipt of notice u/s 143(2) as stipulated by section 124(3), the Tribunal was not justified in annulling assessment on the ground of jurisdiction. In their decision in the case of Hindustan Transport Co Vs. IAC 189 ITR 326 (All), the Hon'ble High Court held, after a survey of the different provisions of the I.T. Act relating to jurisdiction of AOs, that the Income Tax Act being an enactment aimed at collecting revenue, the legislature did not intend collection of revenue to be bogged down on account of technical plea of jurisdiction and had, therefore, prescribed the time limit upto which the plea of jurisdiction may be ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings, flowing from the assumption of jurisdiction based on such invalid notice, culminating in the shape of order under appeal; that the benefit of continuity of proceedings to another officer is available only where the original statutory notice is issued by an officer of competent jurisdiction; that the initial infirmity in the proceedings is thus fatal and, by all means, incurable; that even for the earlier year, i.e., for AY 2006-07, the return was filed with Range-IV as per acknowledgement dt.27.10.06; that it was processed u/s. l43(l)(a) on 16.12.06; that based on this return for AY 06-07, the ACIT R-IV issued Form No.28 with notice u/s.156 for payment of advance tax for AY 2007-08; that then came a notice from ITO Ward-I(3) calling for return for AY 2006-07; that as per reply dt. 9.09.2007, the ITO 1(3) was informed that the return already stood filed with R-IV; that thereafter, notice u/s. 143(2) was issued by ACIT R-IV and finally, order u/s 143(3) was passed on 4.12.2008 by Jt. CIT R-IV; that thus, when or all purposes, R-IV had already taken over absolute jurisdiction on this case, the return for AY 2007-08, was sent to Receipt counter of R-IV; that the address and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te for mandatory notice u/s.143 (2). 8. Further, the ld. counsel for the assessee has contended that the ld. CIT(A) has gone wrong in observing that no objection was taken by the assessee u/s 124(3) of the Income Tax Act, 1961 within 30 days of the service of the notice u/s 143(2) of the Act, and that the assessee was not prejudiced in any manner. It has been contended that the assessee has not challenged the jurisdiction of the AO who has passed the assessment order; and that the regular assessment for assessment year 2006-07 has already been made by the said A.O., i.e., ACIT Circle IV, Jalandhar. 9. The ld. counsel for the assessee has placed reliance on the following case laws: 1) Hindustan Transport Co. vs. IAC , 189 ITR 326 (All.) 2) ACIT v. Hotel Blue Moon , (2010) 321 ITR 362 (SC) 3) CIT v. Sohal Lal Sewa Ram Jaggi (2009) 222 CTR 412 (All.) 4) CWT vs. Siri Paul Oswal , (2007) 293 ITR 273 (P H) 5) CIT vs. Cebon India Ltd. , (2012) 347 ITR 583 (P H) 6) Subhash Chander vs. CIT , (2008) 218 CTR 191 (P H). 10. The Ld. DR, on the other hand, has strongly supported the impugned order an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of the CIT(A) in this regard is incorrect. In I. Builders (P) Ltd. vs. ITO , 115 ITD 419 (Luck.), dealing with sections 124(2) (3)/148, it has been held reassessment proceedings having been initiated by the AO who did not have jurisdiction over the case, completion of reassessment in continuation of such initiation by AO having jurisdiction was invalid in law. Likewise, in the present case, assessment proceedings were initiated by the DCIT, Range-1, Jalandhar, whereas the assessment order was passed by the ACIT, Circle-IV, Jalandhar which completion of the assessment was invalid in law. As such, there was no occasion for the provisions of section 124 of the Act to come into play. 14. The ld. CIT(A) has also objected that no prejudice was caused to the assessee in this matter. Here, again, since initiation of the assessment proceeding is bad in law, the assessment order passed cannot be held to be legally valid. Therefore, all prejudice stands caused to the assessee. 15. In view of the above, Cross Objection Nos. 1 2 are accepted and the assessment order is cancelled. 16. Pursuant to the above cancellation of the assessment order, nothing els ..... X X X X Extracts X X X X X X X X Extracts X X X X
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