TMI Blog2021 (4) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany and is in the business of share transactions and investments. It has it registered office at 8, AJC Bose Road, Kolkata -700 017 . It filed its return of income for the impugned Assessment Year on 17/01/2013, declaring total income of ₹ 38,220/-. Notice u/s 143(2) of the Act was issued to the assessee by the Income Tax Officer (ITO), Ward (Wd) 6(1), Kolkata on 23/09/2013. On 03/10/2013, the assessee filed a letter objecting to the notice given u/s 143(2) of the Act, dt. 23/09/2013 by the ITO, Wd -6(1), Kolkata, on the ground that this officer does not hold jurisdiction over the assessee. Thereafter, the Commissioner of Income Tax passed an order u/s 120 of the Act, transferring the jurisdiction of the assessee to the file of Tax Recovery Officer (TRO), Range-2, Kolkata. The details of this transfer orders are at page 1 para 2 of the assessment order. Thereafter, the TRO-2, Kolkata, passed an order u/s 144 of the Act, determining the total income of the assessee at ₹ 5,02,98,220/- 2.1. Aggrieved the assessee carried the matter in appeal. The ld. First Appellate Authority passed an ex-parte order. While doing so, he has not disposed off the case on merits. He d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rest 7 are body corporates. All share applicants are assessed to income tax and heir source of money is part of regular IT return. The entire share application money was received through proper banking channels. The body corporate companies are registered with MCA. He did not take his own enquiry and investigation, just to reply on various judicial pronouncement and finding of Ld. AO . Thus, confirming said addition in a generalized manner is unjustified and needs to be deleted. 4. That the assessee craves leave to add, alter, amend or withdraw any ground or grounds of appeal before or at the time of hearing. 4.1. The additional grounds raised by the assessee read as follows:- 1. For that the Assessing Officer issuing the notice u/s 143(2) of the IT Act 1961 did not have jurisdiction over the case of the assessee hence said notice and the consequential assessment order is bad in law and hence the same is quashed. 2. For that the Assessing Officer passing the order u/s 144 of the IT Act 1961 did not have jurisdiction over the case of the assessee hence the assessment order is bad in law and hence the same be quashed. 5. The ld. Counsel for the assessee, Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction of ITO, Wd 7(4), Kolkata under Commissioner of Income Tax (CT) Kol III. He submitted that, as per the geographical jurisdiction determined by the notification of the CBDT, the jurisdiction of the assessee company clearly falls within ITO, Ward -7(4), Kolkata. While so, he submits that the ITO Wd- 6(1), Kolkata, issued notice u/s 143(2) of the Act, which is without jurisdiction. Thus, he submits that this notice is bad and non-existent in law. He emphasised that on receipt of the notice dt. 23/09//2013, the assessee on 03/10/2013 had written to the ITO Ward-6(1), Kolkata, pointing out that, he has no jurisdiction to issue notice u/s 143(2) of the Act, to the assessee company. He submitted that the Assessing Officer has not replied. He further pointed out that the TRO-2, Kolkata, completed best judgment assessment u/s 144 of the Act, without issuing the statutory notice u/s 143(2) of the Act and hence, the assessment is bad in law. For this proposition, he relied on the judgment of the Hon ble Supreme Court in the case of ACIT Anr. Vs. Hotel Blue Moon reported in 321 ITR 362 (SC). He prayed for relied. 7. The ld. D/R, Smt. Ranu Biswas, on the other hand, opposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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:- 10. The undisputed fact is that, the address of the assessee company from 12th August, 2010, relevant to Assessment Year 2011-12, is 8, AJC Bose Road, Kolkata 700017 . This fact was intimated to the Assessing Officer on 19/08/2010. The assessee has also filed its return of income for the impugned Assessment Year with the address 8, AJC Bose Road, Kolkata 700017 on 17/01/2013. Copy of the official ROC record, discloses the above address from that date. The address of the assessee for the previous year 2010-11 and 2011-12 is the same. 10.1. The territorial jurisdiction as applicable to the assessee for the Assessment Year 2012-13, is given by the CBDT, vide notification 220A/2001 dt. 31/07/2001. As per this notification, the territorial area falling with the pin code 700017 is with Commissioner of Income Tax (CT) Kol-III and the jurisdictional Assessing Officer for the assessee company is ITO, Ward 7(1), Kolkata, Range-7. This case never fell within the jurisdiction of ITO, Ward-6(1), Kolkata. Notice u/s 143(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erring 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 having jurisdiction of this case and who had completed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mit 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 prescribed by the statute was crossed by him. Therefore, the issuance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to be created - Held, yes Assessee 9.3. The Hon ble Supreme Court in the case of CIT vs. Laxman Das Khandelwal [2019] 108 taxmann.com 183 (SC), held as follows:- 7. A closer look at Section 292BB shows that if the assessee has participated in the proceedings it shall be deemed that any notice which is required to be served upon was duly served and the assessee would be precluded from taking any objections that the notice was (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner. According to Mr. Mahabir Singh, learned Senior Advocate, since the Respondent had participated in the proceedings, the provisions of Section 292BB would be a complete answer. On the other hand, Mr. Ankit Vijaywargia, learned Advocate, appearing for the Respondent submitted that the notice under Section 143(2) of the Act was never issued which was evident from the orders passed on record as well as the stand taken by the Appellant in the memo of appeal. It was further submitted that issuance of notice under Section 143(2) of the Act being prerequisite, in the absence of such notice, the entire proceedings would be invalid. 8. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the Hon ble Supreme Court in the case of ACIT vs. Hotel Blue Moon reported in [321 ITR 328 (SC)] and held as follows:- 9. In the light of the above discussion, particularly taking into consideration the law laid down by the Supreme Court in Hotel Blue Moon (supra), it is inescapable that the issuance of a notice under Section 143(2) of the Act is mandatory if the Assessing Officer seeks not to accept any part of the return as furnished by the assessee or make an assessment order contrary thereto and, even in course of reassessment proceedings, such notice cannot be dispensed with. 10. One of the arguments put forth on behalf of the Revenue is that in course of reassessment proceedings once a notice is issued under Section 148 of the Act, the assessee is made aware of what part of the income or on what count the assessee's income is perceived to have escaped attention. It is submitted that in such a scenario, the requirement of a notice under Section 143(2) may be somewhat diluted, if not unnecessary. Apart from the fact that such argument cannot be countenanced in the light of the dictum in Hotel Blue Moon (supra), it is evident that an assessment under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is a contradiction thereof by the assessee. It is evident that the assessee carried the objection before the Commissioner (Appeals) and the Commissioner brushed aside the objection on the ground that it was a technicality without addressing the issue or applying his mind to such aspect of the matter. Further, it is evident from the order impugned passed by the Appellate Tribunal that no notice under Section 143(2) of the Act had, in fact, been issued in this case. In such a situation, where a notice that is mandatorily required to be issued is found not to have been issued, Section 292BB of the Act has no manner of operation. The two substantial questions of law are answered accordingly as follows: (1) If the time for issuance of the notice under Section 143(2) of the Act has expired or the time for completing the reassessment proceedings under Section 153(2) of the Act has run out, the failure to issue such notice under Section 143(2) of the Act would result in the entire proceedings, including any order of assessment, to be quashed. (2) Section 292BB of the Act does not dispense with the issuance of any notice that is mandated to be issued under the Act, but ..... X X X X Extracts X X X X X X X X Extracts X X X X
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