ACIT, CC-17, New Delhi V. Vista Distributors Pvt. Ltd., New Delhi

ITA 2015/DEL/2021

AI Insights

The case involves the Income Tax Department's appeal against the order of the Commissioner of Income-Tax (Appeals) which quashed an assessment order. The assessment was originally made by the ITO, Ward 5(3), Kolkata, but jurisdiction over the assessee, M/s. Vista Distributors Pvt. Ltd., was transferred to ACIT, Central Circle-3, New Delhi before the assessment order was passed. The Tribunal found that the assessment order was issued without valid jurisdiction, as the transfer of jurisdiction was not reverted back to Kolkata, leading to the quashing of the assessment order by the CIT(A).

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113614 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 27-06-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 29-12-2021
• Other Referred Cases: CIT vs. Shri Shyam Sunder Infra-structure Pvt. Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Corroborative evidences
• Section: 147; 148; 263; 143(3); 142(1); 153A; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH :H: DELHI) BEFORE SHRI SAKTIJIT DEY, VICE-PRESIDENT & SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 2015/Del/2021 Assessment Year: 2009-10 ACIT, Central Circle-17, New Delhi (PAN:AACCV8200E) Vs. M/s. Vista Distributors Pvt. Ltd., A-185, New Friends Colony, Delhi-1100 25 (Appellant) (Respondent) Present for: Department by : Ms. Sapna Bhatia, CIT-DR Assessee by : Shri Suresh Gupta, CA Date of Hearing : 28.06.2023 Date of Pronouncement : 28.06.2023 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the Department is against the order of learned Commissioner of Income-Tax(Appeals)-27, New Delhi in appeal no.573/19-20/1689 vide Order dated 22.06.2021 against the assessment order of ITO, Ward 5(3), Kolkata passed under Sections 144/263/143(3)/147 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 02.03.2015 for assessment year 2009-10. 2. Grounds taken by the Department are reproduced as under: 1. The Ld. CIT(A) has erred in quashing the order of A.O by ignoring the fact that in this case the assessee has challenged order u/s.263 passed by CIT, Kolkata-II 2 ITA No.2015/Del/2021 – Vista Distributors Pvt. Ltd., New Delhi - AY: 2009-10 before the Hon’ble ITAT, Kolkata and the same has been decided in he favour of revenue. 2. The Ld. CIT(A) has erred in fact and law and quashed the assessment order under consideration on the basis of dispute raised by the assessee over the jurisdiction which is contrary to section 124(3)(a) of the Income Tax Act, as the assessee has not challenged the jurisdiction before A.O during the course of assessment proceeding. 3. (a) The order of the CIT(Appeals) is erroneous and not tenable in law and on facts. (b)The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal. 2.1 The sole issue involved in this appeal is in respect of jurisdiction assumed by the authorities below. 3. Brief facts of the case are that assessee filed its return of income on 26.09.2009. Case was reopened under Section 148 and the assessment was completed under Section 147 read with section 143(3) vide order dated 28.04.2011, determining total income at Rs.6,890. 4. Learned Commissioner of Income-Tax-II, Kolkata passed an order under Section 263 on 25.03.2014. Effect giving order was passed by ITO, Ward 5(3), Kolkata under Section 144/263/147/143(3) of the Act vide order dated 02.03.2015 determining total income at Rs.4,84,72,000. 3 ITA No.2015/Del/2021 – Vista Distributors Pvt. Ltd., New Delhi - AY: 2009-10 5. The main contention of the assessee is that learned Assessing Officer has passed the impugned order without jurisdiction. In this respect, assessee submitted a table containing chronology of events along with evidences in the form of paper book, placed on record. The chronological events is tabulated as under: Date Event Remarks by the assessee 26.09.2009 Return filed u/s 139(1) - 04.04.2011 Notice u/s 148 28.04.2011 Order passed u/s 147/143(3) of IT Act. - 30.01.2014 Order passed u/s 127(2)(a) of IT Act Jurisdiction transferred from ITO Ward-5(3), Kolkota to ACIT, Central Circle-3, New Delhi 03.02.2014 Notice u/s. 153C of IT Act The notice was issued by the CIT after transfer of jurisdiction of the case to Delhi. 18.02.2014 Notice u/s 153C of IT Act was issued by ACIT,CC-8, New Delhi. The jurisdiction u/s. 153C was assumed by ACIT. CC-8, New Delhi in accordance with order of CIT-II, Kolkata u/s. 127 of IT Act. 24.02.2014 Return filed u/s 153C in the office of above Central Circle - 25.03.2014 Order u/s.163 of IT Act was passed. The above order was passed without jurisdiction as the 4 ITA No.2015/Del/2021 – Vista Distributors Pvt. Ltd., New Delhi - AY: 2009-10 jurisdiction stood transferred to Delhi charge prior to passing of order u/s 263. Further, the proceedings got abated by virtue of second proviso to set 153A of IT Act. 30.03.2014 Order u/s 153C of IT Act was passed by ACIT, CC-8, Delhi - 02.03.2015 Order u/s 144/263/143(3)/147 of IT Act was passed which is under appeal. This order was passed without cancelling the order u/s153C of IT Act passed by the authority having valid jurisdiction as the proceedings got abated by virtue of second proviso to sec 153C of IT Act. 5.1. From the above table, it was pointed out that order under Section 127(2) was passed on 30.01.2014 by CIT, Kolkata-II whereby jurisdiction was transferred from ITO, Ward 5(3), Kolkata to ACIT, Central Circle-8, New Delhi. It is stated in the said order that it will take immediate effect. Subsequently, revisionary proceedings under Section 263 were invoked by learned CIT, Kolkata-II, Kolkata by issuing show- cause-notice dated 03.02.2014. Revisionary proceedings were completed and order under Section 263 was passed on 25.03.2014. It is important to note that both the show-cause-notice and the revisionary order under 5 ITA No.2015/Del/2021 – Vista Distributors Pvt. Ltd., New Delhi - AY: 2009-10 Section 263 are subsequent to the date of order passed under Section 127(2) i.e. after the transfer of jurisdiction from Kolkata to New Delhi. To give effect to the revisionary order under Section 263, ITO, Ward 5(3), Kolkata issued notice under Section 142(1) on 28.03.2014 and completed the assessment by passing the impugned order on 02.03.2015. Assessee went in appeal before the learned Commissioner of Income- Tax(Appeals) against the said assessment order dated 02.03.2015 and raised the grounds in respect of jurisdiction of ITO, Ward 5(3), Kolkata over the assessee. Learned Commissioner of Income-Tax(Appeals) after considering the chronology of events and the corroborative evidences as well as provisions of law, held in favour of the assessee and quashed the impugned assessment order. The findings given by the learned Commissioner of Income-Tax(Appeals) in this respect are reproduced as under: “4.3 It is observed that the order u/s 127(2) was passed vide F. No. CIT/Kol- 11/Centralisation/2013-14/7948-56 dated 30.01.2014 by CIT-II, Kolkata transferring the jurisdiction to DCIT, Central Circle-8, New Delhi. Accordingly, the notice u/s 153C r.ws 153A was issued by DCIT, Central Circle-8, New Delhi on 18.02.2014. The order u/s 263 was passed by erstwhile CIT Kolkota on 25.3.2014. The case u/s 143(3) r.w.s 263 became pending before the erstwhile AO in Kolkota. Notice u/s 142(1) was issued by the AD in Kolkota on 28.05.2014 and proceedings u/s 143(3) r.w.s 263/147/143(3) were completed by the ITO, Ward-5(3), Kolkata for this assessment year on 2.3.2015. 4.4 Section 127 read as under: 6 ITA No.2015/Del/2021 – Vista Distributors Pvt. Ltd., New Delhi - AY: 2009-10 “127, (1) The Principal Director General or Director General or Principal Chief Commissioner or Chef Commissioner or Principal Commissioner or Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it as possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent Jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. .... Explanation-In section 120 and this section, the word "case, in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year.” 4.5 It is observed that there is nothing on record to show that the Jurisdiction transferred u/s 127(2) of the IT Act 1961 vide F. No. CIT/Kol- 11/Centralisation/2013- 14/7948-56 dated 30.01.2014 by CIT-11, Kolkata to DCIT, Central Circle-8, New Delhi had been reverted back by any other order to ITO, Ward-5(3), Kolkata. There cannot be two proceedings pending with different AO's on same case, without any concurrent order of jurisdiction. In the absence of any such order, the ITO, Ward-5(3), Kolkata had assumed jurisdiction without any authority of law to proceed in this case and frame the assessment order after the order u/s 127 had been passed. Further as on the date of pendency of 153C proceedings for AY 2009-10, the reopened proceedings u/s 143(3) r.w.s. 263 for AY 2009-10 became pending before the ITO, Ward-5(3), Kolkata. These proceedings should have been transferred to DC, CC-8, New Delhi, who had jurisdiction over the case as per the explanation to section 127 reproduced above. Thus the assessment order passed u/s 144/263/147/143(3) on 2.3.2015, by the ITO, Ward-5(3), Kolkata is without any valid jurisdiction and is hereby quashed. These grounds of appeal are allowed. 4.6 Ground Nos. 1 to 4: In view of the decision given in para 4.5 above, these grounds of appeal are not adjudicated, as these will have academic value only. 4.7 Ground No. 7 is general in nature and does not require any separate adjudication. 5. In the result the appeal is "Allowed".” 5.2 Aggrieved, the Revenue is in appeal before the Tribunal. 6. Before us, learned CIT-DR by taking ground no.2 referred to section 124(3)(a) of the Act and submitted that assessee never raised the issue of jurisdiction as contained in the said section within the time 7 ITA No.2015/Del/2021 – Vista Distributors Pvt. Ltd., New Delhi - AY: 2009-10 prescribed. Assessee has always participated in the proceedings and, therefore, has no ground to challenge the jurisdiction on the assessment completed by the learned Assessing Officer. She, thus, placed reliance on the order of learned Assessing Officer. 7. Learned CIT(DR) placed reliance on the decision of Hon'ble jurisdictional Delhi High Court in the case of CIT vs. Shri Shyam Sunder Infra-structure Pvt. Ltd. in ITA No.236/2014 dated 04.02.2015 wherein the jurisdictional issue in reference to section 124 was dealt with by the Hon’ble Court. 8. Per contra, learned counsel for the assessee strongly relied on the facts based finding given by the learned Commissioner of Income- Tax(Appeals). Learned counsel for the assessee also submitted that the limitation prescribed in section 124(3) comes to the rescue of revenue only after crossing the hurdle placed in section 124(1) which in turn refers to section 120(1) and (2) of the Act. According to him, the Assessing Officer has to be first vested with appropriate jurisdiction in terms of section 120(1) and (2) which is not so in the present case. Since an order under Section 127 had already been passed on 30.01.2014 8 ITA No.2015/Del/2021 – Vista Distributors Pvt. Ltd., New Delhi - AY: 2009-10 transferring the jurisdiction from Kolkata to New Delhi, learned Assessing Officer in the present case was divested of the jurisdiction to pass the impugned order. According to him, jurisdiction cannot be conferred by consent even though the assessee participated in the impugned assessment proceedings. He also pointed out to a fact that the same incumbent officer had passed the order under Section 127 transferring the jurisdiction and then passing the revisionary order under Section 263 of the Act. He, thus, submitted that learned Commissioner of Income-Tax(Appeals) has taken rational view which is ought to be upheld. 9. We have heard the rival contention and perused the material on record. Admittedly, it is a fact on record that jurisdiction was transferred vide order under Section 127 and the revisionary proceedings under Section 263 and assessment giving effect to the same were of undertaken thereafter by the officer of erstwhile jurisdiction. The chronology of events tabulated above, supported by documentary evidences placed on record and well reasoned finding given by learned Commissioner of Income-Tax(Appeals) persuades us unhesitatingly to 9 ITA No.2015/Del/2021 – Vista Distributors Pvt. Ltd., New Delhi - AY: 2009-10 uphold the order of learned Commissioner of Income-Tax(Appeals), whereby, the impugned assessment order has been quashed owing to lack of jurisdiction. In respect of reliance placed by the learned CIT (DR) on the decision of Hon'ble Delhi High Court in the case of Shyam Sunder Infra-structure Pvt. Ltd. (supra), we note that there is no mention about passing of any order under Section 127 of the Act, hence, is distinguishable on facts. Accordingly, grounds taken by the Revenue are dismissed. 10. In the result, appeal of the Revenue is dismissed. Order is pronounced in the open court on 28.06.2023. Sd/- Sd/- (Saktijit Dey) (Girish Agrawal ) Vice-President Accountant Member Dated: 28 th June, 2023 *Mohan Lal* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR: ITAT By Order Assistant Registrar ITAT, Delhi Benches, New Delhi