TMI Blog2022 (10) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... as erred in holding that the notice u/s 148 issued by the AO was bad in law and quashing the assessment order on the issue of jurisdiction of the assessee even though the jurisdiction of the assessee as per PAN database was lying with ITO, Ward-35(4),Kolkata on the date of issue of notice and the assessee was being assessed in charge of ITO, Ward-35(4) since 2007. 2. The Ld. CIT(A) wrongly allowed the appeal of the assessee without considering 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said notice, the order is void ab initio . Certain important facts associated with the issue are as under:- (i) Assessing Officer of Ward-35(4), Kolkata have jurisdiction over the assessee since 21.03.2007. (ii) The assessee filed ITR u/s. 139 before the ITO, Ward-35(4) on 22.03.2013. The said return was rejected on 16.04.2013 as nonest due to assessee's failure to file ITR-V in time. (iii) Re-assessment proceeding was initiated by the 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 27.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2016 order dated 1st June, 2018 (Copy enclosed) which is squarely applicable in this case. I also rely on Hon'ble Allahabad High Court decision in favour of the revenue in the case of Bal Chand Jain Sons -Vs.- DCIT[ 2014]41 taxmann.com 524 order dated 30.10.2012. 6.4. In the instant case, the jurisdiction issue as raised by the assessee on 18.11.2019 was immediately taken care of and order u/s. 127 was passed by the PClT. Finally, the assessment order was passed by the AO after providing 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Hon'ble Supreme Court had held as under: It is a fundamental principle well established that a decree passed by a court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it isin respect of the subject-matter of the action, strikes at the very authority of the court 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer never held jurisdiction over the appellant's case. On careful scrutiny of the facts I find that the consequent to the re-structuring carried out by the Department on 15.11.2014, the jurisdiction over the PAN of the appellant stood transferred to AClT, Circle 13(2), Kolkata. This fact was also admitted by the ITO, Ward 36(7), Kolkata in his letter dated 16.12.2019 when the appellant had challenged the jurisdiction being exercised by him and thereafter, he had transferred the case records to the charge of the Assistant Commissioner of Income tax, Circle 13(2), Kolkata. I therefore find force in the submissions of the Ld. AR of the appellant that on 27.03.2019 when the ITO, Ward 35(4), Kolkata recorded his satisfaction u/s 148(2) and proceeded to issue notice u/s 148 he was not the AO holding valid jurisdiction over the appellant's case. It is noted that on 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 ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT, Delhi transferring jurisdiction from ITO, New Delhi dated 4-1- 2010 ITO, Kolkata, there is no proceedings pending before the ITO, Delhi and the transfer order for jurisdiction was passed on that date. The Commissioner, New Delhi passed order under section 127 on 1-1-2010 transferring the jurisdiction of the assessee to ITO, Kolkata and the jurisdiction in respect to every action for all assessment years lay with ITO, Kolkata and only he was competent to issue notice under section 148. Thus, the notice issued under section 148 by the ITO, New Delhi was bad and illegal in view of clear provisions of Act is quashed. Similar view was adopted in the decision rendered by the Bombay High Court in the case of CIT Vs Fiat Automobiles India Ltd (211 Taxman 570). For the reasons set out in the foregoing therefore, I thus find merit in the submissions of the AR that when the notice 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 judicia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Notice u/s. 143(2) of the Act served from office of ITO, Ward-34(2). Then the jurisdiction of the case was transferred to ITO, Ward-6(1), Kolkata and a notice was also issued from this ward. According to AO, summons u/s. 131 of the Act were sent to the directors of the assessee company but summons were returned un-served and no compliance was made on behalf of the assessee company. Thereafter, show cause notice was sent through speed post which has been returned un-served. As no compliance was made on behalf of the assessee till the completion of assessment, the AO was let with no alternative but to pass the assessment order dated 13.03.2015 u/s. 144 of the Act. Thereafter the AO observed that the assessee company was incorporated on21.01.2009 and has shown the figure of Rs.15,36,90,0001- as share premium during the assessment year under consideration. According to AO, the source of huge premium 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to Ld. AR, since the ITO, Ward-34(2), Kolkata did not enjoy any jurisdiction over the assessee-company and thus the notice u/s. 143(2) of the Act claimed to have been issued by the ITO, Ward-34(2), Kolkata against the assessee company was without jurisdiction so, bad in law and, therefore, the notice issued by an officer/authority who does not enjoy jurisdiction is non-est in the eyes of law. Ld. AR also brought to our notice that the claim of ITO, Ward-6(1), Kolkata in the assessment order that the file of assessee was transferred from ITO, Ward-34(2), Kolkata is itself illegal since it was pointed out by the Ld. AR that in the impugned assessment order there was no reference or mention by the AO (ITO Ward-6(l), Kolkata) of any order of transfer of jurisdiction passed by the concerned Pr. CIT u/s. 127 of the Act. According to Ld. AR, in any case, the assessee has not been served with any such order 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he officer authority who was vested with the 'jurisdiction of Assessee i.e. AO of the assessee com an. We note that the impugned assessment order framed by the AO) dated 13.03.2015 was passed by the jurisdictional ITO, Wd-6(1), Kolkata. However, the main grievance of the assessee company is that before scrutinizing the assessment u/s. 143(3) of the Act, notice u/s. 143(2) of the Act needs to have been issued by ITO, Ward-6(1), Kolkata was sine qua non as held by the Hon'ble Supreme Court in Hotel Bluemoon 321 ITR 362 (SC) was in fact not issued by him [ITO, Wd-6(1), Kolkata] before completing the assessment u/s. 143(3)1144 the Act. So the jurisdictional fact which needs to be ascertained by us is whether ITO, Ward-6(1), Kolkata issued notice on the assessee u/s.143(2) of the Act before framing the scrutiny assessment. We note that the ITO, W d-6(1),Kolkata has passed a best judgment assessment u/s. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0) 329 ITR 283 (Cal) has clearly spelt out that the ITO on its own cannot transfer the jurisdiction without order from the competent authority. In this case, we note that there is no mention in the assessment order of any transfer order passed by the concerned CIT-12, therefore, the contention of the ITO, Ward-6(1), Kolkata that the jurisdiction has been transferred from ITO,Wd-34(2) to ITO, Wd- 6(l), Kolkata is also without authority and vitiates the transfer of jurisdiction as claimed by the AO in the assessment order and thus this factual so vitiates the assessment order. In the light of the above as well as the contention of the assessee that no opportunity of hearing was rendered to it by ITO, Wd- 6(1), Kolkata before framing assessment u/s.144of the Act which omission on the part of AO also is against principle so factual justice and the impugned assessment u/s 144 of the Act is fragile for non-adherence of principle 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 ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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