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TMI Blog2022 (10) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... idering the issue of bogus long Term Capital Gain on account of Penny Stocks. 3. The Ld. CIT(A) has erred in allowing the appeal of the assessee in spite of the fact that assessee was continuously filling her return of income with ITO, Ward-35( 4),Kolkata and did not raise any question on jurisdiction before the A.O 4. The Ld. CIT(A) failed to appreciate the provision of section 124(3) of the Income Tax Act that no person shall be entitled to call in question the jurisdiction of an Assessing Officer after the expiry of one month from the date on which he was served with a notice u/s 148. 5. That the Department craves leave to add modify or alter any of the grounds of appeal and for adduce additional evidence at the time of hearing of the case. 3. Through the legal issue in ground no. 1 the Revenue has challenged the finding of ld. CIT(A) holding that since the notice u/s. 148 of the Act issued by the ld. AO was bad in law and without jurisdiction, therefore, the assessment order dt. 19-12-2019 deserves to be quashed. 4. Brief facts pertaining to the issue under consideration are that the assessee is an individual earned income from salary and other sources. Income at Rs. 7, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO, Ward- 35(4) by issuing notice u/s. 148 on 27.03.2019. (iv) Assessee filed ITR in response to the notice u/s. 148 before the ITO, Ward-35(4), Kolkata on 30.04.2019. (v) Notice u/s. 143(2) was issued by the same Assessing Officer on 21.06.2019. (vi) On 18.11.2019, the assessee informed that she was Director of a Company, namely, M/s. Tarang Builders Pvt. Ltd. and the said company was regularly assessed by the Assessing Officer, Circle- 13(2), Kolkata. She also claimed that since the AO of Circle-13(2), Kolkata is having jurisdiction over the company; the said AO is the jurisdictional AO in her case. (vii) The case was transferred to Circle-13(2L Kolkata as per order u/s. 127 passed by the PClT on 27.11.2019. (viii) Finally, the assessment order was passed by the DClT-13(2), Kolkata on 19.12.2019. 6.1. The Ld. DR also submitted that that as the Assessing Officer of DClT, Circle-13(2), Kolkata is having jurisdiction over her case, the notice issued earlier by the AO of Ward -35(4), Kolkata was invalid, without any jurisdiction and consequently, the assessment order passed by the AO of DCIT-13(2), Kolkata is also invalid. The Ld. CIT(A) allowed the appeal of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iding opportunities to the assessee. Thus, no prejudice was caused to the assessee in any manner. Kind attention of the Hon'ble Bench is invited to para 9 of page 14, 15 & 16 and further para-12 of page 21 of the decision of the Hon'ble Madras High Court dated 15.07.2021 in the case of M/s. Vedanta Ltd. in W.P No. 25529/2015 & M.P. NO. 1 of 2015. Finally he before me that the decision of the Ld. CIT(A) may kindly be reversed and that of AO's order may kindly be restored and confirmed. 7. Per contra, the Ld. Counsel for the assessee vide written submissions stated that it is the appellants submission that consequent to order passed by the PClT WB and Sikkim dated 15.11.2014 the jurisdiction over the appellants case no longer vested with ITO Wd 35(4), Kolkata. Yet a notice was issued by the ITO Ward 35(4) Kolkata u/s 148 dated 27.03.2019 and the same was served on the appellant. Since the said ITO had issued the statutory notice, in compliance with the same, return of income was filed with the said Officer. Subsequently, the ITO also issued notices u/s 143(2) and 142(1) dated 20.06.2019 and 21.06.2019. In response to the said notices, the appellant vide reply dated 29.08 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt to pass any decree, and such a defect cannot be cured even by consent of parties." 7.2 The Ld. Counsel for the assessee has also submitted the following details which available in the Paper Book Index:- Sl.No. Particular Page No. 1. Copy of the Notification dated 22.10.2014 issued by CBDT pursuant to which Notification No.1 dated 15.11.2014 was issued by PCCIT West Bengal and Sikkim in terms of which all existing 1-17 charges In the State of West Bengal were abolished and Jurisdictions were assigned afresh to different tax authorities with effect from 15.11.2014. 1-17 2. Notice dated 27.03.2019 issued u/ s 148 by ITO, Ward 35(4), Kolkata. 18 3. Notice dated 20.06.2019 issued u/s 143(2) by ITO, Ward 35(4), Kolkata. 19 4. Communication dated 16.12.2019 issued by ITO, Ward 36(7), Kolkata along with the order passed u/ s 120 of the Act by the Pr.CIT-12, Kolkata. 20-23 5. Rungta Irrigation Ltd. Vs. ACIT (113 taxmann.com 330) [ITAT Kol] 24-61 6. ITO Vs. Anamika Dealcom Pvt. Ltd (ITA No. 2179/Kol/2016 & CO No. 23/Kol/2019) [ITAT Kol] 62-69 8. I have heard the rival contentions and perused the material placed before me. The validity of re-assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n receipt of notice u/s 148, the assessee complied with the notice by filing the return, but simultaneously brought to the attention of the ITO, Ward 35(4), Kolkata the fact that the jurisdiction over the appellant's case always vested with AClT, Circle 13(2), Kolkata. On being satisfied with veracity of this material fact the ITO, Ward 36(7), Kolkata transferred the case records of proceedings-initiated u/s 148 of the Income Tax Act, 1961, to the charge of ACIT, Circle 13(2), Kolkata. The foregoing facts therefore clearly bring on record and prove beyond doubt that the ITO, Ward 35(4), Kolkata who recorded reasons to believe u/s 148(2) and issued notice u/s 148 on 27.03.2019, never held valid jurisdiction over the assessee's case. I therefore hold that since in the present case the reasons to believe that income chargeable to tax for AY 2012-13 escaped assessment was recorded and the notice u/s 148 was issued by the officer who did not hold valid jurisdiction over the appellant, the notice u/s 148 suffered from serious infirmity and therefore bad in law. Any proceedings taken consequent to the notice which was without jurisdiction and every order passed consequent to the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce u/s 148 for assuming jurisdiction over the case of the appellant was issued invalidly, then the consequent order framed u/s 147/143(3) of the Act was ab initio void and bad in law. The impugned order therefore stands quashed." 9. The above finding of the ld. CIT(A) is well supported by the judicial precedence as well as uncontroverted fact that notice was issued u/s. 148 of the Act by the Assessing Officer (AO) not having jurisdiction over the assessee which, thus, renders the consequent assessment proceeding u/s.143(3) r.w.s 147 of the Act void ab initio. Further we find that similar view has also been taken by this Tribunal in the case of ITO Vs. Anamika Dealcom P.Ltd (ITA No. 2179/Kol/2016 & CO No.34/Kol/2019 for the assessment year 2012-13 dated 22-10-2020 observing as follows:- Order dt. 22-10-2020 in ITA No. 2179/Kol/2016 & CO No. 34/Kol/2019:- "5. We have given our thoughtful consideration to the above question of Assessing Officer's jurisdiction going to root of the matter. We would like to reiterate here that Revenue itself is fair enough in admitting the clinching fact that ITO, Ward 24(3), Kolkata only had issued 143(2) notice dated 07- 08-2013 to the assessee wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been explained by the assessee company. Therefore, considering the above share capital claimed by the assessee company to have been introduced during the FY 2011-12 with high premium amounting to Rs.15,66,00,000/- (share capital of Rs.29,10,000/- +premium of Rs.15,36,90,000/-) was treated as unexplained cash credit in the books of the assessee company u/s. 68 of the Act. Aggrieved, by the said order assessee preferred an appeal before the Ld. CIT(A), who confirmed the action of the AO. Aggrieved, the assessee is in appeal before us. 4. We have heard rival submissions and gone through the facts and circumstances of the case. Before us, the Ld. AR while raising the legal issue contended that no notice was issued by the ITO, Ward-6(1), Kolkata u/s. 143(2) of the Act and which was served upon the assessee; and even though the notice was issued u/s. 143(2) of the Act was by ITO, Ward- 34(2), Kolkata [as per ITO, Ward -6(1)] who had no jurisdiction to assess the corporate entity like the assessee company, hence the assessment order framed by the AO(ITO, Ward-6(1), Kolkata) without issuing notice u/s. 143(2) upon the assessee company is 'null' in the eyes of law and, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r i.e. transfer order u/s. 127, or notice u/s. 143(2) or 142(1) etc. Thus, according to Ld. AR, the transfer of file from ITO, Ward- 34(2), Kolkata to ITO, Ward-6(1), Kolkata itself is bad in law; And in any case the assessment order passed by ITO, Ward-6(1) without issuing notice u/s. 143(2) within the prescribed period of time as statute stipulates is also bad in law and needs to be quashed. On the other hand, the Ld. DR heavily relied on the orders of the lower authorities and urged before the bench to confirm the action of Ld.CIT(A). 5. After going through the aforesaid contentions, we note that the assessee is a corporate entity, being a company registered under the Companies Act, 1956 and having registered office in the area mentioned in item (a) of column (4) i.e PIN 700 001 of the notification no. 228/2001 dated 31.07.2001 (page 18 of paper book) issued by CBDT u/s. 120 of the Act and also in reference to later Notification of CBDT No. 50/2014dated 22.10.2014. The Designated Income Tax Authority as per serial No. 159 is Principal Commissioner/Commissioner of Income Tax, Kolkata-2, Headquarter is Kolkata, West Bengal (Page 14 of paper book). Whereas a perusal of Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 144 of the Act alleging nonparticipation on the part of the assessee company during the assessment proceedings. We note that in the assessment order framed by ITO,Wd-6(1) Kolkata, he has mentioned about notice u/s.143(2) of the Act issued not by him but by ITO, Wd-34(2), Kolkata and has mentioned clearly that he [ITO, Wd-6(1), Kolkata] has issued only notice u/s. 142(1)of the Act. We note from a perusal of the impugned assessment order passed by ITO, Wd-6(1), Kolkata there is no whisper/mention about any notice issued by him u/s. 14 of the Act or even notice issued before framing best judgment u/s.144 of the Act. As per the ITO, Wd-6(1), Kolkata, notice u/s. 143(2) of the Act has been issued by ITO, Wd-34(2),Kolkata and not by himself before framing the scrutiny assessment u/s.143(3)/144 of the Act. It is no longer res integra that issuance of notice u/s.143(2)is sine qua non before deciding to proceed to scrutinize the assessment of income of an assessee u/s. 143(3) of the Act. Since the department has failed to adduce any evidence to contradict the claim of assessee that ITO, Wd-6(1), Kolkata who was the jurisdictional AO did not issued notice u/s. 143(2) of the Act before decidi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iple of natural justice on the part of AO. Therefore, looking from any angle as discussed above and especially taking note that the impugned assessment order passed by the ITO, Wd-6(l). Kolkata without issuing notice u/s. 143(2) of the Act is corum non-judice and therefore null in the eyes of law and, therefore, need to be quashed and we quash the impugned assessment order dated 13.03.2015 passed by ITO, Wd-6(l), Kolkata. The additional grounds raised by the assessee are allowed. " 6. We adopt the above detailed discussion mutatis mutandis to conclude that impugned assessment order dated 22-03-2015 had been framed without the competent Assessing Officer's sec. 143(2) notice issued to the assessee. The same is declared invalid for this precise reason. The assessee succeeds in its Cross Objection No. 34/Kol/2019. The Revenue's appeal ITA No. 2179/Kol/16 for the assessment year 2012-13 is dismissed as the necessary corollary. All other Revenue's and assessee's pleadings in above appeal and cross objection are rendered academic. 7. This Revenue's appeal ITA No. 2179/Kol/2016 is dismissed and assessee's Cross Objection No. 34/Kol/2019 is allowed. Ordered accordingly. 10. I, thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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