Sri Krishnendu Chowdhury, Kolkata V. ITO, WD-1, HALDIA, Purba Medinipur

ITA 1153/KOL/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4189 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-09-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 08-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAHADEB GHOSH M
• Keywords: Competent authority; Assessment record; Right to appeal; Condonation of delay; Reason to believe
• Section: 143(3); 142(1); 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.1153/KOL/2015 ASSESSMENT YEAR:2010-11 SRI KRISHNENDU CHOWDHURY, C/O MAHADEV GHOSH, ADVOCATE, BF-199, SLT LAKE CITY, KOLKATA-64 [ PAN NO. ABYPC 8992 J ] / V/S . INCOME TAX OFFICER, WARD-1, BASUDEBPUR, P.O. KHANJANCHAR, PURBA MEDINIPUR-721602 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI MAHADEB GHOSH, ADVOCATE /BY RESPONDENT MD. GHAYAS UDDIN, JCIT-DR /DATE OF HEARING 10-11-2016 /DATE OF PRONOUNCEMENT 18-11-2016 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-7, KOLKATA DATED 31.03.2015. ASSESSME NT WAS FRAMED BY ITO WARD-1, HALDIA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HERE INAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 20.03.2013 FOR ASSESSMENT YEAR 2010-11. SHRI MAHADEB GHOSH, LD. ADVOCATE APPEARED ON BEHALF OF ASSESSEE AND MD. GHAYAS UDDIN, LD. DEPARTMENTAL REPRESENTATIVE APPEARED ON BEHALF OF REVENUE. ITA NO.1153/KOL/2015 A.Y. 2010-11 SH K. CHOWDHURY VS. ITO WD-1, HALDIA PAGE 2 2. THE ASSESSEE HAS RAISED THE ADDITIONAL GROUNDS O F APPEAL WHICH WERE ADMITTED AFTER HEARING BOTH THE PARTIES. THE ADDITIONAL GROU NDS RAISED ARE AS FOLLOWS:- 1. THAT THE NOTICE U/S. 143(2) OF I.T ACT, 1961 DA TED 14.09.2011 ISSUED BY THE ACIT, HALDIA WITHOUT ASSUME THE JURISDICTION AS PER CBDT INSTRUCTION NO. 1/11, DATED 31.1.2011. AS PER THE CBDT INSTRUCTION NO. 1/11 DATED 31.1.2011 THE NON-CORPORATE RETURNS UPTO RS.15 LACS INCOME FOR ITOS IN MOFUSSIL AREAS FROM 1.4.2011. THE NOTICE U/S. 143(2 ) OF THE IT ACT, 1961 SHOULD/MUST BE ISSUED THE JURISDICTIONAL ITO. THE A CTION OF THE ACIT, HALDIA FOR ISSUING THE NOTICE U/S. 143(2) IS ILLEGAL, BAD- IN-LAW AND LIABLE TO BE QUASHED. 2. THAT THE COMPETENT AUTHORITY HAS NOT PASSED ANY TRANSFERRED ORDER U/S 127 OF TRANSFERRING THE ASSESSEES FILE FROM THE ACIT, HAL DIA TO ITO,WARD-1, HALDIA. AS SUCH, WITHOUT TRANSFERRED ORDER U/S 127 THE ITO, WARD-1, HALDIA CANNOT ASSUME THE JURISDICTION OVER THE ASSESSEE. HENCE, T HE ASSESSMENT ORDER PASSED U/S 143(3), DATED 20.03.2013 PASSED BY THE ITO WARD -1, HALDIA WITHOUT JURISDICTION OVER THE ASSESSEE IS INVALID, BAD-N-LA W AND VOID-AB-INITIO, AND LIABLE TO BE QUASH. 3. THAT THE LD. CIT(A)-7 ERRED TO CONFIRM THE ARBIT RARY, ILLEGAL ADDITION U/S 40(A)(IA) OF THE IT ACT, 1961 FOR MACHINE HIRE CHAR GES TO THE TUNE OF 28,21,615.00. 3. WE FIND THAT THE ABOVE ADDITIONAL GROUND RAISED BY THE ASSESSEE FOR ASSUMPTION OF JURISDICTION I.E. THE AO HAVING NO TERRITORIAL J URISDICTION OVER THE ASSESSEE, IS ISSUING NOTICE UNDER SECTION 143(2) OF THE ACT IS PURELY A LEGAL GROUND WHICH GOES TO THE ROOT OF THE MATTER AND NO NEW FACTS ARE REQUIRED TO BE I NVESTIGATED OR PLACED ON RECORD FOR THE ADJUDICATING THE SAME. THE HONBLE SUPREME COUR T IN THE CASE OF NATIONAL THERMAL POWER CO. LTD VS. CIT (1998) 229 ITR 383 HA S HELD AS UNDER : WE DO NOT SEE ANY REASON TO RESTRICT THE POWER OF THE TRIBUNAL UNDER S. 254 ONLY TO DECIDE THE GROUNDS WHICH ARISE FROM THE ORD ER OF THE CIT(A). BOTH THE ASSESSEE AS WELL AS THE DEPARTMENT HAVE A RIGHT TO FILE AN APPEAL/CROSS- OBJECTIONS BEFORE THE TRIBUNAL. WE FAIL TO SEE WHY THE TRIBUNAL SHOULD BE PREVENTED FROM CONSIDERING QUESTIONS OF LAW ARISING IN ASSESSMENT PROCEEDINGS ALTHOUGH NOT RAISED EARLIER. IN VIEW OF THE ABOVE FACTS, THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE ARE APPARENTLY OF A LEGAL GROUND WHICH GOES TO THE ROOT OF THE MAT TER AND NO NEW FACTS ARE REQUIRED TO BE INVESTIGATED, WE ADMIT THE GROUND AND ADJUDICATE THE SAME. ITA NO.1153/KOL/2015 A.Y. 2010-11 SH K. CHOWDHURY VS. ITO WD-1, HALDIA PAGE 3 4. AT THE VERY OUTSET OF THE PROCEEDINGS BEFORE US, IT WAS OBSERVED THAT THERE WAS A DELAY OF 91 DAYS IN FILING THE APPEAL BEFORE THE TR IBUNAL. THE IMPUGNED ORDER OF THE LEARNED CIT(A) CONFIRMING THE ORDER OF AO WAS PASSE D VIDE ORDER DT. 31.3.2015. ADMITTEDLY, THE ORDER WAS RECEIVED BY THE ASSESSEE ON 10.4.2015 AND THEREFORE THE APPEAL FOR A.YS 2010-11 OUGHT TO HAVE BEEN FILED BE FORE THIS TRIBUNAL ON OR BEFORE 9.6.2015. THE APPEAL WAS HOWEVER FILED ON 8.9.2015, THEREBY LEADING TO A DELAY OF 91 DAYS. 4.1 ALONG WITH THE APPEAL FOR ASSESSMENT YEAR, THE ASSESSEE HAS FILED SEPARATE PETITIONS FOR CONDONATION OF DELAY OF 91 DAYS IN FI LING THE APPEAL BEFORE THIS TRIBUNAL. THE REASONS FOR THE SAID DELAY IN FILING THE APPEAL WAS SUBMITTED BY THE ASSESSEE IN THE SAID PETITION THAT THE NECESSARY PAPERS WERE HANDED OVER TO THE OLD COUNSEL TO FILE THE APPEAL BUT HE FAILED TO DO SO. THEREFORE A NEW COUN SEL WAS SEARCHED FOR FILING THE APPEAL TO THE TRIBUNAL. THEREFORE THE DELAY OCCURRE D FOR THE REASONS WHICH WERE BEYOND THE CONTROL OF THE ASSESSEE. ACCORDINGLY THE ASSESSEE HUMBLY PRAYED BEFORE FOR THE CONDONATION OF THE DELAY AND TO ADJUDICATE THE MATTER ON MERITS IN THE INTERESTS OF JUSTICE AND EQUITY. THE ASSESSEE IN SUPPORT OF ITS PETITION SEEKING CONDONATION OF DELAY ALSO PRAYED THE TRIBUNAL TO TAKE A LENIENT VIEW IN THE MATTER, CONDONE THE DELAY AND DISPOSE OFF THE MATTER BASED ON THE MERITS OF THE C ASE AND NOT DISMISS THE MATTER ON THE BASIS OF TECHNICALITIES. ON THE OTHER LD. DR HAS NO T RAISED ANY OBJECTION IF THE PETITION FOR THE DELAY OF CONDONATION IS CONSIDERED. HENCE, WE CONDONE THE DELAY AND TO PROCEED HEARING OF THE APPEAL. 5. THE FIRST ISSUE RAISED BY ASSESSEE IN THIS APPEA L IS THAT THE ASSESSMENT FRAMED U/S. 143(3) OF THE ACT IS INVALID AS THE NOTICE U/S . 143(2) OF THE ACT WAS NOT ISSUED BY THE JURISDICTIONAL INCOME TAX OFFICER. 6. AT THE OUTSET, WE FIND THAT ASSESSEE HAS CHALLEN GED THE RE-ASSESSMENT PROCEEDING ON THE GROUND THAT NO VALID NOTICE UNDER SECTION 143(2) OF THE ACT HAS BEEN ISSUED. THE LD. AR BEFORE US SUBMITTED THAT AS PER THE CBDT INSTRUCTION NO. 1/2011 DATED 31.01.2011A NEW MONETARY LIMITS IN MOFUSSIL A REAS WAS FIXED FOR SELECTING THE CASE UNDER SCRUTINY. ACCORDINGLY THE ITOS WERE EMP OWERED TO TAKE UP THE CASE UP TO ITA NO.1153/KOL/2015 A.Y. 2010-11 SH K. CHOWDHURY VS. ITO WD-1, HALDIA PAGE 4 THE INCOME OF RS. 15 LACS FOR NON-CORPORATE ASSESSE E AND RS. 20 LACS FOR CORPORATE ASSESSEES. IT IS PERTINENT TO MENTION HERE THAT THE ASSESSEE'S RETURN INCOME WAS RS. 12,65,830/-. AS PER THE CBDT INSTRUCTION NO. 1/2011 DATED 31.01.2011, THE JURISDICTION FOR SCRUTINY ASSESSMENT VESTED TO THE ITO FROM 1.4.2011 AND THE NOTICE U/S. 143(2) OF THE ACT SHOULD/MUST BE ISSUED BY THE ITO, WARD - 1, HALDIA AND BY NONE OF THE ACIT / DCIT. IN THE PRESENT CASE, THE NOTICE WAS ISSUED BY THE ACIT, CIRCLE- HALDIA ON 14.9.2011 MUCH AFTER THE CBDT INSTRUCTIO N. CERTIFIED COPY OF THE NOTICE U/S. 143(2) IS ATTACHED IN THE PAPER BOOK MARKED AS ANNEXURE AS 3 WHICH HAS BEEN CHALLENGED. THE ACIT, CIRCLE-HALDIA ISSUED THE NOTI CE U/S. 142(1) OF THE ACT 3.7.2012 WHICH IS IN THE PAPER BOOK. THE SAID NOTICE FOR ISS UING IS BEYOND THE JURISDICTION OF THE ACIT, HALDIA THE AS PER THE CBDT INSTRUCTION MARKED AS ANNEXURE 4 IN THE PAPER BOOK. THE LD. AR FURTHER SUBMITTED THE SECTION 119, STRATEGICALLY PLACED IN CHAPTER XIII WHICH DEALS WITH ' INCOME-TAX AUTHORITIES ' AND ENABLING POWER OF THE CENTRAL BOARD OF DIRECT TAXES, WHICH IS RECOGNIZED AS AN AU THORITY UNDER THE INCOME-TAX ACT U/S 116(A). THE CENTRAL BOARD OF DIRECT TAXES UNDER THIS SECTION IS EMPOWERED TO ISSUE SUCH ORDERS, INSTRUCTIONS AND DIRECTIONS TO O THER INCOME-TAX AUTHORITIES ' AS IT MAY DEEM FIT FOR PROPER ADMINISTRATION OF THIS ACT '. SUCH AUTHORITIES AND ALL OTHER PERSONS EMPLOYED IN EXECUTION OF THIS ACT ARE BOUND TO OBSERVE AND FOLLOW SUCH ORDERS, INSTRUCTIONS AND DIRECTIONS OF THE CENTRAL BOARD OF DIRECT TAXES. THE PROVISO TO SUB-SECTION (1) OF SECTION 119 RECOGNIZES TWO EX CEPTIONS TO THIS POWER. THE FIRST EXCEPTION IS THAT THE CBDT CANNOT REQUIRE ANY INCOM E-TAX AUTHORITY TO MAKE A PARTICULAR ASSESSMENT OR TO DISPOSE OF A PARTICULAR CASE IN A PARTICULAR MANNER. THE SECOND IS WITH REGARD TO INTERFERENCE WITH THE DISC RETION OF THE COMMISSIONER OF (APPEALS) IN EXERCISE OF HIS APPELLATE FUNCTIONS. S UB-SECTION (2) OF SECTION 119 PROVIDES FOR THE EXERCISE OF POWER IN CERTAIN SPECI AL CASES AND ENABLES THE CBDT, IF IT CONSIDERS IT NECESSARY OR EXPEDIENT SO TO DO FOR TH E PURPOSE OF PROPER AND EFFICIENT MANAGEMENT OF THE WORK OF ASSESSMENT AND COLLECTION OF REVENUE, TO ISSUE GENERAL OR SPECIAL ORDERS IN RESPECT OF ANY CLASS OF INCOMES O R CLASS OF CASES, SETTING FORTH DIRECTIONS OR INSTRUCTIONS AS TO THE GUIDELINES, PR INCIPLES OR PROCEDURES TO BE FOLLOWED BY OTHER INCOME-TAX AUTHORITIES IN THE DISCHARGE OF THEIR WORK RELATING TO ASSESSMENT OR INITIATING PROCEEDINGS FOR IMPOSITION PENALTIES. TH E POWERS OF THE CBDT ARE WIDE ITA NO.1153/KOL/2015 A.Y. 2010-11 SH K. CHOWDHURY VS. ITO WD-1, HALDIA PAGE 5 ENOUGH TO ENABLE IT TO GRANT RELAXATION FROM THE PR OVISIONS OF SEVERAL SECTIONS ENUMERATED IN CLAUSE (A). SUCH ORDERS MAY BE PUBLIS HED IN THE OFFICIAL GAZETTE IN THE PRESCRIBED MANNER, IF THE CBDT IS OF THE OPINION TH AT IT IS SO NECESSARY. THE ONLY BAR ON THE EXERCISE OF POWER IS THAT IT IS NOT PREJUDIC IAL TO THE ASSESSEE. IN THE PRESENT CASE, ASSESSEE'S RETURN INCOME WAS 12,65,830/-. AS PER CBDT INSTRUCTION NO. 1/2011 DAT ED 31.01.2011, THE JURISDICTION OVER THE ASSESSEE IS O F THE ITO, WARD - 1, HALDIA AND NOT OF THE ACIT, CIRCLE - HALDIA. THE NOTICE U/S. 143(2 ) OF THE ACT MUST BE ISSUED BY THE ITO, WARD -1, HALDIA AND BY NONE OF THE ACIT, CIRCL E - HALDIA. THE ACIT, CIRCLE - HALDIA WAS VERY MUCH AWARE THAT HE HAS NO JURISDICT ION OVER THE ASSESSEE FROM 1.4.2011 FOR SCRUTINY ASSESSMENT AND ACCORDINGLY CA NNOT ISSUE THE NOTICE U/S. 143(2) OF THE I. T. ACT, 1961 AFTER THE CBDTS INSTRUCTION NO. 1/2011 DATED 31.01.2011. IN THIS REGARD, IT IS IMPORTANT TO READ THE PROVISIONS OF SECTION 143(2) OF THE I. T. ACT 1961 AS FOLLOWS. 143(2) WHERE A RETURN HAS BEEN FURNISHED UNDER SEC TION 139, OR IN RESPONSE TO A NOTICE UNDER SUB-SECTION(1) OF SECTION 142, TH E ASSESSING OFFICER SHALL (I) WHERE HE HAS REASON TO BELIEVE THAT ANY CLAIM OF LO SS, EXEMPTION, DEDUCTION, ALLOWANCE OR RELIEF MADE IN THE RETURN IS INADMISSI BLE, SERVE ON THE ASSESSEE A NOTICE SPECIFYING PARTICULARS OF SUCH CLAIM OF LOSS , EXEMPTION, DEDUCTION, ALLOWANCE OR RELIEF AND REQUIRE HIM, ON A DATE TO B E SPECIFIED THEREIN TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EVIDENCE OR P ARTICULARS SPECIFIED THEREIN OR ON WHICH THE ASSESSEE MAY RELY, IN SUPPORT OF SU CH CLAIM; (PROVIDED THAT NO NOTICE UNDER THIS CLAUSE SHALL BE SERVED ON THE ASSESSEE ON OR AFTER THE 1ST DAY OF JUNE, 2003) (II) NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE ( 1), IF HE CONSIDERS IT NECESSARY OR EXPEDIENT TO ENSURE THAT THE ASSESSEE HAS NOT UNDERSTATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NO T UNDER PAID THE TAX IN ANY MANNER, SERVE ON THE ASSESSEE A NOTICE REQUIRING H IM, ON A DATE TO BE SPECIFIED THEREIN, EITHER TO ATTEND HIS OFFICE OR TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETURN. (PROVIDED THAT NO NOTICE UNDER CLAUSE (II) SHALL BE SERVED ON THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS FROM THE END OF THE FINANC IAL YEAR IN WHICH THE RETURN IS FURNISHED). ' ON A PERUSAL OF THE FOREGOING PROVISION, IT IS EVID ENT THAT THE PROVISIONS OF THIS SECTION ARE MANDATORY IN NATURE. IF THE ASSESSING OFFICER C ONSIDERS IT NECESSARY OR EXPEDIENT TO VERIFY THE CORRECTNESS AND COMPLETENESS OF THE R ETURN THEN HE IS BOUND TO SERVE A NOTICE UNDER THIS SUB SECTION ON THE ASSESSEE REQUI RING HIM, ON A SPECIFIED DATE, EITHER ITA NO.1153/KOL/2015 A.Y. 2010-11 SH K. CHOWDHURY VS. ITO WD-1, HALDIA PAGE 6 TO ATTEND AT THE AO'S OFFICE OR TO PRODUCE OR CAUSE TO BE PRODUCED ANY EVIDENCE ON WHICH THE ASSESSEE DESIRE TO RELY IN SUPPORT OF HIS RETURN. THE ABOVE VIEW GETS FORTIFIED BY THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. GITSONS ENGINEERING CO. REPORTED I N [2015] 370 ITR 87, WHEREIN IT IS HELD THAT, 'THE WORD ' SHALL ' EMPLOYED IN SECTION 143(2) OF THE INCOME TAX ACT, 1961, CONTEMPLATES THAT THE ASSESSING OFFICER SHOULD ISSU E NOTICE TO THE ASSESSEE SO AS TO ENSURE THAT THE ASSESSEE HAS NOT UNDERSTATED INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NOT UNDER PAID THE TAX IN ANY MANNER. IT IS THEREFORE, CLEAR THAT WHEN THE ASSESSING OFFICER CONSIDERS IT NECESS ARY AND EXPEDIENT TO ENSURE THAT TAX IS PAID IN ACCORDANCE WITH LAW, HE SHOULD CALL UPON THE ASSESSEE TO PRODUCE EVIDENCE BEFORE HIM TO ENSURE THAT THE TAX IS PAID IN ACCORDANCE WITH LAW. THE SECTION MAKES IT CLEAR THAT SERVICE OF NOT ICE UNDER SECTION 143(2) OF THE ACT WITHIN THE TIME LIMIT PRESCRIBED IS MANDATO RY AND IT IS NOT A MERE PROCEDURAL REQUIREMENT.' IN THE LIGHT OF ABOVE SUBMISSION, IT IS CRYSTAL CLE AR THAT INSTRUCTION NO. 1/2011 DATED 31.01.2011 WAS APPLICABLE IN THE PRESENT CASE. IN V IEW OF THE SPECIFIC STIPULATION IN THE INSTRUCTION NON-CORPORATE RETURNS INCOME UPTO 15 LACS IN MOFUSS IL AREAS ' ARE VESTED WITH THE ITO'S AND CONSIDERING THAT IN THE P RESENT CASE THE RETURN INCOME BELOW RS. 15 LACS. THE NOTICE U/S. 143(2) OF THE ACT MUST BE ISSUED BY THE ITO. WARD - 1. HALDIA. BUT IN THE INSTANT CASE, THE NOTICE U/S. 14 3(2) WAS ISSUED BY THE ACIT, CIRCLE - HALDIA WITHOUT HIS JURISDICTION OVER THE ASSESSEE K NOWING FULLY WELL AND HE WAS VERY MUCH AWARE THAT HE HAS NO JURISDICTION OVER THE ASS ESSEE FROM 1.4.2011. IN THE INSTANT CASE, THERE WAS NO NOTICE U/S. 143(2) OF THE ACT WA S NOT ISSUED BY THE ITO, WARD - 1, HALDIA BEFORE THE COMPLETION OF THE ASSESSMENT PROC EEDINGS. THEREFORE, THE NOTICE U/S. 143(2) ISSUED BY THE ACIT, CIRCLE - HALDIA FOR SCRU TINY OF THE ASSESSEE'S CASE IN CONTRAVENTION TO CBDT INSTRUCTION IS INVLID, BAD-IN - LAW AND LIABLE TO BE ANNULLED. AND ON THE BASIS OF NOTICE U/S. 143(2) OF THE ACT A CIT, CIRCLE - HALDIA THE ASSESSMENT WAS COMPLETED BY THE ITO, WARD -1, HALDIA WITHOUT I SSUING THE NOTICE U/S. 143(2) OF THE I. T. ACT, 1961 IS ALSO INVALID, BAD-IN-LAW, VOID AB INITIO AND LIABLE TO BE ANNULLED. 7. ON THE OTHER HAND THE LD. DR BEFORE US SUBMITTED THAT THE ASSESSEE CANNOT RAISE THE QUESTION ON THE JURISDICTION OF AO AFTER THE EX PIRY OF ONE MONTH FROM THE DATE ON ITA NO.1153/KOL/2015 A.Y. 2010-11 SH K. CHOWDHURY VS. ITO WD-1, HALDIA PAGE 7 WHICH HE WAS SERVED WITH THE NOTICE OR AFTER THE CO MPLETION OF ASSESSMENT, WHICHEVER IS EARLIER IN TERMS OF THE PROVISIONS OF SECTION 12 4(3) OF THE ACT. 7.1 THE LD. DR FURTHER SUBMITTED THAT AS PER THE PR OVISIONS OF SECTION 127(3) OF THE ACT NO OPPORTUNITY WILL BE GIVEN TO THE ASSESSEE WH ERE THE TRANSFER OF THE JURISDICTION IS FROM ONE AO IS TO ANY OTHER AO PROVIDED THE OFFI CES ALL THE SUCH OFFICERS ARE SITUATED IN THE SAME CITY, LOCALITY AND PLACE. IN T HE INSTANT CASE THE NOTICE WAS ISSUED BY THE ACIT UNDER SECTION 143(2) OF THE ACT AND LAT ER IT WAS TRANSFERRED TO ITO. THE TRANSFER OF THE FILE WAS WITHIN THE SAME LOCALITY. THEREFORE THE VALIDITY OF THE ASSESSMENT FRAMED BY THE AO CANNOT BE CHALLENGED ON THE GROUND OF NON-ISSUANCE OF NOTICE BY THE ITO. THE LD DR ALSO REFERRED TO THE PROVISIONS OF SECTIO N 129 OF THE ACT WHICH ALLOWS THE SUCCEEDING INCOME TAX AUTHORITY TO CONTINUE THE PRO CEEDINGS FROM THE STAGE AT WHICH THE PROCEEDING WAS LEFT BY HIS PREDECESSOR. THE LD DR VEHEMENTLY SUPPORTED THE ORDER OF LOWER AUTHORITIES. 8. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE ALSO PERUSED THE ASSESSMENT RECOR DS. THE CRUX OF THE ISSUE IN THE CASE IS THAT THE NOTICE UNDER SECTION 143(2) OF THE ACT WAS NOT ISSUED BY THE ITO IN TERMS OF THE INSTRUCTION NO. 1/2011 [F.NO. 187/12/2 010-IT(A-I)], DATED 31.1.2011. AS PER THE INSTRUCTION THE NOTICE WAS TO BE ISSUED BY THE ITO BUT THE NOTICE WAS ISSUED BY THE ACIT. THEREFORE IN VIEW OF ABOVE THE NOTICE ISS UED BY THE ACIT IS INVALID AND CONSEQUENTLY THE ASSESSMENT FRAMED BY THE ITO BECOM ES VOID. NOW THE ISSUE BEFORE US ARISES SO AS TO WHETHER THE NOTICE ISSUED BY THE ACIT U/S 143(2) OF THE ACT IS WITHOUT JURISDICTION IN TERMS OF THE AFORESAID INST RUCTION. IN THIS CONNECTION WE CONSIDER IT FIT TO INCORPORATE THE RELEVANT PORTION OF INSTRUCTION NO.1/2011 DATED 31.1.2004 OF THE CBDT CIRCULAR IN RESPECT OF ISSUAN CE OF NOTICE TO NON-CORPORATE ASSESSES WHICH READS AS UNDER :- NSTDRUCTION NO.1/2011 [F.NO.187/12/2010-IT(A-I)], DATED 31-1-2011 ITA NO.1153/KOL/2015 A.Y. 2010-11 SH K. CHOWDHURY VS. ITO WD-1, HALDIA PAGE 8 REFERENCE HAVE BEEN RECEIVED BY THE BOARD FROM A LA RGE NUMBER OF TAXPAYERS, ESPECIALLY FROM MOFUSSIL AREAS, THAT THE EXISTING M ONETARY LIMITS FOR ASSIGNING CASES TO ITOS AND DCS/ACS IS CAUSING HARDSHIP O THE TAXPAYERS, AS IT RESULTS IN TRANSFER OF THEIR CASES TO A DC/AC WHO IS LOCATED I N A DIFFERENT STATION, WHICH INCREASES THEIR COST OF COMPLIANCE. THE BOARD HAD C ONSIDERED THE MATTER AND IS OF THE OPINION THAT THE EXISTING LIMITS NEED TO BE REVISED TO REMOVE THE ABOVEMENTIONED HARDSHIP. AN INCREASE IN THE MONETARY LIMITS IS ALSO CONSIDER ED DESIRABLE IN VIEW OF THE INCREASE IN THE SCALE OF TRADE AND INDUSTRY SINCE 2 001, WHEN THE PRESENT INCOME LIMITS WERE INTRODUCED. IT HAS THEREFORE BEEN DECID ED TO INCREASE THE MONETARY LIMITS AS UNDER: INCOME DECLARED (MOFUSSIL AREAS) ITOS ACS/DCS CORPORATE RETURNS UPTO RS.20 LACS ABOVE RS.20 LACS NON-CORPORATE RETURNS UPTO RS.10 LACS ABOVE RS.15 L ACS METRO CHARGES FOR THE PURPOSE OF ABOVE INSTRUCTIONS SHALL BE AHMEDABAD, BANAGALORE, CHENNAI, DELHI, KOLKATA, HYDERABAD, MUM BAI AND PUNE. THE ABOVE INSTRUCTIONS ARE ISSUED IN SUPERSESSION O F THE EARLIER INSTRUCTIONS AND SHALL BE APPLICABLE WITH EFFECT FROM 1-4-2011. -SEE MORE AT: HTTP://TAXGURU.IN/INCOME-TAX/SECTION- 119-OF-THE-INCOME-TAX-ACT- 1961-INSTRUCTIONS-TOO-SUBORDINATE-AUTHORITIES-INSTD RUCTIONS-REGARDING-INC- LIMITS-FOR-ASSIGNING-CASES-TO-DEPUTY-COMMISSIONERSA SSISTNT- COMMISSIONERSITOS.HTML#STHASH.U17D65534.DPUF THE NOTICE U/S 143(2) AND ORDER SHEET ENTRIES WHICH WERE REFERRED BY THE LD. COUNSEL FOR ASSESSEE ARE PLACED AT ANNEXURE NO. 2 & 5 OF TH E PAPER BOOK RESPECTIVELY. ADMITTEDLY THE NOTICE U/S 143(2) IN THE INSTANT CAS E WAS ISSUED BY THE LD. ACIT TO INITIATE THE ASSESSMENT PROCEEDINGS WHICH WAS LATER TRANSFERRED TO ITO. HOWEVER, THE ITO DID NOT FURTHER ISSUE ANY NOTICE U/S 143(2) OF THE ACT. THEREFORE, ITO ASSUMED THE CHARGE WITHOUT ISSUING NOTICE AND CONSEQUENTLY COMP LETED ASSESSMENT U/S 143(3) OF THE ACT WITHOUT JURISDICTION. IN SIMILAR FACTS AND CIRCUMSTANCES, THE CO-ORDINATE BENCH OF THIS TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE IN THE CASE OF AJANTA FINANCIAL SERVICES PVT. LIMITED VS ITO IN ITA NO. 1426/KOL/2011 . WE CONSIDER IT FIT TO INCORPORATE THE RELEVANT PORTION OF THE TRIBUNAL ORDER WHICH IS AS UNDER :- 5. WE FIND THAT THE HON'BLE CHHATISHGARH HIGH COUR T IN THE CASE OF DCIT VS. SUNITA FINLEASE LTD. (2011) 330 ITR 491 (CHH) HAS C ONSIDERED THE SAME INSTRUCTION NO. 9/2004 DATED 20.09.2004 WHICH ARE A PPLICABLE IN THE PRESENT CASE ALSO AND QUASH THE SELECTION OF SCRUTINY AND C OMPLETION OF ASSESSMENT BY HOLDING AS INVALID. HON'BLE CHATTISHGARH HIGH COURT IN SUNITA FINLEASE LTD.'S ITA NO.1153/KOL/2015 A.Y. 2010-11 SH K. CHOWDHURY VS. ITO WD-1, HALDIA PAGE 9 CASE (SUPRA) HAS CONSIDERED SECTION 119 OF THE ACT BY STATING THAT SECTION 119 OF THE ACT, EMPOWERS THE CENTRAL BOARD OF DIRECT T AXES TO ISSUE ORDERS, INSTRUCTIONS OR DIRECTIONS FOR THE PROPER ADMINISTR ATION OF THE ACT OR FOR SUCH OTHER PURPOSES SPECIFIED IN SUB-SECTION (2) OF THE SECTION. HON'BLE HIGH COURT FURTHER HELD THAT SUCH AN ORDER, INSTRUCTION OR DIR ECTION CANNOT OVERRIDE THE PROVISIONS OF THE ACT. DIRECTION BY ISSUING INSTRUC TIONS TO THE OFFICERS FOR THE PROCESS OF SELECTION OF CASES FOR SCRUTINY FOR RETU RNS FOR A PARTICULAR FINANCIAL YEAR AND ALLOWING TIME OF THREE MONTHS FOR COMPLETI ON OF THE SAME CANNOT BE CONSIDERED TO OVERRIDE OR DETRACT FROM THE PROVISIO NS OF THE ACT. IT ONLY DIRECTS THAT THE ABOVE EXERCISE SHOULD BE COMPLETED WITHIN THREE MONTHS OF THE DATE OF FILING OF RETURN BY THE ASSESSEE, WHICH AMOUNTS TO AN ASSURANCE TO THE ASSESSEE THAT THE RETURN FILED BY HIM CAN BE SCRUTINIZED BY THE ASSESSING OFFICER WITHIN THREE MONTHS OF FILING OF THE RETURN. THE HON'BLE H IGH COURT, DISMISSING THE APPEAL HELD THAT INSTRUCTION NO. 9 OF 2004 DATED SEPTEMBER 20, 2004, WAS APPLICABLE IN THE PRESENT CASE, IN VIEW OF THE SPEC IFIC STIPULATION IN THE CIRCULAR THAT ' FOR RETURNS FILED DURING THE CURRENT FINANCIAL YEAR 2004-05, THE SELECTION OF CASES FOR SCRUTINY WILL HAVE TO BE COM PLETED WITHIN THREE MONTHS OF THE DATE OF FILING THE RETURNS ' AND CONSIDERING THAT THE RETURN HAD 5 ITA 1426/K/2011 AJANTA FINANCIAL SERVICES PVT. LT D. A.Y. 03-04 ADMITTEDLY, BEEN FILED BY THE ASSESSEE O N OCTOBER 29, 2004, I.E., DURING THE CURRENT FINANCIAL YEAR 2004-05. THE SELE CTION FOR SCRUTINY OF THE ASSESSEE'S CASE AND COMPLETION OF THE ASSESSMENT WA S NOT VALID. 6. WE FIND THAT THE HON'BLE CHHATISHGARH HIGH COURT IN SUNITA FINLEASE LTD.'S CASE (SUPRA) HAS ALSO CONSIDERED THE DECISION OF HO N'BLE SUPREME COURT IN THE CASE OF UCO BANK (1999) 237 ITR 889 AND QUOTED FROM PAGE 896 AS UNDER: 'SUCH INSTRUCTIONS MAY BE BY WAY OF RELAXATION OF A NY OF THE PROVISIONS OF THE SECTIONS SPECIFIED THERE OR OTHERWISE. THE B OARD THUS HAS POWER, INTER ALIA, TO TONE DOWN THE RIGOUR OF THE LAW AND ENSURE A FAIR ENFORCEMENT OF ITS PROVISIONS, BY ISSUING CIRCULARS IN EXERCISE OF ITS STATUTORY POWERS UNDER SECTION 119 OF THE INCOME-TAX ACT, WHICH ARE BINDING ON THE AUTHORITIES IN THE ADMINISTRATION OF THE ACT. UNDER SECTION 119(2) (A), HOWEVER, THE CIRCULARS AS CONTEMPLATED THEREIN CANNOT BE ADVERSE TO THE ASSESSEE. THUS, TH E AUTHORITY WHICH WIELDS THE POWER FOR ITS OWN ADVANTAGE UNDER THE AC T IS GIVEN THE RIGHT TO FORGO THE ADVANTAGE WHEN REQUIRED TO WIELD IT IN A MANNER IT CONSIDERS JUST BY RELAXING THE RIGOUR OF THE LAW OR IN OTHER PERMISSIBLE MANNERS AS LAID DOWN IN SECTION 119. THE POWER IS GIVEN FOR THE PURPOSE OF JUST, PR OPER AND EFFICIENT MANAGEMENT OF THE WORK OF ASSESSMENT AND IN PUBLIC INTEREST. IT IS A BENEFICIAL POWER GIVEN TO THE BOARD FOR PROPER ADMI NISTRATION OF FISCAL LAW SO THAT UNDUE HARDSHIP MAY NOT BE CAUSED TO THE ASSESSEE AND THE FISCAL LAWS MAY BE CORRECTLY APPLIED. HARD CASES WH ICH CAN BE PROPERLY ITA NO.1153/KOL/2015 A.Y. 2010-11 SH K. CHOWDHURY VS. ITO WD-1, HALDIA PAGE 10 CATEGORIZED AS BELONGING TO A CLASS, CAN THUS BE GI VEN THE BENEFIT OF RELAXATION OF LAW BY ISSUING CIRCULARS BINDING ON T HE TAXING AUTHORITIES.' THE FACTS AND CIRCUMSTANCES IN THE PRESENT CASE ARE THAT THE SELECTION OF SCRUTINY IN THIS CASE IS ALSO COMPLETED BEYOND THE PRESCRIBED PERIOD AS PRESCRIBED IN INSTRUCTION NO. 9/2004 DATED 20.09.20 04. THE ASSESSEE'S CASE WAS SELECTED FOR SCRUTINY FIRST TIME ON 18.10.2004, AS PER COPY OF ORDER SHEET ENTRY, AND NOTICE WAS ISSUED FIXING THE HEARING ON 18.10.2 004 ITSELF. AS PER INSTRUCTION NO. 9/2004 DATED 20.09.2004, THE PROCES S OF SELECTION OF CASES FOR SCRUTINY FOR RETURNS FILED UP TO 31.03.2004, IN THE PRESENT CASE ASSESSEE FILED ITS RETURN OF INCOME ON 01.12.2003 MUST BE COMPLETED BY 15.10.2004. THE FACTUAL POSITION AS NOTED BY CIT(A) IN HIS APPELLATE ORDER THAT NOTICE U/S. 143(2) IS DATED 10.10.2004, IS NOT SUPPORTED BY LD. SR. DR AT THE TIME OF HEARING RATHER ASSESSEE CONTESTED THAT THIS FINDING OF FACT IS ERR ONEOUS AND ACTUAL CASE WAS SELECTED BY ISSUING NOTICE AS ON 18.10.2004. EVEN T HE BASIS OF RECORDING THIS FACT IS ONLY FROM THE ASSESSMENT ORDER WHEREIN IT I S MENTIONED THAT NOTICE U/S. 143(2) IS DATED 10.10.2004 AND THE SAME WAS SERVED ON THE ASSESSEE ON 19.10.2004 FIXING THE DATE OF HEARING ON 16.12.2004 . WHEN GOING THROUGH THE ORDER SHEET ENTRY, WHICH IS TAKEN BY ASSESSEE FROM THE ASSESSMENT RECORDS CLEARLY REVEALS THAT FACTUALLY NOTICE U/S. 143(2) W AS FIRST TIME ISSUED ON 18.10.2004 AND NOT ON 10.10./2004. THIS FACT HAS NO T BEEN CONTESTED BY LD. SR. DR. RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE CHHATISGARH HIGH COURT IN THE CASE OF SUNITA FINLEASE LTD. (SUPRA), WE QUASH THE ISSUANCE OF NOTICE U/S. 143(2) OF THE ACT AND SUBSEQUENT ASSESSMENT FRAMED U/S. 143(3) OF THE ACT. APPEAL OF ASSESSEE IS ALLOWED . KEEPING IN VIEW OF THE ABOVE AND THE FACTS RELATING TO ITA NO.1426/KOL/2011 THIS TRIBUNAL HAS SQUASHED THE ASSESSMENT FRAMED U/S 143 (1) OF THE IT ACT SINCE THE ISSUANCE OF NOTICE U/S 143(2) OF THE ACT IS BEYOND THE DATES SPECIFIED IN INSTRUCTION NO.9 DATED 20TH SEPTEMBER, 2004. AT THIS JUNCTURE, WE WOULD LIKE TO CLARIFY THAT INSTRUCTION NO.9/2004 DATED 20 TH SEPTEMBER, 2004 REFERRED BY THE TRIBUNAL IN ITA NO.1426/KOL/2011 IN THE CASE OF AJANTA FINANCIAL SE RVICES PVT. LTD. (SUPRA) AS WELL AS THE HONBLE CHATTISGARH HIGH COURT IN THE CASE OF S UNITA FINLEASE LTD. (SUPRA) ARE IN RESPECT OF THE CORPORATE ASSESSES. HOWEVER, IN THE CASE OF THE NON-CORPORATE ASSESSES SIMILAR INSTRUCTION HAS BEEN ISSUED IN INSTRUCTION NO.10 DATED 20.09.2004. IN THIS CASE ALSO AS PER THE ORDER SHEET ENTRIES INCORPORATED IN THE PRECEDING PARAGRAPHS, IT IS OBSERVED THAT THE SELECTION OF SCRUTINY WAS MADE ON 20.06.2005 AND NOTICE U/S 143(2)(II) AND 142(1) WAS ISSUED ON 11.07.2005 I.E. BEYOND THE PERIOD OF THE SCRUTINY AS SPECIFIED IN INSTRUCTION NO.10/2004 DATED 20.09. 2004. THEREFORE, KEEPING IN VIEW OF THE DECISION OF HON'BLE CHATTISGARH HIGH COURT I N THE CASE OF SUNITA FINLEASE LTD ITA NO.1153/KOL/2015 A.Y. 2010-11 SH K. CHOWDHURY VS. ITO WD-1, HALDIA PAGE 11 (SUPRA) AS WELL AS TRIBUNALS ORDER IN ITA NO.1426/ KOL/2011 IN THE CASE OF AJANTA FINANCIAL SERVICES PVT. LTD.(SUPRA). 8.1 IN VIEW OF ABOVE WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES BY SQUASHING THE ORDER OF THE ASSESSMENT FRAMED U/S 14 3(3) OF THE ACT SINCE THE ISSUE OF NOTICE U/S 143(2) OF THE ACT WAS NOT DONE BY THE IT O AS SPECIFIED IN CBDT INSTRUCTION NO.1/2011 DATED 31.01.2011. AS THE ASSESSMENT PROCE EDINGS U/S 143(3) OF THE ACT HAVE BEEN HELD AS INVALID, THEREFORE IN OUR CONSIDE RED VIEW THE OTHER ISSUES RAISED BY THE ASSESSEE DO NOT REQUIRE ANY ADJUDICATION. HENCE THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 18/11/2016 SD/- SD/- (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP SR.P.S ! - 18/11/2016 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SRI KRISHNENDU CHOWDHURY, C/O MAHADEV GH OSH, ADVOCATE BF-199, SA LT LAKE CITY, KOLKATA-64 2. /RESPONDENT-ITO, WARD-1, BASUDEBPUR, P.O. KHANJANCH AK, HALDIA DIST. PURBA ME DINIPUR, PIN 721602 3. '# % / CONCERNED CIT 4. % - / CIT (A) 5. &'( ))'# , '# / DR, ITAT, KOLKATA 6. (*+ / GUARD FILE. BY ORDER/ , /TRUE COPY/ / '#,