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TMI Blog2020 (6) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... nt u/s 147 of the Act is bad in law. Aggrieved the revenue is in appeal before us. 3. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:- 4. A notice was issued u/s 148 of the Act, reopening the assessment on 22/03/2015 by the ITO, Ward-2(2), Kolkata, after recording reasons for reopening. The assessee complied with the notice by filing income tax return on 16/04/2015 declaring -Nil- income. Thereafter the assessee requested for reasons for reopening of assessment u/s 147 of the Act vide letter dt. 24/08/2015. Thereafter, the ITO, Ward2(2), Kolkata, issued notice u/s 143(2) of the Act. Then the file was transferred to the Assessing Officer having jurisdiction over the assessee i.e., ITO, Ward- 4(3), Kolkata. The ITO, Ward- 4(3), Kolkata, issued a notice u/s 143(2) of the Act on 22/12/2015. He also issued notice u/s 142(1) of the Act on 22/12/2015. The assessee filed objections on 07/03/2016 before the ITO, Ward-4(3), Kolkata. The assessee objected to the notice issued u/s 148 of the Act on 20/04/2015. It was contended b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer had legal jurisdiction over the assessee, the Court held in favour of the revenue. In the case on hand, the admitted fact is that the Assessing Officer who issued notice u/s 148 of the Act, had no jurisdiction over the assessee. Thus, case-law relied upon by the ld. D/R, are not applicable to the facts of this case. 6.2. In the case on hand, objections were raised by the assessee u/s 124(3) of the Act, within one month of receipt of notice u/s 148 of the Act and the Assessing Officer who issued notice u/s 148 of the Act, accepted that he had no jurisdiction on this case and thus transferred the case to the ITO, Ward-4(3), who had jurisdiction. A notice issued by non-jurisdictional Assessing Officer is illegal. 6. This Bench of the Tribunal in the case of K.A. Wires Ltd. vs. ITO in ITA No. 1149/Kol/2019, order dt. 22nd January, 2020, held as follows:- "8. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:- 8.1. Jurisdiction of the Income Tax Authorities is conferred by the Board (Central Board of Direct Tax) u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int Director, and, where any order is made under this clause, references in any other provision of this Act, or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint Commissioner or Joint Director by whom the powers and functions are to be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the Joint Commissioner shall not apply. (5) The directions and orders referred to in sub-sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, require two or more Assessing Officers (whether or not of the same class) to exercise and perform, concurrently, the powers and functions in respect of any area or persons or classes of persons or incomes or classes of income or cases or classes of cases; and, where such powers and functions are exercised and performed concurrently by the Assessing Officers of different classes, any authority lower in rank amongst them shall exercise the powers and perform the functions as any higher authority amongst them may direct, and, further, references in any o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication u/s 120(1) and 120(2) of the Act, have to perform their functions as per sec. 124 of the Act. Section 124 of the Act, reads as under: 124. (1) Where by virtue of any direction or order issued under sub-section (1) or sub-section (2) of section 120, the Assessing Officer has been vested with jurisdiction over any area, within the limits of such 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 on in more places than one, if the principal place of his business or profession is situate within the area, and (b) in respect of any other person residing within the area. (2) Where a question arises under this section as to whether an Assessing Officer has jurisdiction to assess any person, the question shall be determined by the Principal Director General or Director General or the Principal Chief Commissioner or Chief Commissioner or the Principal Commissioner or Commissioner; or where the question is one relating to areas within the jurisdiction of different Principal Director Gene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rea, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under subsection (1) or sub-section (2) of section 120.. 8.6. The clear and unambiguous words used in section 124(1) of the Act, are that the Assessing Officer should be vested with the Jurisdiction by virtue of an order, notification or directions issued u/s. 120(1) or u/s. 120(2) of the Act. Therefore, only the Officer who has been vested with the jurisdiction conferred u/s 120(1) and 120(2) of the Act can act as Assessing Officer and issue notice under sec. 143(2) of the Act, since "he shall have jurisdiction" are the words as has been used in sec. 124(1) of the Act. 8.7. Even though the Assessing Officer have been vested with the Jurisdiction u/ s. 124(1) of the Act, by the Board, yet the assessee may dispute such jurisdiction vested u/s 124(1) of the Act, in the Assessing Officer. Such dispute can be raised u/s. 124(3) of the Act, within one month of the issue of notice u/s. 143(2) of the Act. This sub section, therefore, clearly stipulates that the assessee can dispute the jurisdiction of the Assessing Officer to issue notice even though such jurisdiction was vested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conferring concurrent jurisdiction to the ITO Ward 33(1) along with ITO Ward 8(3) u/ s 120(1) or u/ s 120(2) of the Act, which is the condition mentioned in section 120(4) and 120(5) of the Act. 8.12. The Ld DR for the purpose of his submission also read out para 19 of the decision of ITAT in the case of Rungata Irrigation in ITA No 1224/K/2019 dated 6.9.2019. The said decisions is in favour of the assessee. The Ld CIT(DR) has relied on para 19 which is in fact in favour the assessee. The Tribunal has fully analyzed the entire provisions of section 120, 124 and 127 of the Act, in para 13, 14,15,17, 18, 21 of the order with regard to the issue of vesting of jurisdiction and transfer etc and held that the issue of notice by non-jurisdictional AO was bad in law and without jurisdiction. 8.13. The Ld DR argued that the assessee did not dispute the jurisdiction u/ s 124(3) of the Act and hence by not disputing the same, the right to challenge the jurisdiction is lost forever. This would have been so, had the ITO, Ward-33(1), Kolkata, had original jurisdiction over the assessee. This is not the case. When an authority does not have jurisdiction, then the act done by such authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no jurisdiction to undertake the assessment qua the assessee could never have been found to be legal or resurrected." 8.16. While deciding the issue in the case of Mahalchand Motilal Kothari & Co., (supra) the ITAT relied on the Judgement of Calcutta High Court in the case of "West Bengal State Electricity Board" 278 ITR 218. In that case the Hon'ble Calcutta High Court held that jurisdiction cannot be conferred by default or by agreement and the decision without jurisdiction is a nullity. The Hon'ble High Court also relied on a number of Judgements while arriving at such a conclusion. 8.17. The Hon'ble Allahabad High Court in the case of V.P. Electronics Corporation Ltd in ITA No. 79 of 2015 dated 1.3.2017 has also taken similar view wherein the provisions of sec. 124(3) were also referred to. It was held that when the notice was not issued by the competent authority, i.e an Assessing Officer having jurisdiction, then the assessment is a nullity. 8.18. In the case of Deepchand Kothari reported in 171 ITR 381(Raj) it was held that the Assessing Officer who was having no jurisdiction to initiate the proceedings then such proceedings are ab-intio- void. Further t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases page 84 Annulment of assessment is permissible where the taxing authority had no jurisdiction to assessee. 6. Sain Baba Mohansing 90 ITR page 197 Proceedings taken by an authority who lacked jurisdiction is ab initio void. 7. Rajeevkumar Donerria v. Asst. Commissioner of Income Tax 94 ITD page 344 Only the assessing officer who at the relevant time of filing of the appeal has the jurisdiction can file the appeal. An appeal filed by an officer who has no jurisdiction to file the appeal is non est. 8.24. The Hon'ble Gujarat High Court in the case of Jolly Fantasy World Ltd., Tax appeal no. 1254 of 2014,judgement dated 9.3.2015 held that there cannot be waiver of Jurisdiction, even if the assessee has participated in the proceedings. 8.25. Consent cannot confer jurisdiction and if the notice issued is without jurisdiction it is invalid as was held in Resham Petrotech Ltd. ITA O. 2777/ Ahd/2011 dated 10.2.2012 8.26. The Hon'ble Bombay High Court in ITA No.127 OF 2006 in the case of The Commissioner of Income Tax-I, Lalit Kumar Bardia, judgement dt. 11.7.2017, held that the transfer of jurisdiction subsequently cannot validate the action already taken. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid document and then the assessee is required to make an application for change of address in the departmental database of the PAN. In the present case the assessee has failed to do so. This judgment is on the issue of service of notice. It is not an issue as to whether the Assessing Officer has jurisdiction over the assessee. As already stated, it is not a case of notice being issued by a non-jurisdictional Assessing Officer. It is therefore clear that the issue in the case before the Hon'ble Supreme Court was not with regard to the jurisdiction of the officer in issuing the notice but was with regard to the service of notice on the proper address. The said judgement therefore does not help the department on this issue of jurisdiction now before us. Jurisdiction has to be conferred u/s 120 of the Act. Any act by an authority without jurisdiction is ab-initio void. 8.28. In view of the above discussion, as the Assessing Officer who had jurisdiction over the assessee i.e., ITO Ward - 8(3), Kolkata had not issued the notice to the assessee u/s 143(2) of the Act as mandatorily required under the Act, the assessment framed u/s 143(3) of the Act, is bad in law as held by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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