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TMI Blog2019 (4) TMI 1364X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 1432(2) by the A.O holding jurisdiction over this case. (b) That the learned Commissioner of Income tax (A) fell into grave error by holding that issue of jurisdiction gets rectified under Sec. 292B. 2. That the learned Commissioner of Income Tax (A) is not justified in sustaining the addition of Rs. 8,50,000/- made by the A.O out of agricultural income.." 2. Briefly stated, the assessee company which is running a hotel and a club had filed its return of income for A.Y. 2012-13 on 30.09.2012, declaring loss of (-) Rs. 2,71,65,718/-. The return of income filed by the assessee was processed as such under Sec. 143(1) of the I.T. Act. Subsequently, the case of the assessee was selected for scrutiny assessment and a notice under Sec.143(2) was issued on 23.09.2013 by the Dy. Commissioner of Income Tax, Circle 1, Jalandhar (Page 19) of the assesses 'Paper book' (for short 'APB'). The assessee as per its reply dated 24.10.2013 filed with the DCIT, Circle-1, Jalandhar, objected to the notice issued by the latter under Sec. 143(2). It was the claim of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lid and nothing better than nullity. It was further submitted by the assessee that a notice under Sec.143(2) was issued by the jurisdictional A.O only as on 28.05.2014 i.e almost after expiry of a period of about 8 months from the date specified in the I.T. Act. The assessee in order to drive home his contention that in the absence of a valid notice under Sec.143(2) the assessment framed by the A.O could not be sustained, relied on the judgment of the Hon'ble Supreme Court in the case of ACIT Vs. Hotel Blue Moon (2010) 321 ITR 362 (SC). 5. The CIT(A) after deliberating on the contentions advanced by the assessee was however not persuaded to accept the same. It was observed by the CIT(A) that at the relevant point of time when the notice under Sec. 143(2) was issued by the ACIT, Circle-1, Jalandhar, the jurisdiction over the case of the assessee was vested with him. Apart therefrom, it was observed by him that the case of the assessee was selected for scrutiny assessment through CASS i.e "Computer Assisted Scrutiny Selection" and the scrutiny notices were generated through the computerised system. The CIT(A) further observed that the system generated jurisdiction chart of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015, took us through the relevant pages of his "Paper book". It was averred by the ld. A.R that a notice under Sec.143(2) was issued by the A.O for the first time as on 28.05.2014. The ld. A.R in support of his contention that in the absence of a notice issued under Sec.143(2) by the jurisdictional A.O no valid assessment could be framed under Sec.143(3), relied on the following judicial pronouncements: Sr. No. Particulars 1. M/s Lajwanti Cotton Gining Vs. Income Tax officer ITA No.395/ASR/2014 2. Asstt. Commissioner of Income Tax Vs. Parvindar Vir hans ITA No. 88/ASR/2011 3. Income Tax Officer Vs. NVS Builders Pvt. Ltd. ITA No. 3729/Del/2012 4. Commissioner of Income Tax Vs. Cebon India Ltd. (2012)347 ITR 583 (PH) 5. M/s Micro Spacematrix Solution P. Ltd. Vs. Income Tax officer ITA No. 669/Del/2012 6. Umacharan shaw & Bros Vs. Commissioner of Income Tax (1959) 37 ITR 271 (SC) 7. Per contra, the Ld. Departmental Representative (for short 'D.R') relied on the order passed by the CIT(A). 8. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, in accordance with such directions as the CBDT may issue for the exercise of the powers and performance of the functions by all or any of those authorities. It is by virtue of the aforesaid mandate that an A.O as per subsection (1) to Sec.124 assumes jurisdiction in respect of an assessee who is carrying on a business or profession or is residing within a specific area. As per sub-section (3) to Sec.124 an assessee is entitled to call in question the jurisdiction of an A.O, subject to satisfaction of certain conditions carved out in the said statutory provision. However, where an assessee had validly called in question the assumption of jurisdiction by an A.O, then as per subsection (4) to Sec.124 the assessing officer shall, if not satisfied with the correctness of the claim, obligated to refer the matter for determination of jurisdiction to the appropriate authority as envisaged in sub-section (2) of Sec.124. Apart therefrom, the power to transfer cases is contemplated in Sec.127 of the I.T. Act. On a careful perusal of sub-section (2) to Sec.127, it transpires that a case can be transferred from one assessing officer to another, subject to satisfaction of twin conditions viz. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. 143(2)/142(1) were thereafter received by it from the office of the ACIT, Circle 1, Jalandhar. Notice under Sec.143(2), dated 28.05.2014 was issued for the first time by the DCIT, Circle IV, Jalandhar, who thereafter framed the assessment under Sec.143(3), vide his order dated 23.03.2015. We find that neither of the lower authorities had challenged the maintainability of the objection that was raised by the assessee as regards the jurisdiction assumed by the ACIT, Circle-I, Jalandhar in its case. Rather, the CIT(A) had brushed aside the challenge thrown by the assessee to the validity of the jurisdiction assumed by the A.O, observing that at the time of issuance of notice under Sec.143(2) the jurisdiction over the case of the assessee was vested with the ACIT, Circle-1, Jalandhar. The CIT(A) had further justified the assumption of jurisdiction by observing that as per the ITD data base the jurisdiction over the case of the assessee since 27.04.2010 was vested with the DCIT/ACIT, Circle-1, Jalandhar. Apart therefrom, it was observed by the CIT(A) that at the stance of the objections raised by the assessee as regards the issue pertaining to jurisdiction over its case, that the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment for the year under consideration i.e. A.Y. 2012-13 subsequent to issuance of notice under Sec.143(2)/142(1) by the Dy. CIT/ACIT, Circle-1, Jalandhar was thereafter most casually transferred to the Dy. CIT, Circle-IV, Jalandhar, who had for the first time issued a notice under Sec.143(2), dated 28.05.2014 has neither been explained nor is discernible from the records. In the backdrop of the aforesaid serious infirmities as regards the assumption of jurisdiction by the Dy. CIT/ACIT, Circle-1, Jalandhar, for assessing the income of the assessee for A.Y. 2012-13, we are unable to find ourselves as being in agreement with the view taken by the CIT(A) that the assessment framed by the Dy. CIT, Range-IV, Jalandhar on the basis of the notices issued under Sec.143(2)/142(1) by the Dy. CIT/ACIT, Circle-1, Jalandhar is well in order. We thus in terms of our aforesaid observations are of a strong conviction that the inferences drawn by the CIT(A) as regards the validity of the transfer of jurisdiction over the case of the assessee from the ACIT/DCIT, Circle-IV, Jalandhar to ACIT/DCIT, Circle-1, Jalandhar, and vice versa cannot be summarily accepted at the very face of it. As observed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid notice issued by the Dy. CIT Circle-IV, Jalandhar under Sec.143(2) was beyond the specified time period contemplated under Sec.143(2), hence the same had no existence in the eyes of law. We are of the considered view that as there was no valid transfer of jurisdiction over the case of the assessee from the ACIT, Range-IV, Jalandhar to Dy. CIT/ACIT, Circle-I Jalandhar, therefore, no valid notice could have been issued by the latter under Sec.143(2) of the I.T. Act. Apart therefrom, if the view taken by the CIT(A) that the jurisdiction over the case of the assessee pursuant to electronic system of filing of the income tax returns was from 27.04.2010 transferred from the ACIT/DCIT, Circle-IV, Jalandhar to Dy. CIT/ACIT,Circle-1, Jalandhar is accepted, even then in the absence of recording of reasons for the subsequent transfer of jurisdiction from Dy. CIT/ACIT,Circle-1, Jalandhar to Dy. CIT-IV, Jalandhar, as required as per the mandate of Sec..127(2)(a) of the I.T. Act, cannot be subscribed to and merit acceptance. We are of the considered view that as the A.O exercising the jurisdiction over the case of the assessee had failed to issue a notice u/s. 143(2) within the stipulated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts return of income for A.Y. 2013-14 on 30.09.2013, declaring loss of (-)Rs.1,60,76,480/-. Subsequently, the case of the assessee was selected for scrutiny assessment and a notice under Sec.143(2) was issued by the Dy. Commissioner of Income Tax, Circle 1, Jalandhar. The A.O vide his order passed under Sec. 143(3), dated 04.03.2016 assessed the loss at (-) Rs. 1,10,76,480/-. 16. Aggrieved, the assessee carried the matter in appeal before the CIT(A). However, the CIT(A) not being persuaded to subscribe to the contentions advanced by the assessee, upheld the order passed by the A.O. 17. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. In the present case of the assessee before us, the DCIT, Circle IV, Jalandhar, had issued notice u/s 143(2) on 08.04.2015 i.e. after the expiry of a period of about 7 months from the date specified under the I.T Act. As the facts and the issue involved in the present appeal remains the same as were there in the appeal of the assessee for the A.Y 2012-13 in ITA No. 183/Asr/2017, therefore, our order passed while disposing off the appeal of the assessee for the A.Y 2012-13 shall apply mutatis mutand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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