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TMI Blog2024 (9) TMI 1622X X X X Extracts X X X X X X X X Extracts X X X X ..... passed u/s 143(3) of the Income Tax Act, 1961 is void ab-initio as no proper notice issued u/s 143(2) of the Income Tax Act, 1961 by the jurisdiction Assessing Officer. (ii) On the facts and circumstances of the case, the Order passed u/s 143(3) of the Income Tax Act, 1961 is invalid as the same has not been passed by Jurisdictional Assessing Officer. 3) (i) On the facts and circumstances of the case, the Ld. CIT(A)- 5, Delhi erred in treating the purchases amounting to Rs. 6,51,70,866/- as unexplained u/s 69C of the Income Tax Act, 1961 on mere surmises, against facts & law. (ii) On the facts and Circumstances of the case, the Ld. CIT(A)-5, Delhi erred and acted arbitrarily in adding of Rs. 6,51,70,886/- inspite of corresponding sales on purchases, proper records maintained and Gross Profit earned there upon. 4) The Appellant craves to add, alter or delete any grounds of Appeal. 3. Brief fact of the case is that the assessee company was incorporated on 30-12-1994 which was engaged in the business of manufacturing, trading export, import etc of food products such as edible oil, oil seeds deoiled cakes and soaps, soap powder, detergent, milk, pure ghee, vegetable oil etc. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. M/s. Net Agri Company Pvt. Ltd. Vs ITO Ward no. 18 (1) New Delhi 15. Smt. Nirmala Jain w/o Late Sh. Pawan Kumar Jain Vs. ITO Ward - 2(1) CGO complex-2 Kamla Nehru Nagar, Ghaziabad UP 16. M/s. Green Valley Infracity Pvt. Ltd. Noida C/o Nitesh Singh Vs. ITO, Ward- 1 (4) Noida [2020(3) TMI 423] [ITA No.2110/Del/2019] 17. Prashant Piti Vs. ACIT, Central Circle - 4, Delhi [2024(2)TMI 486 ] ITAT Delhi 18. Infrastructure Development Finance Co. Ltd. Vs. JCIT Special Range VI Chennai [2012 (12) TMI 83] 19. Sri Y Brahmiah (died) Karimnagar Vs. ITO [2014 (9) TMI 574] Andhra Pradesh High Court 20. ACIT Circle -22(1), New Delhi Vs. Sanvik Engineers India Pvt. Ltd. 21. M/s. Shahnawaj Quereshi Vs. ACIT, Circle-2, Meerut [2019(2) TMI 112] 22. M/s. Mansarovar Infratech Pvt. Ltd. (Formerly knowns as Garhwal Mandal Salsees Pvt. Ltd. Vs. ACIT, Circle, Haridwar [2019 (4) TMI 1722 ] (ITA No.7022/Del/2014)- ITAT, Delhi 23. Mr. Anil Arora Vs. ITO, Ward- 63 (3) , New Delhi [2021 (12) TMI 1080] {ITA No. 2544/Del/2019) - ITAT Delhi 24. CIT-I Vs. Bholanath Poly Fab Pvt Ltd. [2013 (10) TMI 933] Gujarat High Court 25. PCIT-15 Vs. Jakharia Fabric Pvt Ltd. [2020 (3) TMI 474] Bombay H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returns Upto Rs. 20 lacs Above Rs. 20 lacs Upto Rs. 30 lacs Above 30 lacs Non corporate Upto Rs. 15 lacs The above instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1-4-2011." 6. In the instant case, the notice under section 143(2) of the Act stood issued to the assessee on 12.04.2016 by ITO Ward 27(4), Delhi. In July, 2016, the ITO transferred the jurisdiction of the assessee from him to DCIT since the returned income for A.Y. 2015-16 is more than 30,00,000/- . Copy of the said transfer memo is enclosed in page 5 of the paper book. After the transfer of jurisdiction from ITO to DCIT, no fresh notice under section 143(2) of the Act was issued by ACIT, Circle 4(1), Gurgaon. The assessment was ultimately framed under section 143(3) of the Act for A.Y. 2015-16 on 14.12.2017 by ACIT, Circle - 4(1), Gurgaon. It is pertinent to note that assessment for the A.Y. 2014-15 of the assessee was completed under section 143(3) of the Act on 30.11.2016 by DCIT, Circle - 27(2), New Delhi. Hence, it was argued that the notice under section 143(2) of the Act dated 12.04.2016 issued by the ITO selecting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed return of income of about Rs. 64,34,663/- and therefore, the jurisdiction will be that of DC/AC and not ITO. Mr. Jain submitted that since notice under section 148 of the Act has been issued by ITO, and not by DC/AC that is by a person who did not have any jurisdiction over Petitioner, such notice was bad on the count of having been issued by an officer who had no authority in law to issue such notice. 4. We have considered the affidavit in reply of one Mr. Suresh G. Kamble, ITO who had issued the notice under section 148 of the Act. Said Mr. Kamble, ITO, Ward 12(3)(1), Mumbai admits that such a defective notice has been issued but according to him, PAN of Petitioner was lying with ITO Ward (12)(3)(1), Mumbai and it was not feasible to migrate the PAN having returned of income exceeding Rs. 30 lakhs to the charge of DCIT, Circle 12(3)(1), Mumbai, as the time available with the ITO 12(3)(1) was too short to migrate the PAN after obtaining administrative approval from the higher authorities by 31st March, 2019. 5. The notice under section 148 of the Act is jurisdictional notice and any inherent defect therein is not curable. In the facts of the case, notice having been issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of about Rs. 64,34,663/- and therefore, the jurisdiction will be that of DC/AC and not ITO. Mr. Jain submitted that since notice under section 148 of the Act has been issued by ITO, and not by DC/AC that is by a person who did not have any jurisdiction over Petitioner such notice was bad on the count of having been issued by an officer who had no authority in law to issue such notice. 4. We have considered the affidavit in reply of one Mr. Suresh G. Kamble, ITO who had issued the notice under section 148 of the Act. Sald Mr. Kamble, ITO, Ward 12(3)(1), Mumbai admits that such a defective notice has been issued but according to him, PAN of Petitioner was lying with ITO Ward (12) (3)(1), Mumbai and it was not feasible to migrate the PAN having returned of income exceeding Rs. 30 lakhs to the charge of DCIT, Circle 12(3) (1), Mumbai, as the time available with the ITO 12(3)(1) was too short to migrate the PAN after obtaining administrative approval from the higher authorities by 31st March, 2019. 5. The notice under section 148 of the Act is jurisdictional notice and any inherent defect therein is not curable. In the facts of the case notice having been issued by an officer wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cope, would also be applicable in the facts and circumstances of the present case as the Income-Tax Officer, Ward-1 (1), Noida had the power to assess income accruing or arising within the area as it is not the case of the petitioner-assessee that the said officer did not have jurisdiction in view of location of the bank account and/or petitioner's place of work. Section 124(5) of the Act saves assessment made by an assessing officer provided that the assessment does not bring to tax anything other than income accruing, arising or received in that area over which the assessing officer exercises jurisdiction. However, notwithstanding Section 124(5), the Act does not postulate multiple assessments by different assessing officers, or assessment of part or portion of an income (see Kanji mal & Sons v. CIT [1983] 12 Taxman 34/[1982] 138 ITR 391 (Delhi)]. Thus, it is necessary that the Assessing Officers having concurrent jurisdiction ensure that only one of them proceeds and adjudicate. This is the purport and objective behind sub-section (2) to Section 124 of the Act. 23. In view of the above discussion, objections as to the jurisdiction of assessing officer in the present case c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the sake of convenience letter is as under:- Order u/s. 143(3) was passed on 18.03.2015, in the said order a detailed discussion was done and the main addition of Rs. 6,51,170,886/- was done u/s. 68 as the alleged creditors Rs. 65170886 could not be proved during assessment. The Ld. CIT(A) also upheld this order. This information is being provided after taking prior approval of Add. CIT, Range- 13, Delhi. 12 We find that assessee's return income for the A.Y.2012-13 was Rs. 2,10,529/- hence jurisdiction of the assessee should lie with ITO since the returned income was below Rs. 30,00,000/- in the view of the CBDT instruction no 1/2011 dated 31-01-2011. For the sake of convenience the said instruction no 1/2011 is as under :- 13. In the instant case the notice u/s. 143(2) of the Act was issued to the assessee on 06-08-2013 by the ACIT, Circle -5(1) Delhi. The jurisdiction lied to the ITO. In November, 2014 the jurisdiction of the assessee from ACIT circle was transferred to ITO ward no 14(4), (copy of the said transfer memo is enclosed in page no 47 of the paper book). After the transfer of jurisdiction from ACIT to ITO fresh notice was issued on 06-08-2014 u/s. 143(2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d cake (DOC in short), oil etc during the Impugned year. It incurred expenditure on purchases of de-oiled cake made from certain parties. From the assessment order it is noted that the addition has been made on two accounts (a) that the parties concerned either did not respond to the 133(6) notice or that such notices could not be served, (b) that the bills of the parties had no TIN nor were supported by the transportation builties. I have perused the assessment order and the submissions of the appellant made from time to time before the AO. As per the requisition of the AO the appellant furnished the party wise details of purchase and sales, the profit earned on each transaction of the corresponding sale along with quantitative and inventory details. However, none of these particulars have been found Incorrect by the AO vis-à-vis the books of accounts. It is not as if the AO has made Inquiries and found that the persons from purchases were made were bogus or did not exist. The AO is noted to have discussed in the assessment order that the onus in respect of section 68 shifts to the assessee if Inquiries made by the AO find the claim of the assessee to be bogus. While the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the original assessment. However, from the facts narrated above it is clear that the appellant was prevented by sufficient cause that is on account of insufficient time to produce the desired evidences. It may be kept in mind that the impugned transactions took place three years ago prior to the show cause and it is nobody's case that the appellant had the control and power under law to produce the said persons. Accordingly, the AO's objections are overruled and it is held that the appellant covered under clause (c) and clause (d) of Rule 46A (1). It is to be reiterated a held by the higher judicial forum that the principles of natural justice as enshrine in the twin concepts of audi alteram partem (no man should be condemn unheard) and nemo judex causa sua (no man can be judge in his own case) twin formidable pillars supporting natural justice. 5.4 I have examined the additional evidences placed at pages 74 to 113 of paper book. These comprise of the ledger account of the parties in the books a Enterprises, M/s Bhagwati Prasad Radhey Shyam, M/s Tori Mal Ram Dhan and M/s Pancham Traders, the bank statements for the subsequent financial year 2012-13 of these parties an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orically held that the revenue is entitled to look into the surrounding circumstances, to find out the reality of the recitals made in the documents. The relevant observations and findings of Hon'ble Supreme Court, In the matter of discharge of onus of proof and the relevance of surrounding circumstances of the case are "that though an appellant's statement must be considered real until it was shown that there were reasons to believe that the appellant was not the real, in a case where the party relied on self serving recitals in the documents, it was for the party to establish the transfer of those recitals, the taxing authorities were entitled to look into the surrounding circumstances to find out the reality of such recitals. Science has not yet invented any instrument to test the rellability of the evidence placed before a Court or Tribunal. Therefore, the Courts and the Tribunals have to judge the evidence before them by applying the test of human probability. Human minds may differ as to the reliability of place of evidence, but, in the sphere, the decision of the final fact finding authority is made conclusive by law". 5.6 As held by the Hon'ble Delhi High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the expenditure incurred. and a case where the circumstances clearly justify an inference that there must have been such excess expenditure but the amount thereof can only be estimated for want of direct evidence. Grounds of appeal no 2 & 3 are dismissed and the addition is sustained under the provisions of section 69C." 16. The Ld.AR has submitted that addition made by Ld.CIT(A) without giving the notice. In the case of M/s Net Agri Company Pvt Vs ITO ward No 18(1) New Delhi and vice versa ITA no 4945 /Del/2019 and ITA no.4495/Del/2019 the Hon'ble ITAT Tribunal held as under :- "5. After giving thoughtful consideration to the matter on record and to the above submissions, we are of the considered view that there is no dispute on the settled proposition of law that CIT(A) can make an enhancement only after show causing the assessee and at the same time question of taxability from new source cannot be determined by CIT(A) as first appellate authority and reliance for same is placed on the Hon'ble Supreme Court judgement in CIT vs Sardari Lal & Co(supra). In the case in hand, the assessment order was with regard to questioning the source of investment in the property and befo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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