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TMI Blog2023 (10) TMI 1459X X X X Extracts X X X X X X X X Extracts X X X X ..... , which reads as follows: "Additional Gr.No.1 1. On the facts and circumstances of the case and in law, assessment made u/s. 143(3) dt.28-11-17 by ITO-1(2) would be invalid; notice issued u/s. 143(2) by ACIT-1(1) on 19-9-16 who was not having pecuniary jurisdiction to issue such statutory notice for making assessment as returned income was Rs. 6,56,820; CBDT Instruction No.1/2011 dt.31-1-11 & No.6/2011 dt.8-4-11 is binding on the IT authorities u/s. 119; in absence of a valid statutory notice issued u/s 143(2) by the correct jurisdictional AO u/s. 2(7A) & sec120; the consequential assessment order passed would be invalid and is liable 2. As the assessee, by raising the aforesaid additional ground of appeal, had raised a legal issue that involves purely a question of law, and the same would not require looking any further beyond the facts available on record; therefore, I have no hesitation in admitting the same. My view above that where an assessee had raised, though for the first time, an additional ground of appeal before the Tribunal which involves purely a question of law and requires no further verification of facts, then the same merits admission finds support from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of the Ld. AR that as the assessee had filed his return of income for the year under consideration, i.e. A.Y.2015-16 declaring an income of Rs. 6,56,820/-, therefore, the pecuniary jurisdiction over his case remained vested with the ITO-1(3), Raipur with whom the return of income was filed. Elaborating on his aforesaid contention, it was submitted by the Ld. AR that pursuant to the CBDT Instruction No.1/2011 dated 31.01.2011 r.w. CBDT instruction No.6/2011 dated 08.04.2011, the jurisdiction in case of non-corporate assessees residing in the mufassil areas and declaring income up to Rs. 10 lacs was exclusively vested with the ITOs. The Ld. AR drew my attention to the CBDT Instructions (supra), Pages 6 to 8 of APB. Carrying his contention further, it was submitted by the Ld. AR that as the jurisdiction over the case of the assessee remained with ITO-1(3), Raipur, therefore, the impugned assessment framed u/s. 143(3) dated 28.11.2017 by the ITO-1(2), Raipur based on notice u/s. 143(2) dated 19.09.2016 issued by the ACIT-1(1), Raipur, i.e. non-jurisdictional officer, could not be sustained and was liable to be struck down for want of valid assumption of jurisdiction for framing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is reproduced below:- "Section: 124(3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer- (a) where he has made a return under sub- section (1) of section 139, after the expiry of one month from the date on which he was served with a notice under sub- section (1) of section 142 or subsection (2) of section 143 or after the completion of the assessment, whichever is earlier" In the present case, the assessee has not raised objection in respect of issuance of notice by jurisdictional assessing officer during assessment proceeding, therefore, the assessee has no right to call in question of jurisdiction of the AO in respect of issuance of notice u/s 143(2) after completion of assessment proceeding for a long time. 4.1.2 It is important to mention here that the assessee is well informed for the jurisdictional assessing officer of his case as he is filing his ITR for past many years. Further, he attended assessment proceedings through the authorized representative. The authorized representatives are very experienced and have through knowledge of income tax law and procedure. He is well aware of the jurisdiction over the case and remedial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Transport Co vs IAC, 189 ITR 326 (Allahabad), the Hon'ble HC dealt extensively with the various provisions of the Act and held that the allocation of jurisdiction is a measure of administrative convenience. In such a situation, the concept of jurisdiction cannot be imported and, certainly, not in the sense of invalidating the resultant action on account of the defect in the exercise of functions. The Legislature did not intend collection of revenue to be bogged down on account of technical plea of jurisdiction. It has, therefore, prescribed the limit up to which the plea of jurisdiction may be raised. As provided in section 124(5)(a), the right is lost as soon as the assessment has been completed. Even where the right is exercised before the assessment is completed, the question is to be decided by the Commissioner or by the Board. Courts do not come into the picture. 4.1.4.2 In the case of CIT vs Siri Paul Oswal, [2007] 293 ITR 273 (Punjab &, Haryana), it was held by Hon'ble HC that a distinction has to be made between a situation when there is inherent lack of jurisdiction and a situation where jurisdiction is irregularly assumed and plea of want of jurisdiction can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income or nature and type of business. The Act, therefore, recognized multiple or concurrent jurisdictions. (ii) Provisions of section 124 ensure and prevent two assessments by different assessing officers, having or enforcing concurrent jurisdiction. There cannot be and the Act does not envisage two assessments for the same year by different officers. (Reassessment order can be by a different officer). (iii) Each year is separate and distinct year and in case the assessee shifts his residence or place of business or work etc. Assessing Officer of place where the assessee has shifted or otherwise, will have jurisdiction and it is not necessary that an order under section 127 should be passed. This, however, does not mean that the Assessing Officer where the returns of income were earlier filed ceases to have jurisdiction, provided the assessee has residence in his area, place of business, class, income etc. Residence can mean permanent residence as well as current or temporary residence of some permanence. (iv) The question of jurisdiction or the place of filing has to be examined each year with reference to provisions of section 124. Section 124 provides flexibility and postulate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principles (Doctrine of Clean Hands) are only applicable to Writs & SLPs before the Apex Court and High Courts. The Phrase "but also to the cases instituted in others courts and judicial forums" This judgment lays down the principle that it is obligatory for a petitioner /appellant/applicant to approach any court or judicial forum with clean hands or face the ire of the courts/judicial forums who will not hesitate in applying the doctrine of clean hands and rejecting his appeal/revision." 10. I have heard the ld. Authorized representatives of both the parties, perused the orders of the lower authorities and material available on record as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 11. I have thoughtfully considered the issue above and find substance in the claim of the Ld. AR. As stated by the Ld. AR and, rightly so, I find that the multi-facet issues pertaining to the assumption of jurisdiction by the A.O in light of the pecuniary/monetary limits contemplated in CBDT Instruction No.1/2011 (supra) r.w. CBDT Instruction No.6/2011 (supra) was exclusively looked into by the Division Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1-4-2011." (emphasis supplied by us) As stated by the Ld. AR, and, rightly so, the CBDT vide its aforesaid Instruction No.1/2011, dated 31.01.2011 had, inter alia, revised the earlier existing monetary limit for assigning the cases to ITOs/ACs/DCs w.e.f. 01.04.2011. On the basis of the aforesaid CBDT Instruction No.1/2011 (supra) w.e.f 01.04.2011, the case of a non-corporate assessee located in a mofussil area having declared an income above Rs.15 lacs in his return of income is to be assigned to the ACs/DCs. As the case of the present assessee for the A.Y.2012-13 was selected for scrutiny assessment vide notice issued u/s. 143(2), dated 24.09.2015, therefore, the aforesaid CBDT Instruction No.1/2011, dated 31.01.2011 that was applicable w.e.f. 01.04.2011 duly applied to his case. Also, as per the areas earmarked in the aforesaid Instruction No.1/2011, dated 31.01.2011 as the assessee is not located in any of those cities/stations which have been held to be metro cities, therefore, his case would be as that of a non-corporate assessee who is located in a mofussil area. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n had no pecuniary jurisdiction over the assessee's case was bad in the eyes of law. Considering the aforesaid lapse in the assumption of jurisdiction the Hon'ble High Court had quashed the notice that was issued by the ITO u/s. 148 of the Act. Also, a similar view had been taken by the Hon'ble High Court of Gujarat in the case of Pankajbhai Jaysukhlal Shah Vs. ACIT, Circle-2 (2019) 110 taxmann.com 51 (Guj.). In the said case, though the A.O who had jurisdiction over the case of the assessee had recorded the 'reasons to believe' but notice u/s. 148 of the Act was issued by another officer, therefore, the notice so issued u/s. 148 of the Act was quashed by the Hon'ble High Court. At this stage, we may herein observe, that the aforesaid order of the Hon'ble High Court had thereafter, been upheld by the Hon'ble Supreme Court in the case of ACIT, Circle-1 Vs. Pankajbhai Jaysukhlal Shah[2020] 120 taxmann.com 318 (SC). Also, we find that the similar view had been taken by this Tribunal in its recent order passed in the case of Shri Sudhir Kumar Agrawal, Durg Vs. ITO, Ward-2(2), Bhilai in ITA No.158/RPR/2017 dated 17.10.2022, wherein dealing with the multi-facet contentions that were rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (s) u/s. 143(2) and 142(1), dated 03.03.2015, therefore, it was not permissible for him to challenge the same for the first time in the course of the proceeding before the tribunal. Having given a thoughtful consideration to the aforesaid claim of the ld. DR we are unable to persuade ourselves to subscribe to the same. On a careful perusal of Section 124 of the Act, it transpires that the same deals with the issue of "territorial jurisdiction" of an Assessing Officer. Ostensibly, sub-section (1) of Section 124 contemplates vesting with the A.O jurisdiction over a specified area by virtue of any direction or order issued under sub-section (1) and sub-section (2) of Section 120 of the Act. On the other hand sub-section (2) of Section 124 contemplates the manner in which any controversy as regards the territorial jurisdiction of an A.O is to be resolved. Apropos, sub- section (3) of Section 124 of the Act, the same places an embargo upon an assessee to call in question the jurisdiction of the A.O where he had initially not raised such objection within a period of one month from the date on which he was served with a notice under sub-section (1) of Section 142 or sub-section (2) of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Officer, Ward-2(2), Bhilai is by no means an objection to his territorial jurisdiction, but in fact an objection to the assumption of jurisdiction by him in contravention of the CBDT Instruction No.1/2011, dated 31.01.2011, therefore, the provisions of sub- section (3) of Section 124 would not assist the case of the revenue. 15. We shall now deal with the contention of the Ld. DR that as both the officers in question i.e. Dy. CIT, Circle-1, Bhilaiand the Income Tax Officer, Ward-2(2), Bhilai as per sub-section (5) of Section 120 were vested with concurrent jurisdiction over the assessee, therefore, initiation of the assessment proceedings by the Dy. CIT, Circle-1, Bhilai vide notice issued u/s.143(2) dated 24.09.2013, which thereafter had culminated into an assessment framed by the Income-Tax Officer, Ward-2(2), Bhilai vide his order passed u/s. 143(3), dated 30.03.2015 does not suffer from any infirmity. In our considered view the aforesaid contention of the Ld. DR is absolutely misplaced and in fact devoid and bereft of any merit. As the aforesaid CBDT Instruction No.1/2011, dated 31.01.2011 exclusively vests the pecuniary jurisdiction over the case of the assessee for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case the assessment proceedings were initiated by the Dy. CIT, Circle- 1, Bhilai vide notice u/s. 143(2), dated 24.09.2013, which thereafter were taken up and culminated by the Income-Tax Officer, Ward-2(2), Bhilai vide his order passed u/s.143(3) dated 30.03.2015, then, as per the mandate of sub-section (1) of Section 127 of the Act, the specified authority i.e. Commissioner or above was obligated to have recorded his reasons for transferring the case from the aforesaid Dy. CIT, Circle-1, Bhilai to the Income-Tax Officer, Ward-2(2), Bhilai. However, nothing has been brought to our notice which would justify the transfer of jurisdiction over the assessee's case from the Dy. CIT, Circle-1, Bhilai to Income-Tax Officer, Ward-2(2), Bhilai. 16. Be that as it may, we are of the considered view that as in the case of the assessee the assessment order u/s. 143(3), dated 30.03.2015 had been passed by a non-jurisdictional officer i.e. the Income-Tax Officer, Ward-2(2), Bhilai, which is in clear contravention of the CBDT Instruction No.1/2011 dated 31.01.2011, therefore, the same cannot be sustained and is liable to be struck down on the said count itself. Before parting, we may herein ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is of the opinion that the existing limits need to be revised to remove the abovementioned hardship. An increase in the monetary limits is also considered desirable in view of the increase in the scale of trade and industry since 2001, when the present income limits were introduced. It has therefore been decided to increase the monetary limits as under: Income Declared Income Declared (Mofussil areas) (Metro cities) ITOs ACs/DCs ITOs DCs/ACs Corporate returns Upto Rs. 20 lacs Above Rs. 30 lacs Upto Rs. 30 lacs Above Rs. 30 Lacs Non- corporate returns Upto Rs. 15 lacs Above Rs. 15 lacs Upto Rs. 20 lacs Above Rs. 20 lacs Metro charges for the purpose of above instructions shall be Ahmedabad, Bangalore, Chennai, Delhi, Kolkata, Hyderabad, Mumbai and Pune. The above instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1-4-2011. 6. Now, in this case, the assessment has been framed by the ACIT. At this stage, it will be appropriate to refer to the provisions of section 127 of the Act as under: Power to transfer cases (1) The [Principal Director General or] Director General or [Principal Chief C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at he has no jurisdiction over the assessee. Thereafter on 31/07/2015, the DCIT, Circle-11(1), Kolkata, had issued notice u/s 142(1) of the Act to the assessee. The DCIT, Circle-11(1), Kolkata, completed assessment u/s 143(3) of the Act on 14/03/2016. The issue is whether an assessment order passed by DCIT, Circle-11(1), Kolkata, is valid as admittedly, he did not issue a notice u/s 143(2) of the Act, to the assessee. This issue is no more res-integra. This Bench of the Tribunal in the case of Soma Roy vs. ACIT in ITA No. 462/Kol/2019; Assessment Year 2015- 16, order dt. 8th January, 2020, under identical circumstances, held as under:- "5. After hearing rival contentions, I admit this additional ground as it is a legal ground, raising a jurisdictional issue and does not require any investigation into the facts. The ld. Counsel for the assessee submitted that as per Board Instruction No. 1/2011 [F. No. 187/12/2010-IT(A-I)], dt. 31/01/2011, the jurisdiction of the assessee is with the Assistant Commissioner of Income Tax, Circle- 1, Durgapur, as the assessee is a non- corporate assessee and the income returned is above Rs. 15,00,000/- and whereas, the statutory notice u/s 143(2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if it is above Rs 15 lakhs. Above Rs. 15 lacs income declared by a non- corporate person i.e. like assessee, the pecuniary jurisdiction lies before AC/DC. In this case, admittedly, the assessee an individual (non corporate person) who undisputedly declared income of Rs. 50,28,040/- in his return of income cannot be assessed by the ITO as per the CBDT circular (supra). From a perusal of the assessment order, it reveals that the statutory notice u/s. 143(2) of the Act was issued by the then ITO, Ward-1, Haldia on 06.09.2013 and the same was served on the assessee on 19.09.2013 as noted by the AO. The AO noted that since the returned income is more than Rs. 15 lacs the case was transferred from the ITO, Ward-1, Haldia to ACIT, Circle-27 and the same was received by the office of the ACIT, Circle-27, Haldia on 24.09.2014 and immediately ACIT issued notice u/s. 142(1) of the Act on the same day. From the aforesaid facts the following facts emerged: i) The assessee had filed return of income declaring Rs. 50,28,040/-. The ITO issued notice under section 143(2) of the Act on 06.09.2013. ii) The ITO, Ward-1, Haldia taking note that the income returned was above Rs. 15 lacs transferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee is allowed." Apart from that, we find that a similar view had been taken by the ITAT, Cuttack Bench, Cuttack in the case of Kshirod Kumar Pattanaik Vs. ITO, Angul Ward, Angul, ITA No.380/CTK/2019 dated 10.12.2020. 17. Consequent to our aforesaid deliberations, we are of the considered view that as in the present case before us the assessment had been framed by the Income Tax Officer, Ward-2(2), Bhilai u/s. 143(3), dated 30.03.2015 in clear contravention of the CBDT Instruction No.1/2011, dated 31.01.2011, which divested him of his jurisdiction over the case of the assessee for the year under consideration i.e. AY 2012-13, therefore, the same cannot be sustained and is liable to be struck down in terms of our aforesaid observations. We, thus, in terms of our aforesaid observations quash the order passed by the Income-Tax Officer, Ward-2(2), Bhilai for want of jurisdiction on his part." 17. On the basis of our aforesaid observations, we are of the considered view that as in the case of the present assessee before us the impugned assessment had been framed by the ITO-1(1), Bhilai vide his order passed u/s. 143(3) dated 29.12.2016 on the basis of a notice u/s. 143(2), dat ..... 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