TMI Blog2021 (3) TMI 515X X X X Extracts X X X X X X X X Extracts X X X X ..... d not issue the mandatory notice u/s 143(2) of the Act, he did not enjoy the jurisdiction to frame the assessment u/s. 143(3) of the Act. Therefore, the order passed by the AO (DCIT, Circle-3(1), Kolkata is null in the eyes of law and it has to be quashed. - Decided in favour of assessee. - I.T.A. No. 2456/Kol/2019 - - - Dated:- 10-3-2021 - Shri J. Sudhakar Reddy, AM And Shri A. T. Varkey, JM For the Appellant : Shri Miraj D. Shah, AR For the Respondent : Shri Sandeep Choube, CIT, DR ORDER Per Shri A. T. Varkey, JM : This is an appeal preferred by the assessee against the order of Ld. CIT(A)-5, Kolkata dated 14.10.2019 for AY 2012-13. 2. At the outset, Ld. AR for the assessee Shri Miraj D. Shah drew our attention to the additional ground raised by the assessee which is as under: 1. For that the assessing officer issuing the notice u/s.143(2) of the I. T Act, 1961 did not have jurisdiction over the case, of the assessee hence, the notice is bad in law and the assessment order passed on the basis of such notice is bad in law and should be quashed. 2. For that the assessment order .was passed without service of any valid notice u/s. 143(2) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase laws i.e. M/s Rungta Irrigation Ltd. vs. ACIT in ITA No. 1224/Kol/2019 order dated 06.09.2019 relevant portion of it is re-produced as under: 13. For understanding the legal position with regard to the jurisdiction of Income tax authorities, it is pertinent to make reference to provisions of Section 120, 124, 127 and 129 of the Act which are reproduced herein below: 120. Jurisdiction of income- tax authorities (1) Income- tax authorities shall exercise all or any of the powers and perform all or any of the functions Conferred on, or, as the case may be, assigned to such authorities by or under this Act in accordance with such directions as the Board may issue for the exercise of the powers and performance of the functions by all or any of those authorities. (2) The directions of the Board under sub- section (1) may authorise any other income- tax authority to issue orders in writing for the exercise of the powers and performance of the functions by all or any of the other income- tax authorities who are subordinate to it. (3) In issuing the directions or orders referred to in sub- sections (1) and (2), the Board or other income- tax authority author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied in the notification. 124. Jurisdiction of Assessing Officers (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 beenvested 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 Director General or the Chief Commissioner or the Commissioner; or where the question is one relating to areas within the jurisdiction of different Directors General or Chief Commissioners or Commissioners, by the Directors General or Chief Commissioners or Commissioners concerned or, if they are not in agreement, by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Director General or Chief Commissioner or Commissioner,- (a) where the Directors General or Chief Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Director General or Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order; (b) where the Directors General or Chief Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Director General or Chief Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorise in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, for the exercise of the powers and performance of the functions by all or any of the other Income Tax Authorities who are subordinate to that authority. We also note that the concurrent jurisdiction can be vested in more than one AO, which is discernible by a conjoint reading of Section 120(5) with Section 120(2) of the Act. Section 124(1) of the Act confers jurisdiction on an AO, by virtue of jurisdiction vested by any direction or order issued by CBDT under sub-section (1) and / or (2) of section 120 of the Act. The AO is vested with the jurisdiction u/s. 124 of the Act, over any area within the limits of such area, he shall have jurisdiction over any person (assessee) carrying on a business or profession and if the place at which he (assessee) carries on his business or profession is situated within the area ear-marked for him (AO); or if that person s (assessee s) business or profession is carried on in more places than one, then if the principal place of his business or profession is situated within the jurisdictional territorial area, the AO gets jurisdiction. Other than the assessees who are not in Business or Profession, in their cases, the AO will be vested with the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-sec. (1) or (2) of sec. 120 of the Act. 6. The Ld. A.R submits that the notice u/s 143(2) of the IT Act 1961 dated 08/08/2013 was issued by the DCIT, Circle 2, Gorakhpur, State of Uttar Pradesh was bad in law as the DCIT Circle 2 Gorakhpur did not have jurisdiction by virtue of section 124/120 of the Act over the assessee which was based in Kolkata and is situated at State of West Bengal. Thus, according to him, the notice u/s 143(2) of the Act issued by DCIT, Gorokhpur was without jurisdiction and consequent actions were bad in law. Further, according to him, the case was transferred by DCIT, Gorakhpur to DCIT, Kolkata and the consequent framing of assessment order in this case passed by the DCIT, Circle- 3(1), Kolkata was without issue of any valid notice u/s 143(2) of the IT Act 1961 so bad in law. 7. It was brought to our notice by the Ld. A.R that the transfer of case from Gorakhpur to Kolkata was not made by passing any order u/s 127 of the Act and therefore the assessment by DCIT (Kolkata) is bad in law as held in Kusum Goyal vs. ITO (329 ITR 283). 8. According to Ld. A.R the law it is well settled that if the assessing officer who is not having jurisdiction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee relied on certain case-law, which I would be referring to as and when necessary. 6. The ld. D/R, on the other hand, submitted that the concurrent jurisdiction vests with the ITO as well as the ACIT and hence the assessment cannot be annulled simply because the statutory notice u/s 143(2) of the Act, was issued by the ITO and the assessment was completed by the ACIT. He further submitted that the assessee did not object to the issue of notice before the jurisdictional Assessing Officer and even otherwise, Section 292BB of the Act, comes into play and the assessment cannot be annulled. On merits, he relied on the orders of the lower authorities. 7. I 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, I hold as follows:- 8. I find that there is no dispute in the fact that the notice u/s 143(2) of the Act dt. 29/09/2016 has been issued by the ITO, Wd-1(1), Durgapur. Later, the case was transferred to the jurisdiction of the ACIT on 11/08/2017. Thereafter, no notice u/s 143(2) of the Act was issued by the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;non corporate returns' the ITO's increased monetary limit was upto ₹ 15 lacs; and if the returned income is above ₹ 15 lacs it was the AC/DC. So, since the returned income by assessee an individual is above ₹ 15 lakh, then the jurisdiction to assess the assessee lies only by AC/DC and not ITO. So, therefore, only the AC/DC had the jurisdiction to assess the assessee. It is settled law that serving of notice u/s. 143(2) of the Act is a sine qua non for an assessment to be made u/s. 143(3) of the Act. In this case, notice u/s. 143(2) of the Act was issued on 06.09.2013 by ITO, Ward-1, Haldia when he did not have the pecuniary jurisdiction to assume jurisdiction and issue notice. Admittedly, when the ITO realized that he did not had the pecuniary jurisdiction to issue notice he duly transferred the file to the ACIT, Circle-27, Haldia on 24.09. 2014 when the ACIT issued statutory notice which was beyond the time limit prescribed for issuance of notice u/s. 143(2) of the Act. We note that the ACIT by assuming the jurisdiction after the time prescribed for issuance of notice u/s. 143(2) of the Act notice became qoarum non judice after the limitation prescrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 010) 321 ITR 362 (S.C) wherein the Hon ble Supreme Court has held that issue of a legally valid notice u/s. 143(2) is mandatory for usurping jurisdiction to frame scrutiny assessment u/s. 143(3) of the Act and in the absence of a valid notice u/s 143(2) the scrutiny assessment u/s 143(3) cannot be framed and omission to issue notice u/s 143(2) of the Act is not a curable defect. 12. Since the assessee has been able to demonstrate before us that there has been no notice issued u/s. 143(2) of the Act by the AO (DCIT Circle-3(1), Kolkata before he framed to scrutiny assessment u/s. 143(3) of the Act dated 17.03.2015, the assessment order is null in the eyes of law and the assessee succeeds on the legal issue raised before us. Since the AO (DCIT, Circle-3(1), Kolkata did not issue the mandatory notice u/s 143(2) of the Act, he did not enjoy the jurisdiction to frame the assessment u/s. 143(3) of the Act. Therefore, the order passed by the AO (DCIT, Circle-3(1), Kolkata is null in the eyes of law and it has to be quashed. We order accordingly. 13. We are not inclined to go in to the merits of the action of AO because it has become academic. 14. In the result, the appeal of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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