The Tibetan Multipurpose Co-Operative Society, Tezu V. Income Tax Officer, Ward-2, Digboi

ITA 403/GTY/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3209 (ITAT-GUWAHATI)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 23-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANJOY MODY
• Section: 143(3); 142(1); 143(1); 143(2)

Judgement Text

ITA NO. 403/GAU/2019 THE TIBETAN MULTIPURPOSE CO-OPERATIVE SOCIETY A.Y. 2016-17 1 | P A GE IN THE INCOME TAX APPELLATE TRIBUNAL GAUHATI BENCH, VIRTUAL HEARING AT KOLKATA ( . . , ) [BEFORE SHRI A. T. VARKEY, JM] I.T.A. NO. 403/GAU/2019 ASSESSMENT YEARS: 2016-17 THE TIBETAN MULTIPURPOSE CO- OPERATIVE SOCIETY (PAN:AABAT 7041 E ) VS. ITO, WARD-2, DIGBOI APPELLANT RESPONDENT DATE OF HEARING (VIRTUAL) 03.11.2020 DATE OF PRONOUNCEMENT 20.11.2020 FOR THE APPELLANT SHRI SANJOY MODY, A.R FOR THE RESPONDENT SHRI AMITAVA SEN, DR ORDER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)- DIBRUGARH DATED 20.06.2019 FOR A.Y. 2016-17. 2. AT THE OUTSET THE LD. A.R FOR THE ASSESSEE SHRI SANJOY MODY DREW OUR ATTENTION TO GROUND 2 WHICH IS A LEGAL ISSUE WHEREIN THE ASSE SSEE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE ORDER OF ASSESSING OFFICER. ACCORDING TO ASSESSEE, THE ASSESSING OFFICER WHO FRAMED THE ASSESSMENT ORD ER I.E. ITO, WARD-2, DIGBOI U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO THE ACT) DID NOT ISSUE THE MANDATORY NOTICE U/S 143(2) OF THE ACT. THEREFO RE ALL CONSEQUENT ACTION IS WITHOUT JURISDICTION AND THEREFORE NULL IN THE EYES OF LAW, SO HE WANTED ME TO QUASH THE ASSESSMENT ORDER. 3. BRIEF FACTS OF THE CASE IN RESPECT OF LEGAL ISSU E IS THAT THE ITO, WARD-3, SHILLONG ISSUED NOTICE U/S 143(2) OF THE ACT DATED 09.08.201 8 WHEN THE ASSESSEE OBJECTED TO THE JURISDICTION OF ITO, WARD-3, SHILLONG TO HAVE ISSUE D THE STATUTORY NOTICE WHEREIN IT ITA NO. 403/GAU/2019 THE TIBETAN MULTIPURPOSE CO-OPERATIVE SOCIETY A.Y. 2016-17 2 | P A GE WAS STATED THAT THE ASSESSEE SOCIETY IS IN TEZU WH ICH IS SITUATED IN THE STATE OF ARUNACHAL PRADESH AND ITO, WARD-2, DIGBOI HAS TERRI TORIAL JURISDICTION U/S 124 OF THE ACT SINCE THE BUSINESS OF THE ASSESSEE FALLS IN TER RITORIAL JURISDICTIONS OF ITO, WARD-2, DIGBOI (WHICH IS SITUATED AT TINSUKIA IN ASSAM). AC CORDING TO LD. A.R WHEN THIS OBJECTION WAS BROUGHT TO THE NOTICE OF ITO, WARD-3, SHILLONG, THE ITO, SHILLONG TRANSFERRED THE CASE TO ITO, WARD-2, DIGBOI. IT WA S ALSO POINTED OUT BY THE LD. A.R THE TRANSFER OF ANY JURISDICTION OF AN A.O CAN ONLY BE DONE U/S 127 OF THE ACT BY THE COMPETENT AUTHORITIES SPECIFIED THEREIN AND IN THI S CASE ITO, WARD-3, SHILLONG HAS SIMPLY TRANSFERRED THE CASE WITHOUT AUTHORIZATION / APPROVAL / ORDER OF SECTION 127 OF THE ACT TO ITO, WARD-2, DIGBOI. FURTHER ACCORDING T O LD. A.R, AFTER THE TRANSFER, THE ITO, WARD-2, DIGBOI DID NOT BOTHER TO ISSUE ANY NOT ICE U/S 143(2) OF THE ACT BEFORE COMPLETION OF THE ASSESSMENT ORDER U/S 143(3) OF TH E ACT ON 10.12.2018. SO, THEREFORE ACCORDING TO LD. A.R, THE ACTION OF THE ITO, WARD-2 , DIGBOI FRAMING THE ASSESSMENT ORDER U/S 143(3) WITHOUT ISSUING THE MANDATORY NOTI CE U/S 143(2) OF THE ACT, SO THE ACTION OF AO WAS WITHOUT JURISDICTION AND IS NOT A CURABLE DEFECT AS PER THE HONBLE SUPREME COURT IN THE CASE OF ACIT VS. HOTEL BLUE MO ON (2010) 321 ITR 362 (SC) . THEREFORE, IT WAS URGED BY THE LD. A.R THAT SINCE T HE ITO, WARD-2, DIGBOI HAD NO JURISDICTION TO FRAME THE SCRUTINY ASSESSMENT U/S 1 43(3) WITHOUT ISSUING NOTICE U/S 143(2) OF THE ACT, THE ASSESSMENT ORDER IS NULL IN THE EYES OF LAW AND THEREFORE IT SHOULD BE QUASHED. PER CONTRA, THE LD. D.R SHRI AMI TAVA SEN CONTENDED THAT SINCE THE ASSESSEES CASE WAS SELECTED BY CASS FOR SCRUTINY ASSESSMENT AND BECAUSE THE PAN JURISDICTION OF THE ASSESSEE WAS UNDER ITO, WARD-3 , SHILLONG HE MIGHT HAVE ISSUED THE NOTICE FOR SCRUTINY U/S 143(2) OF THE ACT. ACCO RDING TO LD. D.R THE ASSESSEE SHOULD HAVE OBJECTED TO THE ACTION OF THE ASSESSING OFFICE R AT THE FIRST INSTANCE AS PROVIDED U/S 124(3) OF THE ACT WITHOUT WHICH, THE ACTION OF THE ASSESSING OFFICER CANNOT BE CHALLENGED FOR LACK OF JURISDICTIONS. THEREFORE HE DOES NOT WANT ME TO INTERFERE IN THE ORDER OF ASSESSING OFFICER. 4. I HAVE HEARD AND PERUSED THE RECORD. SINCE THE A SSESSEE HAS RAISED LEGAL ISSUE OF JURISDICTION AND IF IT IS FOUND VALID THEN IT WILL GO TO THE ROOT OF THE MATTER AND THEREFORE I WOULD LIKE TO DEAL WITH IT FIRST. I NOT E THAT THE ASSESSEE SOCIETY HAD FILED ITS ITA NO. 403/GAU/2019 THE TIBETAN MULTIPURPOSE CO-OPERATIVE SOCIETY A.Y. 2016-17 3 | P A GE RETURN OF INCOME ELECTRONICALLY REFLECTING ITS TOTA L INCOME OF RS. 13,30,315/- AND THE RETURN OF INCOME WAS DULY PROCESSED U/S 143(1) OF T HE ACT ON 27.09.2017 AND REFUND OF RS. 2,69,842/- WAS GIVEN TO THE ASSESSEE. LATER THE RETURN WAS SELECTED FOR LIMITED SCRUTINY UNDER CASS, THE ITO, WARD-3, SHILLONG ISSU ED NOTICE U/S 143(2) AND SERVED IT UPON THE ASSESSEE. WHEN THIS NOTICE WAS OBJECTED TO BY THE ASSESSEE POINTING OUT THAT ITO, WARD-3, SHILLONG DOES NOT ENJOY JURISDICT ION OVER THE ASSESSEE, THE ITO, WARD-3, SHILLONG REALIZING THE MISTAKE, TRANSFERRED THE ASSESSEES CASE TO ITO, WARD- 2, DIGBOI. THE ITO, WARD-2, DIGBOI AFTER ISSUING SE VERAL NOTICE U/S 142(1) OF THE ACT WHICH HE STATES IN PARA 2 OF HIS ORDER HAD FINALLY MADE AN ASSESSMENT ORDER DATED 10.12.2018 BY COMPUTING TOTAL INCOME OF RS. 16,03,6 90 /-. 5. ON APPEAL THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. NOW BEFORE ME THE ASSESSEE HAS RAISED THE LEGAL ISSUE O F NON-ISSUE / SERVICE OF MANDATORY NOTICE U/S 143(2) OF THE ACT BY ITO, WARD-2, DIGBOI WHO HAD ADMITTEDLY FRAMED THE ASSESSMENT ORDER U/S 143(3) DATED 10.12.2018. IT IS NOTED THAT IN THIS CASE, THE ITO, WARD-3, SHILLONG HAD ISSUED NOTICE U/S 143(2) EXPRE SSING HIS INTENTION TO SCRUTINIZE THE ASSESSEES RETURN FOR AY 2016-17. THE ASSESSE E OBJECTED TO THE JURISDICTION OF ITO, WARD-3, SHILLONG, AND THEREAFTER THE ITO, WARD -3, SHILLONG TRANSFERRED THE CASE TO ITO, WARD-2, DIGBOI (REFER PAGE 5 OF PAPER BOOK ). IT HAS BEEN BROUGHT TO MY NOTICE THAT SINCE THE PRINCIPAL PLACE OF BUSINESS O F ASSESSEE SOCIETY IS SITUATED IN TEZU, STATE OF ARUNACHAL PRADESH AND AS PER SECTION 124 O F THE ACT, THE TERRITORIAL JURISDICTION OF A.O IS ADMITTEDLY WITH THE ITO, WAR D-2, DIGBOI (TINSUKIA IN ASSAM). IT IS AN ADMITTED FACT THAT THE ASSESSMENT WAS FRAM ED BY THE ITO, WARD-2, DIGBOI AND THAT HE HAS NOT ISSUED NOTICE U/S 143(2) OF THE AC T WHICH IS DISCERNIBLE FROM THE ORDER SHEET AT PAGE 6 TO 10 OF PAPER BOOK AS WELL AS FROM PERUSAL OF THE ASSESSMENT ORDER. THEREFORE, IT IS EVIDENT THAT THE SCRUTINY ASSESSME NT U/S 143(3) OF THE ACT WAS FRAMED WITHOUT ISSUING NOTICE U/S 143(2) OF THE ACT BY THE ITO, WARD-2, DIGBOI. THE LEGAL ISSUE RAISED BEFORE ME IS NO LONGER RES INTEGRA . THE HONBLE SUPREME COURT IN HOTEL BLUE MOON (SUPRA) HAS HELD THAT ISSUE / SERVING NOT ICE U/S 143(2) OF THE ACT IS SINE- QUA-NON BEFORE FRAMING OF SCRUTINY ASSESSMENT U/S 143(3) O F THE ACT. THEREFORE, ITA NO. 403/GAU/2019 THE TIBETAN MULTIPURPOSE CO-OPERATIVE SOCIETY A.Y. 2016-17 4 | P A GE RELYING ON THE SAID DECISION OF HONBLE SUPREME COU RT, I AM INCLINED TO ALLOW THE LEGAL ISSUE RAISED BY THE ASSESSEE. 6. FOR COMPLETENESS, COMING TO THE CONTENTION OF TH E LD D.R THAT PAN JURISDICTION OF ASSESSEE WAS WITH ITO, WARD-3, SHILLONG AND THE REFORE HE ISSUED NOTICE U/S 143(2) OF THE ACT AFTER TAKING NOTE OF CASS IN THE CASE OF ASSESSEE ; AND LATER WHEN HE CAME KNOW THAT JURISDICTION WAS WITH ITO, WARD-2, DIGBOI , HE HAS TRANSFERRED THE CASE TO THE JURISDICTION OF ITO AT DIGBOI AND SINCE THE ASS ESSEE HAS PARTICIPATED IN THE ASSESSMENT PROCEEDINGS, THERE IS NO PREJUDICE CAUSE D TO THE ASSESSEE. THIS SUBMISSION OF LD. D.R CANNOT BE ACCEPTED SINCE THE STATUTE DOE S NOT RECOGNIZE PAN JURISDICTION. THE JURISDICTION RECOGNIZED BY THE ACT ARE BASED ON TERRITORY, RESIDENCE, PECUNIARY, CLASSES OF ASSESSEE LIKE COMPANIES, FIRMS ETC. SI NCE THE PAN JURISDICTION MUST BE AN INTERNAL ARRANGEMENT OF THE DEPARTMENT WHICH DOES N OT HAVE THE SANCTION OF LAW AND SINCE IT IS NOT RECOGNIZED BY THE STATUTE, THEREF ORE THIS CONTENTION OF THE REVENUE CANNOT BE ACCEPTED AND SO IT IS REJECTED. 7. IN THE LIGHT OF THE AFORESAID DISCUSSION, I AM I NCLINED TO ALLOW THE LEGAL ISSUE RAISED BY THE ASSESSEE AND I HOLD THAT ITO, WARD-2, DIGBOI COULD NOT HAVE FRAMED THE ASSESSMENT ORDER U/S 143(3) WITHOUT ISSUING NOTICE U/S 143(2) OF THE ACT AND THEREFORE THE ASSESSMENT ORDER IS NULL IN THE EYES OF LAW. TH EREFORE, I AM INCLINED TO QUASH THE ASSESSMENT ORDER DATED 10.12.2018. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 20.11.2 020. SD/- (J. SU REDDY) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20.11.2020 SB, SR. PS ITA NO. 403/GAU/2019 THE TIBETAN MULTIPURPOSE CO-OPERATIVE SOCIETY A.Y. 2016-17 5 | P A GE COPY OF THE ORDER FORWARDED TO: 1. APPELLANT- THE TIBETAN MULTIPURPOSE CO-OPERATIVE SO CIETY, TEZU, OSHIN COMPLEX, LOHIT, ARUNACHAL PRADESH-792001 2. RESPONDENT- ITO, WARD-2, DIGBOI 3. THE CIT(A)-DIBRUGARH 4. CIT- , GUWAHATI 5. DR, GAUHATI BENCH, GUWAHATI TRUE COPY BY ORDER SR. PRIVATE SECRETARY/ DDO ITAT, GAUHATI BENCH, GUWAHATI