TMI Blog2022 (10) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... from the aforesaid Dy. CIT, Circle-1, Bhilai to the Income-Tax Officer, Ward-2(2), Bhilai. However, nothing has been brought to our notice which would justify the transfer of jurisdiction over the assessee s case from the Dy. CIT, Circle-1, Bhilai to Income-Tax Officer, Ward-2(2), Bhilai. Be that as it may, we are of the considered view that as in the case of the assessee the assessment order u/s.143(3), dated 30.03.2015 had been passed by a non-jurisdictional officer i.e. the Income-Tax Officer, Ward-2(2), Bhilai, which is in clear contravention of the CBDT Instruction No.1/2011 dated 31.01.2011, therefore, the same cannot be sustained and is liable to be struck down on the said count itself. We are of the considered view that as in the present case before us the assessment had been framed by the Income Tax Officer, Ward-2(2), Bhilai u/s. 143(3), dated 30.03.2015 in clear contravention of the CBDT Instruction No.1/2011, dated 31.01.2011, which divested him of his jurisdiction over the case of the assessee for the year under consideration i.e AY 2012-13, therefore, the same cannot be sustained and is liable to be struck down in terms of our aforesaid observations. We, thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing house property income from 11% to 50%. 8. The assessee craves leave to add, urge, alter, modify and withdraw any ground/grounds before or at the time of hearing of the appeal. The assessee has also raised before us an additional ground of appeal, as under: 1. On the facts and circumstances of the case and in law, the ld. AO i.e. ITO-2(2) Bhilai has passed order u/s.143(3) dt.30-3-2015 who was not having pecuniary jurisdiction to make assessment u/s.143(3) for A.Y.2012-13 since returned income shown at Rs.19,07,440 as per CBDT Instruction No. 1/2011 dt. 31.01.11 which is binding on IT authorities u/s.119; assessment made u/s.143(3) DT. 30.03.2015 BY non jurisdictional A.O is invalid, bad in law, non-est and is liable to be quashed. 2. Succinctly stated, the assessee who is engaged in the business of trading in fans, tyres electronic items had e-filed his return of income for A.Y 2012-13 on 29.03.2013, declaring an income of Rs.19,07,440/-. Subsequently, the case of the assessee was selected for scrutiny assessment and notice u/s.143(2) of the Act dated 24.09.2013 was issued by the Dy. CIT-1, Bhilai. 3. Notice u/s.142(1) of the Act, dated 20.08.2014 fixin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l pronouncements that have been pressed into service by them to drive home their respective contentions. 8. As the assessee has assailed the validity of the jurisdiction assumed by the Income-Tax Officer, Ward-2(2), Bhilai for framing the impugned assessment, therefore, we shall first deal with the same. It is claim of the Ld. Authorized Representative (for short AR ) for the assessee that as the Income-Tax Officer, Ward-2(2), Bhilai was not vested with the pecuniary jurisdiction over the case of the assessee for the year under consideration, therefore, the assessment order passed by him u/s.143(3) dated 30.03.2015 cannot be sustained and is liable for being struck down on the said count itself. Elaborating on his aforesaid contention, it was submitted by the Ld. AR that the CBDT Instruction No.1/2011, dated 31.01.2011 w.e.f 01.04.2011 [F.No.187/12 /2010-IT(A-I)] had revised the monetary limits and specified the pecuniary jurisdictions which would be vested with the Assessing Officers i.e. ITOs /ACs/DCs. It was submitted by the Ld. AR that pursuant to the CBDT Instruction No.1/2011, dated 01.04.2011 that was applicable to the case of the assessee for the year under consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8-2021 3. Bhagyalaxmi Conclave PL (2021) ITANo.2517/Ko1/2019 (Kol-Trib) dated 03-02-2021 4. Hillman Hosiery Mills PL(2021) ITA No.2634/Ko1/2019 (Kol-Trib),dated 12-01-2021 5. Khirod Kumar Pattnaik (2020) ITA No.380/Ctk/2019 (Ctk-Trib) dated 10-12-2020. 6. Arti Securities Services (2020) ITANo.553/Lkw/2018 (Luck-Trib) 06-11-2020 7. Dipti Sahana (2020) ITA No.2202/Ko1/2019 (Kol-Trib) dt. 29-05-2020 8. Proficient Commodities Pvt. Ltd. (2020) ITA 1346/Ko1/2016 (Kol-Trib) dated 18-3-20 9. Shaikh Akhtar Hossain (2020) ITA No.2572/Ko1/2019 (Kol-Trib) dated 18-03-2020. 10. Soma Roy (2020) ITA No.462/Kol/2019 (Kol-Trib) dt. 08-01-2020. 11. Sukumar Ch. Sahoo (2017) 60 ITR (T) 225 (Kol-Trib) dt.27-09-2017 12. Krishnendu Chowdhury (2017) 78 taxmann.com 89 (Kol-Trib) date18-11-2016 9. It was further sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of Section 124 of the Act clearly concern the territorial jurisdiction of the Assessing Officer and have no relevance in so far the inherent jurisdiction for passing the assessment order is concerned. It was submitted by the Ld. AR that as in the present case the assessment had been framed by a non-jurisdictional A.O, therefore, the same de hors lack of inherent jurisdiction with the latter was invalid and non-est, and thus, liable to be struck down on the said count itself. 10. Per contra, the Ld. Departmental Representative (for short DR ) relied on the orders of the lower authorities. It was submitted by the Ld. DR that as the A.O having the requisite jurisdiction over the case of the assessee i.e. Dy. CIT, Circle-1, Bhilai had rightly issued notice u/s.143(2) of the Act, dated 24.09.2013, which thereafter had culminated into an order u/s.143(3), dated 30.03.2015, therefore, no infirmity did emerge from the same. Adverting to the fact that while for the assessment proceedings were initiated by the Dy. CIT, Circle-1, Bhilai vide notice issued u/s.143(2), dated 24.09.2013 but assessment was thereafter framed by the Income-Tax Officer, Ward-2(2), Bhilai vide his order p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the cases to ITOs/ACs/DCs w.e.f. 01.04.2011. On the basis of the aforesaid CBDT Instruction No.1/2011 (supra) w.e.f 01.04.2011, the case of a non-corporate assessee located in a mofussil area having declared an income above Rs.15 lacs in his return of income is to be assigned to the ACs/DCs. As the case of the present assessee for the A.Y.2012-13 was selected for scrutiny assessment vide notice issued u/s.143(2), dated 24.09.2013, therefore, the aforesaid CBDT Instruction No.1/2011, dated 31.01.2011 that was applicable w.e.f. 01.04.2011 duly applied to his case. Also, as per the areas earmarked in the aforesaid Instruction No.1/2011, dated 31.01.2011 as the assessee is not located in any of those cities/stations which have been held to be metro cities, therefore, his case would be as that of a non-corporate assessee who is located in a mofussil area. Also, as is borne from the record the assessee had filed his return of income for the A.Y.2012-13 declaring an income of Rs.19,07,440/-, Page 7 to 12 of APB. 12. On the basis of the aforesaid facts, we are of the considered view that as stated by the Ld. AR and, rightly so, the jurisdiction over the case of the assessee who is l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. Also, support is drawn from the judgment of the Hon ble High Court of Chattisgarh in the case of Dy. CIT Vs. Sunita Finlease Ltd. [2011] 330 ITR 491 (Chattisgarh). In its said order it was observed by the Hon ble Jurisdictional High Court that the administrative instructions issued by CBDT are binding on the Income-tax authorities. On the basis of our aforesaid observations, we are of the considered view that as the framing of the assessment in the case of the present assessee by the Income-Tax Officer, Ward-2(2), Bhilai is clearly found to be in contravention of the CBDT Instruction No.1/2011, dated 31.01.2011, therefore, the same cannot be justified. 14. We shall now deal with the objection raised by the Ld. DR that as the assessee had not called in question the jurisdiction of the Income-Tax Officer, Ward-2(2), Bhilai within the stipulated time period of one month from the date on which he was served with the notice(s) u/ss.143(2) and 142(1), dated 03.03.2015, therefore, it was not permissible for him to challenge the same for the first time in the course of the proceeding before the tribunal. Having given a thoughtful consideration to the aforesaid claim of the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd-3 to ITO, Ward-4 and the impugned order was passed by the ITO, Ward-4 without issuing notice u/s 143(2) and only in pursuance to the notice that was issued by the ITO, Ward-3, who had no jurisdiction over the assessee at the relevant time. Considering the fact that as the assessment was framed on the basis of the notice issued under Sec. 143(2) by the assessing officer who had no jurisdiction to issue the same at the relevant point of time, the Hon ble High Court quashed the assessment. Apart from that, the aforesaid view is also supported by the order of the ITAT, Kolkata B Bench in the case of OSL Developers (p) Ltd. Vs. ITO, (2021) 211 TTJ (Kol) 621 and that of ITAT, Gauhati Bench in the case of Balaji Enterprise Vs. ACIT (2021) 187 ITD 111 (Gau.). Accordingly, on the basis of our aforesaid observations, we are of the considered view that as the assessee s objection to the validity of the jurisdiction assumed by the Income-Tax Officer, Ward-2(2), Bhilai is by no means an objection to his territorial jurisdiction, but in fact an objection to the assumption of jurisdiction by him in contravention of the CBDT Instruction No.1/2011, dated 31.01.2011, therefore, the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. On a careful perusal of the aforesaid mandate of law, it transpires, that even in a case where jurisdiction over the case of an assessee that is vested with one A.O (having concurrent jurisdiction over the case of the assessee) is to be transferred to another A.O (having concurrent jurisdiction over the case of the assessee), even then the authority specified under sub-section (1) of Section 127 is obligated to record his reasons for doing so. Considering the aforesaid position of law, we are of the considered view that now when in the present case the assessment proceedings were initiated by the Dy. CIT, Circle-1, Bhilai vide notice u/s.143(2), dated 24.09.2013, which thereafter were taken up and culminated by the Income-Tax Officer, Ward-2(2), Bhilai vide his order passed u/s.143(3) dated 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly in respect of territorial area but also I.T.A. No.339/Kol/2021 Assessment Year: 2016-17 Anderson Printing House Pvt. Ltd having regard to a person or classes of persons and income or classes of income also. Therefore, the CBDT having regard to the income as per return has fixed the jurisdiction of the Assessing Officers. The ld. Counsel in this respect has relied upon the CBDT Instruction No.1/2011 [F.No.187/12/2010-IT(A-I), for the sake of convenience is reproduced as under: Instruction No.1/2011 [F.No.187/12/2010-IT(A-I), DATED 31-1-2011 References have been received by the Board from a large number of taxpayers, especially from mofussil areas, that the existing monetary limits for assigning cases to ITOs and DCs/ACs is causing hardship to the taxpayers, as it results in transfer of their cases to a DC/AC who is located in a different station, which increases their cost of compliance. The Board had considered the matter and is of the opinion that the existing limits need to be revised to remove the abovementioned hardship. An increase in the monetary limits is also considered desirable in view of the increase in the scale of trade and industry since 2001, when the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment. The issue relating to the pecuniary jurisdiction also came into consideration before the Coordinate Bench of the Tribunal in ITA No.2517/Kol/2019 and Others vide order dated 03.02.2021, wherein the Tribunal further relying upon various other decisions of the Coordinate Benches of the Tribunal has decided the issue in favour of the assessee and held that the assessment framed by Assessing Officer who was not having pecuniary jurisdiction to frame such assessment was bad in law. The relevant part of the order dated 03.02.2021 passed in ITA No.2517/Kol/2019 and Others is reproduced as under: 5.2. The assessee relied on the recent decision of this Tribunal in the case of Hillman Hosiery Mills Pvt. Ltd. vs. DCIT, in ITA No. 2634/Kol/2019, order dated 12.01.2021. We find that the issues that arise in this appeal are clearly covered in favour of the assessee. This order followed the principles of law laid down in a number of other decisions of the ITAT, Kolkata Bench on this issue. 5.3. Kolkata B Bench of the Tribunal in the case of Hillman Hosiery Mills Pvt. Ltd.(supra) held as follows: 10. In this case, the ITO Ward-3(3), Kolkata, issued notice u/s 143(2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot 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 assessment on 26/12/2017 i.e., ACIT, Circle-1(1), Durgapur. Under these circumstances, the question is whether the assessment is bad in law for want of issual of notice u/s 143(2) of the Act. 9. This Bench of the Tribunal in the case of Shri Sukumar Ch. Sahoo vs. ACIT in ITA No. 2073/Kol/2016 order dt. 27.09.2017, held as follows:- 5. From a perusal of the above Instruction of the CBDT it is evident that the pecuniary jurisdiction conferred by the CBDT on ITOs is in respect to the 'non corporate returns' filed wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of notice by the ACIT, Circle-27, Haldia after the limitation period for issuance of statutory notice u/s. 143(2) of the Act has set in, goes to the root of the case and makes the notice bad in the eyes of law and consequential assessment order passed u/s. 143(3) of the Act is not valid in the eyes of law and, therefore, is null and void in the eyes of law. Therefore, the legal issue raised by the assessee is allowed. Since we have quashed the assessment and the appeal of assessee is allowed on the legal issue, the other grounds raised by the assessee need not to be adjudicated because it is o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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