TMI Blog2023 (3) TMI 1403X X X X Extracts X X X X X X X X Extracts X X X X ..... eneral of Income Tax and such details must be mentioned in the manual communication by the assessing authorities to the assessee. Para 4 of the circular clearly states that, any communication issued manually which is not in conformity with para 2 and para 3 of the circular shall be treated as invalid and shall be deemed to have never been issued. The above view has been taken by the decisions that has relied by the ld.AR referred to hereinabove and also the decision of M/s. Brandix Mauritius Holdings Ltd. [ 2022 (11) TMI 34 - ITAT DELHI] This Tribunal in the above referred decisions, we hold that, the order passed by the Ld.AO u/s. 144 r.w.s. 147 is invalid and shall be deemed to have never been issued as per para 4 of the CBDT circular, since it is not in conformity with the requirements mentioned in para 3 . Jurisdiction of AO to issue notice - Transfer of case u/s 127 - In the present case, admittedly no notice u/s.143(2) was issued by the AO who had jurisdiction over the assessee at all material point of time. The assessee filed return of income on, with the 28/12/2019. A notice u/s.143(2) of the Act, dated 28/09/2018 was issued by ITO Ward 4(3)(4), who nev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 06.01.2020 did not bear a Document Identification Number (DIN) and therefore is invalid as per the guidelines issued by the Central Board of Direct Taxes on the facts and circumstances of the case 4. The learned Commissioner of Income-tax (Appeals) is not justified in law in confirming the additions made by the learned Assessing officer in respect of unexplained investments under section 69 of the Act to the extent of Rs. 31,10,000/- when the appellant has furnished complete details of the source of the cash which is deposited into his bank account on the facts and circumstances of the case. 5. The learned Commissioner of Income-tax (Appeals) failed to appreciate all the contents of the written submission filed by the appellant in respect of source of amounts for deposit in the bank account of the appellant on the facts and circumstances of the case. 6. The learned Commissioner of Income-tax (Appeals) erred in rejecting the sources explained by the appellant for making cash deposit in the bank account to the extent of Rs. 31,10,000/- on the facts and circumstances of the case. 7. The learned Commissioner of Income-tax (Appeals) failed to appreciate that the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellant denies himself liable to be charged interest under Section 234A, 234B and 234C of the Act on the facts and circumstance of the case. 8. The appellant craves for leave of this Hon'ble Tribunal, to add, alter, delete, amend or substitute any or all of the above grounds of appeal as may be necessary at the time of hearing. 9. For these and other grounds that may be urged at the time of hearing of appeal, the appellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity. 2. Brief facts of the case are as under:- The assessee is a non resident individual and is a resident of U.S.A. For AY 2014-15, assessee had earned interest income and long term capital gains. For AY 2017-18, assessee had earned interest income and short term capital gains. IT(IT)A No. 120/Bang/2022 for AY 2014-15 3. It was noted from the assessment order, the assessee had not filed any return of income, however he had sold property of Rs.30 lakhs and had cash deposit of Rs.58,40,000/-. The ld.AO issued notice u/s. 148 of the Act after recording reasons. The assessee failed to respond to the notices and subsequently, the case was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment order which reveals that the assessment order and the computation sheet has been passed on 30.12.2019. He, thus vehemently opposed the argument advanced by the ld.AR on this issue. 4.3. We have perused the submissions advanced by both the sides in light of records placed before us. 4.4. We find force in the submissions of the Ld.DR. In any event, there is nothing brought in record by the assessee to establish that the assessment order has been made after 31.12.2019 thereby making a time bar. We, therefore reject the first legal plea raised by assessee in Ground No.2 5. The second legal plea raised by the assessee is in respect of non generation of DIN number in the body of the assessment order passed u/s. 144 r.w.s. 147 of the Act dated 30.12.2019. 5.1. The ld.AR submitted that, Ld.AO passed assessment order on 30.12.2019 manually, without containing a DIN number. He submitted that, this was in violation of the CBDT circular No. 19 of 2019 dated 14.08.2019 and therefore, the entire assessment becomes bad in law. He submitted that, any communication in terms of clause (4) of the said circular, which is not conformity, should be treated as invalid. In support, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment, appeals, orders, statutory or otherwise, exemptions, enquiry, investigation, verification of information, penalty, prosecution, rectification, approval etc. to the assessee or any other person, on or after the 1st day of October, 2019 unless a computer-generated Document Identification Number (DIN) has been allotted and is duly quoted in the body of such communication. 3. In exceptional circumstances such as, (i) when there are technical difficulties in generating / allotting / quoting the DIN and issuance of communication electronically; or (ii) when communication regarding enquiry, verification etc. is required to be issued by an income-tax authority, who is outside the office, for discharging his official duties: or (iii) when due to delay in PAN migration. PAN is lying with non-jurisdictional Assessing Officer; or (iv) when PAN of assessee is not available and where a proceeding under the Act (other than verification under section 131 or section 133 of the Act) is sought to be initiated; or (v) When the functionality to issue communication is not available in the system, the communication may be issued manually but only after recording reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e procedure has to be strictly followed. As per para 3 in, the event the DIN number is not mentioned in any of the communication issued by the assessing authorities, should be with the written approval of Chief Commissioner/Director General of Income Tax and such details must be mentioned in the manual communication by the assessing authorities to the assessee. Para 4 of the circular clearly states that, any communication issued manually which is not in conformity with para 2 and para 3 of the circular shall be treated as invalid and shall be deemed to have never been issued. 5.5. The above view has been taken by the decisions that has relied by the ld.AR referred to hereinabove and also the decision of Hon ble Delhi Tribunal in case of M/s. Brandix Mauritius Holdings Ltd. vs DCIT in ITA No.1542/Del/2020 dated 19.09.2022. 5.6. In view of the above discussions and the view consistently taken by this Tribunal in the above referred decisions, we hold that, the order passed by the Ld.AO u/s. 144 r.w.s. 147 of the Act dated 30.12.2019 is invalid and shall be deemed to have never been issued as per para 4 of the CBDT circular, since it is not in conformity with the requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 143(3) of the Act is without jurisdiction and ought to be quashed on the facts and circumstances of the case. 2. The appellant craves leave of this Hon'ble Tribunal, to add, alter, delete, amend or substitute any or all of the above grounds of appeal as may be necessary at the time of hearing. 3. For these and other grounds that may be urged at the time of hearing of appeal, the appellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity. 6.3.1. It is submitted that the issue alleged by the assessee in grounds are purely legal in nature, and no new facts needs to be adverted for verification/adjudication of the same. He thus placed reliance on the decision of the Hon ble Supreme Court in the case of National Termal. Power Company Ltd.vs. CIT reported in 229 ITR 383 and decision of Hon ble Karnataka High Court in the case of Gundur Thimmappa Sons vs. CIT reported in 70 ITR 70 6.3.2. On the other hand, the Ld.DR strictly opposed the admission of additional grounds and submitted that there is no reasonable cause for not raising these grounds on earlier occasion and same to be rejected. The Ld.DR though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e International Taxation Ward-1(1) issue notice u/s. 143(2) of the Act. 7.3. The ld.AR submitted that the notices issued to the assessee for AY 2017-18 u/s. 143(2) of the Act was by non jurisdictional AO, and therefore, unless International Taxation Ward-1(1) issues fresh notice 143(2), assumption of jurisdiction cannot be conferred and entire assessment proceedings without issuance of notice u/s. 143(2) becomes void ab initio. He placed reliance on the following decision in support of his submissions i. Hon ble Supreme Court decision in the case of ACIT vs. SK Industries reported in 141 taxmann.com 569 ii. Hon ble Karnataka High Court in the case of Nittur Vasanth Kumar Mahesh vs. ACIT reported in (2019) 265 taxman 277 iii. Hon ble Kolkata High Court in the case of PCIT vs. Nompany and Sons reported in 136 taxmann.com 414 iv. Hon ble Kolkata High Court in the case of PCIT vs. Cosmat Traders Pvt.Ltd. reported in (2023) 146 taxmann.com 207 v. ITAT Bangalore Tribunal in the case of Arwa Hararwala v. ITO Ward-7(2)(2) in ITA No. 01/Bang/2020 vi. ITAT Banglore Tribunal in the case of Marlabs Innovations Pvt.Ltd. (sucdessor of Marlabs Software Pvt.Ltd.) vs. DCIT i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - (a) where the Principal Directors General or Directors General or Principal Chief Commissioners or] Chief Commissioners or Principal Commissioners or] Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Principal Director General or] Director General or [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order; (b) where the [Principal Directors General or] Directors General or [Principal Chief Commissioners or] Chief Commissioners or [Principal Commissioners or] Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such [Principal Director General or] Director General or [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf. (3) Nothing in sub-section (1) or sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 127 of the Act, which deals with transfer of jurisdiction of a case specifically provides in sub-section (4) of section 127 that there is no necessity to re-issue of any statutory notices already issued by the AO from whom the case is transferred. This Tribunal has consistently held in plethora of cases that, on transferring the jurisdiction of the assessee's case by an AO who had issued 143(2) notice, becames, functus officio and the AO who subsequently frames the assessment order pursuant to transfer of case u/s.127 of the Act, has to mandatorily issue notice u/s 143(2) of the Act. This law has been held by Hon'ble Supreme Court in CIT vs Hotel Blue Moon reported in (2010) 321 ITR 362 (S.C). Hon'ble Supreme Court held that, issue of a legally valid notice u/s. 143(2) is mandatory for usurping jurisdiction to frame scrutiny assessment u/s. 143(3) of the Act and absence of a valid notice u/s 143(2) is not a curable defect. The view taken in the case of Hotel Blue Moon (supra) was reiterated by Hon'ble Supreme Court in another case of CIT vs Laxman Das Khandelwal in (2019) 108 taxmann.com 183. Hon'ble Supreme Court observed as under: 5. At the outset, it m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration and decision of the High Court, they were: (1) Whether on the facts and in circumstances of the case the issuance of notice under Section 143(3) of the Income Tax Act, 1961 within the prescribed time-limit for the purpose of making the assessment under Section 143(3) of the Income Tax Act, 1961 is mandatory? And (2) Whether, on the facts and in the circumstances of the case and in view of the undisputed findings arrived at by the Commissioner of Income Tax (Appeals), the additions made under Section 68 of the Income Tax Act, 1961 should be deleted or set aside? 4. The High Court, disagreeing with the Tribunal, held, that the provisions of Section 142 and sub-sections (2) and (3) of Section 143 will have mandatory application in a case where the assessing officer in repudiation of return filed in response to a notice issued under Section 158-BC(a) proceeds to make an inquiry. Accordingly, the High Court answered the question of law framed in affirmative and in favour of the appellant and against the Revenue. The Revenue thereafter applied to this Court for special leave under Article 136, and the same was granted, and hence this appeal. ** ** ** 13. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings, 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 law on the point as regards applicability of the requirement of notice under Section 143(2) of the Act is quite clear from the decision in Hotel Blue Moon's case (supra). The issue that however needs to be considered is the impact of Section 292BB of the Act. 9. According to Section 292BB of the Act, if the assessee had participated in the proceedings, by way of legal fiction, notice would be deemed to be valid even if there be infractions as detailed in said Section. The scope of the provision is to make service of notice having certain infirmities to be proper and valid if there was requisite participation on part of the assessee. It is, however, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unity 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. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Principal ITA Nos.1037 1038/Bang/2019 Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner,-- (a) where the Principal Directors General or Directors General or Principal Chief Commissioners or] Chief Commissioners or Principal Commissioners or] Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Principal Director General or] Director General or [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner from whose jurisdiction the case is to be transferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act cannot come to the rescue of revenue. 7.8. We find the Hon'ble Supreme Court in case of Hotel Blue Moon reported in 321 ITR 362, non-issue of notice u/s.143(2) by the AO who passed the assessment order renders the order of assessment proceedings a nullity. According to the revenue as per section 127 of the Act, which deals with transfer of jurisdiction of a case specifically provides in sub-section (4) of section 127 that there is no necessity to re-issue of any statutory notices already issued by the AO from whom the case is transferred. 7.9. This Tribunal has consistently held in plethora of cases that, on transferring the jurisdiction of the assessee's case by an AO who had issued 143(2) notice, becomes, functus officio and the AO who subsequently frames the assessment order pursuant to transfer of case u/s.127 of the Act, has to mandatorily issue notice u/s 143(2) of the Act. This law has been held by Hon'ble Supreme Court in CIT vs Hotel Blue Moon reported in (2010) 321 ITR 362 (S.C). Hon'ble Supreme Court held that, issue of a legally valid notice u/s. 143(2) is mandatory for usurping jurisdiction to frame scrutiny assessment u/s. 143(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. It was observed: 3. The Appellate Tribunal held, while affirming the decision of CIT (A) that non-issue of notice under Section 143(2) is only a procedural irregularity and the same is curable. In the appeal filed by the assessee before the Gauhati High Court, the following two questions of law were raised for consideration and decision of the High Court, they were: (1) Whether on the facts and in circumstances of the case the issuance of notice under Section 143(3) of the Income Tax Act, 1961 within the prescribed time-limit for the purpose of making the assessment under Section 143(3) of the Income Tax Act, 1961 is mandatory? And (2) Whether, on the facts and in the circumstances of the case and in view of the undisputed findings arrived at by the Commissioner of Income Tax (Appeals), the additions made under Section 68 of the Income Tax Act, 1961 should be deleted or set aside? 4. The High Court, disagreeing with the Tribunal, held, that the provisions of Section 142 and sub-sections (2) and (3) of Section 143 will have mandatory application in a case where the assessing officer in repudiation of return filed in response to a notice issued under Section 158-BC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved 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 law on the point as regards applicability of the requirement of notice under Section 143(2) of the Act is quite clear from the decision in Hotel Blue Moon's case (supra). The issue that however needs to be considered is the impact of Section 292BB of the Act. 9. According to Section 292BB of the Act, if the assessee had participated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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