Assistant Commissioner of Income-Tax, Bangalore V. Dr. Kamini Aravind Rao, Bangalore

ITA 1482/BANG/2016

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7062 (ITAT-BANGALORE)
• Duration Of Justice: 5 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2022
• Appeal Filed By: Department
• Order Result: PartlyAllowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 11-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Gift
• Section: 143(3); 54F; 292BB; 64

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES “C”, BANGALORE Before Shri George George K, JM & Ms.Padmavathy S, AM ITA No.1482/Bang/2016 : Asst.Year 2013-2014 The Assistant Commissioner of Income-tax, Circle 2(3)(1) Bangalore. v. Dr.Kamini Aravind Rao No.5, Santhana, 2 nd Cross Kumara Cot, Madhavanagar Bangalore – 560 001. PAN : ABFPR4756E. (Appellant) (Respondent) Appellant by : Sri.Dilip, Standing Counsel for Dept. Respondent by : Sri.Narendra Sharma, Advocate Date of Hearing : 10.03.2022 Date of Pronouncement : 11.03.2022 O R D E R Per George George K, JM : This appeal at the instance of the Revenue is directed against CIT(A)’s order dated 24.05.2016. The relevant assessment year is 2013-2014. 2. The grounds raised read as follows:- “1. Learned CIT(A)-I is erred in assumption of appellate jurisdiction on the assessee, a doctor by profession whose case comes under the jurisdiction of CIT(A)-II, Bengaluru. 2. Learned CIT(A)-I ought to have observed the appellate jurisdiction before passing the order. 3. Learned CIT(A)-I ought to have perused the assessment order u/s 143(3) and Form No.35 filed by the assessee which are clearly showing the order is passed by Assistant Commissioner of Income-tax, Circle-2(3)(1), Bengaluru and CIT(A)-I is not having the jurisdiction over the orders passed by that officer. 4. Learned CIT(A)-I erred in passing the order without verifying the case of a professional which is not assigned to ITA No.1482/Bang/2016. Dr.Kamini Aravind Rao. 2 the jurisdiction of CIT(A)-I on administrative grounds or order u/s 127 by notifying the jurisdiction of the case to any assessing officer whose orders falls under the CIT(A)-I appellate jurisdiction. 5. Learned CIT(A)-I erred in passing an appellate order in the case of an doctor who is assessed regularly in the professional range without noticing that he is not having appellate jurisdiction over professional Range cases . 6. The order of Learned CIT(A)-I in the case of Dr. Kamini Aravinda Rao may be set aside to the correct jurisdictional CIT(A), i.e, CITCA)-II, Bengaluru for fresh adjudication. 7. Without prejudice to the grounds raised above, on merits of the case the CIT(A)-I failed to distinguish the case laws relied on assessee to case on hand. 8. Learned CIT (A)-I failed to differentiate the terms of income u/s 64 and head of income by ignoring the intension of the Section 64, which is legislated for the purpose of not allowing the unintended benefits such as reducing the tax incidence by transferring the properties to the spouse and claiming the exemption of income in the hands of spouse otherwise the sale proceeds are taxable in the hands of assessee. 9. Learned CIT(A)-I failed to understand the fact that assessee is not eligible to claim exemption u/s 54F being the owner of more than two houses hence she has chosen a tax avoidance route to claim the exemption in the return of her husband. 10. Learned CIT(A)-I failed to notice the basic intention behind the transactions of gifting shares to her spouse and sale of the same in very short span of time is to avoid the substantial tax payment. 11. Learned CIT(A)-I is not correct in allowing the exemption in the hands of spouse of the assessee without appreciating that the exemption is only allowable in the hands of assessee's spouse if the assessee also eligible for the same exemption. 12. The learned CIT(A)-I failed to distinguish the difference between terms exemption claimed and deduction allowable under the provisions of clubbing of incomes.” ITA No.1482/Bang/2016. Dr.Kamini Aravind Rao. 3 3. At the very outset, the learned Departmental Representative submitted that the CIT(A) who passed the impugned order does not have the jurisdiction over the assessee, hence, the impugned order is void ab initio. In this context, the learned DR has filed a paper book comprising of 46 pages including the copy of the Notification dated 15.11.2014 issued by the Principal Chief Commissioner of Income-tax, Karnataka & Goa Region (“Pr.CCIT” for short) and the case laws relied on. 4. The learned AR, on the other hand, submitted that in the notice of demand it is not mentioned to which CIT(A) the appeal is to be preferred. Further, the learned AR submitted that in ITNS there is no objection raised by the Assessing Officer as regards the jurisdiction of the CIT(A) over the assessee. 5. In the rejoinder, the learned DR submitted that there is no mention in the CIT(A)’s order calling for A.O.’s objection. 6. We have heard rival submissions and perused the material on record. The assessee, who is a practicing medical professional, falls under the jurisdiction of Assistant Commissioner of Income-tax, Circle 2(3)(1), Bangalore (hereinafter referred to as the `AO’). The A.O. falls under the administrative control of Pr.CIT-1, Bangalore. For the relevant assessment year, the assessment order was passed on 03.12.2015. The Pr.CCIT, vide Notification dated 15.11.2014 had passed jurisdictional allocation of CIT(A). A copy of the ITA No.1482/Bang/2016. Dr.Kamini Aravind Rao. 4 same is enclosed from pages 1 to 5 of the paper book submitted by the learned DR. As per the aforesaid Notification, the Commissioner of Income-tax (Appeals) mentioned in Column (3) shall exercise the powers and perform functions in respect of any appeal filed by cases or class of persons specified in Column (5) and falling under the jurisdiction of the Income-tax Authorities specified in Column (4) of the Schedule. Further, as per the aforesaid Notification, vide Sl.No.2, it is clearly mentioned that the CIT(A), Bangalore-2 shall be the Commissioner (Appeals) for any appeal filed by cases falling under the jurisdiction of Pr.CIT-2, Bangalore. In the present case, the first appeal has been decided by the CIT(A), Bangalore-1, who did not have jurisdiction over the appeal filed by the cases falling under the jurisdiction of Pr.CIT-2, Bangalore. In view of the above, the CIT(A)’s order in the present case passed by the CIT(A)-1, Bangalore is without jurisdiction and hence void ab initio. The Hon’ble jurisdictional High Court in the case of Himalaya Drug Company v. DCIT in ITA No.441/2014 & Ors. (judgment dated 15 th September, 2021) had held that notice issued by the A.O. is without jurisdiction and as such all further proceedings would render void ab initio. Further, the Hon’ble High Court in the case of Himalaya Drug Company (supra) vide para 20 of the said order had held that the notice issued without jurisdiction is a substantive illegality and not a procedural violation of the nature adverted to in section 292B and 292BB of the I.T.Act. Therefore, for the aforesaid reasons, the impugned order of the CIT(A) is set aside. The correct ITA No.1482/Bang/2016. Dr.Kamini Aravind Rao. 5 jurisdictional CIT(A) is directed to adjudicate the appeal of the assessee in accordance with law. It is ordered accordingly. 7. In the result, the appeal filed by the Revenue is partly allowed. Order pronounced on this 11 th day of March, 2022. Sd/- (Padmavathy S) Sd/- (George George K) ACCOUNTANT MEMBER JUDICIAL MEMBER Bangalore; Dated : 11 th March, 2022. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT(A)-1, Bangalore. 4. The Pr.CIT-1, Bangalore. 5. The DR, ITAT, Bengaluru. 6. Guard File. Asst.Registrar/ITAT, Bangalore