ACIT, Bhubaneswar V. Harshpariya Construction Pvt. Ltd, Bhubaneswar

ITA 218/CTK/2012

• Counselvise Citation: 21822114 RSA 2012
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2012
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 20-07-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 04-04-2012
• Court: TRIBUNAL
• Department Lawyers: M K SAHOO
• Assessee Lawyers: A BHATTACHARJEEDR
• Keywords: Invalid notice; Opportunity of being heard; Period of limitation; Time period of passing order
• Section: 144; 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , HONBLE SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER / I.T.A.NO. 218/CTK/2012 ( / ASSESSMENT YEAR 2006 - 07) ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(1), BHUBANESWAR. - - - VERSUS - HARSHPRIYA CONSTRUCTIONPVT. LTD., PLOT NO.542, S AHID NAGAR, BHUBANEWAR PAN: AAACH 9644Q ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI M.K.SAHOO, AR / FOR THE RESPONDENT: / SHRI . A.BHATTACHARJEE,DR / DATE OF HEAR ING: 20.07.2012 / DATE OF PRONOUNCEMENT: 14.08.2012 / ORDER . . , , SHRI K.K.GUPTA, ACCOUNTANT MEMBER . THIS APPEAL BY THE REVENUE RAISES THE FOLLOWING GROUND. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN LAW AS WELL AS IN FACT IN ANNULLING THE ASSESSMENT MADE U/S.144 OF THE ACT, WHEN THE PAN JURISDICTION OF THE ASSESSEE LIES WITH THE ACIT, CIRCLE - 2(1), BHUBANESWAR SINCE 11.O8.2001. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN LAW AS WELL AS IN FACT IN ANNULLING THE ASSESSMENT MADE U/S.144 OF THE ACT, WHEN THE ASSESSEE HAS NOT CHANGED ITS JURISDICTION TO KOLKATA AND STATED ITS ADDRESS AT 542, SAHID NAGAR, BHUBANESWAR. 3. ON THE FACT S AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN LAW AS WELL AS IN FACT IN ANNULLING THE ASSESSMENT MADE U/S.144 OF THE ACT, WHEN THE SCRUTINY ASSESSMENT WAS COMPLETED BY THE AO BEING SELECTED UNDER CASS, IN VIOLATION TO SECTION 1 24(3) OF THE ACT. I.T.A.NO. 218/CTK/2012 2 2. THE BRIEF FACTS AS HAVE BEEN BROUGHT ON RECORD BY THE AUTHORITIES BELOW ARE THAT T HE ASSESSEE IS PRIVATE LTD COMPANY NAMELY M/S HARSHA PRIYA CONSTRUCTION PVT.LTD, SITUATED AT 11, RAJANI KUMAR SEN LANE, HOWRAH, WEST BENGAL IS CARRYING ON BUSINESS OF REAL ESTATE, BUILDERS & DEVELOPERS. THE ASSESSEE FILED A RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006 - 07 ON 27.1 1.2006 DECLARING AN INCOME OF 14,26,591. THE ASSESSEE IS FILLING RETURN IN KOLKATA ASSESSABLE IN KOLKATA, WEST BENGAL. FOR TH E IMPUGNED ASSESSMENT YEAR THE ASSESSING AUTHORITY, DCIT , CIRCLE - 1, KOLKATA HAS PASS ED AN ASSESSMENT ORDER UNDER S EC 143(1), DATED 31 .03.2008. HOWEVER THE ASSESSING OFFICER, ACIT, CIRCLE 2(1) BHUBANESWAR HAS ALSO PASSED AN ORDER U/ S 144 ASSESSING AN IN COME OF 34,44,901 ON THE GROUNDS THAT THE ASSESSEE IS ASSESSABLE UNDER HIS CIRCLE AND THE ASSESSEE HAS NOT PRODUCED BOOKS OF ACCOUNTS. IN SPITE OF THE ASSESSEES HUMBLE SUBMISSIONS BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE IS NOT ASSESSABLE UNDER CIR CLE 2(1) BHUBANESWAR THE ASSESSING OFFICER PASSED AN ORDER U/S 144 DISMISSING ASSESSEE REQUEST. 2. AGGRIEVED THE ASSESSEE APPEALED BEFORE THE FIRST APPELLATE AUTHORITY WHO CONSIDERED THE CASE OF THE ASSESSEE APPELLANT AND AFTER VERIFYING ALL THE SUBMISSI ONS AND DOCUMENTARY EVIDENCES WITH RESPECT TO THE ASSESSMENT HAVING BEEN MADE AT KOLKATA HELD AS UNDER : 8.9. THE ACIT, CIRCLE - 2(I), BHUBANESWAR DOES NOT HAVE ANY JURISDICTION OVER THE APPELLANT WHOSE REGISTERED OFFICE IS MENTIONED IN THE VERY ASSESSMENT ORDER AT 11 , RAJANI KUMAR SEN LANE, HOWARH. THE AC PREFERRED SILENCE AND NEVER GAVE ANY REMAND REPORT. THE AC ALSO DID NOT APPEAR IN THE HEARINGS TO DEFEND THE ORDER PASSED BY HIM. FROM THIS IT CAN BE CONCLUDED THAT THE AO HAS NO VALID REASON AND HAS REALI SED THAT THE ORDER IS INVALID IN THE EYES OF LAW. AS JURISDICTION IS A VALID CONDITION PRECEDENT TO AN ORDER OF ASSESSMENT BECOMING EFFECTIVE AND THE AO HAS PASSED THE ORDER BEYOND JURISDICTION, I HOLD THAT THE ASSESSMENT ORDER IS I.T.A.NO. 218/CTK/2012 3 NON EST AND INEFFECTIVE U NDER LAW IN ACCORDANCE WITH THE COURT CASES CITED ABOVE AND AS PER THE JURISDICTION ORDERS. TO HOLD OTHERWISE, WOULD GIVE R ISE TO A SITUATION WHEREBY AN AO LOCATED IN BHUBANESWAR WOULD FEEL ENCOURAGED TO ASSESS ASSESSES LOCATED IN DELHI OR MUMBAI WITHOUT A NY REASON BASED ON HIS WHIMS AND FANCIES AND THAT WOULD OBVIOUSLY CREATE COMPLETE JUDICIAL CHAOS. THE NOTICE WITHOUT JURISDICTION IS AN INVALID NOTICE AND ANY ASSESSMENT BASED ON THE SAID NOTICE IS ALSO AB INTIO VOID. CONSEQUENTLY THE ASSESSMENT MADE U/S.1 44 OF THE ACT IS ANNULLED AND GROUND NO.2 OF THE APPEAL IS ALLOWED . 3. THE LEARNED DR INITIATING HIS ARGUMENTS SUBMITTED THAT THE LEARNED CIT(A) ASSUMED JURISDICTION OF THE PERSON RESPONSIBLE FOR HOLDING VIEW THAT THE ASSESSING OFFICER DID NOT HAVE ANY J URISDICTION INSOFAR AS THE ASSESSMENT MADE BY THE ASSESSING OFFICER U/S.144 WAS IN ACCORDANCE WITH THE PROVSIONS OF THE I.T.ACT THE RETURN HAVING BEEN FILED THROUGH ELECTRONIC MEDIA. IT WAS NOT THE CASE OF THE ASSESSEE TO CHOSE JURISDICTION FOR THE ASSESS MENT WAS RIGHTLY CONSIDERED BY THE ASSESSING OFFICER TO GIVE OPPORTUNITY OF BEING HEARD BY ISSUING NOTICE U/S.143(2) AND 142(1) WHICH WERE SERVED ON THE ASSESSEE WHEN NO ONE APPEARED. THE ASSESSING OFFICER, THEREFORE, RIGHTLY PROCEEDED TO PASS THE ORDER U/ S.144 WHEN ON THE BAS IS OF PROFIT SHOWN AGAINST THE TOTAL RECEIPTS OF 6.98 CRORES THE ASSESSEE BEING IN THE BUSINESS IN REAL ESTATE THE INCOME WAS ASSESSED TO BEST OF HIS JUDGEMENT WHICH HAS BEEN HELD OTHERWISE BY THE LEARNED CIT(A). HE PRAYED THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN ANNULLING THE ASSESSMENT U/S.144 WHEN THE ASSESSEE HAS NOT CHANGED ITS JURISDICTION TO KOLKATA AND STATED ITS ADDRESS AT 542, SAHIDNAGAR, BHUBANESWAR. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT WAS NOT THE CASE OF THE ASSESSEE T O CHOSE JURISDICTION OF THE ASSESSING OFFICER INSOFAR AS THE SUBMISSIONS OF THE LEARNED DR IS MISPLACED AS SUB - SECTION (3) OF SECTION I.T.A.NO. 218/CTK/2012 4 124 IS NOT APPEALABLE . THE LEARNED CIT(A) THEREFORE WAS JUSTIFIED IN ANNULLING THE ORDER PASSED BY THE ASSESSING OFFICER U/ S.144 WHEN THE COUNTERPART ASSESSING OFFICER HAD ALREADY PROCESSED THE RETURN FILED BY THE ASSESSEE AT KOLKATA U/S.143(1) AND HAD NOT ISSUED ANY NOTICE U/S S .143(2)/142(1) WITHIN THE LIMITATION PERIOD. ONCE HAVING SETTLED THE ISSUE IT WAS NOT THE CASE OF TH E ASSESSING OFFICER TO HAVE JURISDICTION OF THE ASSESSEE INSOFAR AS THE LEARNED CIT(A) RIGHTLY NOTED THAT THE ASSESSEE HAD CHA NGED ITS REGISTERED OFFICE AS PER THE CERTIFICATE OF REGISTRATION GRANTED TO THE ASSESSEE FROM THE REGISTRAR OF COMPANIES , WEST B ENGAL , KOLKATA CONFIRMING TRANSFER OF REGISTERED OFFICE FROM ONE STATE TO ANOTHER W.E .F. 19.1.2004. A LETTER TO THAT EFFECT HAD BEEN SUBMITTED TO THE CCIT, BHUBANESWAR ON 25.7. 2009 INDICATING THAT THE ASSESSEE HAS BEEN FILING THE RETURN FOR THE PAST SIX Y EARS IN KOLKATA UNDER INTIMATION TO THE DEPARTMENT THE ASSESSEES JURISDICTION MAY KINDLY BE TRANSFERRED TO KOLKATA, CIRCLE 2(1), WEST BENGAL U/S.127 OF THE I.T.ACT AND WHERE THE ASSESSMENTS WERE BEING PASSED WHICH WAS NEVER RESPONDED TO BY THE CCIT, BHUBA NESWAR. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DEPARTMENT INTER SE DO NOT HAVE ANY METHOD TO HOLD AN ASSESSEE RESPONSIBLE FOR NO T ACTING UPON THEIR OWN COMMUNICATIONS WHEN THE ANNULMENT OF THE ORDER BY THE LEARNED CIT(A) HAS BEEN HELD AS T HE RESPONSIBILITY OF THE PERSON WHO IS CHALLENGING THE JURISDICTION U/S.124(3). ALL THE LEGAL FORMALITIES HAVE BEEN COMPLETED INSOFAR AS FOR THE IMPUGNED ASSESSMENT YEAR THE COPY OF THE INTIMATION/SD.143(1) DT.31.3.2008 WAS SUBMITTED TO THE LEARNED CIT(A) WHEN ACCEPTING THE RETURN OF INCOME OF 14,26,591 HAS BEEN ACKNOWLEDGED BY DCIT, CIRCLE 1, KOLKATA. THE TAX CREDIT THEREFORE HAS BEEN TAKEN CARE OF BY THE ASSESSING OFFICER UNDER JURISDICTION OF KOLKATA COULD NOT BE AGAIN I.T.A.NO. 218/CTK/2012 5 DEMANDED FROM THE ASSESSEE ON THE BASIS OF AN ORDER U/S.144 BY THE ASSESSING OFFICER AT CIRCLE 2(1), BHUBANESWAR. HE FULLY SUPPORTED THE ORDER OF THE LEARNED CIT(A) FOR HIS PART SUBMISSION. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. ON CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE INCLINED TO UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(A) INSOFAR AS THE LEARNED CIT(A) HAS ANNULLED THE ORDER U/S.144 PASSED BY THE ASSESSING OFFICER. THE ASSESSEE IS NOT THE PERSON BE HELD RESPONSIBLE TO COMPLY WITH THE PROVISIONS OF SECTION 124(3) INSOFAR AS IT WAS NEVER THE CASE OF THE ASSESSEE TO BE ASSESSED AGAIN ON THE BASIS OF RETURN FILED AT KOLKATA TO BE ASSESSED AT BHUBANESWAR WHEN PAN ACKNOWLE DGING THE RETURN FILED HAD BEEN ACCEPTED AT KOLKATA. NO TWO RETURNS WERE FILED BY THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR WAS THEREFORE RIGHTLY SUBJECTED TO ANNULMENT WHEN THE ACKNOWLEDGEMENT OF PROCESSING THE RETURN HAD BEEN INTIMATED TO THE ASSESSE E ON ITS RETURN HAVING BEEN FILED ON 31. 10 .200 6 . THE ASSESSING OFFICER PASSING THE ORDER U/S.144 ISSUED NOTICE U/S.142(1) ON 4.9.2008 WHEN HE PASSED THE ORDER U/S.144 ON 31.3.2008. THIS CLINCHES THE ISSUE IN FAVOUR OF THE ASSESSEE INSOFAR AS THE ASSESSEE STOOD TRANSFERRED UNDER THE JURISDICTION OF CCIT , WEST BENGAL AT KOLKATA WHEN THE ASSESSEES RETURNS FOR THE EARLIER YEARS WERE PROCESSED AND ADJUSTMENT FOR TAX CREDITS HAD BEEN INCORPORATED. IN OTHER WORDS, THE DEMAND HAD BEEN SETTLED AGAINST ONE PAN WHICH THE ASSESSEE IS NOT DISPUTING COULD NOT BE ANY BASIS FOR ISSUING NOTICE U/S.142(1) FOR COMPLIANCE FOR PASSING THE ORDER U/S.144. THE ASSESSEE NEVER CHALLENGED THE JURISDICTION AS PROVIDED IN LAW U/S.124(3) THEREFORE CANNOT BEHELD AGAINST THE ASSESSEE AS PER THE GROUNDS RAISED BY THE REVENUE. IN I.T.A.NO. 218/CTK/2012 6 VIEW O F THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) ANNULLING THE ASSESSMENT PASSED U/S.144. THE SAME IS UPHELD AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. S D/ - S D/ - ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( ) DATE: - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(1), BHUBANESWAR. 2 / THE RESPONDENT: HARSHPRIYA CONSTRUCTIONPVT. LTD., PLOT NO.542, SAHID NAGAR, BHUBANEWAR 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, APPENDIX XVII SEAL TO BE AFFIXED ON THE ORDER SHEET BY THE SR. P.S./P.S. AFTER DICTATION IS GIVEN 1. DATE OF DICTATION 09.08.2012 . 2. DATE ON WHICH TH E TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 10.08.2012 OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S 14.08.2012 . 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 14.08.2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ................ 9. DATE OF DESPATCH OF THE ORDER .. ( ), (H.K.PADHEE), SENIOR.PRIVATE SECRETARY.