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TMI Blog2023 (1) TMI 1429X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case. 3. That the Ld. CIT(A) has erred in not deleting the disallowance of Rs. 50,000/- out of Gift expenses, which is highly arbitrary, unwarranted and unjustified on the facts and in the circumstances of the case 4. That the Ld. CIT(A) has erred in not deleting the addition of Rs. 21,97,992/- u/s. 80IB(10) Deduction, which is highly arbitrary, unwarranted and unjustified on the facts and in the circumstances of the case . 5. The appellant reserves the right to add, amend or alter any ground or grounds of appeal . Also the assessee has raised an additional ground of appeal which reads as under: "1. On the facts and circumstances of the case and in law, since no notice u/s. 143(2) has been issued by the jurisdictional A.O; assessment order passed u/s. 143(3) dt.30.03.15 in absence of a valid notice issued u/s. 143(2) would be invalid, bad in law & non-est and is liable to be quashed." 2. As the assessee by raising the aforesaid additional ground of appeal has assailed the validity of jurisdiction that was assumed by the A.O on the basis of notice issued u/s. 143(2) of the Act dated 19.08.2013 by the ITO, Ward-1(3), Raipur, which involves purely a ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same. 7. It is the claim of the Ld. Authorized Representative (for short 'AR') for the assessee that as the jurisdiction over the case of the assessee firm which had its office at, viz. "A-2, Krishna Apartment, Baloda Bazar Road, Mowa, Raipur-492 001" was at the time of issuance of notice u/s. 143(2) of the Act dated 19.08.2013 vested with the ITO, Ward-2(3), Raipur, therefore, in absence of any notice u/s. 143(2) having been issued by the said jurisdictional A.O, no valid assessment u/s. 143(3) in its case could have been framed by the ITO, Ward-3(1), Raipur. On being queried by the Bench about the notice u/s. 143(2) dated 19.08.2013 issued by the ITO, Ward-1(3), Raipur on 19.08.2013, it was submitted by the Ld. AR that as the said officer at the relevant point of time had no jurisdiction over the case of the assessee, therefore, no valid assessment could have been framed on the basis of the same. Elaborating further on his aforesaid contention, it was submitted by the Ld. AR that the territorial jurisdiction over its case at the relevant period of time was vested with the ITO, Ward-2(3), Raipur, which pursuant to a subsequent restructuring that was carried out by the Jt. Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aipur-492 001 (as provided in the return of income), both were within the municipal jurisdiction of Ward-27, Raipur, therefore, the territorial jurisdiction over its case at the time of issuance of notice u/s. 143(2) of the Act, dated 19.08.2013/during the prescribed period within which notice u/s. 143(2) could have validly been issued by the A.O upto 30.09.2013, i.e., prior to the restructuring/reshuffling of the jurisdiction vide Notification No.1 of 2014-15, dated 15.11.2014 was vested with the ITO, Ward-2(3), Raipur, Page 64-65 of APB. In order to buttress his claim that office of the assessee as per municipal records was within the jurisdiction of "Ward-27, Raipur", the assessee had placed on record three receipts of the municipal corporation, Raipur dated 04.10.2012, 01.03.2013 & 07.10.2014, wherein the said property was stated to be situated within the municipal jurisdiction of "Dr. Bhimrao Ambedkar Ward-27 ", Page 1 to 3 (of the documents that were filed by him to support his aforesaid claim pursuant to the direction of the Tribunal). Also, the Ld. AR has filed a copy of a sale deed, dated 13.12.2012 wherein it was stated that the address of the assessee firm, viz. "A-2, Kr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stance, it was the claim of the Ld. AR that as no notice u/s. 143(2) had been issued within the prescribed time period by the jurisdictional A.O, i.e., ITO, Ward-2(3), Raipur, therefore, the assessment order passed u/s. 143(3) dated 30.03.2015 would stand vitiated on the said count itself for want of valid assumption of jurisdiction by the A.O who had framed the assessment i.e. ITO, Ward-3(1), Raipur. 10. Per contra, the Ld. Departmental Representative (for short 'DR') relied on the orders of the lower authorities. It was submitted by the Ld. DR that as the territorial jurisdiction over the case of the assessee at the relevant point of time i.e. on 19.08.2013/during the period prescribed for issuance of notice u/s. 143(2) of the Act for the year under consideration i.e. A.Y.2012-13, was vested with the ITO, Ward- 1(3), Raipur, therefore, no infirmity could be related to the assessment order passed u/s. 143(3) of the Act dated 30.03.2015 by the ITO, Ward-3(1), Raipur. It was submitted by the Ld. DR that pursuant to the territorial reshuffling/restructuring of the jurisdiction of the AOs vide Notification No.1 of 2014-15, dated 15.11.2014 by the Jt. Commissioner of Income Tax, Range ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee firm, it was established beyond doubt that the office of the assessee firm was situated in "Ward-27, Raipur", therefore, it was proved to the hilt that the territorial jurisdiction over its case at the time of issuance of notice u/s. 143(2), dated 19.08.2013 as per Notification No.1 of 2011- 12, dated 31.05.2011 issued by the Jt. Commissioner of Income Tax, Range-II, Raipur, which did hold the ground during the relevant period was vested with the ITO, Ward-2(3), Raipur. It was submitted by the ld. AR that a bald assertion raised by the department that the jurisdiction over the assessee's case at the relevant point of time was vested with the ITO, Ward-1(3) had no legs to stand upon. Elaborating further, it was submitted by the Ld. AR that the very fact that as per the municipal receipts, Page 1 to 3 (filed by the assessee as per direction of the Tribunal), the property from where the assessee firm was carrying on its business during the period 04.10.2012 to 07.10.2014 was being subjected to levy of municipal taxes in itself proved to the hilt that the same was situated well within the municipal limits of Raipur. It was submitted by the Ld. AR that now when the documentary e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued by the ITO who had no jurisdiction over the case of the assessee at the relevant point of time, then, the impugned assessment order so passed would be null and void. 13. I have heard the ld. authorized representatives of both the parties, perused the orders of the lower authorities and the 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. 14. I have given a thoughtful consideration to the issue in hand in the backdrop of the contentions advanced by the ld. authorized representatives of both the parties. On the first principle canvassed by the Ld. AR, I am in agreement with his contention that an assessment order passed u/s. 143(3) of the Act without issuance of a valid notice u/s. 143(2) would be bad in law. The aforesaid view that an order passed u/s. 143(3) of the Act presupposes issuance of a valid notice u/s. 143(2) of the Act finds support from the judgments of the Hon'ble Supreme Court in the case of ACIT & Anr. Vs. Hotel Blue Moon [2010] 321 ITR 362 (SC) and CIT v. Laxman Das Khandelwal (2019) 417 ITR 325 (SC). 15. Apropos the multi-facet contentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision 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, as the Income-Tax Officer, Ward-1(2), Jabalpur could not by any means be held to be the "Assessing Officer" of the assessee as per Section 2(7A) of the Act, therefore, no assessment u/s. 143(3) could have been validly framed on the basis of the notice issued by him u/s. 143(2) of the Act, dated 01.08.2012. Our aforesaid view that where an assessment order is passed by an AO under section 143(3) only in pursuance to a notice issued under section 143(2) by an assessing officer who had no jurisdiction over the assessee at the relevant time, then, the impugned assessment order would be null and void is supported by a recent judgment of the Hon'ble High Court of Calcutta in the case of Pr. CIT Vs. Nopany & Sons (2022) 286 Taxman 388(Cal). Facts before the Hon'ble High Court were that the case of the assessee was transferred from ITO, Ward-3 to ITO, Ward-4. Assessment order was thereafter passed by the ITO, Ward-4 only in pursuance of notice iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment so framed would be nullity. Also a similar view had been taken by the co- ordinate benches of the Tribunal, i.e, ITAT, Gauhati in the case of Balaji Enterprise Vs. ACIT (2021) 187 ITD 111 (Gau.) and the ITAT, Kolkata Bench in the case of OSL Developers (P) Ltd. Vs. ITO, (2021) 211 TTJ (Kol) 621. We further find that a similar view had also been taken by the Hon'ble High Court of Gujarat in the case of CIT Vs. Ramesh D Patel (2014) 362 ITR 492 (Guj.). It was observed by the Hon'ble High Court that the provisions of sub-section (3) of Section 124 pertains to the dispute of the assessee with respect to the territorial jurisdiction of the A.O and have no relevance in so far the inherent jurisdiction is concerned. 21. Accordingly, on the basis of our aforesaid observations, we are of the considered view that as the Income-Tax Officer, Ward-1(2), Jabalpur was not having jurisdiction over the case of the assessee, and thus, did not fall within the meaning of "Assessing Officer" as defined in Section 2(7A) of the Act, therefore, no obligation was cast upon the assessee to have called in question the assumption of jurisdiction by him to issue notice u/s 143(2), dated 01.08.2012 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons jurisdiction; (iii) jurisdiction on the basis of income/classes of income i.e. pecuniary jurisdiction; and (iv) jurisdiction as per cases or classes of cases, are clearly spelt out in sub-section (3) of Section 120 of the Act, therefore, we are not inclined to accept the aforesaid claim of the department. We, thus, in terms of our aforesaid observations are unable to concur with the Ld. DR that the Income-Tax Officer, Ward-1(2), Jabalpur was validly vested with the jurisdiction over the case of the assessee on the basis of allocation of his case on PAN data base. Our aforesaid view that an invalid jurisdiction assumed by the A.O cannot be held to be correct by drawing support from PAN jurisdiction is supported by the order of the ITAT, Delhi in the case of ITO Vs. NVS Builders (P.) Ltd. (2018) 169 ITD 679 (Delhi) (Trib.) and that of the ITAT, Kolkata in the case of Cosmat Traders P. Ltd. (2021) 128 taxmann.com 174(Kol). 24. We, thus, in terms of our aforesaid observations concur with the contention advanced by the Ld. AR that as the impugned assessment u/s. 143(3), dated 12.03.2014 had been framed de hors any valid notice issued by the jurisdictional Assessing Officer i.e. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 143(3) of the Act, though by the officer having jurisdiction at the time of passing of the assessment order cannot be sustained and would be liable to be quashed for want of valid assumption of jurisdiction. Also, I concur with his contention that the A.O having jurisdiction over the case of the assessee at the time of framing of the assessment u/s. 143(3) of the Act cannot assume jurisdiction on the basis of a notice u/s. 143(2) issued by an A.O who at the relevant point of time had no jurisdiction over the assessee. My aforesaid conviction is principally supported by the judgments of the Hon'ble High Court of Bombay in the case of Ashok Devichand Jain Vs. UOI in W.P. No.3489 of 2019 dated 08.03.2022 and that in the case of Pavan Murarka Vs. ACIT-2 (2022) 136 taxmann.com 2 (Bom.). Also support is drawn from the judgment of the Hon'ble High Court of Allahabad in the case of Pr. Commissioner of Income Tax-II Vs. Mohd. Rizwan, prop. of M/s. MR Garments Moulviganj, Lucknow, ITA No.100 of 2015 dated 30.03.2017 and CIT Vs. MI Builders (P) Ltd. (2014) 349 ITR 271 (Allahabad). Also, reliance in support the aforesaid propostion is drawn from the judgment of the Hon'ble High Court of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . DR. It is the claim of the Ld. DR that as the office of the assessee firm was situated at: "A-2, Krishna Apartment, Baloda Bazar Road, Mowa, Raipur-492 001" i.e. an area falling beyond the municipal limits of Raipur, therefore, as per Notification No.1 of 2011/12 dated 31.05.2011 issued by the Jt. Commissioner of Income Tax, Range-1, Raipur, that was applicable during the relevant period, Page 61 of APB, the jurisdiction over its case remained with the ITO, Ward-1(3), Raipur. 18. Considering the respective claims of the assessee and the department which militate against each other, I shall cull out certain facts which will have a strong bearing on resolving the controversy in hand. 19. As per the Notification No.1 of 2011-12, dated 31.05.2011, issued by the Jt. Commissioner of Income Tax, Range-2, Raipur, Page 64 of APB (as was applicable at the relevant point of time on 19.08.2013 i.e. the date on which notice u/s. 143(2) was issued), the territorial jurisdiction of ITO, Ward-2(3), Raipur was as under ( relevant extract): 4. ITO,2(3), Raipur BPL- W-86-5 1. All the cases of salaried employees of private sector of Raipur Dist. 2. All persons other than companies and other th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d-27", Raipur". Considering the aforesaid fact that the territorial jurisdiction over "Ward-27", Raipur" as on 19.08.2013 was vested with ITO, Ward-2(3), Raipur, I find that the jurisdiction over the case of the assessee whose place of business at the relevant point of time is claimed to be situated in "Ward-27, Raipur", as the Ld. AR had tried to demonstrate before me on the basis of municipal receipts, sale deed and an affidavit of the partner of the assessee firm was at the relevant point of time i.e. on 19.08.2013 vested with the ITO, Ward-2(3), Raipur. On the contrary, it is the claim of the ld. DR that the territorial jurisdiction over the case of the assessee at the relevant point of time i.e. on 19.08.2013 was vested with the ITO, Ward-1(3), Raipur who had on the said date validly issued notice u/s. 143(2) of the Act. 21. Ostensibly, the contention of the Ld. DR that the territorial jurisdiction over the case of the assessee firm at the time of issuance of notice u/s.143(2), dated 19.08.2013 was vested with the ITO, Ward-1(3), Raipur is based on his claim that as the office address of the assessee firm viz. "A-2, Krishna Apartment, Baloda Bazar Road, Mowa, Raipur-492 001" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of "Ward-27, Raipur", i.e., an area falling with the then territorial jurisdiction of ITO, Ward-2(3), Raipur. (iii) that now when the office address of the assessee firm is shown to be situated within the municipal jurisdiction of "Ward-27, Raipur", therefore, the very claim of the Ld. DR that the same during the relevant period was situated beyond the municipal limits of the Raipur apparently falls to ground and fails. (iv) that the A.O vide his letter dated 16.01.2023 filed before me (through the Jt. Commissioner of Income Tax, ITAT Raipur) in the course of hearing of the appeal, while rectifying the contents of his earlier letter dated 18.11.2022, had stated, that it was on the earlier occasion inadvertently stated by him that the notice u/s. 143(2) for A.Y.2012-13 was issued by the jurisdictional A.O i.e. ITO, Ward-1(3), Raipur on 19.08.2013, while the fact was that the same was issued by the A.O i.e. ITO, Ward-1(3), Raipur who was having PAN jurisdiction over the case of the assessee on 19.08.2013. For the sake of clarity, the relevant observation of the A.O is culled out as under (relevant extract) :- "In this regard, it is submitted that in this office letter dated 18.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, but contrary to what was claimed by him it appears that the ITO, Ward-1(3), Raipur was not even having PAN jurisdiction over the assessee's case at the said relevant point of time. 22. I am though of the considered view that now when the Ld. AR had on the basis of supporting documentary evidences apparently substantiated his claim that the territorial jurisdiction over the case of the assessee at the relevant point of time was vested with the ITO, Ward-2(3), Raipur, therefore, there is substance in his claim that in the absence of any notice u/s. 143(2) having been issued by the said A.O within the stipulated time period i.e. latest by 30.09.2013, the assessment order thereafter passed by the ITO, Ward-3(1), Raipur u/s. 143(3) of the Act, dated 30.03.2015 cannot be sustained and is liable to be vacated on the said count itself. However, in all fairness, being the last fact finding authority, I am of the considered view that as the assessee in order to drive home his aforesaid claim had placed on record certain fresh documents, viz. municipal receipts, copy of sale deed and affidavit of the partner of the assessee firm, neither of which were there before the lower authori ..... X X X X Extracts X X X X X X X X Extracts X X X X
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