Smt. S.Vasanthi, Salem V. ACIT, Coimbatore

ITA 1402/CHNY/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 7926 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 27-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G BASKAR SHRI P B S EKARAN
• Keywords: Validity of assessment
• Section: 143(3); 142(1); 133A; 153A; 132; 154

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL: B- BENCH:CHENN AI (BEFORE SHRI HARI OM MARATHA, JUDICIAL M EMBER AND SHRI ABRAHAM P. GEORGE. ACCOUNTANT MEMBER) 1) ITA NOS.1401 TO 1404 / MDS/10 & 2) ITA NOS.1405 TO 1408 /MD S/10 (ASST. YEARS 2004-05 TO 2007-08) 1. SMT.S.VASANTHI, 12-2/5, SANNANA CHETTY ST. ELAMPILLAI, SALEM 637502 PAN ABGPV5704M 2. SMT.S.JAYANTHI, 5/49 BAJANA KOIL ST., ELAMPILLAI, SALEM 637502 PAN ACGPJ3689L VS THE ACIT, CENTRAL CIR.II, COIMBATORE. (APPELLANTS) (RESPONDENTS) APPELLANTS BY: RESPONDENT BY: SHRI G.BASKAR SHRI P.B.SEKARAN, CIT-DR ORDER PER BENCH IN ALL THESE APPEALS OF BOTH THE ASSESSES ONE COMM ON GROUND THAT HAS BEEN TAKEN QUESTIONS THE JURISDICTION OF THE AO TO MAKE ASSESSMENTS UNDER SEC. 143(3) OF THE INCOME-TAX ACT, 1961 (THE ACT FOR SHORT), EVEN THOUGH HE WAS HAVING CONCURRENT JURISDICTION. THOU GH THERE ARE OTHER ITA NOS. 1401 TO 1404/MDS/10 .. 2 GROUNDS ALSO TAKEN UP BY THE ASSESSES, GROUND REGAR DING JURISDICTION IS CONSIDERED FIRST SINCE IT GOES TO THE VERY ROOT OF THE VALIDITY OF ASSESSMENTS. 2. SHORT FACTS APROPOS ARE THAT THERE WAS A SEARCH UNDER SECTION 132 AND SURVEY UNDER SECTION 133A OF THE INCOME-TAX ACT, 19 61 (IN SHORT, THE ACT) ON 18.10.2006 IN A GROUP OF CONCERNS CALLED MKRP TEX G ROUP OF SHRI P. SUNDARARAJ AND P. SUKUMAR. AS PER THE REVENUE, CERTAIN BOOKS OF ACCOUNTS / DOCUMENTS OR OTHER ASSETS SEIZED THEREFROM, BELONGED TO THE ASSE SSEE. ON 03.07.2008 NOTICES U/S 153 READ WITH SECTION 153A(A) OF THE AC T WERE ISSUED TO THE ASSESSEE BY DCIT, CENTRAL CIRCLE, SALEM, FOR FILING RETURN I N RESPECT OF ASSESSMENT YEAR 2001-02 TO ASSESSMENT YEAR 2006-07. ON THE SAME DA Y NOTICE UNDER SECTION 142(1) OF THE ACT WERE SERVED BY THE SAME AUTHORITY FOR FILING THE RETURN FOR ASSESSMENT YEAR 2007-08 ALSO. RETURNS WERE FILED B Y THE ASSESSEES AND NOTICE DATED 02.09.2008 U/S 143(2) ISSUED BY ACIT, CENTRAL CIRCLE, SALEM 7, REQUIRING THEIR ATTENDANCE ON 29.9.2008 FOR PRODUCING DOCUMEN TS, ACCOUNTS AND OTHER EVIDENCE SUPPORTING THE RETURN FILED. BEFORE THE I SSUE OF SUCH NOTICE, ON 25.07.2007 THE CIT, SALEM THROUGH HIS INCOME TAX OF FICER (HQ) INFORMED THE ASSESSEES HIS PROPOSAL TO TRANSFER THE CASE FROM IN COME TAX OFFICER, WARD-II(3), SALEM TO ACIT, CENTRAL CIRCLE-II, COIMBATORE. ASSE SSEES FILED ITS OBJECTION THROUGH LETTER DATED 06.08.2007, INTER ALIA STATING THAT THE TRANSFER OF FILES WOULD INVOLVE MUCH DIFFICULTY DUE TO THE DISTANCE, AND AL SO POINTED OUT THAT THERE WAS CENTRAL CIRCLE OFFICE AT SALEM ITSELF. HOWEVER, ON 28.11.2008, ADDL. CIT, CENTRAL RANGE, COIMBATORE ISSUED AN ORDER NUMBERED AS 02/08 -09 [CR NO.1(10)/CR/CBE/2008-09], WHEREBY, HE UNDER POWERS CONFERRED ON HIM BY CIT, ITA NOS. 1401 TO 1404/MDS/10 .. 3 CENTRAL-III AUTHORIZED ACIT, CENTRAL CIRCLE II, COI MBATORE TO EXERCISE CONCURRENT JURISDICTION OF THE CASES OF THE GROUP OF MKRP TEX, WHICH INCLUDED THE ASSESSEES, ALONG WITH ACIT, CENTRAL CIRCLE, SALEM. SUBSEQUENT TO THIS, NOTICE UNDER SECTION 143(2) WERE ISSUED TO THE ASSESSEE ON 01.12.2008 BY ACIT, CENTRAL CIRCLE II, COIMBATORE. ON THE SAME DAY THE SAME AUTHORITY ALSO ISSUED NOTICE U/S 142(1) REQUIRING THE ASSESSEES TO FILE R ETURNS FOR ALL THE ASSESSMENT YEARS INVOLVED. ASSESSEES FILED A REPLY ON 11.12.2 008 INTER ALIA POINTING OUT THE PROCEEDINGS ALREADY INITIATED BY DCIT, CENTRAL CIRC LE, SALEM AND ALSO OBJECTING TO THE EXERCISE OF JURISDICTION BY ACIT, CENTRAL CI RCLE II, COIMBATORE. DESPITE ASSESSEES OBJECTION THE SAID OFFICER PROCEEDED WIT H THE ASSESSMENT AND COMPLETED THE ASSESSMENTS FOR ALL YEARS UNDER SECTI ON 153 R.W.S.143(3) OF THE ACT. 3. ASSESSEES QUESTIONED THE JURISDICTION OF THE ACI T, CENTRAL CIRCLE II TO DO THE ASSESSMENTS BEFORE THE COMMISSIONER OF INCOME T AX (APPEALS). ACCORDING TO THEM, ONLY THE ASSESSING OFFICER AT SALEM HAD JU RISDICTION OVER THEM. ISSUE OF NOTICE UNDER SECTION 153A WAS ALSO QUESTIONED, SINC E THE SEARCH INITIATED WAS NOT IN THEIR NAME. ACCORDING TO THE ASSESSEES, NOT IFICATION GIVING CONCURRENT JURISDICTION, GAVE ONLY LIMITED POWERS TO ACIT, CEN TRAL CIRCLE II, COIMBATORE, AND SUCH POWERS DID NOT INCLUDE THE POWER OF MAKING AN ASSESSMENT UNDER SECTION 143(3). HOWEVER, THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) OVERRULED THIS OBJECTION GIVING THE FOLLOWING REASONING:- 4.2 CIT, CENTRAL-III, CHENNAI, VIDE HIS NOTIFICAT ION NO.01/2008-09 DATED 27.11.2008 ORDERED THAT ADDL. CIT, CENTRAL RA NGE, COIMBATORE SHALL EXERCISE CONCURRENT JURISDICTION OF ALL CASES ASSESSABLE IN HIS ITA NOS. 1401 TO 1404/MDS/10 .. 4 RANGE AND IN ADDITION ALL THE ASSESSING OFFICERS OF THE RANGE SHALL EXERCISE CONCURRENT JURISDICTION WITH EACH OTHER IN RESPECT OF ALL CASES ASSESSABLE BY THEM INDIVIDUALLY. ALSO HE AUTHORIZE D THE ADDL. CIT, CENTRAL RANGE, COIMBATORE TO ASSIGN SPECIFIC CASES FROM ONE ASSESSING OFFICER TO ANOTHER ASSESSING OFFICER OF H IS RANGE FOR PROPER ARRANGEMENT OF WORK RELATING TO THE CENTRAL RANGE, COIMBATORE. 4.3 ADDL. CIT, CENTRAL RANGE, COIMBATORE PASSED ORD ER ASSIGNING THIS CASE TO ACIT, CENTRAL CIRCLE-II, COIMBATORE. IT IS THUS NOT CORREC TO SAY THAT PRESENT ASSESSING OFFICER DID NOT HAVE JURISDICTION OVER THE CASE OF THE APPELLANT. 4.4 SHRI P. SUNDARARAJ, PARTNER AND HIS AUTHORIZED REPRESENTATIVES APPEARED BEFORE ASSESSING OFFICER SUBSEQUENTLY. OR DER SHEET ENTRY DATED 11.12.2008 HAS REFERENCE TO THE EFFECT THAT T HEY HAVE NO OBJECTION TO CERTRALIZE THE ASSESSEE GROUP CASE WIT H ACIT, CENTRAL CIRCLE-II, COIMBATORE. IN VIEW OF THE ABOVE, I DO NOT FIND ANY MERIT IN THE GROUND OF APPEAL RELATING TO JURISDICTION. ACC ORDINGLY, THIS GROUND OF APPEAL IS DISMISSED. 4. NOW BEFORE US LEARNED COUNSEL FOR THE ASSESSEES PLACING RELIANCE ON NOTIFICATION NUMBER 285/2006 F.NO.133/38/2006-TPL D ATED 10.10.2006 (PB-29), OF THE CBDT SUBMITTED THAT THE POWERS OF CHIEF COMM ISSIONERS AND DIRECTOR GENERALS, FOR ISSUING ORDERS FOR EXERCISING CONCURR ENT JURISDICTION WAS LIMITED TO (I) ISSUE OF LIMITATION AND REFUND UNDER SECTION 14 3(1), AND (II) ISSUE OF RECTIFICATION U/S 154. THEREFORE, ACCORDING TO HIM , THE EXERCISE OF ASSESSMENT JURISDICTION BY ACIT, CENTRAL CIRCLE-II, COIMBATORE , FOR ALL THE IMPUGNED ASSESSMENT YEARS WAS BEYOND HIS POWERS AND SUCH ASS ESSMENTS HAD TO BE QUASHED FOR WANT OF JURISDICTION. HE ALSO RELIED O N THE DECISION OF CO-ORDINATE BENCH IN THE CASE OF P. SUKUMAR (HUF) VS. DCIT (ITA NO.1731 TO 1737/MDS/09 DATED 30.4.2010) IN THIS REGARD. 5. PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTAT IVE ARGUED THAT, ASSESSEES REPRESENTATIVE HAD GIVEN NO OBJECTION TO THE ASSESSING OFFICER AT ITA NOS. 1401 TO 1404/MDS/10 .. 5 COIMBATORE IN THE HEARINGS HELD ON 11.12.2008. REL IANCE WAS PLACED ON THE DECISION OF THE PUNJAB AND HARYANA HIGH COURT IN TH E CASE OF SMT. JASWINDER KAUR KOONER VS. CIT (2007) 291 ITR 80. 6 . IN REPLY, THE LD. AR SUBMITTED THAT IN THE CASE O F ONE OTHER ASSESSEE NAMED SHRI P.JEEVARATHINAM, WHO WAS ALSO SUBJECTED TO SIMILAR PROCEEDING PURSUANT TO THE SEARCH CONDUCTED IN MKRP TEX GROUP, WHERE THE SAME ISSUE OF JURISDICTION WAS RAISED, THIS TRI BUNAL HAD HELD IN FAVOUR OF THE ASSESSEE. ORDER OF THE TRIBUNAL IN ITA NOS.6 1 TO 67/MDS/2010 DATED 11-06-2010 IS ALSO FILED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS. WE FIND THE FACTS TO BE EXACTLY SIMILAR TO THE FACTS I N THE CASE OF SHRI P.JEEVARATHINAM (SUPRA) WHEREIN IT WAS HELD BY THIS TRIBUNAL AT PARAS- 6 TO 8 AS UNDER: . 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. FACTS ARE CLEAR. NOTICE WAS FIRST ISSUED BY DCIT, CENTRA L CIRCLE, SALEM (IN SHORT, SALEM OFFICER) FOR FILING RETURNS. DETAILS WERE CA LLED FOR BY THE SALEM OFFICER REQUIRING THE ASSESSEE TO FURNISH VARIOUS D ETAILS. EVEN NOTICE UNDER SECTION 143(2) WAS ALSO ISSUED BY THE SALEM O FFICER. IN BETWEEN THERE WAS NOTICE TO THE ASSESSEE BY CIT, SALEM PROP OSING TRANSFER OF THE CASE TO ACIT, CENTRAL CIRCLE II, COIMBATORE OFFICER (IN SHORT, COIMBATORE OFFICER). ASSESSEE HAD OBJECTED TO THIS AS WELL. NEVERTHELESS ORDER WAS PASSED ON 28.11.2008 BY ADDL. CIT, CENTRAL RANGE, C HENNAI, CONFERRING CONCURRENT JURISDICTION TO THE COIMBATORE OFFICER. THAT IT WAS ONLY CONCURRENT JURISDICTION IS CLEAR FROM THE OPENING P ARA OF THIS ORDER WHICH RAN AS UNDER:- IN EXERCISE OF THE POWERS CONFERRED ON THE UNDERSI GNED BY THE PROCEEDINGS OF THE COMMISSIONER OF INCOME TAX, CENTRAL-III, CHENNAI, IN C.NO.NOTIFICATION/08-09/C- III DATED ITA NOS. 1401 TO 1404/MDS/10 .. 6 27.11.2008, AND IN SUPERSESSION OF THE EARLIER ORDE R OF THIS OFFICE IN ORDER NO.01/08-09 DATED 11.09.2008, I HER EBY AUTHORIZE THE ASSESSING OFFICERS MENTIONED IN COL.( 5) OF THE SCHEDULE TO THIS NOTIFICATION TO EXERCISE CONCURREN T JURISDICTION ON THE CASES, PARTICULARS OF WHICH ARE MENTIONED IN COL. (2) AND (3) OF THE SCHEDULE FOR THE PURPOSE OF COMPLETION OF INCOME TAX & WEALTH TAX ASSESSMENTS F OR WHICH THE TIME LIMIT EXPIRES BY 31.12.2008. 7. VIS--VIS THE POWER OF CHIEF COMMISSIONER AND DI RECTOR GENERAL OF INCOME TAX FOR ISSUING POWER OF CONCURRENT JURISDIC TION, NOTIFICATION NUMBER 285/2006 F.NO.133/38/2006-TPL DATED 10.10.20 06, IS VERY CLEAR. IT RUNS AS UNDER:- IN EXERCISE OF THE POWERS CONFERRED BY SUB-SECTION S (1) AND (2) OF SECTION 120 OF THE INCOME-TAX ACT, 1961 (43 OF 1961 ), THE CENTRAL BOARD OF DIRECT TAXES HEREBY AUTHORIZES EVERY CHIEF COMMISSI ONER OF INCOME TAX AND DIRECTOR-GENERAL OF INCOME TAX TO ISSUE ORDERS, IN WRITING, FOR THE EXERCISE OF POWERS AND PERFORMANCE OF FUNCTIONS CON CURRENTLY BY ALL THE ASSESSING OFFICERS SUBORDINATE TO HIM WITH ANY OTHE R ASSESSING OFFICER OR ASSESSING OFFICERS (WHETHER SUBORDINATE TO HIM OR N OT) IN RESPECT OF (I) ISSUE OF INTIMATION AND REFUND UNDER SUB-SECTIO N (1) OF SECTION 143 OF THE INCOME-TAX ACT, 1961 IN CASES ASSESSED OR ASSESSABLE WITH THE ASSESSING OFFICER SUBORDINATE TO THE CHIEF COMMISSIONER OF INCOME TAX OR, AS THE CASE MAY BE, THE DIRECTOR GENERAL OF INCOME TAX; (II) RECTIFICATION UNDER SECTION 154 OF THE INCOME- TAX ACT, 1961 IN RESPECT OF SUCH INTIMATION. 8. NOTHING WAS BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT THE CENTRAL BOARD OF DIRECT TAXES TO CIT & DCIT, WITH R EGARD TO CONFERMENT OF CONCURRENT JURISDICTION. THIS BEING THE POSITION, THE COIMBATORE OFFICER HAD LIMITED POWERS OF ISSUING INTIMATION AND REFUND OF EFFECTING RECTIFICATION THEREON. THERE IS NOTHING MORE. HE HAS NO POWERS TO MAKE ASSESSMENTS. AS FOR THE DECISION OF HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF SMT. JASWINDER KAUR KOONER (SU PRA) RELIED ON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE, IT WAS NOT AN ISSUE OF GIVING CONCURRENT JURISDICTION, BUT TRANSFER OF JURISDICTI ON. HERE, ON THE OTHER HAND, THOUGH THE ASSESSEE WAS INITIALLY PUT ON NOTI CE REGARDING A PROPOSED TRANSFER OF JURISDICTION, AFTER RECEIVING ASSESSEES OBJECTIONS, WHAT WAS DONE WAS TO GIVE CONCURRENT JURISDICTION T O THE COIMBATORE OFFICER ALONG WITH THE SALEM OFFICER. THERE WAS NO TRANSFER OF JURISDICTION AS SUCH. HENCE THIS CASE WILL NOT SUPPORT THE REVE NUE IN ANY WAY. RECORDS CLEARLY SHOW THAT ASSESSEE HAD OBJECTED, AN D IN ANY CASE, JURISDICTION CANNOT BE CONFERRED BY AN ASSESSEE UND ER SECTION 120 OF THE ITA NOS. 1401 TO 1404/MDS/10 .. 7 ACT. WE ALSO FIND THAT IN THE CASE OF P. SUKUMAR H UF VS. ACIT (SUPRA), WHICH ASSESSEE WAS ONE IN THE KRP TEX GROUP, AS IT COMES OUT FROM THE ORDER DATED 28.11.2005 OF ADDL. CIT, GIVING CONCURR ENT JURISDICTION TO COIMBATORE OFFICER, ONE OF THE MAIN REASONS FOR WHI CH THE TRIBUNAL HELD THE ASSESSMENT TO BE ULTRA VIRES WAS WANT OF JURISD ICTION, ON SIMILAR CIRCUMSTANCES. THUS WE HAVE NO HESITATION TO QUASH THE ASSESSMENTS FOR ALL THE ASSESSMENT YEARS, HAVING BEEN DONE, BEYOND THE POWERS AVAILABLE TO THE ASSESSING OFFICER CONCERNED. SINCE WE HAVE HELD IN ASSESSEES FAVOUR ON THE JURISDICTIONAL ASPECT, OTHER ISSUES A RE NOT CONSIDERED. 8. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THA T THE ASSESSES HAVE TO SUCCEED ON THE ISSUE OF JURISDICTION. SINCE WE H AVE HELD IN FAVOUR OF THE ASSESSES ON JURISDICTIONAL ISSUE, THE OTHER ISSUES ARE NOT CONSIDERED. 9. IN THE RESULT, APPEALS OF THE ASSESSES FOR ALL T HE ASSESSMENT YEARS ARE ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 12 -11-20 10.. SD/- SD/- ( HARI OM MARATHA) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI: 12 TH NOVEMBER, 2010 NBR CC: ASSESSEES/ ASSESSING OFFICER/ CIT(A)/ CIT/ D.R/ GUARD FILE. ITA NOS. 1401 TO 1404/MDS/10 .. 8 ITA NOS. 1401 TO 1404/MDS/10 .. 9 ITA NOS. 1401 TO 1404/MDS/10 .. 10 ITA NOS. 1401 TO 1404/MDS/10 .. 11 8. SINCE WE HAVE HELD IN FAVOUR OF THE ASSESSES ON JURISDICTIONAL ISSUE, THE OTHER ISSUES ARE NOT CONSIDERED. ITA NOS. 1401 TO 1404/MDS/10 .. 12 9. IN THE RESULT, APPEALS OF THE ASSESSES FOR ALL T HE ASSESSMENT YEARS ARE ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 12 -11- 2010.. SD/- SD/- ( HARI OM MARATHA) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI: 12TH NOVEMBER, 2010 NBR CC: ASSESSEES/ ASSESSING OFFICER/ CIT(A)/ CIT/ D.R/ GUARD FILE.