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TMI Blog2022 (12) TMI 1161X X X X Extracts X X X X X X X X Extracts X X X X ..... ) is invalid. 2. On the facts & circumstances of the case and in law, ld AO & ld CIT(A) has erred in treating the purchases of Rs.7,58,800 from 'Goyal Jute Udyog' as 'bogus purchases'; disallowing of Rs.1,89,700, which is 25% of Rs.7,58,800; arbitrary/ baseless estimation of 25% is on mere presumption, surmises and without having any basis/ supporting corroborative evidence/ material brought on record, is invalid & is liable to be deleted." Also the assessee has raised an additional ground before us which reads as under: "3. On the facts and circumstances of the case and in law, notice issued u/s.148 dt.25-3-18 by ITO-1(3), Raipur is invalid, nonest, since he was not vested any jurisdiction over the assessee at the relevant point of time; assessment made by ITO-1(1), Raipur u/s147 rws.143(3) dt.30-12-18 in absence of a valid notice issued u/s.148 by the 'AO having jurisdiction' over the assessee; would be invalid, ab-initio-void & is liable to be quashed." 2. Succinctly stated, the assessee firm which is engaged in the business of manufacturing of rice and by-products had e-filed its return of income for A.Y.2011-12 on 24.08.2011, declaring an incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant point of time was not vested with the jurisdiction over the case of the assessee. On the basis of his aforesaid contention, it was submitted by the Ld. AR that as the ITO-1(1), Raipur who was duly vested with the jurisdiction over the assessee's case had on the basis of notice issued by the aforesaid ITO-1(3), Raipur, i.e., a nonjurisdictional officer proceeded with and framed the impugned assessment vide his order passed u/s.143(3) r.w.s. 147 of the Act, dated 30.12.2018, therefore, the assessment so framed being devoid and bereft of any force of law was liable to be quashed. The Ld. A.R on being queried as to on what basis it was being claimed that the ITO- 1(3), Raipur was not vested with jurisdiction over the assessee's case took us through the copy of the return of income of the assessee for the year under consideration that was e-filed on 24.08.2011 with the ITO-1(3), Raipur. It was averred by the Ld. AR that as per the Notification No.1/2014-15, dated 15.11.2014 the Joint Commissioner of Income Tax, Range-1, Raipur had pursuant to the powers that were vested with him by the Commissioner of Income Tax-1, Raipur in exercise of powers conferred under sub-sections (1), (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 120 of the Act, on the basis of which, restructuring/reallocation of the territorial jurisdiction of the AOs was carried out, was binding on the department and there could be no escape from the same. In support of his aforesaid contention, the Ld. AR had relied on the judgment of the Hon'ble Supreme Court in the case of UOI v. Azadi Bachao Andolan (2003) 263 ITR 706 (SC). Further, the Ld. AR in support of his contention that an assessment framed on the basis of a notice u/s.148 issued by a non-jurisdictional A.O would be devoid and bereft of any force of law had drawn support from the judgment of the Hon'ble High Court of Bombay in the case of Pavan Morarka Vs. ACIT-2 (2022) 136 taxmann.com 2 (Bombay). It was averred by the Ld. AR that in the aforesaid case as the A.O who had issued notice u/s.148 was not vested with the jurisdiction over the case of the assessee, therefore, the assessment framed by the A.O having jurisdiction over the case of the assessee by acting upon the aforesaid notice issued by the non-jurisdictional A.O was quashed by the Hon'ble High Court. Also, reliance was placed by the Ld. AR on the judgment of the Hon'ble High Court of Gujarat in the case of Pankajbh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir contentions. 10. Admittedly, it is a matter of fact borne from record that the notice u/s.148 of the Act, dated 25.03.2018 was issued by the ITO-1(3), Raipur. Also, it is a fact that the Joint Commissioner of Income Tax, Range-1, Raipur in exercise of the powers vested with him by the Commissioner of Income Tax-1, Raipur under sub-section (1), (2) and (5) of Section 120 of the Act had carried out restructuring/reallocation of the territorial jurisdictions of the AOs within his jurisdiction vide Notification No.1/2014-15, dated 15.11.2014. Ostensibly, as per the Notification No.1/2014-15, dated 15.11.2014, the territorial jurisdiction of the ITO, Ward-1(1), Raipur was, inter alia, to be exercised over all persons, other than companies, deriving income from business or procession and other than those assessable by DCIT/ACIT-1(1), Raipur and whose principal place of business was within the territorial area of the District Gariaband and Tehsil Abhanpur, Nawapara-Rajim and areas of District Raipur beyond the Municipal limits of Raipur towards Abhanpur and old Dhamtari Road. For the sake of clarity the relevant extract of the aforesaid Notification No.1/2014-15, dated 15.11.2014 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction could not be held to be in continuation of the proceedings which were initiated by the A.O at Delhi. To sum up, it was observed by the Hon'ble High Court that if an A.O who had issued notice u/s.148 was not vested with jurisdiction over the case of the assessee, then, the subsequent notice issued by the jurisdictional A.O could neither be construed as a notice issued in continuation of the earlier proceedings, nor any valid assessment u/ss. 143(3)/147 of the Act could be framed on the basis of such notice issued by the nonjurisdictional A.O. Also, a similar view had been taken by the Hon'ble High Court of Allahabad in the case of Pr. Commissioner of Income Tax-II Vs. Mohd. Rizwan, Prop. M/s. M.R Garments Moulviganj, Lucknow, ITA No. 100 of 2015 dated 30.03.2017. In the case before the Hon'ble High Court, notice u/s.148 was issued by the ITO-(IV)(1), Lucknow who at the relevant point of time had no jurisdiction over the case of the assessee, as the same was already transferred to ITO-V(2), Lucknow. Thereafter, as the ITO-V(2), Lucknow proceeded with and framed the assessment without issuing any notice u/s.148 of the Act, therefore, the Hon'ble High Court treating the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present proceedings, in our considered view does not merit acceptance. I, say so, for the reason that as stated by the Ld. AR and, rightly so, as the notice u/s.148, dated 25.03.2018 issued by the Income-Tax Officer, Ward-1(3), Raipur was not a notice issued by an authority falling within the meaning of "Assessing Officer", i.e., either of the authorities contemplated in Section 2(7A) of the Act, viz. such authority who was vested with the relevant jurisdiction by virtue of any directions or orders issued under sub-section (1) or sub-section (2) of Section 120 of the Act or any other provision of the Act; or any such authority who was directed under clause (b) of sub-section (4) of Section 120 to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under the Act; therefore, no obligation was cast upon the assessee to call in question his jurisdiction on receipt of notice u/s. 148, dated 25.03.2018 from him. Our aforesaid conviction that where an assessee is in receipt of notice from an officer who was not vested with the jurisdiction over the case of the assessee either u/s.124(1) or u/s.127 or by notification or circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO-2(1), Moradabad. On the basis of the aforesaid facts, it was the claim of the assessee-petitioner that no valid jurisdiction on the basis of the impugned notice u/s.148 of the Act issued by the ITO-2(1), Moradabad, i.e., a non jurisdictional officer could have been assumed for reopening of its case u/s.147 of the Act. 18. Considering the aforesaid facts, it was observed by the Hon'ble High Court that though the assessee had admitted that the ITO, Ward- 2(1), Moradabad had the territorial jurisdiction over its case, but at the same time had objected to the assumption of jurisdiction by him, for the reason that as per the CBDT Instruction No.1 of 2011, dated 31.01.2011 the jurisdiction over the case for the year under consideration was exclusively vested with the ACIT-2, Moradabad. On the basis of the aforesaid facts involved in the case before them, the Hon'ble High Court after relying on the judgment of the Hon'ble High Court of Delhi in the case of Abhishek Jain Vs. ITO, Ward-55(1), New Delhi (2018) 94 taxmann.com 355 (Delhi) observed, that though the A.O i.e. ITO-2(1), Moradabad had the territorial jurisdiction over the case of the assessee, but as the same was challenged o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8(2) Delhi. On the basis of "Annual Information Return" (AIR) that the assessee had made cash deposits of Rs.12.89 lacs (approx.) in his SB account No. 628401512177 with ICICI Bank Ltd., Sector 27, Branch: Noida, Uttar Pradesh in A.Y. 2009-10, the A.O carried out necessary verifications and gathered that the communication address provided by the assessee as per bank record was "A-32, Sector-5, Noida-201 301", while for his permanent address was "FF-50, 3rd floor, Laxmi Nagar New Delhi-110 092". The assessee had not provided his PAN details to the bank. On the basis of the aforesaid details that were provided by the assessee to the bank the ITO, Ward-1(1), Noida issued notices u/s 133(6) of the Act on two occasions vide registered/speed post to the assessee-petitioner, which was followed by another notice addressed to his New Delhi address. Subsequently, the Income-Tax Inspector visited the assessee's Laxmi Nagar, New Delhi address with the notice u/s.133(6) of the Act, but as the assessee-petitioner could not be located, therefore, the notice was affixed at the said address. 22. Considering the fact that the assessee was not responding to the notices which were issued to him u/s.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had not called in question the jurisdiction of the ITO, Ward- 1(1), Noida within the stipulated time period as contemplated under sub-section (3) of Section 124 of the Act, therefore, he had lost his right to question such jurisdiction. At this stage, it may be observed that the Hon'ble High Court had observed that in the case of the assessee before them the ITO, Ward-1(1), Noida did not per se lack jurisdiction, albeit he had concurrent jurisdiction with the ITO, Ward-36(1)/58(2), Delhi. Considering the aforesaid factual position, now when in the aforesaid case the ITO, Ward-1(1), Noida was held to be vested with the jurisdiction over the case of the assessee, therefore, it was in the backdrop of the said material fact that the Hon'ble High Court, had observed, that as the assessee had failed to call in question the jurisdiction of the said A.O, i.e., ITO, Ward-1(1), Noida within the stipulated time period as provided under sub-section (3) of Section 124 of the Act, therefore, he had lost his right to subsequently call in question such jurisdiction. 25. As in the present case before me the ITO-1(3), Raipur at the time of issuance of notice u/s.148 of the Act dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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