Sh. Sunil Khullar, Samrala V. DCIT, Circle, Khanna

ITA 137/CHANDI/2018

AI Insights

The case involves an appeal by Shri Sunil Khullar against the order of the Commissioner of Income Tax (Appeals) - 2, Ludhiana, which upheld the assessment made by the DCIT, Circle-Khanna. The primary contention was the jurisdiction of the DCIT to assess the case, given that the assessee's income was below the threshold of Rs. 35 lakhs as per CBDT instructions. The Tribunal examined the legal and territorial jurisdiction of the income tax authorities and found procedural lapses in the issuance of notices and the framing of the assessment order.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 124982 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-10-2022
• Assessment Year: 2013-2014
• Appeal Filed On: 04-02-2018
• Other Referred Cases: Bhagya Laxmi Conclave Pvt Ltd vs DCIT, Hillman Hosiery Mills Pvt Ltd vs DCIT, Soma Roy vs ACIT, Krishnendu Chowdhury vs ITO, West Bengal State Electricity Board vs Deputy Commissioner of Income Tax, Special Range \\u2013 I
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 68; 40A(3); 143(3); 92; 92B; 201; 143(2); 43; 13; 145(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH CHANDIGARH Before Shri Sanjay Garg, Judicial Member & Shri Vikram Singh Yadav, Accountant Member I.T.A. No.137/CHANDI/2018 Assessment Year: 2013-14 Shri Sunil Khullar........................... ..................................................... Appellant C/o Sat Parkash & Company, Ward No.7, H.No.10, Kang Mohalla, Samrala. [PAN:AZQPK0380E] vs. DCIT, Circle-Khanna............................................................................ Respondent Appearances by: Shri J. S. Bhasin, Advocate, appeared on behalf of the appellant. Shri Sarabjeet Singh, CIT, DR, appeared on behalf of the Respondent. Date of concluding the hearing : October 27, 2022 Date of pronouncing the order : December 30, 2022 ORDER Per Sanjay Garg, Judicial Member: T he pr es e nt a p pe a l ha s be e n p re fe r re d by th e as s e s see ag a i ns t t he or d e r d a te d 2 6. 0 4. 20 1 9 o f t he C o m m i s s i one r o f In c o me T ax ( A pp e al s ) - 2, L u dhi a n a [ h er ei na f t er r e f er re d t o as ‘C I T( A ) ’] p a s sed u /s 25 0 o f t h e In c o m e T a x A c t (he re i na f te r r e f er re d to a s th e ‘ A c t’). 2. The as s es s ee in thi s appe al has take n fol lowing gr ounds of appe al :- 1. That the Id. CIT(A) has grossly erred to hold that even when the returned income was well below Rs.35 lacs, the DCIT Circle Khanna, was still competent to hold jurisdiction in this case, contrary to CBDT instructions in vogue prescribing limit of Rs.35 lacs for the AC/DCIT to assume jurisdiction for assessment. I.T.A. No.137/CHANDI/2018 Assessment Year: 2013-14 Shri Sunil Khullar 2 2. That the assessee's declaration before AO that he was only a name lender and the real beneficiaries of the liquor business run in his name, were some other persons named by him, the authorities below grossly erred in not seriously probing the matter to arrive at a logical conclusion by simply resting the entire onus on assessee, ignoring the assessee's poor financial and social status 3. That the Id. CIT(A), even while deleting the addition of Rs.1,50,000,00/-, as not pertaining to this year, was not justified in still holding that the source of Rs.1,50,000,00/- could not be explained by the assessee and further erred in law in directing the AD u/s.150(1) to bring this amount to tax in AY 2012-13. 4. That the Id. CIT(A) was again not justified in law or on facts in sustaining the addition of Rs.4,70,71,484/- as made by the Id.AO by way of disallowance under section 40A(3) and in further enhancing the same by Rs.16,47,597/-. 5. That in the facts and circumstances of the case, the assessment ought to have been made by estimating the income after invoking section 145(3) when the books were found to be incomplete and incorrect, rather than making superfluously inflated additions u/s 68 and 40A(3), and rejection of this ground by Id.CIT(A) is arbitrary and unjustified. 6. That the order under appeal, to the extent disputed herein, is against law and facts of the case. 3. A pe rus al of the above grounds of appe al reve als that the as s es s ee int er alia, has cont es t ed t he jur is di cti on of t he conc erne d DCI T t o fr a me the a ss e ss me nt order dat ed 31.3. 2016 u/s 143(3) of the Inc o me Ta x Ac t. Sinc e t he l egal ground goe s t o the root of the ca s e, henc e, we proc ee d t o deci de t his legal gr ound f irs t. I.T.A. No.137/CHANDI/2018 Assessment Year: 2013-14 Shri Sunil Khullar 3 4. The Ld. Couns el i n thi s re spe ct has sub mi t ted tha t as per the re le vant s t atut or y provi sions, not onl y the te rrit ori al j urisdi ction but t he pe cuni ar y juri s dic tion of the Inc o me Tax Of f ic er / AO is to be fi xed b y CB DT. The Ld. Couns el has further s ubmit ted t hat a s per the not ifi ca tion of the CBDT, orders issued b y the PCIT a ppl ic abl e for the as s es s ment ye ar / rel evant pe riod, the j uris di ction over the ca s es havi ng tot al i ncome of more t han Rs . 35 l ac s we re a ss i gned to the conc erne d DCI Ts / ACITs a nd t he juri sdi ction to frame a ss es s ment in ot her cas es li ed wi th the conc erne d Inc o me Tax Of fice r. The Ld. Couns el i n thi s re spe ct ha s plac ed rel ia nce on the f oll owi ng docu ments : - “Copy of Noti ficat ion No. 50 dat ed 22. 10.2014 publ is hed in t he Gaz et te of India Ext r aordinar y (SO 2752(e ) is s ued by t he CBDT unde r s ub s ec . (1 ) & (2 ) of Se c. 120 of Income Tax Act 1961. Copy of Notifi cation No. 64/2014 date d 13. 11. 2014 F. No. 187/40/ 2014(I TA-1 ) i s sue d by CBDT under cl aus e (b ) of s ub s ec (4 ) of s ec ti on 120 of Inc ome Tax Ac t, 1961. Copy of or der date d 31. 10.2014 be ar ing F. No. Pr CCIT/CHD/Tec h./ 2014-15/ 4595-96, is s ued by the Pr . Chie f Commi ss i oner of Income Tax , N.W. Re gion, Chandigarh pas s ed in pursuance Not if icati on No. 50 dat ed 22.10.2015 publis hed in the Gaz ett e of India Ex tr aor dinar y (SO No.2751(E), addr es s ed t o t he Chief Commis s ione r of Inc ome Tax Shiml a / Panchkula / Ludhiana and Amr i ts ar. I.T.A. No.137/CHANDI/2018 Assessment Year: 2013-14 Shri Sunil Khullar 4 5 The Ld. couns el ha s further invite d our at te nti on to t he ret urn of i nco me fi le d b y the a s se sse e to s ubmi t t hat the i nco me re turne d b y the as s es s ee was at Rs. 16, 95,280/- whic h was l es s than Rs . 35 l ac s a nd furt her the return of inco me wa s fil ed on 21.01.2014, where as , the not ice wa s i s sue d u/s 143(2) of the Act t o the as sess ee on 2. 9. 2014 and where as t he ass es s me nt orde r wa s pas se d on 31.3. 2016.. The Ld. Couns el, the refore , has s ub mi tt ed t hat the juri sdi ct ion to f ra me the as s es s ment in this c as e at that ti me li ed wi th the conce rned Inco me Ta x Offi ce r a nd not wi th t he DCIT. 6. The Ld. DR, on the ot her hand, has sub mi tt ed that there was no s uch monet ar y li mit pr es cri bed. The afore sa id noti fi cati on / l et ter was i ss ued for int erna l / ad mi nis t rat ive purpos e of t he De part ment and the s a me did not give r is e to t he a n y l e gal ri ght t o the a sse ss e e t o obje ct re gardi ng t he pe cuni ar y j uris di cti on to t he As s ess ing off ice r. That eve n a s pe r the sa id noti fi cat ion / le tt er the conce rned J CIT / DCIT di d not pa s s an y orde r to tr ans fer the cas e to the conc erne d ITO and, t here fore, i n the abs ence of the an y l et te r i n wri ti ng, the juri s dicti on was ve s ted with the c oncer ned DCIT / J CIT. 7. We ha ve hea rd the riva l conte nti ons and gone through the re cord. Be fore proc ee ding furt her, it wil l be a ppropriate to refe r to the I.T.A. No.137/CHANDI/2018 Assessment Year: 2013-14 Shri Sunil Khullar 5 provi sions of Sec ti on 2(7A) of the Inc ome Tax Act whi ch de fine s the Ass es s ing off ic er as under: - 2 (7A) "As s es s ing Off ic er " means t he As s is tant Commis s ione r or Deput y Commis s ione r or As s is t ant Di r ec tor or Deput y Dir ec tor or the Inc ome- tax Of fi cer who is vest ed wi th t he r el ev ant j uri sdic tion by v irt ue of dir ec ti ons or or ders is sued under sub-s ec tion (1 ) or s ub-s ect ion (2 ) of s e ct ion 120 or any ot her pr ovisi on of t his Act , and t he Addi ti onal Commis s ioner or Additi onal Di r ec tor or Joi nt Commi ss i oner or J oint Di re ct or who is di re ct ed unde r cl aus e (b ) of sub- se ct ion (4 ) of t hat s ec ti on to ex er ci se or per for m all or any of the power s and f unct ions confe rre d on, or as s igne d to, an As se s si ng Of fi ce r unde r t his Act ” 8. A pe rus al of the a bove defi ni ti on of the AO’s reveal s tha t i n a ca s e t he AO me an s the c oncer ned off ic er who is ve ste d wi th r ele vant j uris di ct ion b y vir t ue of dir ect ions or order s is s ued unde r sub s ec tion (1) or s ub s ect i on ( 2) of Se ct ion 120 or an y ot her provi s ions of thi s Act. 9. At t his s t age, it wi ll be appropri at e t o re fer to t he provis i ons of Sect i on 120 of the Ac t, whic h for the s ake of re ady r efe renc e, ar e re produce d as unde r:- “J ur i s d ic t i o n o f in c o m e - t a x a u t h o r i t i e s ( 1 ) In c o m e - t a x a u t h o r i t i e s s h a l l e x e r c i s e a l l o r a n y o f t h e p o w e r s a n d p e r f o r m a l l o r a n y o f th e f u nc t i o n s C o n fe r r e d I.T.A. No.137/CHANDI/2018 Assessment Year: 2013-14 Shri Sunil Khullar 6 o n , o r , a s t h e c a s e m a y b e , a s s i g n e d t o s u c h a u t h o rit i e s b y o r u n d e r t h i s A c t i n a c c o r d a n c e w i th s u c h d i r e c t io ns a s t h e B o a r d m a y is s u e f o r t h e e x e r c i s e o f t h e p o w e r s a n d p e r fo r m a n c e o f t h e f u n c t i o n s b y a l l o r a n y o f t h o s e a u t h o r i t i e s . [ E x p l a n a t io n . - F o r t h e r e m o v a l o f d o u b t s , it i s h e re b y d e c l a r e d t h a t a n y i n c o m e -t a x a u t h o r i t y , b e i n g a n a ut h o r i ty h ig h e r i n r a n k , m a y , i f s o d i r e c t e d b y t h e B o a r d , ex e r c i s e t h e p o w e r s a n d p e r f o r m t h e f u n c ti o n s o f t h e i n c o m e -t a x a u t h o r i t y l o w e r i n r a n k a n d a n y s u c h d i r e c t io n is s ue d b y t h e Bo a r d s h a l l b e d e e m e d to b e a d i r e c ti o n i s s u e d u n d e r s u b - s e c ti o n (1 )] . ( 2 ) Th e d i r e c t i o n s o f t h e B o a r d u n d e r s u b - s e c t io n ( 1 ) m a y a u t h o r i s e a n y o t h e r i n c o m e - t a x a u t h o r i t y t o i s s u e o r d e r s i n w r it i n g f o r t h e e x e r c i s e o f t h e p o w e r s a n d p e r f or m a n c e o f t h e f u n c t i o n s b y a l l o r a n y o f t h e ot h e r i n c o m e - t a x a u t h o r i t i e s w h o a r e s u b o r d i n a t e t o i t. ( 3 ) In i s s u in g t h e d ir e c t i o n s o r o r d e r s r e f e r r e d t o i n s u b - s e c t i o n s (1 ) a n d (2 ), t h e B o a r d o r o t h e r i n c o m e - t ax a u t h o r i t y a u t h o r i s e d b y i t m a y h a v e r e g a r d t o a n y on e o r m o r e o f t h e f o ll o w i n g c r i t e r i a , n a m e l y :- ( a ) te r r i t o r i a l a r e a ; ( b ) p e r s o n s o r c l a s s e s o f p e r s o n s ; (c ) i n c o m e s o r c l a s s e s o f i n c o m e ; a n d ( d ) c a s e s o r c la s s e s o f c a s e s ...... 10 . A p er us al o f t h e a f ore s a i d s ta t ut or y pr o vi s i o ns w ou l d re v e al t h at t h e j ur i s di c t i o n o f I nc o me T a x A ut ho ri ti e s ma y be f i x ed no t o nl y i n r es p ec t o f t er ri to r i a l ar ea b ut al s o ha vi ng r e g a r d t o a p e rs o n or c l a s s es o f p e r s ons an d i nc o me or cl a ss e s o f in co m e al s o. T h er e f o re , t he C BD T ha vi ng r e g a r d t o t he i n c o me a s p er r et ur n h as fi x e d t he j ur is d i c t io n o f t he A s s e ss in g O ff ic er s . 11. At t his sta ge r efe renc e c an be made to the cop y of the orde r dat ed 31.10.2014 be ari ng F. No. Pr. CCIT/ Chd/ Te ch. /2014-15/ 4595-96, I.T.A. No.137/CHANDI/2018 Assessment Year: 2013-14 Shri Sunil Khullar 7 i ss ued b y t he Pr . Chie f Co mmis s ione r of Inco me Ta x, N. W. Region, Chandi garh pas s ed in pur suance Not i fic at ion No. 50 dat ed 22. 10. 2014 publ is hed i n the Gaz ett e of Indi a Ext raor dinar y ( SO No. 2752( E), addr es se d to the Chie f Co mmis s ione r of Inc o me Tax, Shi mla / Panchkul a / Ludhi ana and Amr it sa r wher ein, a mong othe rs, the fol lowing s pec ifi c di rect i ons were given in pa ra 4. “4. In v ie w of the Gaz e tt e Not if ic ati on and the approval re ce iv ed f rom the Zonal M embe r , I have bee n dir ec te d to s tat e t hat j ur is dict ion ove r the cas e s having tot al inc ome of mor e than Rs . 35 lac s bef or e e xe mpt ion unde r Chapte r III and deduc tions under Chapt er –XI A be as si gned to t he DCs IT /ACsIT a nd othe r cas es be as signed to ITOs . ” 12. In vi ew of t his , the pec uniar y jur is dic ti on in thi s case li ed wit h t he I nco me Ta x Offi ce r a nd not with the DCIT, therefore, the as s es s ee fra med b y the DCI T bei ng wit hout juri sdi ct ion was bad in l aw. 13 . T he is s u e r el a t i n g to t he pe cu ni ar y j uri s di ct i on al s o c a me i nt o c ons i de ra ti o n be fo r e t he C o o rd i n a t e B e nc h o f t he T ri b una l i n IT A N o. 25 17/ K ol / 20 19 a n d O t he rs t i t l ed as B h ag ya L a x mi Con cl a ve P v t L t d . vs D CIT vi de co mm o n or de r da t e d 0 3. 0 2. 20 2 1, w he re i n the T ri b un al fu rt he r re l yi ng u po n var io us ot he r d ec i s io ns of t h e C o or d i na t e Be nc h es o f t h e T ri bu na l ha s de c i d e d th e is s ue i n fa v our o f t h e as se s s ee a nd he l d th a t t he a s s es s men t fr a me d b y A s s e ss in g O ff ic e r w ho w as not h av i n g pe cu ni ar y I.T.A. No.137/CHANDI/2018 Assessment Year: 2013-14 Shri Sunil Khullar 8 j ur i s di c t i o n t o fr a me s u ch a s se ss me nt w a s bad i n law . T he r el e v an t pa r t o f t he o rd e r da te d 03 . 02 . 202 1 p as s e d in I TA N o . 2 517 /K ol / 20 19 a n d O t he rs (s u pr a ) i s r ep r od u c e d a s u nd e r: “ 5. 2. T he as s e ss ee r e l ie d on th e r e c e n t dec i s io n o f th is T r i bun a l i n th e c a s e of H i ll m an H o s i e r y Mi l l s Pv t . L td . vs. D CIT , i n IT A No. 2 6 34/ K ol / 20 1 9, or d e r dat e d 12. 0 1 . 20 2 1 . We f in d th at t he i ss u es t ha t ar i s e i n t hi s a p pe a l a r e c l e ar l y c o v er e d i n f av ou r of t he a s ses s e e. T hi s or de r fo ll ow e d th e pr i nc i p l e s of l a w l a i d d o wn i n a nu m b er o f o t h er d ec i s io n s of t he IT AT , Ko l k a t a B e n c h o n t hi s i ss u e. 5. 3. Ko l k a t a “ B” Be nc h of th e T r ib un a l i n th e c as e o f H il l m a n H os i er y Mi l l s Pv t . L t d. (s u pr a) h el d as f ol l o ws : “ 10. I n t hi s cas e , t he IT O War d - 3 ( 3) , Kol k a t a , i s s ue d no t i c e u/ s 14 3( 2) o f t he A c t o n 0 4/ 09 / 20 14. In r ep ly , on 22 / 0 9 /2 01 4, t he a s s e s s e e w ro te t o t h e IT O , Wa r d- 3( 3), Ko l k a t a, s t at i n g t h at h e h as no j u r i s di ct i o n ov er th e as s e s s ee . T her e af t er on 3 1/ 0 7/ 20 1 5, th e D C IT , Ci r cle - 11 ( 1) , K ol k at a, h a d i s s ue d no t i ce u /s 1 42 ( 1) of t h e A c t t o t he a ss e s s e e. T he D CI T , Ci r cl e - 11 ( 1 ), Ko l k a t a, c om pl e t e d as s e s sm ent u / s 14 3( 3) o f t he A ct on 14 / 0 3/ 2 0 16 . T he is s u e i s whe t her a n as s e s s m ent o rd er p as s ed by D CIT , Ci r cl e - 11 ( 1) , K ol k a t a , is va l i d as a d m i t t ed l y , he di d n ot i s s ue a no t i c e u/ s 1 4 3( 2 ) o f t he A c t, to t he as s es s e e. T hi s i ss ue i s no m or e r e s -i nt e gr a. T hi s Be nc h of t he T r i bun al i n th e c as e of Som a R o y vs. A CIT i n I T A No . 4 62/ K ol / 2 01 9 ; A s se s sm en t Y e ar 201 5 -1 6, o r de r dt . 8 t h J anu a r y, 2 020, un der i de nt ic al c ir c um s ta nc es , he l d as un de r :- “ 5. Af t e r h ear i n g r i v al co n te nt i o ns , I ad m i t t hi s ad di t i o na l gr ou n d a s i t i s a l ega l gr ou n d, r a is i ng a j ur i s di ct i o na l i s s ue an d d o es n ot r equ ir e an y i nv es t i ga t i o n i nt o t h e f a c t s . T he l d. C ou n se l f or th e as s e s s ee s ubm i t te d t hat as pe r B oar d I ns tr u c t i o n No . 1/ 20 11 [ F. No. 18 7 / 1 2/ 20 1 0-I T ( A- I)] , d t. 31 / 0 1 /2 01 1, t h e j ur i s di c t i on o f t h e a s s es s e e is w ith t he As s i s t a nt C om m i ss i on er o f I nc om e T ax , Ci r cl e - 1, D ur ga pur , as t he as s es s e e i s a n o n-c or po r a t e as s e s s ee and t he i nc om e r e t ur n e d is ab ov e R s . 1 5, 00, 00 0/ - an d wh er e as , th e s t a t ut or y n o t ic e u /s 14 3(2 ) o f t h e A c t , wa s i s s ue d o n 2 9 / 0 9/ 2 01 6, by th e In c o m e T ax O f f ic e r , war d- 1 (1 ), D ur ga pur , w ho h a d I.T.A. No.137/CHANDI/2018 Assessment Year: 2013-14 Shri Sunil Khullar 9 no j ur i s di ct i o n of t he c as e . H e s u bm it t ed t h at th e as s e s sm ent or d er was pa s s ed b y t he A CI T , Ci r c le - 1( 1 ), D ur gap ur , w ho ha d t he j u r is di c t i on o ve r th e as s e s s ee , but h e h a d no t i s s ue d t h e no t i c e u/ s 14 3(2 ) o f t h e A c t , w it h i n t h e s t at ut or y p e r i od pr e s cr i be d un de r t he A c t . T h us , he s ubm it s t ha t th e as s e s sm ent i s bad i n l aw. 5. 1. O n m er i t s , h e re bu t t ed t he f i n di ng s o f t he l ower au t h or i t i es . T h e l d. Cou n se l f or t he as s e s s ee r e l ied on c e r t a i n c as e- la w, whi c h I w o u l d b e r e fe r r i n g t o as an d wh e n n e c e s s ar y . 6. T he l d. D / R , on t he o th er ha n d, su bm it t e d t ha t t he co nc ur r en t j u ri s di c ti on v e s t s wi t h t h e IT O as we l l a s t he A C IT an d h e nc e t h e as s e ss m e nt ca n no t be a n nu l l e d s i m p ly be c a us e t he s t at ut or y not i ce u / s 14 3(2 ) o f t he A c t , w as i ss ue d by t he IT O an d th e as s e s sm ent wa s co m p le t ed by t h e A C I T . H e fu r th er s ub m i t t e d t ha t th e as s e s s e e d id not ob j e c t t o t h e i s s ue of not i ce b e f or e t he j ur i s di c t i o na l A ss e s s i ng O f fi c er and e v e n o th er w i s e , Se c t i o n 29 2 B B of t h e A ct , co m es i nt o pl ay an d t he as s es s m e nt ca n not b e an nul le d. O n m e r i ts , h e r el i ed on t he or d er s o f th e l o we r aut hor i t i e s . 7. I ha v e h e ar d r iv al co n te nt i o ns . O n c ar e fu l c ons i de r a t i o n of t h e f ac t s and ci r c um s ta nc es o f th e c as e , pe r us al of t he pa pe r s on r e co r d, o r de rs of the au t h or i t i es b el o w a s we ll a s cas e l aw c i t e d, I h ol d as f ol l o ws : - 8. I fi n d t h at t h e r e i s n o d is p ut e in t h e f ac t t h at t h e no t i c e u/ s 14 3( 2) o f th e A c t d t. 29 / 0 9 /2 01 6 ha s b e en i s s ue d b y th e IT O , Wd -1( 1 ), D ur g apu r . L at er , th e c as e wa s t r ans f e r re d t o th e j ur is d i c t io n o f t h e A C IT on 1 1/ 0 8/ 20 1 7. T he re af t er , no no t i c e u/ s 143( 2) o f t he Ac t was i s s ue d b y t h e A s s es s i ng O f f ic e r hav i n g j ur i s di ct i o n of t h i s c as e a n d wh o ha d c om pl e t e d t h e as s e s sm ent o n 2 6 / 1 2/ 20 17 i . e . , A CIT , Ci r cl e - 1( 1), D ur ga p ur . U nd er the s e ci r c um s t a nc es , t he qu es t i o n i s wh et he r t h e as s e s s m en t is bad i n l a w f or w an t of i s s ual of n ot ic e u / s 1 4 3(2 ) of t h e A c t . 9. T hi s B en ch o f th e T r ib un al i n t h e c as e o f Sh ri Su k um a r Ch. Sa ho o v s . A CIT i n IT A No. I.T.A. No.137/CHANDI/2018 Assessment Year: 2013-14 Shri Sunil Khullar 10 20 73/ K ol / 20 16 or de r dt . 2 7. 09. 20 17, he l d as f ol lo ws :- “ 5. Fr o m a p er u sa l o f t h e ab ov e I ns t r u ct i on o f t he C B D T i t is evi d e n t t ha t th e pe cun ia r y j ur i s di ct i o n c onf er r e d by th e CB D T o n IT O s i s i n r e s pe ct t o t h e 'n on co r p or at e r e t u r ns ' f i le d wh e r e i nc om e de c l a r e d is on ly u pt o R s . 1 5 la cs ; an d t h e IT O do es n 't ha v e t he j ur is d i c t i o n t o c on du ct as s es s m e nt i f i t i s ab ov e R s 1 5 la k hs . A b ov e Rs . 15 l acs in c om e de c la re d by a no n- c or por a te pe r s on i. e . li k e as s es s e e , th e pe c un i ar y j ur i s d i c t i on l ie s bef or e AC / D C. In t hi s ca s e, ad m it t ed ly , t he as s ess e e an i nd i v id u a l ( n on c or po r at e pe r s on) wh o un di sp u t e d l y de c l a r ed in co m e of R s . 5 0, 28, 04 0/ - i n hi s r et ur n of i nc om e ca nn o t be a s se s s e d b y t h e IT O as p er th e CB D T c ir c u l ar ( su pr a ) . F r om a p er u s al of th e as s e s sm ent or de r , i t r e ve al s t h at th e s ta tu to r y no t i c e u/ s . 1 43 ( 2 ) o f th e Ac t w as is s ue d by t h e t he n IT O , War d - 1, H al di a o n 06. 0 9. 2 0 13 a nd t he s a m e was s er v e d on th e as s e s s ee on 19 . 0 9. 2 01 3 a s no te d by t he A O . T he AO no te d t ha t s i nc e t he r e t u r ne d in c om e i s m o re th an R s . 15 la cs t he c as e wa s t r ans f er r e d f r om th e IT O , War d - 1, H a ld ia t o A C IT , Ci r cl e -27 a nd t he s am e w a s r ec ei v ed b y th e of f ic e of th e A C IT , Ci r cl e -2 7, H al di a o n 2 4. 09 . 2 01 4 a n d i m m e di a t e l y A C IT is s u ed no ti c e u/ s . 14 2( 1) of t he Ac t o n t he s a m e da y. F r om th e af or e s ai d f ac ts t he fo ll ow i n g f ac t s e m e rg ed : i ) T he a s s es s e e h a d f i l e d r et ur n of i nc o m e de c la ri ng R s . 50, 2 8 , 040 / -. T he IT O i s s ue d no t i c e und e r s e c ti on 14 3 (2 ) of t he A c t on 06 . 0 9. 2 01 3. i i) T he IT O , War d - 1 , H a ld ia ta ki ng n ot e t h at t he i n c o m e r e tu r n ed was a b ov e R s . 15 la cs t r ans f e rr e d t h e ca s e t o A CIT , Ci r cl e - 27, H al di a on 2 4 . 09. 2 0 1 4. i ii ) O n 2 4. 09. 2 0 14 s ta t u t o r y not i ce s f or s c r ut in y w er e i s s ue d b y AC I T , Ci rc l e- 27, H al di a. I.T.A. No.137/CHANDI/2018 Assessment Year: 2013-14 Shri Sunil Khullar 11 6. We no te t h a t t h e CB D T I ns tr u ct i o n i s da te d 31 . 0 1. 2 01 1 an d t h e as s es s e e has f i l ed th e r e tu r n of i nc om e on 29. 0 3. 2 01 3 d ec l ar i n g t ot al i n c om e o f R s . 5 0, 28, 0 40 / -. A s p er th e CB D T I ns t r uc t i o n t he m one t ar y li m it s i n r e s pec t t o a n a s se s s e e who is a n in d iv i d ua l wh i c h f al l s u n de r t he c a t eg or y of ' n o n c or por a te r et ur ns ' t he I T O 's i n cr e as e d m one t ar y l i m i t was upt o Rs . 15 l ac s ; an d if th e r e tu r ne d i nc om e i s abov e R s . 1 5 l ac s it was t he AC / D C. So , s i nc e th e r e t ur n e d i nc om e b y as s e s s ee an in d i vi du a l is a bo v e Rs . 15 la k h, t he n th e j ur i s d i ct i on t o as s e s s th e as s e s s e e l ie s o nl y by A C /D C an d n ot IT O . So, t he r e f or e , on l y t he A C /D C ha d th e j ur i s di ct i o n t o a s s es s t he as s e s s e e. I t i s s e tt l ed l a w th at s e r v in g of n ot i ce u/ s . 1 43( 2) of th e Ac t i s a s i ne qua no n f or an as s e s s m ent t o be m a d e u/ s . 143 (3) o f t he A c t. In t h i s ca s e, no t i c e u /s . 143( 2) of t he Ac t was is s ue d on 06 . 0 9. 2 01 3 by I T O , War d- 1, H a ld ia wh en h e di d no t h a ve t h e pe c u n i ar y j ur is d i c t i o n t o as s um e j ur i s di c ti on an d i s s ue no ti c e. A dm it t e d l y , wh e n t he IT O r eal i z ed t ha t he di d no t h a d t h e p e c u n i ar y j ur i s d i ct i o n t o is s u e no t i c e he d u l y t r ans f er r e d t he f il e to th e A C IT , Ci r c le - 2 7, H al d i a o n 2 4. 0 9. 2 014 wh e n t he AC I T i s su ed s ta t u t o r y n ot i c e wh i ch was be y on d t h e t i m e l i m i t pr e s cr i be d f or is s ua nc e of no ti c e u/ s. 143( 2) o f th e A c t. We n ot e t ha t t he A C IT by as s u m i ng t h e ju r is d i c t i on af t er t he t i m e pr es c r i b e d f or is su anc e of no t i ce u /s . 14 3(2 ) of t he Ac t not i c e be cam e q oa r u m n on j ud i c e af te r t h e l i m it at i o n pr es c r i b e d b y t h e s t at u t e was c r os s ed b y hi m . T he r e fo r e , th e i s s uanc e o f no t i ce by t he A CIT , Ci r cl e - 27, H al di a a f t e r t he l i m i t at i o n p e r io d fo r is s ua nc e of s t at u t or y n ot i c e u/ s . 1 43( 2 ) of t he Ac t h as s e t in , go es to t he r oot o f t h e c a s e an d m ak es t he no t i c e b ad i n th e e y es o f l aw a n d c ons e qu e n t i a l as s e s sm e nt o rd er pas se d u /s . 14 3(3 ) o f t h e A c t i s n ot v al i d in t he ey e s of l a w an d, t her e f or e , i s nu ll an d vo id in th e e ye s o f l a w. T he r e f o r e, t he l eg al is s u e r a is e d by th e as s e ss e e i s al lo w ed . Si n c e w e h av e qu as he d t he as s e ss m en t an d th e ap pe a l o f I.T.A. No.137/CHANDI/2018 Assessment Year: 2013-14 Shri Sunil Khullar 12 as s e s s ee i s a ll o w e d o n th e l e g a l i s s ue , th e ot h e r g r oun d s r ai s e d b y t he as s e s s ee ne ed n ot t o b e a dj u di ca te d b e ca us e i t i s on l y a c ad em i c. T he r ef or e , th e ad di ti o na l g ro un d r a is e d by t h e as s e s s ee i s a ll ow e d . 7. In t he r e s ul t , ap pe a l of as s e s s ee i s al l ow e d. 9. 1. T hi s B enc h o f t he T r i b un a l i n t he c as e of Kr i s hne nd u Ch ow d hur y v s . I T O r e po r te d i n [ 20 17] 78 t a xm a n n. co m 8 9 ( K ol k a t a- T r ib . ) he l d as f ol lo ws :- “Re tu r n of i n c om e o f as s e s s ee wa s Rs . 12 l akh s - As pe r C BD T i n st r u c ti on , j u r i sdi c ti on fo r s c r u t i n y as s e ssm e n t ve s t ed i n I n co m e -t a x O ff ic er an d n ot i ce u n de r se c ti on 143 ( 2) m u s t be i s s u e d b y I n com e -t ax O f fi ce r , W ar d-I , H a ld i a an d n on e ot h er - B u t, n o ti c e w as i s s u e d by A s st t . C om m is s i on e r , Ci r c le Hal d i a m u c h af te r CB D T ' s in s t r u ct i on an d kn ow i n g fu l l y w el l t h a t h e h ad n o j u r is d ic t i o n ov er as s e s s ee - W h e t h er , th e r ef or e , n ot i ce i ss u e d by As s t t . Com m iss i on e r was in v al id an d c on s eq u en t l y as s e ssm en t fr am ed b y In c om e - t ax O f f ic e r s b ec o m es v oi d s i n c e i s s u e o f n ot i c e u n de r s ec t io n 143( 2 ) was n ot do n e b y I n co m e -t ax O ffi c e r s as s pe ci fi e d i n C BD T i n s tr u c ti on N o. 1/ 201 1. ” 9. 2. T he H o n’ b le H i gh C o ur t o f C a l c ut t a i n t he c a s e of Wes t Be n g a l St at e El ec t r ic i ty Bo a r d vs. D ep ut y Co m m i s s io n e r of Inc om e T ax , Spe c ia l R an g e – I, r e por t e d i n [ 2 00 5] 278 IT R 21 8 ( Cal . ) h as he l d as f ol lo ws :- “S ec t io n 2 54 o f t h e I n co m e -t ax Ac t , 19 6 1 - Ap p el l a t e Tr i bu n al - Pow er s o f - As se s sm e n t y ea r s 19 8 3- 8 4 to 1 987 - 8 8 - W h et h er a qu e s ti on of l a w a r i s i n g o u t of fac t s f ou n d b y au t h or i ti e s an d wh i ch we n t to r oot o f j u r is di c t io n ca n be r a is e d for fi r s t ti m e be f o re T r ib u n a l - He ld , ye s W h e t h er j u r is di c t io n o f As s e s s in g Au th o ri t y i s n ot de p e n de n t on dat e of a cc r u al o f cau s e of ac t io n bu t on da t e wh e n i t is i n it i at ed - H el d, I.T.A. No.137/CHANDI/2018 Assessment Year: 2013-14 Shri Sunil Khullar 13 y es - W h e th e r on c e a p ar t ic u l ar j u r i s di c t i on i s c re at e d, s am e m u s t be pr os p ec t i v e an d c an n ot be r et r os p e c t i v e an d it h as t o b e i n te r pr e t e d h av i n g r ega r d to m an n e r in wh i ch i t h as bee n so u gh t t o be cr ea te d - H el d, ye s – As s e ss ee ” 9. 3. T h e H on’b l e S upr e m e Co ur t i n t h e cas e o f CIT v s . L ax m a n D as Kh and el wa l [ 20 1 9] 1 08 t ax m a nn. c om 183 ( SC ), he l d as f ol l o w s: - “7. A c lo s er l ook a t Se c ti on 2 9 2 B B s how s t ha t i f th e as s es s e e ha s par t i c i p at e d i n th e pr o ce ed in gs it s hal l be d e e m ed t ha t an y no ti c e wh i c h i s r e qui r e d t o be s er v e d up o n was d ul y s e r ve d a nd t h e as s e s se e wo ul d b e pr ec l ud e d f r om t ak i ng a n y ob j e ct i o ns t hat t h e n ot i ce w as (a ) n o t s er v e d up o n hi m ; o r (b ) no t s e r ve d up on h i m in t i m e; o r (c ) s er v e d up on hi m i n an im pr o pe r m a nne r . Ac co r d i n g t o Mr. Ma h a bi r Si n gh, l ea r ne d Se n i o r A dv o c a t e, s i nc e t h e R e s po nd e nt ha d p ar t i c i p at e d in th e pr o ce ed in gs , t he pr ov is i on s o f Se ct i o n 2 92B B wo u l d be a c om p l e t e ans we r . O n t he o th e r han d, Mr . A nk it V i j a y w ar gi a, l ea r n ed A dv oc at e, ap pe ar in g f o r th e R es po nd e n t s ubm i t t e d th at t he no t i c e un d er Se c ti on 1 43 ( 2) o f t he A c t w as n ev er i s s ue d wh i c h wa s e v i d en t f r om t he or d er s pa s s ed on r e co rd as w el l as t he s t and t a ke n b y th e A p pe l l a n t i n t he m e m o of a pp e a l . It w as f ur t h e r s ubm i tt e d t hat i s s uan c e of no ti c e un der Sec t io n 14 3(2 ) of t he A ct be i ng pr e r eq u i s it e , in th e a bs en c e of s uc h no ti c e, t he e nt i r e pr o ce e d i n gs wo ul d b e i n v a l i d. 8. T h e l aw o n t he poi nt as r eg ar ds ap pl i c a bi l i t y o f t he r e qu i r em e n t o f no ti c e un der Se c t i on 1 43 ( 2) of t he A c t i s qu i t e c l e ar f r om th e de c is i o n i n H ot el B l u e M oo n 's ca s e (s u pr a). T he i s s ue t ha t ho we ve r ne e ds to b e c ons i de r e d is t he i m pac t o f Se ct i o n 2 9 2 B B of t he A c t. 9. A cc or d i n g t o Se c ti on 2 92 B B o f t he A ct , i f t he as s e s s ee ha d pa rt i ci pa t e d i n th e pr o ce ed in gs , by way of l e g al f i c t io n , no ti c e I.T.A. No.137/CHANDI/2018 Assessment Year: 2013-14 Shri Sunil Khullar 14 wo u l d be de em e d t o b e v a l i d e v e n i f t he r e b e i nf r a c t i o ns a s de t a il e d i n s ai d S e c ti on. T h e s c ope o f t he pr o v i s i on is t o m a ke s er v ic e of no t i c e h av in g c er t a i n i n f i r m it i es t o be pr op er an d v al i d if t h e r e wa s r eq ui s i t e par t i c i p at i o n on par t o f th e a s s es s e e. I t i s, how e v e r , t o b e no t e d th a t t he Se ct i on d oe s n o t s a v e c om p le t e ab s en c e o f no t i ce . F or Se ct i on 2 9 2 B B t o ap pl y, t h e n o ti c e m us t hav e e m an a t e d f r om th e de p ar t m e n t. I t is onl y th e i n f i r m it i e s i n th e m ann er of s e r vi c e of n ot ic e t ha t th e Se c t i on s e ek s to cu re . T he Sec t i o n i s n ot in t e nd e d t o c ur e c om p l e te abs e nc e o f no ti c e i ts e l f. ” 10 . R es pe c tf ul l y f o ll o w i n g t h e p r opos i t i o ns o f l aw l ai d d o wn in al l t he s e cas e - l a w and ap pl y i n g th e s am e t o t he f a c t s of t he c as e, we hol d t h at t h e as s e s sm ent o rd er i s ba d i n l a w f or t h e r ea s on t h at t he A s s es s i ng O ff i ce r h av i n g j ur i s d i c t i o n ov er th e as s e s s ee , has n ot is s u ed a not i ce u/ s 14 3 (2 ) of th e A ct as r e qui r ed by the s t at ut e. No t i c e i ss ue by t he of f ic e r h avi ng n o j ur i s di c ti on o f t h e as s e ss e e i s nu ll an d vo id . W he n a not i c e i s iss ue d b y an of f i c er ha v i n g no j u r is d i c t io n , Se c t i o n 29 2 B B of t h e A c t, do es no t c om e s in t o p la y. Co m i n g to t he ar g um e nt of t h e l d. D / R t hat ob je c t i o n u /s 1 2 4( 3 ) of t he A c t ha s t o b e ta ke n by t he as s e s s ee o n r e c ti f yi ng no t i ce u/ s 1 43 (2 ) o f t he A c t f r om a no n-j ur i s di ct i o na l as s e s s in g of f ic e r, I am of t he v ie w t h at I n e e d n ot ad j u d ic at e t hi s i s s ue , a s I ha ve h el d th at n o n- i s s ua l of s ta t u t o r y no t i c e/ s 143 ( 2 ) of t he A ct by th e j ur i s di ct i o na l A s se s s i ng O f fi c er m ak e s th e as s e s sm ent b ad i n l a w . U n de r th es e c ir c um s t an c es , we al lo w th is ap p ea l o f t h e as s es s e e. ” 6. R es pe c t f u l l y f ol l o w i ng t he p ro pos i t i o n s of l aw l a i d d o wn i n t h es e or d e r s s t at e d a bo ve , w e ho l d t hat t h e or d er s ar e ba d i n l a w f or th e r e as on t hat t he a s se s s i ng au th or it y pass e d th e or d er u/ s 1 43 ( 3 ) of t h e A ct i. e . D CIT - 13( 1), K o l ka t a h as not is s u ed a no t i c e u/ s 143 ( 2 ) of th e Ac t an d al s o f or th e r ea s on t hat t h e j ur i s di ct i o n o f t hes e c as e s l i es wi th t h e IT O a nd not t he D CIT . H en ce a ll t he o r d er s pas s e d by t h e l d. CI T ( A) i n t he s e f o ur c as e s ar e he r e b y q ua sh e d a nd t he a p p ea ls of t he as se s s ee s a r e al l ow e d. ” I.T.A. No.137/CHANDI/2018 Assessment Year: 2013-14 Shri Sunil Khullar 15 14 . In v i e w o f t h e di s c us s i on m ad e ab ove a nd r e s pe ct f ul l y fo l l ow i n g t h e de c is i o n c i te d a bo v e, i t is h el d t ha t th e a s s ess me nt fra me d u/ s 14 3(3 ) o f t he A c t by t he D C I T be i n g w it h ou t j ur i s di c ti on i s ba d i n l aw an d t h e s a m e i s ac co rdi ng l y s e t a s i de . In th e re s ul t , t he ap pea l o f t h e a s s e s s ee s ta nd s al lo w e d. Chandigarh, the 30 th December, 2022. sd/- sd/- [Shri Vikram Singh Yadav] [Sanjay Garg] Accountant Member Judicial Member Dated: 30 .12.2022. Rs./rkk Copy of the order forwarded to: 1. Shri Sunil Khullar 2. DCIT, Circle-Khanna 3. CIT(A)- 4. CIT- , 5. CIT(DR), ITAT, Chandigarh