DCIT, CENTRAL CIRCLE-2, FARIDABAD V. VEE GEE INDUSTRIAL ENTERPRISES PRIVATE LIMITED, FARIDABAD

CO 122/DEL/2024

AI Insights

The case involves cross appeals by the assessee, Vee Gee Industrial Enterprises Pvt. Ltd., and the Revenue against the order of the Commissioner of Income Tax (Appeals)-29, New Delhi, dated 27.06.2024, concerning the assessment year 2011-12. The primary contention revolved around the validity of the assessment order dated 26.03.2014, which was challenged on grounds of lack of jurisdiction and violation of principles of natural justice. The assessee argued that the assessment was conducted by a non-jurisdictional officer and without a valid notice under section 143(2) of the Income Tax Act, 1961, rendering it void ab initio. The Tribunal, after considering the submissions and the legal provisions, quashed the assessment order, highlighting the procedural lapses and jurisdictional errors.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23713 (ITAT-DELHI)
• Appeal Type: Cross Objection
• Pronouncement Date: 19-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Other Referred Cases: National Thermal Power Co. Ltd. v. CIT, Mansarovar Commercial (P.) Ltd. v. CIT, India Glycols Ltd. v. CIT, Deluxe Enterprises v. ITO, Ward-1, Solan, Bidi Supply Co. v. Union of India
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA GUPTA; OBSERVING; QUASHING
• Assessee Lawyers: PAVAN VED
• Keywords: Set aside; Business income; Revised return; Question of law; Bogus purchase; Principle of natural justice; TDS; Earning of tax free income; Assessment record; Bogus
• Section: 147; 148; 144; 143(3); 142(1); 143(2); 195; 250; 143(1); 64; 153; 68; 43; 113; 13; 14A; 72; 20

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT and SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No.3550/DEL/2024 (Assessment Year: 2011-12) Vee Gee Industrial Enterprises Pvt. Ltd., vs. DCIT, Central Circle, Plot No.31 B, Industrial Area, NIT Faridabad, Faridabad. Faridabad - 121 001 (Haryana). (PAN : AACCV6675P) ITA No.3915/DEL/2024 (Assessment Year: 2011-12) DCIT, Central Circle, vs. Vee Gee Industrial Enterprises Pvt. Ltd., Faridabad. Plot No.31 B, Industrial Area, NIT Faridabad, Faridabad - 121 001 (Haryana). (PAN : AACCV6675P) CO No.122/Del/2024 (in ITA No.3915/DEL/2024) (Assessment Year: 2011-12) Vee Gee Industrial Enterprises Pvt. Ltd., vs. DCIT, Central Circle, Plot No.31 B, Industrial Area, NIT Faridabad, Faridabad. Faridabad - 121 001 (Haryana). (PAN : AACCV6675P) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Pavan Ved, Advocate Shri Mohit Gupta, CA Shri Mirza Baig, CA Shri Sarthak Agarwal, CA REVENUE BY : Smt. Amisha Gupta, CIT DR Date of Hearing : 24.02.2025 Date of Order : 19.03.2025 2 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER : 1. These cross appeals filed by the assessee and Revenue are against the order of the ld. Commissioner of Income Tax (Appeals)-29, New Delhi [“ld. CIT(A)”, for short] dated 27.06.2024 for the AY 2011-12. 2. The grounds of appeal raised by the assessee in ITA No.3550/Del/2024 are as under :- 1. “That on the facts and in the circumstances of the case, the order passed by the assessing officer was bad in law, violative of principles of natural justice and void-ab-initio. 2. That on the facts and in the circumstances of the case, the Ld. Assessing Officer (AO) has erred in law in determining the total income of the appellant at Rs.57,15,05,400/- u/s 143(3) of the Income Tax Act, 1961 as against the returned income of Rs. 18,87,66,500/- and thereby making erroneous additions of Rs. 38,27,38,898/-. 3. That on the facts and in the circumstances of the case, the Ld. AO has erred in law in framing a high-pitched assessment u/s 143(3) of the Act by making erroneous, arbitrary and ad-hoc additions based on mere conjectures, suspicions and surmises amounting to Rs. 38,27,38,898/- without considering the submissions made by the appellant. 4. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in confirming the additions amounting to Rs.3,88,42,034/- (on three counts) and not deleting the ad-hoc and arbitrary additions in entirety amounting to Rs. 38,27,38,898/- vide order u/s 250 of the Act dated 27.06.2024 which additions have been made erroneously & arbitrarily by the Ld. AO against the principles of natural justice while framing assessment u/s 143(3) of the Act. 5. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in restricting the additions/disallowances to the 3 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 extent of Gross Profit Rate of the appellant amounting to Rs.3,43,34,313/- as against deleting the entire ad-hoc addition/disallowance of Rs.27,27,10,982/-, the entire erroneous addition needs to be deleted. 6. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in not deleting the ad-hoc & arbitrary addition/disallowance of travelling expenditure amounting to Rs.15,71,356/- which additions/disallowances have been made by just applying ad-hoc random percentages without any basis by the Ld. AO, which needs to be deleted. 7. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in not deleting the ad-hoc and arbitrary addition/disallowance of Rs. 29,36,365/- which addition has been made by the Ld. AO by wrongly invoking the provisions of Sec. 14A r.w.r. 8D without establishing any connection whatsoever between the expense disallowed and exempt income earned and applied the provisions of Sec. 14A r.w.r. 8D without recording any cogent reasons, which needs to be deleted. 8. That on the facts and in the circumstances of the case, the orders of the Ld. CIT(A) as well as Ld. AO needs to be quashed (to the extent stated above) and accordingly, the wrongful additions need to be deleted in entirety. 9. That the appellant craves to add, amend, alter or withdraw any Ground or Grounds of Appeal.” 3. The assessee company vide letter dated 10.02.2025 has revised its first ground of appeal, the contents of the said letter dated 10.02.2025 are reproduced hereunder: - “Dear Sir, Reg.: Request for “Revising Ground of Appeal No. 1” only in the case of VEE GEE Industrial Enterprises Pvt. Ltd. for AY 2011-12 in ITA No. 3550/Del/2024 fixed before the Hon’ble “F” Bench 4 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 With regard to the captioned matter, it is most respectfully submitted before the Hon’ble Members as under: - 1) That the captioned matter in case of the appellant company in ITA No. 3550/Del/2024 for AY 2011-12 is fixed before Hon’ble “F” Bench, ITAT, Delhi. 2) That the appellant has timely filed the appeal before the Hon’ble ITAT on 05.08.2024 wherein 9 grounds have been raised by the appellant. Copy of the Form 36 so filed on 05-08-2024 is enclosed herewith. 3) Request for Revision of Ground No.1. only in Form 36:- Original Ground No. 1 reads as under:- “That on the facts and in the circumstances of the case, the order passed by the assessing officer was bad in law, violative of principles of natural justice and void-ab-initio.” It is prayed before the Hon’ble Bench that Ground No.1 may be allowed to be revised as under: - , Revised Ground No. 1:- “That on the facts and in the circumstances of the case, the order passed by the assessing officer was bad in law, violative of principles of natural justice, without jurisdiction as passed by non-jurisdictional AO that too without following the mandatory procedure in law of issuance of valid notice u/s 143(2) of the Act, barred by limitation and thus, void-ab-initio.” 4) That the aforementioned revision to add “out of jurisdiction as passed by non-jurisdictional AO that too without following the mandatory procedure in law” relates to the facts already on record and has been inadvertently left by the appellant at the time of filing of appeal. 5 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 5) That it is respectfully submitted that the appellant company has raised the similar ground before the Ld. CIT(A), New Delhi in the Memorandum of Appeal in Form-35 [Ground No. 2 and 3 in Form 35] and thus is a matter of record, copy enclosed. 6) That it is most respectfully submitted that rest of the Grounds of Appeal namely Ground 2- 9 remains unchanged. In view of the above, it is hereby most humbly prayed before your honors to kindly take the Revised Ground No.1 on record while adjudication of the said appeal matter keeping in view the principles of natural justice and oblige.” 4. The Ld. AR submitted that vide the aforesaid application dated 10.02.2025, the assessee company has just elaborated the Ground no. 1 taken originally while filing the appeal that as to how the assessment order is void ab initio and bad in law. The said revision emanates from the objections raised before the Ld. AO as well as from the Grounds already raised earlier before the Ld. CIT(A) in context to wrongly assuming jurisdiction of framing the disputed assessment which were not properly considered by the Ld. AO and the CIT(A) while disposing the first appeal and moreover, the said revision goes to the root of the matter. 5. However, Ld. DR objected to the above modification of original grounds of appeal. After considering the facts on record and following the law laid down by the Hon’ble Apex Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 97 Taxman 358 (SC), the said revision of 6 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 Ground no. 1 is admitted wherein a jurisdictional issue has been raised which goes to the root of the matter. 6. The grounds of appeal raised by the Revenue in ITA No. 3915/DEL/2024 are as under: - 1. “Whether Ld. CIT(A) is right in restricting the addition of Rs. 27,27,10,982/- made on account of bogus purchases to Rs. 3,43,34,313/- by applying GP rate of 12.59 percent on such bogus purchase in view of ratio laid down by Hon'ble Apex Court in the case of N. K. Proteins Ltd. Vs Deputy Commissioner of Income- tax [20l7] 84 taxmann.com 195 (SC)? 2. Whether Ld. CIT(A) has not erred in applying the GP rate on bogus purchases in view of decision of Hon'ble Apex Court in the case of N. K. Proteins Ltd. Vs Deputy Commissioner of Income- tax l [20l7] 84 taxmann.com 195 (SC) confirming decision of Hon'ble Gujarat High Court in the case of NK Industries Ltd. Vs. DCIT (2016) 72 taxrnann.com 289 (Gujarat) holding that restricting the addition by applying some percentage on bogus purchases goes against the principle of section 68 and 69C? 3. Whether Ld. CIT(A) is right in holding that the addition of Rs. 10,55,20,195/- made under the head business income on account of sale of assets to be made u/s 50 of the Act ignoring the facts brought out by the AO that the sale bills do not have any mention that old and used dies have been sold? 4. Whether the decision of Ld. CIT(A) is right in holding that the addition on account of sale of assets to be made u/s 50 of the Act ignoring the facts as to how the impugned Block of Assets can be sold at three times than its Written Down Value (WDV)?” 7. The cross objections raised by the assessee in CO no. 122/DEL/2024 against the appeal preferred by the revenue are as under: - 7 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 1. “That on the facts and in the circumstances of the case, the order passed by the assessing officer was bad in law, violative of principles of natural justice and void-ab-initio. 2. That on the facts and in the circumstances of the case, the Ld. Assessing Officer (AO) has erred in law in determining the total income of the appellant at Rs. 57,15,05,400/- as against the returned income of Rs. 18,87,66,500/- vide order u/s 143(3) of the Income Tax Act dated 26.03.2014. 3. That on the facts and in the circumstances of the case, the Ld. AO has erred in law in framing a high-pitched assessment u/s 147 r.w.s. 143(3) of the Act by making erroneous, arbitrary and ad-hoc addition based on mere conjecture, suspicions and surmises. 4. That on the facts and in the circumstances of the case, the Ld. AO has erred in law in making an ad-hoc & arbitrary addition of Rs. 27,27,10,982/- without application of mind as well as the Ld. CIT(A) has erred in law in not entirely deleting the said erroneous addition and restricting the same to Rs. 3,43,34,313/- only whereas the said addition deserves to be deleted in entirety. 5. That on the facts and in the circumstances of the case, the Ld. CIT(A) has rightly deleted the baseless, ad-hoc, arbitrary and unlawful addition amounting to Rs. 10,55,20,195/- as the said addition was made by acting totally contrary to the law and the said unlawful addition also tantamount to double taxation and therefore, the same has been rightly deleted. 6. That on the facts and in the circumstances of the case, the appeal filed by the Ld. AO is absolutely frivolous & vexatious and thus, deserves to be dismissed. 7. That the appellant craves to add, amend, alter or withdraw any Ground or Grounds of Objection.” 8 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 8. During the course of hearing, the Ld. Authorized Representative [AR] for the assessee placed following written submissions on record: - “Your Honors, The written submissions on the jurisdictional defect in the impugned assessment order dated 26.03.2014 framed u/s 143(3) of the Act in respect of the captioned matter are being most respectfully submitted as under: - A. BRIEF FACTS OF THE MATTER: 1) The present appeal has been preferred against the order passed u/s 250 of the Act dated 27.06.2024 based on the following Grounds of Appeal: - “ 1. That on the facts and in the circumstances of the case, the order passed by the assessing officer was bad in law, violative of principles of natural justice, without jurisdiction as passed by non- jurisdictional AO that too without following the mandatory procedure in law of issuance of valid notice u/s 143(2) of the Act, barred by limitation and thus, void-ab-initio. [Revised vide Application dated 10.02.2025 u/r 11 of the ITAT Rules, 1963, copy enclosed] 2. That on the facts and in the circumstances of the case, the Ld. Assessing Officer (AO) has erred in law in determining the total income of the appellant at Rs. 57,15,05,400/- u/s 143(3) of the Income Tax Act, 1961 as against the returned income of Rs. 18,87,66,500/- and thereby making erroneous additions of Rs. 38,27,38,898/-. 3. That on the facts and in the circumstances of the case, the Ld. AO has erred in law in framing a high-pitched assessment u/s 143(3) of the Act by making erroneous, arbitrary and ad-hoc additions based on mere conjectures, suspicions and surmises amounting to Rs. 38,27,38,898/- without considering the submissions made by the appellant. 9 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 4. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in confirming the additions amounting to Rs. 3,88,42,034/- (on three counts) and not deleting the ad-hoc and arbitrary additions in entirety amounting to Rs. 38,27,38,898/- vide order u/s 250 of the Act dated 27.06.2024 which additions have been made erroneously & arbitrarily by the Ld. AO against the principles of natural justice while framing assessment u/s 143(3) of the Act. 5. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in restricting the additions/disallowances to the extent of Gross Profit Rate of the appellant amounting to Rs. 3,43,34,313/- as against deleting the entire ad-hoc addition/disallowance of Rs. 27,27,10,982/-, the entire erroneous addition needs to be deleted. 6. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in not deleting the ad-hoc & arbitrary addition/disallowance of travelling expenditure amounting to Rs. 15,71,356/- which additions/disallowances have been made by just applying ad-hoc random percentages without any basis by the Ld. AO, which needs to be deleted. 7. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in not deleting the ad-hoc and arbitrary addition/disallowance of Rs. 29,36,365/- which addition has been made by the Ld. AO by wrongly invoking the provisions of Sec. 14A r.w.r. 8D without establishing any connection whatsoever between the expense disallowed and exempt income earned and applied the provisions of Sec. 14A r.w.r. 8D without recording any cogent reasons, which needs to be deleted. 8. That on the facts and in the circumstances of the case, the orders of the Ld. CIT(A) as well as Ld. AO needs to be quashed (to the extent stated above) and accordingly, the wrongful additions need to be deleted in entirety. 9. That the appellant craves to add, amend, alter or withdraw any Ground or Grounds of Appeal. 10 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 2) The assessment for AY 2011-12 in case of the appellant company was framed u/s 143(3) of the Act vide order dated 26.03.2014 by the Ld. Addl. CIT, Range-17, Delhi (erroneously by the non- jurisdictional AO)determining the assessed income of the appellant company as under (the copy of the assessment order dated 26.03.2014 for AY 2011-12 has already been provided along with Form-36 filed on 05.08.2024):- Erroneous Additions made Issue Amount i. Wrong Disallowance of Purchases made from M/s. AGR Steel Strips Pvt. Ltd. 2,04,78,714 ii. Wrong Disallowance of Purchases made from M/s. Uttam Component Pvt. Ltd. 5,10,24,357 iii. Wrong Disallowance of Purchases made from M/s. Essar Steel Ltd. 19,76,84,960 iv. Wrong Disallowance of Purchases made from M/s. Shalimar Engineers Ltd. 35,22,951 v. Wrong Addition on Sale of Fixed Assets 10,55,20,195 vi. Wrong Disallowance of Travelling Expenses 15,71,356 vii. Wrong Disallowance u/s 14A r.w.r. 8D 29,36,365 Total Additions Made 38,27,38,898 Add: Returned Income 18,87,66,500 Assessed Income 57,15,05,398 3) Having aggrieved with the aforesaid assessment order dated 26.03.2014, an appeal was filed on 15.04.2014 before the first appellate authority and after a long period of 10 years, only the partial relief has been allowed to the assessee company as under: - 11 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 4) The department has also preferred an appeal against the order of the Ld. CIT(A) (bearing no. 3915/DEL/2024) in respect of additions deleted against which the appellant company has also filed Cross Objections bearing no. 122/DEL/2024on 12.11.2024. 5) The assessee company has filed the present appeal before the Hon’ble ITAT against the order passed by the Ld. CIT(A) as complete relief has not been allowed to the assessee company for which the company is duly entitled due to the fact that the entire assessment proceedings are bad in law, void-ab-initio and legally unsustainable as discussed in subsequent paras below. B. WRITTEN SUBMISSIONS w.r.t. Jurisdictional Issues/Defects raised vide Revised Ground No. 1 First Appeal Result Addition Confirmed Addition Deleted Total Addition Addition on account of disallowance of purchases restricted to Gross Profit @12.59% 25,78,270 1,79,00,444 2,04,78,714 64,23,967 4,46,00,390 5,10,24,357 2,48,88,536 17,27,96,424 19,76,84,960 4,43,540 30,79,411 35,22,951 Addition deleted by Ld. CIT(A) as the Sale Consideration already reduced from the WDV of Assets keeping in view the provisions of Sec. 50 of the I. Tax Act. - 10,55,20,195 10,55,20,195 Addition Confirmed 15,71,356 - 15,71,356 Addition Confirmed 29,36,365 - 29,36,365 Total 3,88,42,034 34,38,96,864 38,27,38,898 Add: Returned Income 18,87,66,500 18,87,66,500 Assessed Income (after Appeal Effect) 22,76,08,534 Assessed Income 57,15,05,398 12 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 That on the facts and in the circumstances of the case, the order passed by the assessing officer was bad in law, violative of principles of natural justice, without jurisdiction as passed by non-jurisdictional AO that too without following the mandatory procedure in law of issuance of valid notice u/s 143(2) of the Act, barred by limitation and thus, void-ab-initio in view of the following facts: - I. (a) Order has been passed without jurisdiction by Non- Jurisdictional Assessing Officer (A.O.) in Delhi as the lawful jurisdiction in case of assessee lies with DCIT, CC-1, Faridabad i) The assessee company was incorporated on 06.08.2007 and had taken over the business of the erstwhile firm, namely, M/s. Vee Gee Industrial Enterprises having registered as well as place of business at Plot No. 90, Sector 24, Faridabad-121001, Haryana w.e.f. 01.04.2008 as the said firm was dissolved as at the closing hours of 31.03.2008. ii) A search & seizure action was conducted in case of the above- named firm and other group concerns including promoters/partners of the group on 16.01.2007 and thereafter, the jurisdiction of the erstwhile dissolved firm was centralized with Central Circle-1, Faridabad and since then and up-till the last AY 2008-09, the assessment of the erstwhile firm was framed by the Central Circle-I, Faridabad. iii) From 01.04.2008, the business of the abovenamed firm was entirely transferred to the assessee company and since then the assessee company has been carrying out its business operation from the following premises: 1. Plot no. 31-B, Industrial Area NIT, Faridabad – 121001, Haryana. 2. Plot no. 90, sector 24, Faridabad, 121005, Haryana 3. Plot no. 26F, Industrial area, NIT Faridabad, Haryana 4. Plot 53/2 NIT Faridabad, Haryana 5. Plot no. 25/8, industrial Area Faridabad, 121001 13 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 However, the registered address of the company was at C-8, East of Kailash, New Delhi – 110065 only as a correspondence/communication address. iv) As no business was carried out in FY 2007-08 by the appellant company, Nil return of income was filed for AY 2008-09, copy of ITR Ack. for AY 08-09 is enclosed at Page no. 1 of Indexed Compilation Of Documents Duly Forming Part Of Assessment And Appeal Record (Indexed Compilation) already filed on record. v) The first year of business operation of the assessee company was FY 2008-09 relevant to AY 2009-10. The said AY 2009-10 was selected for scrutiny assessment through CASS vide notice u/s 143(2) of the Act dated 19.08.2010 issued by ITO Ward-21(1), Delhi. The assessee company vide letter dated 06.09.2010 informed the Ld. ITO Ward-21(1), Delhi that as the case of the erstwhile predecessor firm has been centralized with Central Circle-1, Faridabad due to search action conducted in case of the Vee Gee Group on 16.01.2007, the jurisdiction of the assessee company will also lie with the Central Circle-1, Faridabad as the assessee company has taken over the business of the said firm w.e.f. 01.04.2008 which firm was subject to search action. The copy of the said letter dated06.09.2010 for AY 2009-10 is enclosed at Pages 2 to 5 of Indexed Compilation andcopy of notice u/s 143(2) dated 19.08.2010 is enclosed at Page no. 6 of Indexed Compilation. vi) Thereafter, on acceptance of the request of the assessee vide letter dated 06.09.2010 to transfer the case of the assessee to the jurisdictional AO in Faridabad, the case was transferred from Delhi to Central Circle-1, Faridabad vide letter bearing F. no. ITO/Ward-21(1) Scrutiny/2010-11/209 dated 20.10.2010 by the ITO, Ward-21(1), Delhi himself after being satisfied that the jurisdiction of the assessee company lies with Central Circle-1, Faridabad only. The said fact of transfer of jurisdiction is duly evident from the assessment order dated 08.11.2011 framed u/s 143(3) of the Act by the Ld. DCIT, CC-1, Faridabad for AY 2009- 10, i.e., the first assessment of the assessee company was framed by DCIT, CC-1, Faridabad which indicates that the jurisdiction 14 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 of the assessee company vests with DCIT, CC-1, Faridabad as duly confirmed by the Ld. ITO Ward-21(1), Delhi himself. The copy of the order u/s 143(3) dated08.11.2011 for AY 2009-10 is enclosed at Pages 7 to 9 of Indexed Compilation. vii) Further, the case of the assessee company for AY 2010-11 was re- opened u/s 148 r.w.s. 147 of the Act vide notice u/s 148 of the Act dated 25.03.2013 issued by DCIT, CC-1, Faridabad on the basis of the information received from search action conducted by Central Excise Department, Faridabad on 22.12.2010 on some third party. The order of the re-opening assessment for AY 2010-11 was framed by the Ld. DCIT, CC-1, Faridabad on 31.03.2014, i.e., just 4 days after the impugned order u/s 143(3) of the Act for AY 2011-12 was framed by the Ld. Addl. CIT, Range-17, New Delhi on 26.03.2014. [EMPHASIS SUPPLIED] The copy of the order u/s 147 r.w.s. 143(3) of the Act dated 31.03.2014 for AY 10-11 is enclosed at Pages 10 to 12 of Indexed Compilation. viii) From the above stated facts, it can be seen that two distinct authorities have framed assessment for two different assessment years at the same time in case of the assessee company – Two simultaneous assessments cannot be framed by different authorities that too located at different stations, one at Delhi and another at Faridabad which is totally against the principles of jurisprudence of tax administration. ix) In the present case, the jurisdiction assumed by the Ld. Addl. CIT, Range-17, New Delhi is invalid as the jurisdiction of the assessee company since AY 2009-10 vests with the Central Circle, Faridabad only due to the fact that the jurisdiction was transferred from Delhi to Faridabad vide letter dated 20.10.2010 by the ITO Ward-21(1), Delhi himself as indicated at Para (vi) above as well as the case of the assessee company was centralized with Central Circle, Faridabad on account of search action conducted by the Central Excise Department, Faridabad on 22.12.2010 on some third party due to which, case of the assessee company was re- opened for FY 2006-07 to FY 2009-10 by DCIT, CC-1, Faridabad 15 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 vide notice issued u/s 148 of the Act dated 25.03.2013. The copies of the notice u/s 148 of the Act dated 25.03.2013 along with reasons for re-opening are enclosed at Pages 13 to 20 of Indexed Compilation. x) It is pertinent to mention here that the jurisdiction was transferred by ITO Ward-21(1), Delhi for AY 2009-10 after being satisfied that jurisdiction vests with the DCIT, CC-1, Faridabad and on transfer, the jurisdiction of the assessee company was duly accepted by the DCIT, CC-1, Faridabad which fact makes it very clear that the valid jurisdiction of the assessee company vests with the DCIT, CC-1, Faridabad only which position has been duly affirmed by both the authorities at Delhi and Faridabad and after this coordinated transfer of jurisdiction, there remains no doubt that the jurisdiction vests with the DCIT, CC-1, Faridabad only.[Emphasis Supplied] xi) After the aforementioned transfer of jurisdiction, all the assessments have been duly framed by the DCIT, CC-1, Faridabad except AY 2011-12 as depicted hereunder: - AY Details of Assessment Order Copies of orders enclosed at Pgs. Of Indexed Compilation Framed u/s Date Passed by 2009- 10 143(3) 08.11.2011 ACIT, CC-1, Faridabad [Notice u/s 143(2) issued on 19.08.2010 by ITO-21(1), Delhi enclosed at Page 6 and thereafter case was transferred to CC-1, Faridabad] 7-9 2010- 11 147 r.w.s. 31.03.2014 DCIT, CC-1, Faridabad 16 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 143(3) [Notice u/s 148 issued on 25.03.2013 by DCIT, CC-1, Faridabad enclosed at Page 19] 10-12 2011- 12 143(3) 26.03.2014 Addl. CIT, Range- 17, New Delhi Already placed in the appeal record 2012- 13 143(3) 20.02.2015 DCIT, CC-1, Faridabad [Notice u/s 142(1) issued on 29.11.2013 by DCIT, Circle- 17(1), Delhi enclosed at Page 21 and thereafter case was transferred to CC-1, Faridabad on request made vide letter dated 12.09.14 enclosed at Page 22] 23-25 2013- 14 143(3) 17.03.2016 DCIT, CC-1, Faridabad [Notice u/s 143(2) issued on 12.09.2014 by DCIT, Circle- 17(1), Delhi enclosed at Page 26 and thereafter case was transferred to CC-1, Faridabad] 27-28 2014- 143(3) 21.12.2016 DCIT, CC-1, 17 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 F r F r o m the afore-stated facts, it can be easily construed that the valid jurisdiction of assessee company vests with the Central Circle-1, Faridabad since inception, i.e., AY 2009-10 and therefore, Ld. Addl. CIT, Range-17, New Delhi has erred in law in assuming jurisdiction over the assessee company. In the instant case of the assessee company, the assessment from AY 2009-10 to AY 2015- 16 (except AY 2011-12) have been framed by the DCIT, Central Circle-1, Faridabad, i.e., the assessment years falling before as well as after AY 2011-12, the year under appeal have all been framed by Central Circle-1, Faridabad. xii) It can also be observed from the table at para (xi) above that during AY 2009-10, AY 2012-13 to AY 2015-16, notice u/s 143(2)/142(1) have first been issued by the Assessing Officer at Delhi and then subsequently, the cases were transferred to the DCIT, CC-1, Faridabad and accordingly, assessments have been framed by the DCIT, CC-1, Faridabad as indicated in the table at para (xi) above. 15 Faridabad [Notice u/s 143(2) issued on 31.08.2015 by DCIT, Circle- 26(1) & (2), Delhi and thereafter case was transferred to CC-1, Faridabad] 29-31 2015- 16 143(3) 14.03.2017 DCIT, CC-1, Faridabad [Notice u/s 143(2) issued on 17.03.2016 by DCIT, Circle- 26(1), Delhi and thereafter case was transferred to CC-1, Faridabad] 32-34 18 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 xiii) The above facts also establishes that the authorities at Delhi were continuously under some misconception initiating the proceedings due to the fact that the AO at Delhi were wrongly assuming jurisdiction on the basis of PAN database wherein the registered address of the assessee company is mentioned but after realising the mistake, the cases were duly transferred & taken over by the valid jurisdictional AO, i.e., the DCIT, CC-1, Faridabad and subsequently the assessments were framed by the DCIT, CC-1, Faridabad only. xiv) From the table at para (xi) above, it can be seen that for the first time, the notice u/s 143(2) for AY 2009-10 was issued by ITO Ward-21(1), Delhi then subsequently notices u/s 142(1)/143(2) for AY 2011-12, AY 2012-13 & AY 2013-14 were issued by DCIT, Circle-17(1), Delhi and for AY 2014-15 & AY 2015-16, notice u/s 143(2) was issued by DCIT, Circle-26(1)&(2), Delhi – It remained unascertained as to how the jurisdiction in Delhi was changing repeatedly that too without any communication to the assessee company which indicates that Assessing Officer at Delhi were not sure that whether jurisdiction vests with them. Furthermore, it is also vehemently submitted that the assessee company during the course of assessment proceedings for AY 2011-12 has challenged the jurisdiction assumed by the income tax authority at Delhi but the Ld. AO as well as the Ld. CIT(A) paid no heed to the objection so raised by the assessee company. xv) The Ld. AO as well the Ld. CIT(A) has erred in law in assuming & confirming jurisdiction in Delhi on the basis of the PAN History of the assessee company which is not the criteria to determine jurisdiction as per the provisions of the income tax law – No provision of law states that jurisdiction will be decided on the basis of the data available in PAN database. The governing section for determining jurisdiction is Sec. 124 of the Act which is discussed in the subsequent para below. The Hon’ble ITAT, Delhi in case of ACIT, Circle-27(1), Delhi v. M/s. UV Realtors Pvt. Ltd. in I.T.A. No.6033/DEL/2016 after deep examination of the issue of jurisdiction and taking into account numerous judgements of the Hon’ble High Courts 19 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 including the Hon’ble Jurisdictional Delhi High Court, observed as under vide order dated 17.03.2021: - “16. The entire case of the revenue hinges upon the interpretation that allotment of PAN is the criteria and foundation of deciding the jurisdiction of the Assessing Officer. However, nowhere in the statute it has been provided that PAN address will decide the territorial jurisdiction of the Assessing Officer. Section 139A merely provides who are the persons required to obtain PAN having regard to the nature of transaction of business and other conditions laid down that, Assessing Officer may allot a PAN and other procedure and mechanism of allotment of the PAN. The territorial jurisdiction is decided by the CBDT in terms of Section 120 only. Here, in this case, as discussed above, none of the parameters laid down for the territorial jurisdiction are applicable to the assessee. Even the Assessing Officer or the Ld. CIT(A) has not I.T.A. No.6033/DEL/2016 & CO No.11/DEL/2017 23 made out any case that assessee’s case falls in either of the given categories provided in sub Section (3) of Section 120. Allotment of a PAN from a particular place cannot provide jurisdiction to the Assessing Officer. The jurisdiction of the Assessing Officer over an assessee is decided by the CBDT on the basis of from where the assessee is either carrying the business in that area assigned to the Assessing Officer u/s.120 or the assessee is residing within that area. Admittedly, the assessee company does not only have registered office in New Delhi but also has been carrying out all its activities from which it has been earning income from New Delhi and has been filing the return of income from New Delhi. Even in the software of the Income Tax Department where return of income is uploaded online, the designation of the Assessing Officer as per the address has always been mentioned as Range-18, New Delhi. Had there been the allotment of jurisdiction by virtue of PAN, then the software of the Department would have assigned the jurisdiction as when assessee uploads the return of income electronically online. Be that as it may, nowhere in the statute it has been provided that allotment of a PAN would be the determinative factor for jurisdiction of the Assessing Officer. Thus, we hold that ITO, Ward-10(2)/DCIT, Circle-10(2), Kolkata did not have any jurisdiction over the assessee company and any order passed without jurisdiction is 20 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 null and void. Accordingly, we hold that the impugned assessment order passed by Assessing Officer of Kolkata is without jurisdiction and hence the same deserved to be quashed as per the provisions of law. Accordingly, Cross Objection of the assessee is allowed.” Few other judgements, amongst many, taking the aforesaid similar view are cited herein below: - b. Dr. Hari Singh Chandel v. ITO [2024] 166 taxmann.com 353 (Raipur - Trib.) c. ITO v. NVS Builders (P.) Ltd. [2018] 91 taxmann.com 462/169 ITD 679 (Delhi - Trib.) d. Cosmat Traders (P.) Ltd. v. ITO [2021] 128 taxmann.com 174/189 ITD 504 (Kolkata - Trib.). In view of the above, the jurisdiction assumed by the Ld. Addl CIT, Range-17, New Delhi is totally against the law and there is inherent lack of jurisdiction on part of the Ld. Addl CIT, Range-17, New Delhi in view of the provisions of Sec. 124 of the Act meaning thereby that Ld. Addl CIT, Range-17, New Delhi is not entitled to be an Assessing Officer for the assessee company as defined u/s 2(7A) of the Act. Accordingly, as held by a Division Bench of Bombay High Court in CIT v. Bharat kumar Modi [2000] 246 ITR 693/113 Taxman 386 wherein the well settled principle of law was discussed setting out the difference between lack of jurisdiction and irregular exercise of authority/ jurisdiction and it was held that “Proceedings are a nullity when the authority taking it, has a no power to have seisin over the case”, therefore, in the instant case, as the Ld. AO, i.e., Ld. Addl CIT, Range-17, New Delhi lacks the jurisdiction by virtue of provisions of Sec. 124 of the Act, the order as well as the proceedings carried out by him for AY 2011-12 are a nullity and accordingly, deserves to be quashed on this count itself. 21 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 xvi) In support of the above, it is vehemently submitted that as per the governing section which determines the jurisdiction of an Assessing Officer, i.e., Sec. 124 of the Income Tax Act, 1961, theLd. Addl. CIT, Range-17, New Delhi cannot assume jurisdiction of the assessee company as the principal place of business of the assessee company is situated only in Faridabad, Haryana and no- where in Delhi, the copy of the Registration Certificate under Central Excise and VAT are enclosed at Pages 35 to 42 of Indexed Compilation evidencing that the principal place of business of the assessee company is Faridabad, Haryana. The relevant provision of the aforesaid Sec. 124 of the Act are reproduced hereunder: - “Jurisdiction of Assessing Officers. 124. (1) Where by virtue of any direction or order issued under sub-section (1) or sub-section (2) of section 120, the Assessing Officer has been vested with jurisdiction over any area, within the limits of such area, he shall have jurisdiction— (a) in respect of any person carrying on a business or profession, if the place at which he carries on his business or profession is situate within the area, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situate within the area, and (b) in respect of any other person residing within the area.” xvii) Moreover, the promoter directors of the assessee company who own, controls and manage the overall business operations & functioning / business dynamics of the assessee company also resides in Faridabad, Haryana only, meaning thereby that the place of effective management of the assessee company is also located at Faridabad, Haryana only and not in Delhi. The evidence to this effect is enclosed at Pages 43 to 46 of Indexed Compilation. xviii) Since inception to till date, the principal place of business of the assessee company has always been situated/located in Faridabad, Haryana. The copy of the GST Registration Certificate of the assessee company is enclosed at Pages 47 to 49 of Indexed Compilation wherein it can be seen that all the places of business including the principal place of business of the assessee company as well as the residential state of the directors is located in Faridabad, Haryana only and no xix) Furthermore, where the business transactions are carried out are all located in Faridabad only accounts so maintained is as under: xx) It is further pertinent to mention here that in the Tax Audit Report in Form 3CD, the auditor has categorically mentioned the address at 31-B, Industrial Area NIT, Faridabad “Corporate Office cum Works” which further buttress the fact the principal place of business of the assessee company is located at Faridabad only. The relevant page of Form aforesaid address is mentioned is at Compilation 22 ITA No. ITA No. CO No.122/Del/2024 including the principal place of business of the assessee company as well as the residential state of the directors is located in Faridabad, Haryana only and no-where in Delhi. Furthermore, all the bank accounts of the assessee company from where the business transactions are carried out are all located in Faridabad only for ease of doing business, the list of bank accounts so maintained is as under: - It is further pertinent to mention here that in the Tax Audit Report in Form 3CD, the auditor has categorically mentioned the address B, Industrial Area NIT, Faridabad – 121001, Haryana as “Corporate Office cum Works” which further buttress the fact the principal place of business of the assessee company is located at Faridabad only. The relevant page of Form- aforesaid address is mentioned is at Page 52 Compilation. ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 including the principal place of business of the assessee company as well as the residential state of the directors is located in where in Delhi. ll the bank accounts of the assessee company from where the business transactions are carried out are all located in for ease of doing business, the list of bank It is further pertinent to mention here that in the Tax Audit Report in Form 3CD, the auditor has categorically mentioned the address 121001, Haryana as “Corporate Office cum Works” which further buttress the fact that the principal place of business of the assessee company is located -3CD where the Page 52 of Indexed 23 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 xxi) To support the afore-stated facts & law, reliance is placed on the following landmark judgements wherein it has been held that the jurisdiction over the assessee company is determined on the basis of the principal place of business and not on the basis of registered address of the assessee company/ PAN history: - a. Hon’ble Supreme Court of India in case of Mansarovar Commercial (P.) Ltd. v. CIT [2023] 149 taxmann.com 178 (SC) vide order dated 10.04.2023 held as under: “8. The sum and substance of the above decisions of this Court as well as various High Courts would be that where the head and seat and directing power of the affairs of the company and the control and management is must be shown is not merely theoretical control and power, i.e., not de jure control and power, but de facto control and power actually exercised in the course of the conduct and management of the affairs of the firm; that the domicile or the registration of the company is not at all relevant and the determinate test is where the sole right to manage and control of the company lies. 9. Applying the above principles of law to the facts of the case at hand, and the findings recorded by the AO, confirmed by the CIT(A), it is rightly concluded that the control and management of the affairs of the respective assessees were with Rattan Gupta, Chartered Accountant in Delhi. The findings of fact recorded by the AO, confirmed by the CIT(A) that the control and management of the affairs of the assessee companies was with Rattan Gupta are based on the entire material on record. In light of the aforesaid findings, the High Court has not committed any error in reversing the contrary findings recorded by the ITAT and it is rightly observed and held that service of notice upon Rattan Gupta treating him as the principal officer and/or as a principal officer for and on behalf of the assessee companies were valid notices and the High Court has rightly held that the AO at New Delhi was having the jurisdiction to issue notice under the Income-tax Act, 1961.” 24 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 b. High Court of Calcutta in the case of India Glycols Ltd. v. CIT [2005] 145 TAXMAN 549 (CAL.) vide order dated 07.10.2004 held as under: “24. While deciding the merits of the case I find pursuant to the judgment and order of the Allahabad High Court the then Commissioner of Income tax, Lucknow, on April 25, 1994, has found that because the registered office of the company is situated within the jurisdiction of the Deputy Commissioner of Income-tax, Special Range, Moradabad, the petitioner is deemed to have the principal place of business of the company within the jurisdiction of the aforesaid officer. This finding in my view is not legally tenable by reason of the fact that the petitioner in its objection specifically stated that though petitioner No. 1 does have its registered office at Moradabad and also has various branch offices at various places, its principal place of business and/or corporate office is located at Calcutta. This fact has not been dealt with and/or adverted to by the Commissioner. Perhaps, he has equated registered office with the principal place of business. Principal place of business of the company is termed and/or treated as the place wherefrom all control over the business activities is exercised. In other words, the centre of power of the corporate body is located. This principal place of business may or may not be a registered place of business. In a very old decision of the Allahabad High Court in the case of Dina Nath Hemraj of Cawnpore v. CIT [1927] 2 ITC 304, the aforesaid position as regards principal place of business has been stated. In another decision of the Andhra Pradesh High Court in Devi Dayal Marwah v. CIT [1964] 52 ITR 829 the corresponding provision of the old Income-tax Act, namely section 64 (1 and 2) the court has been pleased to observe the principal place of business related to the controlling place. 25. In this case the petitioners have stated in the writ petition specifically that the principal place of business is located at Calcutta and as such respondent No. 2 having been satisfied as to the fact of location of the petitioner’s principal place of business at Calcutta, has assessed. I am unable to find lawful reason how such a decision could be rendered nugatory by the counterpart at Lucknow or for that matter at Moradabad. 25 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 26. From the material placed in the writ petition and uncontroverted averments made therein I hold writ petitioner No. 1 has its principal place of business within the meaning of section 124 of the said Act. 27. Accordingly, two orders are set aside. Naturally the impugned notices which are sequel to the aforesaid two impugned orders are also set aside.” c. Hon’ble ITAT Chandigarh in the case of Deluxe Enterprises v. ITO, Ward-1, Solan [2017] 88 taxmann.com 771 (Chandigarh - Trib.) vide order dated 16.01.2017 held: “9. A bare perusal of the above would reveal that in respect of a person carrying on business or profession the jurisdiction lies with the Assessing Officer of the place where the business or profession is carried on or if the business or profession is carried on in more than one place, then it lies with the Assessing Officer of the place where the principal place of business or profession is situated. In the present case, the facts before us demonstrate that the assessee was carrying on business or profession at one place only, which undisputedly is in Solan. The Ld. CIT (Appeals) has given a finding of fact that the partnership deed was got registered with Sub Registrar, Solan. In the partnership deed, the address of the firm as well as that of the partners, namely Shri Vivek Bhalla, Smt. Anjali Bhalla, Shri Har Dev Raj Bhalla and Mrs. Neelam Bhallla has been given as village Ranguwal, Tehsil Nalagarh, District Solan. No other place of business of the firm or the partners is mentioned in the partnership deed. A perusal of the partnership deed filed before us confirms the above fact, wherein at Clause 2 it is stated that the unit shall be set up at Nalagarh or any other place which the parties may from time to time determine and the partners have put their signatures giving address at village Ranguwal, Tehsil Nalagarh, Solan. Even PAN of the assessee lies with ITO, Baddi .Further even the assessee has not disputed the above facts. Thus, by virtue of sub section (1) to section 124 of the Act, the territorial jurisdiction undisputedly lay with the ITO, Solan and the Ld. CIT (Appeals) has rightly held so. The Ld. counsel for the assessee has not demonstrated before us as to how the jurisdiction, 26 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 in the backdrop of the above facts, did not lie with the ITO, Solan, despite repeated opportunities given. The entire thrust of the arguments of the Ld. counsel for the assessee was that it was consistently filing returns at Delhi and was being assessed there. This argument has no legs to stand on. The assessee has not stated as to why it was filing its returns at Delhi. It is not the assessee's case, nor has it been demonstrated before us that it had its head office or any place of business in Delhi. Specific query was raised by the Bench in this regard but nothing was forthcoming from the Ld. counsel for the assessee as to what was the basis of filing its return in Delhi. Merely because the assessee gives address of Delhi and files return there, the territorial jurisdiction is not conferred on the Assessing Officer located in Delhi. In as much as the place of carrying on business was located at Solan, by virtue of conferment of jurisdiction over the area, the ITO, Solan had the requisite jurisdiction to complete the assessment of the assessee firm. We, therefore, have no hesitation in upholding the order of the Ld. CIT (Appeals) on this issue.” d. Hon’ble Supreme Court in the case of Bidi Supply Co. v. Union of India [1956] 29 ITR 717 (SC) vide order dated 20.03.1956 held: “It is said that since its inception the firm has all along been assessed to income-tax by the Income-tax Officer, District III, Calcutta. In the course of assessment proceedings for the year 1950-51 a question was raised regarding the location of the principal place of business of the petitioner. Eventually the Income-tax authorities seem to have been satisfied that it was in Calcutta and on 18th December, 1954, the Income-tax Officer, District III, Calcutta, made assessment for the year 1950-51. On the 25th January, 1955, the petitioner received a letter from the Income-tax Officer, District III, Calcutta, informing it \"that in pursuance to orders under section 5(7-A) of the Income-tax Act your assessment records are transferred from this office to the Income-tax Officer, Special Circle, Ranchi, with whom you may correspond in future regarding your assessment proceedings.\" “Turning now to the Indian Income-tax Act, 1922, we find that section 64 makes provision for determining\" the place of 27 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 assessment. By subsection (1), where an assessee carries on a business, profession or vocation at any place, he shall be assessed by the Income-tax Officer of that area in which that place is situate or where the business, profession, or vocation is carried on at more than one place by the Income-tax Officer of the area in which the principal place of business, profession or vocation is situate. In all other cases, according to sub section (2), an assessee shall be assessed by the Income-tax Officer of the area in which he resides. If any question arises as to the place of assessment such question shall be decided, after giving the assessee an opportunity to represent his views by the Commissioner or Commissioners concerned or in case of disagreement between them by the Board of Revenue : [subsection (3)]. It is quite clear from the aforesaid provisions of section 64 that the Legislature considered the question of the place of assessment to be of some importance to the assessee. This order is calculated to inflict considerable inconvenience and harassment on the petitioner. Its books of account will have to be produced before the Income-tax Officer, Special Circle, Ranchi—a place hundreds of miles from Calcutta, which is its place of business. Its partners or principal officers will have to be away from the head office for a considerable period neglecting the main business of the firm. There may be no suitable place where they can put up during that period. There will certainly be extra expenditure to be incurred by it by way of railway fare, freight and hotel expenses. Therefore, the reality of the discrimination cannot be gainsaid. For the reasons stated above this petition must be allowed. Accordingly, the impugned order is set aside and an injunction is issued in terms of prayer (c) of the petition. The petitioner is entitled to the costs of this application. Crux as per well-settled judicial pronouncements - It can be seen that the place of business has the crucial role to play in determining the jurisdiction of an assessee as the jurisdiction is also a matter of administrative convenience for both the assessee as well as the income tax authorities. Therefore, Sec. 124 of the Act 28 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 specifically mandates that the Assessing Officer will assess the person who carries on his business or profession within his designated area. However, in the instant case of the assessee company, the said proposition of law was followed in all the years from AY 2009-10 to AY 2015-16 but not in AY 2011-12 which is under appeal before the Hon’ble Tribunal. In view of the afore-stated facts and law, it is clearly evident that assessment for AY 2011-12 has been framed by a Non- Jurisdictional AO u/s 143(3) of the Act vide order dated 26.03.2014 and thus, the same deserves to be quashed being out of jurisdiction. I(b). EVEN OTHERWISE, IF IT IS CONSIDERED THAT JURISDICTION LIES AT DELHI ONLY FOR ACADEMIC AND DISCUSSION PURPOSES, THE ADDL. CIT, RANGE-17, DELHI CANNOT BE CONSIDERED AS A LAWFUL JURISDICTIONAL ASSESSING OFFICER (A.O.) IN VIEW OF THE FOLLOWING FACTS: - 1) As per Sec. 2(7A) of the Act, the assessing officer is defined as under:- “7A) \"Assessing Officer\" means the Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of this Act, and the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director who is directed under clause (b) of sub-section (4) of that section to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Act” From a bare reading of the aforesaid definition, it can be seen that an Additional Commissioner can exercise & perform functions of an “Assessing Officer” only when a specific direction u/s 120(4)(b) of the Act has been issued. 29 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 2) In the instant case of the assessee company, no such direction has been issued u/s 120(4)(b) of the Act which fact is evident from the assessment order itself where there is not even a single whisper of the fact that how the assessment was taken over by the Ld. Addl. CIT, Range-17, New Delhi from the Ld. DCIT, Circle-17(1), New Delhi. The first notice which was received by the appellant company was notice u/s 142(1) of the Act dated 11.04.2013 which was issued by the DCIT, Circle-17(1), New Delhi and the first notice issued by the Ld. Addl. CIT, Range-17, New Delhi was notice u/s 142(1) of the Act dated 08.10.2013, the complete chain of notices so issued is as under: - *No communication whatsoever has been received on record regarding change of incumbent from Ld. Addl. CIT, Range-17, New Delhi to the Ld. DCIT, Circle-17(1), New Delhi before issuance of notice u/s 142(1) of the Act dated 08.10.2013 by the Ld. Addl. CIT, Range-17, New Delhi. 3) In view of the afore-stated facts, in the absence of an order/direction u/s 120(4)(b) of the Act, the Ld. Addl. CIT, Range- 17, Delhi cannot even be considered as an “Assessing Officer” and Date of Notice u/s 142(1) of the Act Notice u/s 142(1) issued by Copy enclosed vide Annexure 11.04.2013 Ld. DCIT, Circle-17(1), New Delhi A1 09.07.2013 Ld. DCIT, Circle-17(1), New Delhi A2 08.10.2013 * Ld. Addl. CIT, Range-17, New Delhi A3 17.01.2014 Ld. Addl. CIT, Range-17, New Delhi A4 27.02.2014 Ld. Addl. CIT, Range-17, New Delhi A5 30 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 when the Addl. CIT, Range-17, Delhi cannot at all be considered as an “Assessing Officer”, the question of whether jurisdiction lies with him does not arise at all. 4) The aforesaid fact speaks in volume that there is an inherent lack of jurisdiction on the part of the Ld. Addl. CIT, Range-17, New Delhi. The reliance is placed on the judgement of the Hon’ble Delhi, ITAT in the case of Nasir Ali v. Additional Commissioner of Income-tax, Range-23, New Delhi [2020] 113 taxmann.com 515 (Delhi - Trib.) wherein the Hon’ble Tribunal vide order dated 25.09.2019 held as under vide Para 7.2 in relation to AY 2011-12 only (as in the instant case of the assessee company): - “Considering the provisions of Section 2(7A) of the I.T. Act, 1961, which defines the definition of the Assessing Officer would make it clear that Addl. Commissioner of Income Tax could function as an Assessing Officer when jurisdiction have been assigned to him by virtue of the directions or orders issued under section 120(4)(b) of the I.T. Act, 1961. However, in the present case the Revenue Department has failed to produce any Order or Notification in favour of Addl. CIT, Range-23, New Delhi to act as an Assessing Officer, despite giving sufficient opportunities. No order or direction of the Board or any other Authority have been produced on record under section 120(1)(2) and (4) of the I.T. Act, 1961, empowering the Addl. CIT, Range-23, New Delhi, to act as an Assessing Officer in the present case to pass the impugned assessment order. The ld. D.R. contended that since it is mentioned in the assessment order that case was assigned to Addl. CIT, Range-23, New Delhi, vide Order of the CIT, Delhi-VIII, New Delhi, dated 09.12.2013, therefore, it is sufficient that Addl. CIT, Range-23, New Delhi, was having jurisdiction over the case of assessee. However, no Order or Notification in support of the above contention have been produced on record to satisfy the requirements of the Law. Mere mentioning of such order, dated 09.12.2013, may not serve the purposes. The ld. D.R. also relied upon Judgment of the Hon'ble Delhi High Court in the case of Mega Corpn. Ltd., (supra), in which it is mentioned in para-2 that on 31 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 01.08.2007, a Notification was issued under section 120(2) conferring power upon Addl. CIT. Therefore, this Judgment would not support the case of the Revenue. It may be noted further that provisions of Section 124(3) of the I.T. Act would not be applicable in the case of the assessee because Addl. CIT, Range-23, New Delhi did not have jurisdiction over the case of the assessee. Therefore, there is no question of raising any objection before him. It may, however, noted that Section 124 of the I.T. Act, would come into play when there was a direction or order issued under section 120(1)(2) of the I.T. Act, and A.O. have been vested with the jurisdiction over the case of the assessee. In that event, if there is any dispute of the jurisdiction of the A.O, such question will be determined in accordance with the provisions of Section 124 of the Income Tax Act. However, in the present case, the Addl. CIT, Range-23, New Delhi lacks in jurisdiction over the case of assessee. In the absence of any Order or Notification issued by the Board or any other Income Tax Authority in this behalf, contentions of ld. D.R. are rejected. Considering the totality of the facts and circumstances of the case, we are of the view that Addl. CIT, Range-23, New Delhi do not have jurisdiction over the case of assessee and since he did not assume the jurisdiction legally and validly, therefore, the impugned assessment order framed by him is vitiated and illegal and without jurisdiction. In view of the above discussion, we set aside the Orders of the authorities below and quash the impugned orders. Resultantly, all additions stand deleted. The Additional Ground No.1 of appeal of assessee is allowed.” The aforesaid order of the Hon’ble Delhi ITAT has been duly affirmed by the Hon’ble Jurisdictional High Court of Delhi in ITA No. 133/2021whereby the Hon’ble High Court vide order dated 20.03.2024 dismissed the appeal of the Revenue by observing as under: - “6. In our considered opinion, the provisions of Section 124(3) of the Act and the questions surrounding that provision would have warranted further consideration, 32 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 provided the appellant had been able to establish that the Addl. CIT Range-23, New Delhi was duly empowered to act as the AO. 7. We note from the judgment rendered by the ITAT that the Addl. CIT Range-23 New Delhi is stated to have been assigned to be the AO by virtue of an order of the CIT dated 09 December 2013. 8. The ITAT however has noted that despite opportunity having been granted, the appellant had failed to place that authorisation for its perusal. It is the aforesaid aspect which has constrained the ITAT to observe that the mere mentioning of such an order in the assessment order which was framed would not suffice. 9. In view of the aforesaid, we find no ground to interfere with the views expressed by the ITAT. The appeal raises no substantial question of law and shall consequently stand dismissed.” Further, reliance is placed on M/s. Tata Communications Ltd. Vs. Additional commissioner of income tax range-1(3) (MUM. TRIB.) ITA NO. 3972/MUM/2007 order dated 16.08.2019 and ITO (IT) TDS-2 VS. Tata Steel Ltd. [2024] 163 TAXMANN.COM 345 (MUMBAI - TRIB.) order dated 07.06.2024. In view of the afore-stated facts and settled law, the order passed by the Ld. Addl. CIT, Range-17, New Delhi is undisputedly without jurisdiction and accordingly, deserves to be quashed. II. (a) The impugned order dated 26.03.2014 has been passed u/s 143(3) of the Act without following the mandatory procedure of law of issuance of a valid notice u/s 143(2) of the Act In addition to the fact that the impugned assessment order dated 26.03.2014 has been framed by a Non-Jurisdictional AO (which has already been demonstrated in view of the detailed submission made above), the said assessment order has been passed without issuing a valid notice u/s 143(2) of the Act which is a mandatory 33 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 & preliminary requirement envisaged under the income tax law for selecting a case for scrutiny assessment u/s 143(3) of the Act. The said fact that no notice u/s 143(2) has been issued by the non-jurisdictional AO is evident from the following submission: - 1) The assessee company has never received a notice u/s 143(2) of the Act which fact was also raised before the Ld. CIT(A) vide Ground no. 3 of the Grounds of Appeal forming part of Form-35 filed on 15.04.2014, the copy of the same has also been filed vide application for Revised Ground dated 10.02.2025. 2) The first notice which was received by the assessee company was notice issued on 11.04.2013 u/s 142(1) of the Act by the Ld. DCIT, Circle-17(1), Delhi and no notice was ever received before that, whereas in the impugned assessment order dated 26.03.2014, the alleged date of issuance of notice u/s 143(2) of the Act is mentioned as 09.08.2012, however, no such notice has been received by the assessee company. The copy of the aforesaid notice dated 11.04.2013 is already enclosed herewith vide Annexure-A1. 3) It is worthwhile to mention here that the Ld. DCIT, Circle-17(1), Delhi had passed an intimation order u/s 143(1) of the Act on 28.03.2013 for AY 2011-12 wherein the returned income of the appellant company was accepted, the copy of the same is enclosed at Page 50 of the Indexed Compilation. 4) The Ld. AO had passed an intimation order u/s 143(1) of the Act particularly when Sec. 143(1D) of the Income Tax Act, 1961, grants immunity to the Assessing Officer from the processing of return u/s 143(1) of the Act in case where the said Assessing Officer has issued a notice u/s 143(2) of the Act meaning thereby that the AO need not to pass an intimation order u/s 143(1) of the Act when he/she has selected the case for scrutiny assessment by issuing notice u/s 143(2) of the Act, the relevant provisions of the said Sec. 143(1D) (Copy of relevant Sec. 143 is enclosed herewith marked as Annexure-B): - 34 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 “143(1D) Notwithstanding anything contained in sub-section (1), the processing of a return shall not be necessary, where a notice has been issued to the assessee under sub-section (2).” 5) From the aforesaid fact, it is clear that the Ld. AO had not issued any notice u/s 143(2) of the Act otherwise there is no occasion for him to pass an intimation order u/s 143(1) of the Act on 28.03.2013 particularly when the statute itself allows relief in this regard as already aforesaid. The statute gives the power to the Assessing Officer to issue notice u/s 143(2) of the Act upon the assessee to require any information or document from the assessee to explain the information furnished in its return of income when the Ld. AO has certain doubts about the information so furnished in the return of income. Therefore, when the Ld. AO has issued a notice u/s 143(2) of the Act then it is totally incongruous on the part of the Ld. AO to pass an order u/s 143(1) of the Act accepting the returned income of the assessee company particularly when the statute itself allows immunity in this regard (as already aforesaid). Reliance placed on CIT vs. Gujarat Electricity Board [2003] 129 Taxman 65 (SC) order dated 12.11.2002. 6) Furthermore, as a matter of departmental practice, notice u/s 142(1) of the Act are simultaneously issued after issue of notice u/s 143(2) of the Act but in the instant case, the first notice u/s 142(1) of the Act have only been issued on 11.04.2013, i.e., after the processing of the return u/s 143(1) of the Act on 28.03.2013 and no notice has been issued from 09.08.2012 [i.e., impugned date of notice u/s 143(2)] till 11.04.2013. 7) From the afore-stated facts, it appears from the face of the record that no notice was issued u/s 143(2) of the Act as is evident from the impugned assessment order dated 26.03.2014 itself as it has been clearly mentioned in the assessment order dated 26.03.2014 that case was selected for scrutiny under CASS subsequent to processing of return. The relevant portion of the assessment order dated 26.03.2014 is imaged herein below for ready reference: - Keeping the said fact in view, in absence of a notice u/s 143( the Act, the whole assessment framed u/s 143(3) of the Act is null & void as well as the intimation order so passed u/s 143(1) of the Act becomes the final assessment order as the time for issuing a valid notice u/s 143(2) of the Act got already expi issuance of order u/s 143(1) of the Act on 28.03.2013 wherein the returned income has been duly accepted. [EMPHASIS SUPPLIED] II (b) No notice u/s 143(2) of the act issued by the Ld. Addl. CIT, Range framing the impugned order u/s 143(3) of the act dated 26.03.2014 that too in the absence of an order u/s 127 of the Act 35 ITA No. ITA No. CO No.122/Del/2024 Keeping the said fact in view, in absence of a notice u/s 143( the Act, the whole assessment framed u/s 143(3) of the Act is null & void as well as the intimation order so passed u/s 143(1) of the Act becomes the final assessment order as the time for issuing a valid notice u/s 143(2) of the Act got already expi issuance of order u/s 143(1) of the Act on 28.03.2013 wherein the returned income has been duly accepted. [EMPHASIS SUPPLIED] No notice u/s 143(2) of the act issued by the Ld. Addl. CIT, Range-17, New Delhi who concluded the assessment framing the impugned order u/s 143(3) of the act dated 26.03.2014 that too in the absence of an order u/s 127 of the Act ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 Keeping the said fact in view, in absence of a notice u/s 143(2) of the Act, the whole assessment framed u/s 143(3) of the Act is null & void as well as the intimation order so passed u/s 143(1) of the Act becomes the final assessment order as the time for issuing a valid notice u/s 143(2) of the Act got already expired before issuance of order u/s 143(1) of the Act on 28.03.2013 wherein the returned income has been duly accepted. [EMPHASIS No notice u/s 143(2) of the act issued by the Ld. Addl. 17, New Delhi who concluded the assessment by framing the impugned order u/s 143(3) of the act dated 26.03.2014 that too in the absence of an order u/s 127 of the Act 36 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 As already stated at Para 2 of Part I(b) above that the jurisdiction was taken over by the Ld. Addl. CIT, Range-17, New Delhi from the Ld. DCIT, Circle-17(1), New Delhi which fact came to the knowledge of the assessee company for the first time when the notice u/s 142(1) of the Act dated 08.10.2013 issued by the Ld. Addl. CIT, Range-17, New Delhi was received by the assessee. After the takeover of jurisdiction, the first notice which was issued by the Ld. Addl. CIT, Range-17, New Delhi was notice u/s 142(1) of the Act dated 08.10.2013 and no notice u/s 143(2) has been issued by the Ld. Addl. CIT, Range-17, New Delhi which fact is evident from the assessment order dated 26.03.2014 itself as the date of issuance of notice u/s 143(2) of the Act has been mentioned as 09.08.2012 and the assessment proceedings have been taken over by the Ld. Addl. CIT, Range-17, New Delhi w.e.f. 08.10.2013, i.e., after the expiry of limitation to issue notice u/s 143(2) of the Act for AY 2011-12 which expired on 30.09.2012. It is a well-settled law that the Assessing Officer who concludes the assessment and initiates the assessment should be the same, reliance place on Valvoline Cummins Ltd. v. DCIT, Circle-17(1) [2008] 171 Taxman 241 (Delhi High Court). Owing to the said settled law, the assessing officer who concludes the assessment u/s 143(3) of the Act has to mandatorily issue notice u/s 143(2) of the Act for initiation of the assessment proceedings. The Ld. Addl. CIT, Range-17, New Delhi is not required to issue notice u/s 143(2) of the Act only when an order u/s 127 of the Act has been passed transferring the jurisdiction from Ld. DCIT, Circle-17(1), New Delhi to Ld. Addl. CIT, Range-17, New Delhi by virtue of Sub- Section (4) of Sec. 127 of the Act. No such order u/s 127 of the Act has been passed which is a matter of record and also evident from the assessment order itself as there is no mention of transfer of jurisdiction vide order u/s 127 of the Act. Reliance is being placed on the judgement of the Hon’ble Jurisdictional Delhi High Court in case of PCIT-19 v. Vimal Gupta in ITA no. 515/2016whereby the Hon’ble Court vide order dated 16.10.2017 held that without an order u/s 127 of the Act the Addl. Commissioner cannot assume jurisdiction/ takeover jurisdiction from ITO and thus, the order passed by him is 37 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 without jurisdiction and bad in law. Further, reliance is placed on the following decisions of the Coordinate Benches of the Hon’ble ITAT: - i) Hon’ble ITAT, Delhi in case of VIPUL MITTAL VS. DCIT, CIRCLE 11 (2) (DELHI – TRIB.) ITA NO.2850/DEL/2019 vide order dated 15th January 2025 held as under: - “16. Further the Revenue has not brought on record an order u/s 127 of the Act passed in order to transfer the case to DCIT, Circle 11 (2), New Delhi except making the submissions that assessee should file the objection within one month u/s 124(3) of the Act. Since the issue of notice u/s 143(2) is the basis of initiation of the assessment u/s 143(3) and the jurisdictional officer should have issued the notice and also completed the assessment. The present Assessing Officer has completed the assessment without following the due process of law and we, respectfully following the decisions of the coordinate Bench and ITAT Mumbai, are inclined to hold that the jurisdictional notice u/s 143(2) was not issued by the DCIT before completing the assessment u/s 143(3) of the Act and that there is an unwarranted defect in this case which is not curable. Accordingly, the assessment passed in the given case is quashed and accordingly, the additional grounds raised by the assessee are allowed.” ii) Hon’ble ITAT, Delhi in case of Sapna Rastogi Vs Income Tax Officer, Ward–1(2)(5) (DELHI–TRIB.) vide order dated 28TH August, 2024. In view of the afore-stated facts, in absence of order u/s 127 of the Act, the Ld. Addl. CIT, Range-17, New Delhi cannot assume jurisdiction as well as he was required to issue notice u/s 143(2) of the Act again which has not been issued by the Ld. Addl. CIT, Range-17, New Delhi who has framed the impugned assessment order dated 26.03.2014 which makes the whole assessment proceedings null and void-ab-initio being without jurisdiction that too without following the mandatory procedure in law of issuance of notice u/s 143(2) of the Act. 38 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 III. The impugned assessment order dated 26.03.2014 is barred by limitation Apart from the aforesaid facts that the assessment has been framed by a Non-Jurisdictional AO that too without following the mandatory procedure of law of issuance of valid notice u/s 143(2) of the Act, the impugned assessment order dated 26.03.2014 is also barred by limitation as the limitation for framing assessment u/s 143(3) of the Act for AY 2011-12 got expired on 31.12.2013 as per the provisions of Sec. 153(1) read with First Proviso to Sec. 153(1) of the Act, the relevant contents of the said provisions as they stood immediately before the amendment made vide Finance Act 2012 w.e.f. 01.07.2012 are reproduced herein below(Copy of relevant Sec. 153 is enclosed herewith marked as Annexure-C): - “153. 99[(1) No order of assessment 1 shall be made under section 143 or section 144 at any time after the expiry of— (a ) two years from the end of the assessment year in which the income was first assessable ; or (b ) one year from the end of the financial year in which a return or a revised return relating to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, is filed under sub-section (4) or sub-section (5) of section 139, whichever is later :] 2 [Provided that in case the assessment year in which the income was first assessable is the assessment year commencing on the 1st day of April, 2004 or any subsequent assessment year, the provisions of clause (a) shall have effect as if for the words \"two years\", the words \"twenty-one months\" had been substituted :]” In view of the afore-stated facts and law, the assessment so framed u/s 143(3) of the Act for AY 2011-12 vide order dated 26.03.2014 is time barred and thus, bad in law, void-ab-initio & non-est and accordingly, deserves to be quashed. C. PRAYER 39 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 In view of the above submissions, it is hereby prayed before your honors to kindly grant requisite relief to the appellant by quashing the legally unsustainable assessment order so framed u/s 143(3) of the Act by a non-jurisdictional AO that too without following the mandatory procedure in law of issuance of notice u/s 143(2) of the Act keeping in view the principles of natural law & justice and oblige.” 9. Brief facts of the matter are that an assessment was framed by the Ld. AO vide order u/s 143(3) of the Act dated 26.03.2014 whereby the income of the assessee company was determined at Rs. 57,15,05,398/- as against the returned income of Rs. 18,87,66,500/- by making additions to the tune of Rs. 38,27,38,898/- on different issues. The Ld. CIT(A), Delhi-29 vide order u/s 250 of the Act dated 27.06.2024 allowed partial relief to the assessee company by confirming the addition to the extent of Rs. 3,88,42,034 out of total addition of Rs. 38,27,38,898/-. 10. The assessee company as well as the Revenue are under appeal before us against the aforesaid order dated 27.06.2024 u/s 250 of the Act. 11. During the course of hearing held on 24.2.2025, the Ld. AR for the assessee vehemently argued that the assessment order so passed u/s 143(3) of the Act dated 26.03.2014 by the Ld. AO is without jurisdiction based on the fact that the valid jurisdiction of the assessee company lies with the DCIT, Central Circle-1, Faridabad at the time when the 40 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 assessment was framed for AY 2011-12 by the Ld. Addl. CIT, Range-17, New Delhi. 12. The ld. AR submitted that since inception of the business operations of the assessee company from 01.04.2008, the assessments have been framed by the DCIT, Central Circle-1, Faridabad except the assessment so framed for the impugned assessment year under this appeal i.e. 2011- 12. The Ld. AR submitted before the Bench, a chart of assessment history which contained the details of assessments framed in case of the assessee company from AY 2009-10 to AY 2015-16 whereby it was demonstrated that the assessments from AY 2009-10 to AY 2015-16 all have been framed by the ACIT/DCIT, Central Circle-1, Faridabad except for AY 2011-12. The said chart is reproduced hereunder: - AY Details of Assessment Order Framed u/s Date Passed by 2009- 10 143(3) 08.11.2011 ACIT, CC-1, Faridabad [Notice u/s 143(2) issued on 19.08.2010 by ITO-21(1), Delhi enclosed at Page 6 and thereafter case was transferred to CC-1, Faridabad] 2010- 11 147 r.w.s. 143(3) 31.03.2014 DCIT, CC-1, Faridabad [Notice u/s 148 issued on 25.03.2013 by DCIT, CC-1, Faridabad enclosed 41 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 13. T h e L d . A R s u b m i tted that in the aforesaid chart, it is apparent that the re-assessment order at Page 19] 2011- 12 143(3) 26.03.2014 Addl. CIT, Range-17, New Delhi 2012- 13 143(3) 20.02.2015 DCIT, CC-1, Faridabad [Notice u/s 142(1) issued on 29.11.2013 by DCIT, Circle-17(1), Delhi enclosed at Page 21 and thereafter case was transferred to CC-1, Faridabad on request made vide letter dated 12.09.14 enclosed at Page 22] 2013- 14 143(3) 17.03.2016 DCIT, CC-1, Faridabad [Notice u/s 143(2) issued on 12.09.2014 by DCIT, Circle-17(1), Delhi enclosed at Page 26 and thereafter case was transferred to CC-1, Faridabad] 2014- 15 143(3) 21.12.2016 DCIT, CC-1, Faridabad [Notice u/s 143(2) issued on 31.08.2015 by DCIT, Circle-26(1) & (2), Delhi and thereafter case was transferred to CC-1, Faridabad] 2015- 16 143(3) 14.03.2017 DCIT, CC-1, Faridabad [Notice u/s 143(2) issued on 17.03.2016 by DCIT, Circle-26(1), Delhi and thereafter case was transferred to CC-1, Faridabad] 42 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 for AY 2010-11 was framed by the DCIT, Central Circle-1, Faridabad on 31.03.2014, i.e., just 5 days after the impugned order so framed u/s 143(3) of the Act for AY 2011-12 on 26.03.2014 by the Ld. Addl. CIT, Range-17, New Delhi. 14. Ld. AR submitted that there is no provision of law in the Income Tax Act which allows simultaneous jurisdiction that too where the two authorities are located at different cities – one at Faridabad and one at Delhi. 15. The Ld. AR placing reliance on the aforesaid chart, argued that it can be seen that the assessment for the subsequent assessment years for AY 2012-13 to AY 2015-16 were all framed by the Ld. DCIT, Central Circle- 1, Faridabad and while the assessment proceedings were being conducted for AY 2011-12 by the Ld. Addl. CIT, Range-17, New Delhi, re- assessment proceedings for AY 2010-11 were also parallelly being conducted by the DCIT, Central Circle-1, Faridabad which re-opening assessment was initiated vide notice u/s 148 of the Act dated 25.03.2013. The Ld. AR most vehemently submitted that the Ld.AO has brushed aside to the objections filed regarding assumption of invalid jurisdiction during the course of assessment proceedings. The Ld. AR argued that on the basis of the facts apparent on record, it is undoubtedly clear that the jurisdiction has been erroneously assumed by the Ld. Addl. CIT, Range- 43 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 17, New Delhi and therefore, the impugned assessment order u/s 143(3) of the Act has been framed without a valid jurisdiction. 16. Furthermore, the Ld. AR also submitted that the principal place of business of the assessee company is located in Faridabad only for which the Ld. AR placed the Excise Registration Certificates, & VAT Registration Certificates before the Bench forming part of the Indexed Compilation filed by the Ld. AR during the course of hearing. It has also been pointed out by the Ld. AR vide their written submissions that all the Bank Accounts of the assessee company are also maintained in Faridabad as well as the directors/promoters having control over the management of the assessee company are also based in Faridabad. The said facts also emanate from the records of the authorities below. On the strength of these facts, the Ld. AR submitted that as per the governing section of jurisdiction, i.e., Sec. 124 of the Act which states that the in case of a person carrying on a business or profession, the Assessing Officer having jurisdiction over the area where the principal place of business is located will be considered as the Assessing Officer meaning thereby that in any case, the jurisdiction of the assessee company cannot lie in Delhi. 17. The Ld. AR argued that the aforesaid fact was available on record before the Ld. Addl. CIT, Range-17, New Delhi that the principal place of 44 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 business of the assessee is at Faridabad only as the said fact was duly indicated in the Tax Audit Report in Form-3CD for AY 2011-12. The Ld. AR further argued that the registered address of the assessee company at C-8, East of Kailash, New Delhi served only as a correspondence address and no business has ever been carried out from such address. 18. In support of the aforesaid argument that the jurisdiction is determined on the basis of principal place of business, the Ld. AR placed reliance on the following judgements: -  Hon’ble Supreme Court of India in case of Mansarovar Commercial (P.) Ltd. v. CIT [2023] 149 taxmann.com 178 (SC) vide order dated 10.04.2023 held at Para 8 & 9 as under: - “8. The sum and substance of the above decisions of this Court as well as various High Courts would be that where the head and seat and directing power of the affairs of the company and the control and management is must be shown is not merely theoretical control and power, i.e., not de jure control and power, but de facto control and power actually exercised in the course of the conduct and management of the affairs of the firm; that the domicile or the registration of the company is not at all relevant and the determinate test is where the sole right to manage and control of the company lies. 9. Applying the above principles of law to the facts of the case at hand, and the findings recorded by the AO, confirmed by the CIT(A), it is rightly concluded that the control and management of the affairs of the respective assessees were with Rattan Gupta, Chartered Accountant in Delhi. The findings of fact recorded by the AO, confirmed by the CIT(A) that the control and management of the affairs of the assessee companies was with Rattan Gupta are based on the entire material on record. In light of the aforesaid findings, the High Court has not committed any error in reversing 45 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 the contrary findings recorded by the ITAT and it is rightly observed and held that service of notice upon Rattan Gupta treating him as the principal officer and/or as a principal officer for and on behalf of the assessee companies were valid notices and the High Court has rightly held that the AO at New Delhi was having the jurisdiction to issue notice under the Income-tax Act, 1961.”  High Court of Calcutta in the case of India Glycols Ltd. v. CIT [2005] 145 TAXMAN 549 (CAL.) vide order dated 07.10.2004 observed held at Paras 24 to 27 as under: - “24. While deciding the merits of the case I find pursuant to the judgment and order of the Allahabad High Court the then Commissioner of Income tax, Lucknow, on April 25, 1994, has found that because the registered office of the company is situated within the jurisdiction of the Deputy Commissioner of Income-tax, Special Range, Moradabad, the petitioner is deemed to have the principal place of business of the company within the jurisdiction of the aforesaid officer. This finding in my view is not legally tenable by reason of the fact that the petitioner in its objection specifically stated that though petitioner No. 1 does have its registered office at Moradabad and also has various branch offices at various places, its principal place of business and/or corporate office is located at Calcutta. This fact has not been dealt with and/or adverted to by the Commissioner. Perhaps, he has equated registered office with the principal place of business. Principal place of business of the company is termed and/or treated as the place wherefrom all control over the business activities is exercised. In other words, the centre of power of the corporate body is located. This principal place of business may or may not be a registered place of business. In a very old decision of the Allahabad High Court in the case of Dina Nath Hemraj of Cawnpore v. CIT [1927] 2 ITC 304, the aforesaid position as regards principal place of business has been stated. In another decision of the Andhra Pradesh High Court in Devi Dayal Marwah v. CIT [1964] 52 ITR 829 the corresponding provision of the old Income-tax Act, namely section 64 (1 and 2) the court has been pleased to observe the principal place of business related to the controlling place. 46 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 25. In this case the petitioners have stated in the writ petition specifically that the principal place of business is located at Calcutta and as such respondent No. 2 having been satisfied as to the fact of location of the petitioner’s principal place of business at Calcutta, has assessed. I am unable to find lawful reason how such a decision could be rendered nugatory by the counterpart at Lucknow or for that matter at Moradabad. 26. From the material placed in the writ petition and uncontroverted averments made therein I hold writ petitioner No. 1 has its principal place of business within the meaning of section 124 of the said Act. 27. Accordingly, two orders are set aside. Naturally the impugned notices which are sequal to the aforesaid two impugned orders are also set aside.”  Hon’ble ITAT Chandigarh in the case of Deluxe Enterprises v. ITO, Ward-1, Solan [2017] 88 taxmann.com 771 (Chandigarh - Trib.) vide order dated 16.01.2017 held at Para 9 as under: - “9. A bare perusal of the above would reveal that in respect of a person carrying on business or profession the jurisdiction lies with the Assessing Officer of the place where the business or profession is carried on or if the business or profession is carried on in more than one place, then it lies with the Assessing Officer of the place where the principal place of business or profession is situated. In the present case, the facts before us demonstrate that the assessee was carrying on business or profession at one place only, which undisputedly is in Solan. The Ld. CIT (Appeals) has given a finding of fact that the partnership deed was got registered with Sub Registrar, Solan. In the partnership deed, the address of the firm as well as that of the partners, namely Shri Vivek Bhalla, Smt. Anjali Bhalla, Shri Har Dev Raj Bhalla and Mrs. Neelam Bhallla has been given as village Ranguwal, Tehsil Nalagarh, District Solan. No other place of business of the firm or the partners is mentioned in the partnership deed. A perusal of the partnership deed filed before us confirms the above fact, wherein at Clause 2 it is stated that the unit shall be set up at Nalagarh or any other place which 47 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 the parties may from time to time determine and the partners have put their signatures giving address at village Ranguwal, Tehsil Nalagarh, Solan. Even PAN of the assessee lies with ITO, Baddi .Further even the assessee has not disputed the above facts. Thus, by virtue of sub section (1) to section 124 of the Act, the territorial jurisdiction undisputedly lay with the ITO, Solan and the Ld. CIT (Appeals) has rightly held so. The Ld. counsel for the assessee has not demonstrated before us as to how the jurisdiction, in the backdrop of the above facts, did not lie with the ITO, Solan, despite repeated opportunities given. The entire thrust of the arguments of the Ld. counsel for the assessee was that it was consistently filing returns at Delhi and was being assessed there. This argument has no legs to stand on. The assessee has not stated as to why it was filing its returns at Delhi. It is not the assessee's case, nor has it been demonstrated before us that it had its head office or any place of business in Delhi. Specific query was raised by the Bench in this regard but nothing was forthcoming from the Ld. counsel for the assessee as to what was the basis of filing its return in Delhi. Merely because the assessee gives address of Delhi and files return there, the territorial jurisdiction is not conferred on the Assessing Officer located in Delhi. In as much as the place of carrying on business was located at Solan, by virtue of conferment of jurisdiction over the area, the ITO, Solan had the requisite jurisdiction to complete the assessment of the assessee firm. We, therefore, have no hesitation in upholding the order of the Ld. CIT (Appeals) on this issue.”  Hon’ble Supreme Court in the case of Bidi Supply Co. v. Union of India [1956] 29 ITR 717 (SC) vide order dated 20.03.1956 19. On the contrary, the Ld. DR placed reliance on the order of the Ld. CIT(A) and argued that the jurisdiction has been assumed by the Ld. Addl. CIT, Range-17, New Delhi on the basis of PAN database and therefore, the jurisdiction assumed by the Ld. Addl. CIT, Range-17, New Delhi is totally correct and in consonance to the provisions of income tax 48 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 law. The Ld. CIT(A) also adjudicated the issue of jurisdiction in case of the assessee company by observing that as per the PAN History, the PAN of assessee company is at Delhi and therefore, the jurisdiction is valid. 20. In the rejoinder, against the aforesaid contention of the Ld. DR, the Ld. AR for the assessee submitted that it is a settled law that “PAN jurisdiction is no jurisdiction” as already decided by the Hon’ble ITAT, Delhi itself in case of ACIT, Circle-27(1), Delhi v. M/s. UV Realtors Pvt. Ltd. in I.T.A. No.6033/DEL/2016 wherein vide order dated 17.03.2021 at Para 16, the Hon’ble Tribunal held that “nowhere in the statute it has been provided that PAN address will decide the territorial jurisdiction of the Assessing Officer.” In view of the aforesaid judgement, the argument of the Ld. DR does not hold good and moreover is against the settled law. 21. Considered the rival submissions, material placed on record. We find that the whole thrust of the arguments of the Ld. AR of the assessee company is based on the First Ground of Appeal which was further revised vide letter dated 10.02.2025 which relates to the Jurisdictional Defect in the assessment order framed u/s 143(3) of the Act dated 26.03.2014 for AY 2011-12 that the assessment has been framed without assuming a valid jurisdiction. 49 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 22. We have observed that the Ld. AR of the assessee company vide his submissions have demonstrated that the jurisdiction of the assessee company lies with DCIT, CC-1, Faridabad on the backdrop of the assessment history of the assessee company. We also find the submission of the Ld. AR logical that when the case of the assessee company for the years before as well as after the impugned AY 2011-12 have all been framed by the Ld. DCIT, CC-1, Faridabad then how the jurisdiction for AY 2011-12 was assumed by the Ld. Addl. CIT, Range-17, New Delhi particularly when no order u/s 127 of the Act has been brought on record by the Revenue. 23. We have seen from the records placed before us that during the assessment proceedings for AY 2009-10, the proceedings were initiated by ITO Ward-21(1), Delhi vide notice u/s 143(2) of the Act dated 19.08.2010 then a request was made by the assessee vide letter dated 06.09.2010 to transfer the case to the valid jurisdictional assessing officer, i.e., DCIT, CC-1, Faridabad. On receipt of such request, the ITO Ward-21(1), Delhi transferred the case vide his letter dated 20.10.2010 to the DCIT, CC-1, Faridabad. This fact shows that the point of jurisdiction was well accepted by both the authorities at Delhi as well as at Faridabad that jurisdiction of the assessee company lies at DCIT, CC-1, Faridabad. 50 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 This transfer of jurisdiction is evident from the assessment order for AY 2009-10 itself and the same reference of transfer of jurisdiction from Delhi to Faridabad has been noticed in the assessment orders framed for AY 2014-15 and AY 2015-16 as well. It appears that the authorities at Delhi were under misconception for assuming jurisdiction of the assessee company based on the PAN history or PAN database. 24. We concur with the argument of the Ld. AR for the assessee that jurisdiction is not determined on the basis of PAN data rather territorial jurisdiction is determined on the basis of the provisions of Sec. 124 of the Act. As per the provisions of Sec. 124, the principal place of business has to be seen while exercising jurisdiction over an assessee who derives income from business or profession. In the instant case, as submitted by the Ld. AR, the principal place of business of the assessee company is also located at Faridabad only which means that in no case, the jurisdiction could have been validly assumed by the authority or an officer at Delhi over the assessee company. 25. The Ld. DR for the Revenue has only asserted on one point that the jurisdiction assumed by the Ld. Addl. CIT, Range-17, New Delhi is valid as PAN of the assessee company falls in Delhi and neither any other point has been raised by the Ld. DR with respect to the jurisdictional issue 51 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 raised by the assessee company nor any counter has been made against the facts submitted by the Ld. AR for the assessee. On the other hand, the Ld. AR for the assessee has duly demonstrated that the jurisdiction of the assessee company lies with Faridabad only by providing detailed submissions on the assessment history of the assessee company as well as by establishing that principal place of business of the assessee company is at Faridabad only which information was duly available with the Ld. Addl. CIT, Range-17, New Delhi while framing assessment u/s 143(3) of the Act for AY 2011-12 in the form of Tax Audit Report in Form-3CD as already stated at 12 above. 26. In the light of the above facts on record, we are of the opinion that the Ld. Addl. CIT, Range-17, New Delhi has framed the impugned assessment order dated 26.03.2024 without assuming a valid jurisdiction and we thus allow the ground no. 1 raised by the assessee challenging the validity of assessment framed by the Ld. Addl. CIT, Range-17, New Delhi and accordingly quash the assessment so framed ,without jurisdiction, being bad in law, non-est and void-ab-initio. 27. Since we have quashed the assessment order on the jurisdictional issue of assuming an invalid jurisdiction by the Ld. Addl. CIT, Range-17, New Delhi for A.Y. 2011-12 in appeal before us in favour of the assessee, the 52 ITA No.3550/DEL/2024 ITA No.3915/DEL/2024 CO No.122/Del/2024 other grounds raised both in assessee’s as well as in revenue’s appeal have become infructuous and hence not adjudicated. 28. In the result, the appeal of the assessee is allowed and the appeal of the Revenue stands dismissed. The cross objections have been withdrawn by the assessee as the same now becomes infructuous in view of the dismissal of the appeal of the Revenue, and the same is dismissed as withdrawn. Order pronounced in the open court on this 19th day of March, 2025. Sd/- sd/- (MAHAVIR SINGH) (S.RIFAUR RAHMAN) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 19.03.2025 TS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals). 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "