Appeal Details
Counselvise Citation
[2020] 110 COUNSELVISE.COM (IT) 3797 (ITAT-LUCKNOW)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
2 year(s) 3 month(s) 24 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
06-11-2020
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Assessment Year
2014-2015
Appeal Filed On
12-07-2018
Judgement Text
I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 INCOME TAX OFFICER-6(1), KANPUR. VS. M/S ARTI SECURITIES & SERVICES LTD., FLAT NO.60, B-BLOCK, SECTOR-02, NOIDA, GAUTAM BUDDHA NAGAR, NOIDA-201301 PAN:AABCA1714B (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LEARNED CIT(A)-I, KANPUR DATED 09/04/2018 PERTAINING TO ASS ESSMENT YEAR 2014- 2015. 2. THE ASSESSEE HAS FILED AN APPLICATION UNDER RULE 27 OF THE I.T.A.T. RULES RAISING THEREIN TWO ISSUES; ONE RELATING TO J URISDICTION AND THE OTHER RELATING TO ISSUE OF LIMITED SCRUTINY. LEARNED COU NSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THOUGH THE APPEAL HAS BE EN FILED BY THE REVENUE BUT AGAINST THE APPEAL FILED BY THE REVENUE, THE AS SESSEE HAS PREFERRED TO FILE APPLICATION UNDER RULE 27 OF THE I.T.A.T., RUL ES RAISING THEREIN PRELIMINARY ISSUES WHICH GO TO THE ROOT OF THE MATT ER AND WHICH ARE COMING APPELLANT BY SHRI S. K. MADHUK, CIT (D.R.) RESPONDENT BY SHRI KAPIL GOEL, ADVOCATE DATE OF HEARING 21/10/2020 DATE OF PRONOUNCEMENT 06 / 11 /20 20 I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 2 OUT OF RECORDS AND MATERIAL ALREADY AVAILABLE ON RE CORD. LEARNED COUNSEL FOR THE ASSESSEE, IN VIEW OF THE JUDGMENT OF HON'BLE I. T.A.T. IN THE CASE OF AAA PAPER MARKETING LTD. VIDE ORDER DATED 27/04/2018, P RAYED THAT THE ISSUES RAISED BY THE ASSESSEE IN ITS APPLICATION UNDER RUL E 27 OF THE I.T.A.T. RULES MAY BE ADMITTED AND ADJUDICATED FIRST BEFORE TAKING UP THE APPEAL FILED BY THE REVENUE. LEARNED COUNSEL FOR THE ASSESSEE, IN SUPPORT OF HIS ARGUMENTS THAT THE SAID APPLICATION UNDER RULE 27 CAN BE ADMI TTED AND ADJUDICATED AT I.T.A.T. LEVEL ALSO, RELIED ON A NUMBER OF CASE LAW S BESIDES ITS RELIANCE ON THE CASE LAWS OF LUCKNOW BENCH OF THE TRIBUNAL IN T HE CASE OF AAA PAPER MARKETING LTD. OUR SPECIFIC ATTENTION WAS INVITED TO THE CASES LISTED IN THE PAPER BOOK AT PAGES 7 AND 8. THEREFORE, IN VIEW OF THE JUDICIAL PRECEDENTS, LEARNED COUNSEL FOR THE ASSESSEE ARGUED THAT THE AP PLICATION, MOVED BY THE ASSESSEE UNDER RULE 27 OF THE I.T.A.T. RULES, MAY B E ADMITTED AND ADJUDICATED. 3. LEARNED D. R., ON THE OTHER HAND, VEHEMENTLY ARG UED AGAINST ACCEPTANCE OF APPLICATION UNDER RULE 27 OF THE I.T. A.T. RULES AND SUBMITTED THAT THE ISSUES RAISED IN APPLICATION DO NOT ARISE EITHER FROM THE ORDER OF THE ASSESSING OFFICER OR LEARNED CIT(A) AND NONE OF THE AUTHORITIES BELOW HAVE DECIDED THE ISSUE AGAINST THE ASSESSEE AND THEREFOR E, THERE IS NO OCCASION AVAILABLE TO THE ASSESSEE TO RAISE THESE ISSUE AT T HIS POINT OF TIME. IT WAS ARGUED THAT THE APPLICATION FILED BY THE ASSESSEE M AY BE DISMISSED. 4. IN RESPONSE LEARNED COUNSEL FOR THE ASSESSEE SUB MITTED THAT THIS ASPECT HAS BEEN EXAMINED IN VARIOUS DECISIONS OF VA RIOUS AUTHORITIES CITED BY HIM AND STATED THAT EVEN THE HON'BLE LUCKNOW BEN CH OF THE TRIBUNAL IN THE CASE OF AAA PAPER MARKETING LTD. HAS CONSIDERED THIS ASPECT AND HAS PASSED A DETAILED ORDER IN THIS RESPECT. IT WAS SU BMITTED THAT HON'BLE TRIBUNAL HAS TAKEN NOTE OF SUCH ARGUMENTS OF THE RE VENUE AND AFTER RELYING I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 3 ON THE CASE LAW OF DCIT VS. JUBILIANT ENPRO PVT. LT D. DECIDED BY DELHI D BENCH, HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSE SSEE. 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ASSESSEE HAS IN VOKED THE PROVISIONS OF RULE 27 OF THE I.T.A.T. RULES TO CHALLENGE THE ORDE R OF CIT(A) ON THE FOLLOWING GROUNDS: (I) THAT THE DEPARTMENT HAS INITIATED THE ASSESSMENT FO R LIMITED SCRUTINY WHICH HAS BEEN CONVERTED INTO FILL SCRUTIN Y WITHOUT TAKING THE APPROVAL OF CONCERNED PR. CIT, WHICH WAS MANDATORY IN VIEW OF CBDT INSTRUCTION NO.20/2015 AN D 5/2016. (II) THE OTHER GROUND TAKEN IN THE APPLICATION IS THAT N OTICE U/S 143(2) DATED 03/09/2015 IS ISSUED BY DCIT, CIRCLE-6 , KANPUR AND LATER ON ASSESSMENT IS FRAMED BY INCOME TAX OFF ICER, WARD-6(1), KANPUR WITHOUT VALID ISSUE OF MANDATORY NOTICE U/S 143(2) OF THE ACT AND THEREFORE, THE ASSESSMENT IS BAD IN LAW AND VOID AB INITIO. WE FIND THAT THESE ISSUES HAVE NOT BEEN DECIDED BY THE ASSESSING OFFICER OR BY LEARNED CIT(A) IN THEIR RESPECTIVE ORDERS. HOWE VER, THESE ISSUES GO TO THE ROOT OF THE ASSESSMENT ITSELF AND ARE FORMING P ART OF THE MATERIAL ALREADY AVAILABLE ON RECORD. LEARNED COUNSEL FOR T HE ASSESSEE HAD INVITED OUR ATTENTION TO THE FOLLOWING CASE LAWS WHERE UNDE R SIMILAR FACTS AND CIRCUMSTANCES, THE VARIOUS BENCHES OF THE TRIBUNAL HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE: (I) SIS LIVE, DELHI BENCHES:I-2, NEW DELHI. I.T.A. NO.1313/DEL/2015 DATED 02/12/2015 (II) JUBILIANT ENPRO PVT. LTD., I.T.A. NO.560/DEL/2010, DATED 19/05/2014 (III) RAJ KUMAR JALAN, IT(SS)A. NO.28/DEL/2012, DATED 08/07/2015 (IV) M/S TATA PETRODYNE LTD., I.T.A. NO.7679/MUM/2010, D ATED 16/09/2015 I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 4 (V) M/S CERNER HEALTHCARE SOLUTIONS PVT. LTD., I.T.A. NO.675/BANG/2012, DATED 08/01/2016 (VI) GREAT WALL MARKETING (P) LTD., I.T.A. NO.660/KOL/20 11, DATED 03/02/2016 (VII) CIT VS. EDWARD DEVENTER (SUCCESSORS) PVT. LTD. 123 ITR 200 (DEL) (VIII) DEEP CHAND KOTHARI VS. CIT 171 ITR 381 (RAJ) (IX) R. B. CONSTRUCTION, I.T.A. NO.1537/AHD/2011, DATEDL 10/04/2015 (X) IME INTERNATIONAL PVT. LTD., I.T.A. NO.1873/DEOL/20 12, DATED 08/01/2016 (XI) THANDI RAM JAI NARAIN, I.T.A. NO.1289/DEL/2013, DAT ED 27/06/2017 (XII) JOLLY FANTASY WORLD LTD. 373 ITR 530 BESIDES THE ABOVE NOTED CASES, LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO INVITED OUR ATTENTION TO AN ORDER PASSED BY LUCKNOW BENCH OF THE TRIBUNAL VIDE ORDER DATED 28/04/2017 IN THE CASE OF AAA PAPE R MARKETING LTD. WE FIND THAT IN THIS ORDER THE TRIBUNAL HAS CONSIDERED THE ARGUMENTS RAISED BY LEARNED D. R. AND AFTER CONSIDERING THE ARGUMENTS A ND AFTER RELYING ON THE CASE LAW OF JUBILIANT ENPRO PVT. LTD. (SUPRA), HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER: 2. WE HAVE HEARD ARGUMENT OF BOTH THE SIDES AND CA REFULLY CONSIDERED THE RELEVANT MATERIAL AVAILABLE ON RECOR D OF THE TRIBUNAL. LD. COUNSEL OF THE ASSESSEE-RESPONDENT SU BMITTED THAT THE ASSESSEE WANT TO INVOKE THE PROVISION OF I TAT RULES 27 TO CHALLENGE THE ORDER OF THE CIT(A) ON FOLLOWIN G GROUNDS: 'THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN AFFIRMING THE JURISDICTION OF THE ASSESSING OFFICER UNDER SECTION 153A, IGNORING THAT THE ADDITIONAL COMMISSI ONER HAS GRANTED THE APPROVAL IN A MECHANICAL MANNER, TH E CIT(A) HAS FURTHER ERRED IN NOT APPRECIATING THAT N O PROCEEDINGS WERE PENDING ON THE DATE OF SEARCH AND THE ENTIRE ASSESSMENT HAS BEEN FRAMED WITHOUT ANY REFERENCE TO INCRIMINATING MATERIAL FOUND AS A RESU LT OF SEARCH.' I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 5 3. THE LD. COUNSEL FURTHER SUBMITTED THAT UNDER RUL E 27 OF THE ITAT RULES, A LEGAL PLEA, WHICH WAS NOT RAISED BY T HE ASSESSEE BEFORE THE LOWER AUTHORITIES, CAN BE RAISED AT ANY STAGE BY THE ASSESSEE BEFORE THE TRIBUNAL AS PER PROPOSITION LAI D DOWN BY VARIOUS DECISION AND ORDERS INCLUDING ORDER OF THE ITAT 'ID' BENCH DELHI DATED 19.05.2014 IN THE CASE OF DCIT VS . JUBILIANT ENPRO PVT. LTD. IN ITA NO. 560/DEL/2010 ASSESSMENT YEAR 1998-99. 4. IN REPLY TO THE ABOVE, LD. DR STRONGLY OPPOSED T O ADMISSION OF THE ABOVE NOTED GROUND AND SUBMITTED T HAT THE LEGAL PLEA WHICH WAS NOT RAISED BEFORE THE ASSESSIN G OFFICER AND CIT(A) CANNOT RAISED BEFORE THE TRIBUNAL AT THE APPELLATE STAGE UNDER ANY PROVISION INCLUDING RULE 27 OF ITAT RULES. 5. ON CAREFUL CONSIDERATION OF RIVAL SUBMISSION, WE ARE OF THE VIEW THAT IN THE SIMILAR SITUATION ITAT DELHI 'D' B ENCH IN THE CASE OF JUBILIANT ENPRO PVT. LTD. (SUPRA) HELD AS F OLLOWS : '13. THUS, IT CAN BE SEEN FROM THE ABOVE DISCUSSION THAT WE HAVE REVERSED THE ORDER OF THE LD. CIT(A) BY RESTORING THE PENALTY U/S 271(1)(C) OF THE ACT IN R ESPECT OF THREE ITEMS, VIZ., INTEREST OF RS. 2,996/- EARNE D BUT NOT DECLARED AS INCOME; AMOUNT OF INCOME-TAX PAID A T RS.71,432/- CLAIMED AS DEDUCTION BY CLUBBING WITH INTEREST EXPENDITURE ; AND INTEREST ON LATE DEPOSIT OF WEALTH-TAX AMOUNTING TO RS.19,084/- CLAIMED AS DEDUCTION BY CLUBBING WITH INTEREST EXPENDITURE. 14.1. THE ASSESSEE HAS FILED AN APPLICATION UNDER R ULE 27 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 19 63 REQUESTING FOR THE DELETION OF ENTIRE PENALTY ON A LEGAL ISSUE, BEING THE FINAL DETERMINATION OF TOTAL INCOM E OF THE ASSESSEE U/S 115]A OF THE ACT AND THE ADDITIONS SUSTAINED PERTAINING ONLY TO THE INCOME COMPUTED UN DER THE NORMAL PROVISIONS OF THE ACT. THE ID. AR RELIED ON THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COU RT IN C1T VS NALWA SONS INVESTMENT LTD. (2010) 327 ITR 54 3 (DEL) TO PROPEL THIS SUBMISSION. 14.2. BEFORE PROCEEDING WITH THE MATTER ON MERIT, I T WOULD BE APPOSITE TO FIRST DECIDE ABOUT THE I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 6 MAINTAINABILITY OR OTHERWISE OF SUCH APPLICATION. R ULE 27OFITA T RULES, 1963 WITH ITS MARGINAL NOTE READS AS UNDER- 'RESPONDENT MAY SUPPORT ORDER ON GROUNDS DECIDED AGAINST HIM. THE RESPONDENT, THOUGH HE MAY NOT HAVE APPEALED, MA Y SUPPORT THE ORDER APPEALED AGAINST ON ANY OF THE GROUNDS DECIDED AGAINST HIM.' 14.3. THE EFFECT OF THIS RULE IS THAT A RESPONDENT HAS BEEN ENTITLED TO SUPPORT THE ORDER ON THE GROUND WH ICH HAS BEEN DECIDED AGAINST HIM. THE UNDERLYING IDEA A ND THE SPIRIT OF RULE 27 IS TO ARM A RESPONDENT, IN AN APPEAL FILED BY THE PLAINTIFF, WITH AN OPTION TO CONTEST UNFAVORABLE DECISION OF THE CIT(A) ON THE ASPECT(S) OF AN ISSUE, THE FINAL DECISION ON WHICH ISSUE HAS BEE N DELIVERED IN HIS FAVOR. TAKE AN INSTANCE OF FIRST A PPELLATE AUTHORITY DECIDING THE LEGAL ISSUE OF REOPENING OF AN ASSESSMENT AGAINST THE ASSESSEE BUT DELETING THE ADDITION ON MERITS IN FAVOR OF THE ASSESSEE. WHEN T HE REVENUE FILES APPEAL AGAINST THIS ORDER BEFORE THE TRIBUNAL, IT WILL NATURALLY ASSAIL THE FINDING OF T HE CIT(A) QUA THE DELETION OF ADDITION ON MERITS. NOTWITHSTAN DING THE FACT THAT THE RESPONDENT ASSESSEE DID NOT FILE ANY APPEAL AGAINST THE ORDER PASSED BY THE CIT(A), HE S HALL STILL BE ENTITLED UNDER RULE 27 OF THE ITAT RULES, 1963, TO SUPPORT THE CONCLUSION OF THE ORDER OF THE FIRST APPELLATE AUTHORITY, BEING THE DELETION OF ADDITION , BY CHALLENGING THE FINDING OF THE. CIT(A) WHICH WAS DELIVERED AGAINST HIM ON THE LEGAL ISSUE OF REOPENI NG OF ASSESSMENT. 14.4. THE MANDATE OF RULE 27 IS TO BE SEEN IN CONTRADISTINCTION TO THE PROVISIONS OF SECTION 253( 4) OF THE ACT, WHICH EMPOWER THE RESPONDENT, ON AN APPEAL FILED BY THE PLAINTIFF, TO FILE CROSS OBJECTION AGA INST ANY PART OF THE ORDER. AT THIS STAGE, IT MAY BE FRUITFU L TO TAKE NOTE OF THE PRESCRIPTION OF SEC. 253(4), WHICH PROV IDES THAT: THE ASSESSING OFFICER OR THE ASSESSEE, AS THE CASE MAY BE, ON RECEIPT OF NOTICE THAT AN APPEAL AGAINST THE ORDER OF THE DEPUTY COMMISSIONER (APPEALS) OR, AS T HE CASE MAY BE, THE COMMISSIONER (APPEALS) OR THE I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 7 ASSESSING OFFICER IN PURSUANCE OF THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL HAS BEEN PREFERRED UNDER S UB- SECTION (1) OR SUB-SECTION (2) OR SUB-SECTION (2A) BY THE OTHER PARTY, MAY, NOTWITHSTANDING THAT HE MAY NOT H AVE APPEALED AGAINST SUCH ORDER OR ANY PART THEREOF, WI THIN THIRTY DAYS OF THE RECEIPT OF THE NOTICE, FILE A MEMORANDUM OF CROSS-OBJECTIONS, VERIFIED IN THE PRESCRIBED MANNER, AGAINST ANY PART OF THE ORDER OF THE ASSESSING OFFICER (IN PURSUANCE OF THE DIRECTIONS O F THE DISPUTE RESOLUTION PANEL) OR DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS), AND SUCH MEMORANDUM SHALL BE DISPOSED OF BY THE APPELLATE TRIBUNAL AS IF IT WERE AN APPEAL PRESENTED WITHIN THE TIME, SPECIFIED IN SUB-SECTION (3) OR SUB-SECTION (3A).' WHEN WE CONSIDER RULE 27 OF THE ITA T RULES IN JUXTAPOSITION TO SEC. 253(4) OF THE ACT, THE POSITION WHICH EMERGES IS THAT WHEREAS RULE 27 IS A REMEDY TO THE RESPONDENT TO SUPPORT THE ULTIMATE FAVOURABLE CONCLUSION OF THE CIT(A) BY CHALLENGING SUCH ASPECTS OF THE ISSUE WHICH WERE DECIDED AGAINST HIM , A CROSS OBJECTION U/S 253(4) OF THE ACT IS A REMEDY T O THE RESPONDENT TO CHALLENGE' THE ULTIMATE UNFAVORABLE CONCLUSION OF THE CTT(A). 14.5. A CURSORY LOOK AT THE LANGUAGE OF RULE 27 TRANSPIRES THAT A RESPONDENT HAS BEEN EMPOWERED TO SUPPORT THE ORDER APPEALED AGAINST ON ANY OF THE GROUNDS DECIDED AGAINST HIM. IN OTHER WORDS, THE CHALLENGE CAN BE MADE BY A RESPONDENT ONLY IN RESPE CT OF A GROUND DECIDED AGAINST HIM' IN SUCH CIRCUMSTAN CES, A QUESTION ARISES THAT IF THERE IS NO DECISION AT A LL OF THE CIT(A) ON A PARTICULAR ASPECT, WHICH IS OTHERWISE GERMANE TO THE OVERALL ISSUE DECIDED IN FAVOR OF TH E RESPONDENT, CAN THE RESPONDENT ESPOUSE SUCH ASPECT UNDER RULE 27 IN AN APPEAL FILED BY THE PLAINTIFF. IF WE GO BY THE LITERAL INTERPRETATION OF THE RULE, THEN THE ANSWER IS IN NEGATIVE THAT UNLESS THE GROUND IS NOT DECIDE D AGAINST' THE RESPONDENT, HE CANNOT TAKE RECOURSE TO THIS PROVISION. HOWEVER, IT IS OF PARAMOUNT IMPORTANCE T O KEEP IN MIND THE FUNDAMENTAL OBJECT OF ENSHRINING R ULE 27, BEING GIVING AN OPPORTUNITY TO THE RESPONDENT T O SUPPORT THE IMPUGNED ORDER IN AN APPEAL FILED BY TH E I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 8 PLAINTIFF A PRAGMATIC APPROACH ON CONSIDERATION OF THE OBJECT OF SUCH RULE, IN OUR CONSIDERED OPINION, NECESSITATES THE ADOPTION OF LIBERAL INTERPRETATION THAT WHEN A PARTICULAR ISSUE IS DECIDED IN FAVOR OF THE RESPONDENT AND THE PLAINTIFF HAS COME UP IN APPEAL AGAINST SUCH DECISION ON THE ISSUE, THEN ALL THE RE LEVANT ASPECTS HAVING BEARING ON THE OVERALL ISSUE, EVEN T HOUGH NOT SPECIFICALLY DECIDED AGAINST THE PLAINTIFF, SHO ULD BE OPEN FOR CHALLENGE BY THE RESPONDENT UNDER THE RULE . IF THE RESPONDENT IS DEBARRED FROM RAISING THAT ASPECT OF THE ISSUE, WHICH WAS NOT TAKEN UP BEFORE THE FIRST APPELLATE AUTHORITY OR TAKEN UP BUT REMAINED UNDECI DED, AND THE APPEAL OF THE PLAINTIFF IS ALLOWED, THE RES PONDENT WOULD BE RENDERED WITHOUT REMEDY. IT HAS BEEN NOTIC ED ABOVE THAT A RESPONDENT IS NOT ENTITLED TO FILE CRO SS OBJECTION ON SUCH ASPECTS OF THE ISSUE U/S 253(4) O F THE ACT, THE SCOPE OF WHICH PROVISION IS CIRCUMSCRIBED TO CHALLENGING THE ULTIMATE UNFAVORABLE CONCLUSION DRA WN BY THE CIT(A). IN COMMON PARLANCE, WHEN AN ISSUE IS DECIDED IN FAVOR OF ONE PARTY WHETHER ON ONE ASPECT OR THE OTHER, IT IS NOT EXPECTED OF SUCH A PARTY TO CH ALLENGE THE ORDER BY ASSERTING THAT THE DECISION SHOULD HAV E BEEN GIVEN IN HIS FAVOR ON THAT ISSUE ON ALL THE AS PECTS AND NOT ON THAT PARTICULAR ASPECT ON WHICH IT WAS G IVEN. WHEN AN APPEAL IS FILED AGAINST SUCH FAVORABLE DECISION ON THE ISSUE BY THE OTHER PARTY, AND SUPPOSE THE IMPUGNED ORDER IS NOT SUSTAINABLE ON THAT ASPECT OF THE ISSUE ON WHICH IT WAS DECIDED, BUT ON SOME OTHER AS PECT WHICH WAS NOT DECIDED BY THE FIRST APPELLATE AUTHOR ITY AND THE RESPONDENT IS RESTRAINED FROM TAKING UP SUC H ASPECT ON THE REASONING THAT RULE 27 IS NOT APPLICA BLE ON SUCH ASPECT, THE RESPONDENT WOULD STAND NOWHERE. IN VIEW OF THE FOREGOING DISCUSSION, IT IS CLEAR THAT HYPER TECHNICALITIES OF RULE 27 CANNOT COME IN THE WAY OF THE DECIDING SUCH ASPECTS OF THE ISSUE TAKEN UP BY THE RESPONDENT BEFORE THE TRIBUNAL WHICH WERE GERMANE T O THE MAIN ISSUE BUT WERE NOT CONTESTED OR DECIDED PROVIDED NO FRESH INVESTIGATION OF FACTS IS REQUIRE D FOR RENDERING DECISION ON SUCH ASPECTS.' 6. IN VIEW OF ABOVE, LEGAL GROUND RAISED BY THE ASS ESSEE BY INVOKING RULE 27 OF THE ITAT RULES IN ALL THREE APP EALS IS I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 9 ADMITTED FOR CONSIDERATION ON ADJUDICATION. CONSEQU ENTLY, APPLICATIONS OF THE ASSESSEE IN ALL THREE APPEALS O F THE REVENUE ARE ALLOWED. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE LEGAL PRECEDENTS CITED BY LEARNED COUNSEL FOR THE ASSESSE E, WE ADMIT THE APPLICATION UNDER RULE 27 OF THE I.T.A.T. RULES AND LEARNED COUNSEL FOR THE ASSESSEE WAS ASKED TO PROCEED WITH HIS ARGUMENTS ON MERITS OF THE GROUNDS TAKEN BY HIM IN THE APPLICATION. 6. LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THE SECOND GROUND TAKEN BY THE ASSESSEE IS A JURISDICTI ONAL ISSUE THEREFORE, HE WILL BE TAKING UP THE SAME FIRST AND INVITED OUR AT TENTION TO THE FACT THAT THE ASSESSEE HAD E-FILED RETURN OF INCOME ON 26/09/2014 DECLARING INCOME OF RS.11,11,750/- AND THE CASE WAS SELECTED FOR SCRUTI NY U/S 143(2) VIDE NOTICE ISSUED BY DCIT, CIRCLE-4, KANPUR AND DCIT-6, KANPUR ON THE SAME DATE I.E. 03/09/2015 AND IN THIS RESPECT OUR ATTENTION WAS IN VITED TO PAGES 40 TO 42 OF THE PAPER BOOK WHERE THE FACT OF HAVING FILED TH E RETURN FOR RS.11,11,750/- ALONG WITH THE TWO NOTICES ISSUED BY DCIT, CIRCLE-4, KANPUR AND DCIT-6, KANPUR WERE PLACED. LEARNED COUNSEL F OR THE ASSESSEE SUBMITTED THAT AS PER ASSESSMENT ORDER DATED 29/12/ 2016 READ WITH TRANSFER MEMO DATED 16/05/2016, THE PRESENT CASE WA S TRANSFERRED FROM DCIT-6, KANPUR TO INCOME TAX OFFICER -6(1), KANPUR ON THE GROUND OF MONETARY LIMIT VIDE PR. CIT-2, KANPUR ORDER DATED 2 8/04/2016 AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO PAGES 31 TO 32 OF THE PAPER BOOK. IT WAS SUBMITTED THAT WHEN THE FIRST NOTICE U/S 143(2) WAS ISSUED ON 03/09/2015, REVENUE WAS AWARE OF THE FACT THAT AS P ER MONETARY LIMIT FOR ITR OF RS.11,11,750/- ONLY CONCERNED AND COMPETENT ASSESSING OFFICER TO ISSUE NOTICE U/S 143(2) OF THE ACT WAS INCOME TAX O FFICER-6(1), KANPUR ONLY. THE JURISDICTIONAL INCOME TAX OFFICER, KANPU R DID NOT ISSUE ANY NOTICE I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 10 U/S 143(2) OF THE ACT AND COMPLETED THE ASSESSMENT WITHOUT ISSUING ANY NOTICE U/S 143(2). LEARNED COUNSEL FOR THE ASSESSEE INVIT ED OUR ATTENTION TO COPY OF ORDER SHEET PLACED AT PAPER BOOK PAGES 27 TO 30 AND OUR SPECIFIC ATTENTION WAS INVITED TO THE FACT THAT THE JURISDIC TIONAL ASSESSING OFFICER STARTED THE PROCEEDINGS FROM 18/05/2016 BY MENTIONI NG THAT CASE RECORDS WERE RECEIVED FROM DCIT-6, KANPUR BECAUSE OF CHANGE OF MONETARY LIMIT. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ON THIS COPY OF ORDER SHEET THERE IS NO MENTION OF ISSUE OF NOTICE U/S 143(2) O F THE ACT AND NEITHER THERE IS ANY MENTION OF ANY ORDER PASSED BY COMMISS IONER U/S 127 OF THE ACT. LEARNED COUNSEL FOR THE ASSESSEE FURTHER TOOK US TO PAPER BOOK PAGE 31 WHERE A COPY OF TRANSFER MEMO DATED 16/05/2016 T RANSFERRING THE RECORD FROM DCIT-6 TO INCOME TAX OFFICER, WARD-6(1) WAS PL ACED. OUR SPECIFIC ATTENTION WAS INVITED TO REASON FOR TRANSFERRING TH E CASE WHICH WAS AS MODIFIED MONETARY LIMITS UPTO RS.20 LACS VIDE CIT O RDER DATED 28/04/2016. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT FIRSTLY THIS IS NOT AN ORDER BY PR. CIT AND MOREOVER, THERE WAS NO CHANGE IN THE MONETARY LIMIT AS THE CBDT INSTRUCTION NO. 1/2011 ITSELF MENTIONS THE MONETARY LIMIT OF RS.20 LACS FOR WHICH THE ASSESSMENT WAS TO BE COMPL ETED BY ASSESSING OFFICER. LEARNED COUNSEL FOR THE ASSESSEE THEREFOR E, SUBMITTED THAT THE DEPARTMENT WAS AWARE FROM THE BEGINNING ITSELF THAT THE ASSESSMENT OF THE ASSESSEE WAS TO BE COMPLETED BY INCOME TAX OFFICER- 6 ONLY AND THEREFORE INCOME TAX OFFICER-6 WAS REQUIRED TO ISSUE NOTICE U /S 143(2) AND WHICH HE HAS NOT DONE AS THE NOTICES WERE ISSUED ONLY BY DCI T-4 AND DCIT-6 AND THEREFORE, IT WAS ARGUED THAT SUCH ASSESSMENT ORDER IS BAD IN LAW IN VIEW OF THE VARIOUS DECISIONS BY I.T.A.T. BENCHES OF KOLKAT A AND ALSO WAS BAD IN VIEW OF THE JUDGMENT OF JURISDICTIONAL HIGH COURT O F ALLAHABAD IN THE CASE OF MOHD. RIZWAN AND ALSO IN VIEW OF THE JUDGMENT OF HO N'BLE GUJARAT HIGH COURT IN THE CASE OF PANKAJ BHAI SHAH 425 ITR 70. LEARNED I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 11 COUNSEL FOR THE ASSESSEE IN THIS RESPECT INVITED OU R ATTENTION TO THE SHORT WRITE UP AT PAGE 3 WHERE THE ORDERS FAVOURING THE ASSESSEE WERE PLACED. INVITING OUR ATTENTION TO CBDT INSTRUCTION NO. 1/2011 DATED 31/01/2011 OF CBDT, LEARNED COUNSEL FOR THE ASSESSE E ARGUED THAT THE COMPETENT PERSON TO ISSUE NOTICE U/S 143(2) WAS INC OME TAX OFFICER-6, KANPUR WHO HAD PASSED THE ASSESSMENT ORDER AS THE I NCOME OF THE ASSESSEE WAS LESS THAN RS.20 LACS WHEREAS THE NOTIC E U/S 143(2) HAS BEEN ISSUED BY DCIT AND THAT TOO BY TWO DCITS FROM CIRCL E-4 & 6 AND, THEREFORE, IT WAS ARGUED THAT THE ASSESSMENT IN THIS CASE IS B AD IN LAW AND IS VOID AB INITIO AND THE APPEAL FILED BY THE REVENUE NEEDS TO BE DISMISSED. AT THE ASKING OF BENCH REGARDING JUDGMENT OF HON'BLE SUPRE ME COURT IN THE CASE OF I-VEN INTERACTIVE LTD, THE LEARNED COUNSEL FOR T HE ASSESSEE STATED THAT IN THAT JUDGMENT HON'BLE SUPREME COURT HAS HELD THAT N OTICE ISSUED TO ASSESSEE U/S 143(2) AT THE ADDRESS MENTIONED IN THE PAN DATABASE IS A VALID NOTICE. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS JUDGMENT IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE AS IN TH IS CASE THE HON'BLE SUPREME COURT HAS DECIDED THE ISSUE OF SERVICE OF N OTICE U/S 143(2) AT THE ADDRESS MENTIONED IN PAN DATABASE OF THE ASSESSEE W HEREAS IN THE PRESENT CASE THE ISSUE IS NOT OF THE SERVICE OF NOTICE BUT THE ISSUE OF NOTICE ISSUED BY THE ASSESSING OFFICER NOT HAVING JURISDICTION OVER THE ASSESSEE. THEREFORE, IT WAS STATED THAT EVEN THIS JUDGMENT OF HON'BLE SUPRE ME COURT CANNOT COME TO THE RESCUE OF THE DEPARTMENT. 7. LEARNED D. R., ON THE OTHER HAND, SUBMITTED THAT THE PAN AT THAT TIME WAS LYING WITH DCIT-4, KANPUR AND THEREFORE, HE ISS UED NOTICE U/S 143(2) ON 03/09/2015 AND SINCE THE NATURAL JURISDICTION OVER THE ASSESSEE WAS WITH DCIT-6, KANPUR, HE ALSO ISSUED THE NOTICE U/S 143(2 ) ON 03/09/2015 AND THE NOTICES WERE DULY SERVED UPON THE ASSESSEE WITHIN T HE TIME LIMIT AS PRESCRIBED UNDER THE ACT. LEARNED D. R. SUBMITTED THAT SUBSEQUENTLY THE I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 12 PR. CIT-2, KANPUR, VIDE ORDER DATED 28/04/2016, MOD IFIED THE MONETARY LIMITS AND ORDERED THAT JURISDICTION OVER THE CASES HAVING RETURNED INCOME BELOW RS.20 LACS SHALL LIE WITH THE INCOME TAX OFFI CER AND JURISDICTION OVER THE CASES WITH RETURNED INCOME ABOVE RS.20 LACS SHA LL LIE WITH ACIT AND DCIT AND ACCORDINGLY, IN VIEW OF THE REVISED MONETA RY LIMITS, DCIT-6, KANPUR VIDE LETTER DATED 16/05/2016 TRANSFERRED THE CASE RECORD TO THE INCOME TAX OFFICER-6, KANPUR AS THE JURISDICTION OV ER THE CASE LIED WITH HIM AND THEREFORE, IT WAS ARGUED THAT THE TECHNICAL GRO UND OF JURISDICTION WITH RESPECT TO ISSUE OF NOTICE BY THE JURISDICTIONAL AS SESSING OFFICER IS NOT SUSTAINABLE IN THE EYES OF LAW. IT WAS FURTHER ARG UED THAT IF THE ASSESSEE HAD ANY OBJECTION WITH REGARD TO JURISDICTION, IT S HOULD HAVE BEEN CHALLENGED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PRO CEEDINGS BUT NO SUCH OBJECTION WAS RAISED BY THE ASSESSEE DURING THE ASS ESSMENT PROCEEDINGS AND THEREFORE, THE PROVISIONS OF SECTION 292BB ARE APPLICABLE IN THIS CASE. IT WAS FURTHER ARGUED THAT IF THE ARGUMENTS OF THE ASS ESSEE ARE ACCEPTED THEN SECTION 119, 120 AND 127 OF THE ACT, WHICH DEAL WIT H THE INCOME TAX AUTHORITIES AND DEAL WITH THE TRANSFER OF CASES, HA VE NO MEANING AND THEREFORE, IT WAS PRAYED THAT THE GROUND TAKEN BY T HE ASSESSEE BE DISMISSED. 8. LEARNED COUNSEL FOR THE ASSESSEE, IN THE REJOIND ER, SUBMITTED THAT IT IS AN ADMITTED FACT THAT NOTICE U/S 143(2) WAS NOT ISS UED BY THE ASSESSING OFFICER WHO HAD COMPLETED THE ASSESSMENT AND SUBMIT TED THAT INSTRUCTION NO. 1 OF 2011 ARE THE INSTRUCTIONS ISSUED BY THE CB DT WHICH ARE BINDING ON THE DEPARTMENT AND WHICH SAYS THAT THE ASSESSMENT O F THE ASSESSEES WITH INCOME LESS THAN RS.20 LACS HAS TO BE COMPLETED BY INCOME TAX OFFICER AND SINCE THE ASSESSEE HAD FILED RETURN OF INCOME DECLA RING INCOME OF RS.11,11,750/- WHICH IS LESS THAN RS.20 LACS, THE J URISDICTIONAL ASSESSING OFFICER WAS INCOME TAX OFFICER-6, KANPUR WHO WAS MA NDATORILY REQUIRED TO I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 13 ISSUE NOTICE U/S 143(2) AND WHICH HE DID NOT DO. T HEREFORE, IT WAS PRAYED THAT SINCE THE STATUTORY NOTICE U/S 143(2) WAS NOT ISSUED BY JURISDICTIONAL INCOME TAX OFFICER, THE ASSESSMENT ORDER IS BAD IN LAW. AS REGARDS THE RELIANCE PLACED BY LEARNED D. R. ON SECTIONS 119, 1 20 AND 127 ARE CONCERNED, LEARNED COUNSEL FOR THE ASSESSEE SUBMITT ED THAT SECTION 119 IN FACT GOES IN FAVOUR OF ASSESSEE WHICH EMPOWERS THE CBDT TO ISSUE INSTRUCTIONS/ORDERS ETC. TO INCOME TAX AUTHORITIES AND WHICH ARE BINDING ON DEPARTMENT THEREFORE, INSTRUCTION NO. 1/2011 ISSUED BY CBDT ARE BINDING INSTRUCTIONS. REGARDING SECTION 120, THE LEARNED C OUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS SECTION DEALS WITH JURISDICTION OF INCOME TAX AUTHORITIES WHICH AGAIN SAYS THAT INCOME TAX AUTHORITIES WILL P ERFORM ALL THE FUNCTIONS AS MAY BE ASSIGNED TO THEM BY CBDT. AS REGARDS SECTIO N 127, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS SECTIO N DOES NOT APPLY TO THE ASSESSEE AS THERE IS NO ORDER PASSED UNDER THAT SEC TION. 9. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT IT IS AN ADMITTED FA CT THAT TWO NOTICES U/S 143(2) WERE ISSUED BY DCIT-4, KANPUR AND DCIT-6, KA NPUR ON THE SAME DATE I.E. 03/09/2015. THE COPIES OF THESE NOTICES ARE PLACED AT PAGES 41 AND 42 OF THE PAPER BOOK. PAGE 41 IS THE COPY OF N OTICE ISSUED BY DCIT-4, KANPUR WHEREAS PAGE 42 IS THE COPY OF NOTICE ISSUED BY DCIT-6, KANPUR. THIS IS ALSO AN ADMITTED FACT THAT ASSESSMENT WAS C OMPLETED BY THE ASSESSING OFFICER, WARD-6(1), KANPUR. THE ASSESSIN G OFFICER WHILE FRAMING THE ASSESSMENT HIMSELF HAS NOTED THAT STATUTORY NOT ICE U/S 143(2) DATED 03/09/2015 WAS ISSUED BY DCIT-4, KANPUR AND DCIT-6, KANPUR AND WERE DULY SERVED UPON THE ASSESSEE. THE ASSESSING OFFIC ER HAS NOT MENTIONED ABOUT ANY FACT OF HAVING ISSUED NOTICE U/S 143(2) B Y HIM. LEARNED D. R. HAD ARGUED THAT THE PR. CIT-2, KANPUR, VIDE ORDER D ATED 28/04/2016, HAD MODIFIED MONETARY LIMIT AND HAD ORDERED THAT THE JU RISDICTION OVER THE CASES I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 14 HAVING RETURNED INCOME BELOW RS.20 LACS SHALL LIE W ITH THE INCOME TAX OFFICER AND THEREFORE, THE CASE OF THE ASSESSEE WAS TRANSFERRED FROM DCIT TO INCOME TAX OFFICER. LEARNED D. R. HAS FURTHER P LACED RELIANCE ON SECTION 127 WHICH AUTHORIZES THE CONTINUATION OF ASSESSMENT PROCEEDINGS EVEN IF THE RECORDS ARE TRANSFERRED FROM ONE ASSESSING OFFI CER TO ANOTHER. IN THIS RESPECT IT IS IMPORTANT TO VISIT THE PROVISIONS OF SECTIONS 119, 120 & 127 RELATING TO INCOME TAX AUTHORITIES AND TRANSFER OF CASES RESPECTIVELY. 9.1 AS REGARDS SECTION 119 OF THE ACT, WE FIND THAT THIS SECTION RELATES TO INSTRUCTIONS TO SUBORDINATE AUTHORITIES AND WHICH R EADS AS UNDER: [SECTION 119. INSTRUCTIONS TO SUBORDINATE AUTHORITIES. (1) THE BOARD MAY FROM TIME TO TIME, ISSUE SUCH OR DERS, INSTRUCTIONS AND DIRECTIONS TO OTHER INCOME-TAX AUT HORITIES AS IT MAY DEEM FIT FOR THE PROPER ADMINISTRATION OF THIS ACT, AND SUCH AUTHORITIES AND ALL OTHER PERSONS EMPLOYED IN THE E XECUTION OF THIS ACT SHALL OBSERVE AND FOLLOW SUCH ORDERS, INST RUCTIONS AND DIRECTIONS OF THE BOARD: PROVIDED THAT NO SUCH ORDERS, INSTRUCTIONS OR DIRECTIONS SH ALL BE ISSUED- (A) SO AS TO REQUIRE ANY INCOME-TAX AUTHORITY TO MA KE A PARTICULAR ASSESSMENT OR TO DISPOSE OF A PARTICULAR CASE IN A PARTICULAR MANNER; OR (B) SO AS TO INTERFERE WITH THE DISCRETION OF THE [COMMISSIONER (APPEALS)] IN THE EXERCISE OF HIS APPELLATE FUNCTIO NS. (2) WITHOUT PREJUDICE TO THE GENERALITY OF THE FORE GOING POWER,- (A) THE BOARD MAY, IF IT CONSIDERS IT NECESSARY OR EXPEDIENT SO TO DO, FOR THE PURPOSE OF PROPER AND EFFICIENT MANA GEMENT OF THE WORK OF ASSESSMENT AND COLLECTION OF REVENUE, I SSUE, FROM TIME TO TIME (WHETHER BY WAY OF RELAXATION OF ANY O F THE PROVISIONS OF [SECTIONS [115P, 115S], [115WD, 115 WE, 115WF, 115WG, 115WH, 115WJ, 115WK]] [139,] 143, 14 4, 147, 148, 154, 155, [158BFA] [SUB-SECTION (1A) OF SECTION 201, SECTIONS 210, 211, 234A, 234B, 234C, [234E],] I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 15 [270A,] 271 [,271C, 271CA] AND 273 OR OTHERWISE), GENERAL OR SPECIAL ORDERS IN RESPECT OF [ANY CLASS OF INCOMES OR FRINGE BENEFITS] OR CLASS OF CASES, SETTING FORTH DIRECTIONS OR INSTRUCTIONS (NOT BEING PREJUDICIAL T O ASSESSEES) AS TO THE GUIDELINES, PRINCIPLES OR PROCEDURES TO BE FOLLOWED BY OTHER INCOME-TAX AUTHORITIES IN THE WORK RELATING TO ASSESSMENT OR COLLECTION OF REVENUE OR THE INITIATION OF PROCEEDI NGS FOR THE IMPOSITION OF PENALTIES AND ANY SUCH ORDER MAY, IF THE BOARD IS OF OPINION THAT IT IS NECESSAR Y IN THE PUBLIC INTEREST SO TO DO, BE PUBLISHED AND CIRCULATED IN THE PRESCRIBED MANNER FOR GENERAL INFORMATION; (B) THE BOARD MAY, IF IT CONSIDERS IT DESIRABLE OR EXPEDIENT SO TO DO FOR AVOIDING GENUINE HARDSHIP IN ANY CASE OR CLA SS OF CASES, BY GENERAL OR SPECIAL ORDER, AUTHORISE [ANY INCOME-TAX AUTHORITY, NOT BEING A COMMISSIONER (APPEALS)] TO ADMIT AN APPLICATION OR CLAIM FOR ANY EXEMPTION, DEDUCTION, REFUND OR ANY OTHER RELIEF UNDER THIS ACT AFTER THE EXPIRY OF THE PERIOD SPECI FIED BY OR UNDER THIS ACT FOR MAKING SUCH APPLICATION OR CLAIM AND DEAL WITH THE SAME ON MERITS IN ACCORDANC E WITH LAW. [(C) THE BOARD MAY, IF IT CONSIDERS IT DESIRABLE O R EXPEDIENT SO TO DO FOR AVOIDING GENUINE HARDSHIP IN ANY CASE OR CLASS OR CASES, BY GENERAL OR SPECIAL ORDER FOR REA SONS TO BE SPECIFIED THEREIN, RELAX ANY REQUIREMENT CONTAINED IN ANY OF THE PROVISIONS OF CHAPTER IV OR CHAPTER VI-A, WHERE THE ASSESSEE HAS FAILED TO COMPLY WITH ANY REQUIREMENT SPECIFIED IN SUCH PROVISION FOR CLAIMING DEDUCTION THEREUNDER, SUBJEC T TO THE FOLLOWING CONDITIONS, NAMELY:- (I) THE DEFAULT IN COMPLYING WITH SUCH REQUIREMENT WAS DUE TO CIRCUMSTANCES BEYOND THE CONTROL OF THE ASSESSEE; AND (II) THE ASSESSEE HAS COMPLIED WITH SUCH REQUIREMEN T BEFORE THE COMPLETION OF ASSESSMENT IN RELATION TO THE PREVIOUS YEAR IN WHICH SUCH DEDUCTION IS CLAIMED: PROVIDED THAT THE CENTRAL GOVERNMENT SHALL CAUSE EVERY ORDER ISSUED UNDER THIS CLAUSE TO BE LAID BEFORE EACH HOUSE OF PARLIAMENT.] I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 16 9.1.2 THE ABOVE PROVISIONS CLEARLY EMPOWER THE CBDT TO ISSUE SUCH ORDERS, INSTRUCTIONS AND DIRECTIONS TO INCOME TAX AUTHORITI ES AS IT MAY DEEM FIT FOR THE PROPER ADMINISTRATION OF THE ACT. 9.1.3 IN VIEW OF THESE PROVISIONS OF SECTION 119 ON LY, THE CBDT ISSUED INSTRUCTIONS NO.1/2011 FOR COMPLETION OF ASSESSMENT BY INCOME TAX OFFICERS AND ACITS AND DCITS. THIS INSTRUCTION IS BINDING O N THE DEPARTMENT AND THEREFORE, IN VIEW OF SECTION 119 & IN VIEW OF CBDT INSTRUCTIONS, THE ASSESSMENT OF THE ASSESSEE WAS TO BE COMPLETED BY A SSESSING OFFICER-6(1), KANPUR AND ALL STATUTORY NOTICES WERE TO BE ISSUED BY HIM ONLY. IN FACT THE RELIANCE PLACED BY LEARNED D. R. ON SECTION 119 GOE S IN FAVOUR OF THE ASSESSEE. 9.2 SIMILARLY SECTION 120 DEALS WITH JURISDICTION O F INCOME TAX AUTHORITIES WHEREIN IT HAS BEEN MENTIONED THAT INCOME TAX AUTHO RITIES SHALL EXERCISE ALL POWERS AND PERFORM ALL FUNCTIONS CONFERRED ON OR AS THE CASE MAY BE AS ASSIGNED TO SUCH AUTHORITIES UNDER THIS ACT IN ACCO RDANCE WITH SUCH DIRECTIONS AS THE BOARD MAY ISSUE FOR EXERCISE OF P OWERS AND PERFORMANCE OF THE FUNCTIONS BY ALL OR ANY OF THESE AUTHORITIES. THE RELIANCE PLACED BY LEARNED D. R. ON THIS SECTION IS ALSO NOT HELPFUL T O REVENUE AS THIS SECTION ONLY BINDS THE AUTHORITIES TO ACT IN ACCORDANCE WIT H DIRECTIONS OF CBDT AND THEREFORE, ONLY THE JURISDICTIONAL ASSESSING OFFICE R AS PER INSTRUCTION NO.1/2011 SHOULD HAVE ISSUED THE NOTICE U/S 143(2) OF THE ACT WHEREAS THE NOTICES HAVE BEEN ISSUED BY NON JURISDICTIONAL ASSE SSING OFFICERS. 9.3 NOW COMING TO PROVISIONS OF SECTION 127 RELATIN G TO TRANSFER OF CASES. THIS IS AN IMPORTANT SECTION AND FOR THE SAKE OF CO MPLETENESS, THE PROVISIONS OF SECTION 127 ARE REPRODUCED BELOW: I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 17 [SECTION 127. POWER TO TRANSFER CASES. (1) THE [PRINCIPAL DIRECTOR GENERAL OR DIRECTOR GE NERAL] OR [PRINCIPAL CHIEF COMMISSIONER, CHIEF COMMISSIONER O R PRINCIPAL COMMISSIONER OR COMMISSIONER] MAY, AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD IN THE MATT ER, WHEREVER IT IS POSSIBLE TO DO SO, AND AFTER RECORDI NG HIS REASONS FOR DOING SO, TRANSFER ANY CASE FROM ONE OR MORE AS SESSING OFFICERS SUBORDINATE TO HIM (WHETHER WITH OR WITHOU T CONCURRENT JURISDICTION) TO ANY OTHER ASSESSING OFFICER OR ASS ESSING OFFICERS (WHETHER WITH OR WITHOUT CONCURRENT JURISDICTION) A LSO SUBORDINATE TO HIM. (2) WHERE THE ASSESSING OFFICER OR ASSESSING OFFICE RS FROM WHOM THE CASE IS TO BE TRANSFERRED AND THE ASSESSIN G OFFICER OR ASSESSING OFFICERS TO WHOM THE CASE IS TO BE TRANSF ERRED ARE NOT SUBORDINATE TO THE SAME [PRINCIPAL DIRECTOR GENERA L OR DIRECTOR GENERAL] OR [PRINCIPAL CHIEF COMMISSIONER, CHIEF C OMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSIONER],- (A) WHERE THE [PRINCIPAL DIRECTOR GENERAL OR DIREC TOR GENERAL] OR [PRINCIPAL CHIEF COMMISSIONER, CHIEF COMMISSION ER OR PRINCIPAL COMMISSIONER OR COMMISSIONER] TO WHOM SUCH ASSESSING OFFICERS ARE SUBORDINATE ARE IN AGREEMENT, THEN THE 3774 [PRINCIPAL DIRECTOR GENERAL OR DIRECTOR GENERAL] OR 3775 [PRINCIPAL CHIEF COMMISSIONER, CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSIONER] FROM WHOSE JURISDICTION THE CASE IS T O BE TRANSFERRED MAY, AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD IN THE MATTER , WHEREVER IT IS POSSIBLE TO DO SO, AND AFTER RECORDI NG HIS REASONS FOR DOING SO, PASS THE ORDER; (B) WHERE THE [PRINCIPAL DIRECTOR GENERAL OR DIREC TOR GENERAL] OR [PRINCIPAL CHIEF COMMISSIONER, CHIEF COMMISSION ER OR PRINCIPAL COMMISSIONER OR COMMISSIONER] AFORESAI D ARE NOT IN AGREEMENT, THE ORDER TRANSFERRING THE CA SE MAY, SIMILARLY, BE PASSED BY THE BOARD OR ANY SUCH [PRINCIPAL DIRECTOR GENERAL OR DIRECTOR GENERAL] OR [PRINCIPAL CHIEF COMMISSIONER, CHIEF COMMISSIONER O R PRINCIPAL COMMISSIONER OR COMMISSIONER] AS THE I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 18 BOARD MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, AUTHORISE IN THIS BEHALF. (3) NOTHING IN SUB-SECTION (1) OR SUB-SECTION (2) S HALL BE DEEMED TO REQUIRE ANY SUCH OPPORTUNITY TO BE GIVEN WHERE THE TRANSFER IS FROM ANY ASSESSING OFFICER OR ASSESSING OFFICERS (WHETHER WITH OR WITHOUT CONCURRENT JURISDICTION) T O ANY OTHER ASSESSING OFFICER OR ASSESSING OFFICERS (WHETHER WI TH OR WITHOUT CONCURRENT JURISDICTION) AND THE OFFICES OF ALL SUC H OFFICERS ARE SITUATED IN THE SAME CITY, LOCALITY OR PLACE. (4) THE TRANSFER OF A CASE UNDER SUB-SECTION (1) OR SUB-SECTION (2) MAY BE MADE AT ANY STAGE OF THE PROCEEDINGS, AN D SHALL NOT RENDER NECESSARY THE RE-ISSUE OF ANY NOTICE ALREADY ISSUED BY THE ASSESSING OFFICER OR ASSESSING OFFICERS FROM WH OM THE CASE IS TRANSFERRED. EXPLANATION.-IN SECTION 120 AND THIS SECTION, THE W ORD 'CASE', IN RELATION TO ANY PERSON WHOSE NAME IS SPECIFIED IN A NY 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 COMP LETED ON OR BEFORE SUCH DATE, AND INCLUDES ALSO ALL PROCEEDI NGS UNDER THIS ACT WHICH MAY BE COMMENCED AFTER THE DATE OF S UCH ORDER OR DIRECTION IN RESPECT OF ANY YEAR.] THE ANALYSIS OF ABOVE PROVISIONS CLEARLY DEMONSTRAT E THAT PRINCIPAL COMMISSIONER OR CHIEF COMMISSIONER CAN PASS AN ORDE R U/S 127 OF THE ACT FOR TRANSFER OF ASSESSMENT RECORDS FROM ONE ASSESSI NG OFFICER TO ANOTHER ASSESSING OFFICER AND EARLIER ASSESSMENT PROCEEDING S UNDERTAKEN BY EARLIER ASSESSING OFFICER WILL BE DEEMED TO BE PART OF ASSE SSMENT PROCEEDINGS CONTINUED BY NEW ASSESSING OFFICER BUT THE REQUIREM ENT OF SECTION IS THE PASSING OF ORDER U/S 127 OF THE ACT WHICH IN THIS C ASE HAS NOT BEEN DONE. IN THE PRESENT CASE INSTEAD OF ORDER HAVING BEEN PA SSED BY COMMISSIONER, THE TRANSFER MEMO HAS BEEN PREPARED BY DCIT-6 AND R ECORDS HAVE BEEN TRANSFERRED TO JURISDICTIONAL ASSESSING OFFICER. A COPY OF TRANSFER MEMO IS PLACED IN PAPER BOOK AT PAGE 31. THE TRANSFER MEMO DOES NOT TALK ABOUT I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 19 ANY ORDER U/S 127 OF THE ACT AND INSTEAD TALKS ABOU T THE REASON FOR TRANSFERRING THE CASE WHICH READS OUT AS UNDER: TRANSFER MEMO OFFICE OF THE DY. COMMISSIONER OF INCOME TAX-6 KANPUR DATED:16/05/2016 1. NAME AND ADDRESS OF THE ASSESSEE:M/S ARTI SECURI TIES & SERVICES LTD. SHALIMAR, GHAZIABAD-201005 2. PAN AADCK6717A 3. STATUS COM. 4. DETAILS OF IT/WT/GT RECORDS ASSESSMENT RECORDS 2014-15 (IN ONE VOLUME) 5. DETAILS OF PENDING ASSESSMENTS 6. TIME BARRING PENDENCY, IF ANY DEC 2016 7. DETAILS OF AUDIT OBJECTIONS 8. DETAILS OF PENALTY PROCEEDINGS PENDING ASSESSMENT YEAR UNDER SECTION ENACTMENT 9. DETAILS OF ARREAR DEMAND: ASSESSMENT YEAR (S) D & CR NO. NATURE OF DEMAND | A MOUNT | 10. RECORDS SENT FOR FURTHER ACTION TO ITO 6(1), K ANPUR 11. REASONS FOR TRANSFERRING RECORDS DUE TO MODIFIE D MONETARY LIMITS UPTO 20 LAKH VIDE PCIT-II ORDER NO.17/2016-17 DATED 28/4/2016 12. ANY OTHER PROCEEDINGS PENDING NIL SD/. (DR. SANGEETA YADAV) DY. CIT-6, KANPUR. I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 20 AS PER THE TRANSFER MEMO THE REASON FOR TRANSFERRIN G THE CASE WAS THE REVISION IN MONETARY LIMITS FOR PASSING ORDERS BY I NCOME TAX OFFICERS. THIS REVISION IN MONETARY LIMIT IS IN FACT NOT A REVISIO N AS THIS LIMIT IS ALREADY THERE IN THE CBDT INSTRUCTION NO. 1/2011 DATED 30/1 1/2011 WHICH FOR THE SAKE OF COMPLETENESS IS REPRODUCED BELOW: INSTDRUCTION NO.1/2011 [F.NO.187/12/2010-IT(A-I)], DATED 31-1-2011 REFERENCE HAVE BEEN RECEIVED BY TH E BOARD FROM A LARGE NUMBER OF TAXPAYERS, ESPECIALLY FROM MOFUSSIL AREAS, THAT THE EXISTING MONETARY LIMITS F OR ASSIGNING CASES TO ITOS AND DCS/ACS IS CAUSING HARD SHIP OO THE TAXPAYERS, AS IT RESULTS IN TRANSFER OF THEI R CASES TO A DC/AC WHO IS LOCATED IN A DIFFERENT STATION, WHIC H INCREASES THEIR COST OF COMPLIANCE. THE BOARD HAD CONSIDERED THE MATTER AND IS OF THE OPINION THAT TH E EXISTING LIMITS NEED TO BE REVISED TO REMOVE THE ABOVEMENTIONED HARDSHIP. AN INCREASE IN THE MONETARY LIMITS IS ALSO CONSIDER ED DESIRABLE IN VIEW OF THE INCREASE IN THE SCALE OF T RADE AND INDUSTRY SINCE 2001, WHEN THE PRESENT INCOME LIMITS WERE INTRODUCED. IT HAS THEREFORE BEEN DECIDED TO INCREA SE THE MONETARY LIMITS AS UNDER: INCOME DECLARED (MOFUSSIL AREAS) ITOS ACS/DCS CORPORATE RETURNS UPTO RS.20 LACS ABOVE RS.20 LACS NON CORPORATE RETURNS UPTO RS.10 LACS ABOVE RS.15 LACS METRO CHARGES FOR THE PURPOSE OF ABOVE INSTRUCTIONS SHALL BE AHMEDABAD, BANAGALORE, CHENNAI, DELHI, KOLKATA, HYD ERABAD, MUMBAI AND PUNE. THE ABOVE INSTRUCTIONS ARE ISSUED IN SUPERSESSION OF THE EARLIER INSTRUCTIONS AND SHALL BE APPLICABLE WITH EFFECT FROM 1-4-2011. I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 21 THE ABOVE CBDT INSTRUCTION CLEARLY STATES THAT FOR CORPORATE ASSESSEES HAVING INCOME UPTO RS.20 LAC, THE ASSESSMENT IS TO BE DONE BY INCOME TAX OFFICER. IN THE PRESENT CASE, ADMITTEDLY THE ASSES SEE IS A CORPORATE ASSESSEE AND ITS RETURNED INCOME IS LESS THAN RS.20 LAC AS THE ASSESSEE HAD FILED RETURN FOR AN INCOME OF RS.11,11,750/-. THER EFORE, AS PER THE ABOVE INSTRUCTIONS, THE JURISDICTIONAL ASSESSING OFFICER WAS INCOME TAX OFFICER AND NOT DCIT OR ACIT WHO HAD ISSUED NOTICED U/S 143(2) OF THE ACT. IT IS ALSO AN ADMITTED FACT THAT JURISDICTIONAL ASSESSING OFFI CER WHICH IS INCOME TAX OFFICER, WARD-6, KANPUR HAD NOT ISSUED ANY NOTICE U /S 143(2) OF THE ACT. THEREFORE, IN THE CASE BEFORE US, THE FOLLOWING FIN AL FACTS EMERGE: (I) THE ASSESSEE IS A CORPORATE ASSESSEE. (II) THE ASSESSEE FILED RETURN OF INCOME DECLARING INCOM E OF RS.11,11,750/-. (III) THE JURISDICTIONAL ASSESSING OFFICER WAS INCOME TAX OFFICER, WARD-6, KANPUR. (AS PER CBDT INSTRUCTION NO.1/2011) (IV) THE STATUTORY NOTICE U/S 143(2) HAS NOT BEEN ISSUED BY THE JURISDICTIONAL ASSESSING OFFICER. (V) NO ORDER U/S 127 HAS BEEN PASSED BY THE CIT TRANSFE RRING THE CASE FROM DCIT-6 TO INCOME TAX OFFICER-6 KANPUR . UNDER THESE FACTS AND CIRCUMSTANCES, THE HON'BLE KOLKATA TRIBUNAL IN THE CASE OF KRISHNENDU CHOWDHURY VS. INCOME TAX OFFICER IN I.T.A. NO.1153/KOL/2015 VIDE ORDER DATED 18/11/20167 HAS D ECIDED THE ISSUE BY HOLDING AS UNDER: 5. THE FIRST ISSUE RAISED BY ASSESSEE IN THIS APP EAL IS THAT THE ASSESSMENT FRAMED U/S. 143(3) OF THE ACT IS INV ALID AS THE NOTICE U/S. 143(2) OF THE ACT WAS NOT ISSUED BY THE JURISDICTIONAL INCOME TAX OFFICER. 6. AT THE OUTSET, WE FIND THAT ASSESSEE HAS CHALLE NGED THE RE-ASSESSMENT PROCEEDING ON THE GROUND THAT NO VALI D NOTICE UNDER SECTION 143(2) OF THE ACT HAS BEEN ISSUED. TH E LD. AR BEFORE US SUBMITTED THAT AS PER THE CBDT INSTRUCTIO N NO. I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 22 1/2011 DATED 31.01.2011A NEW MONETARY LIMITS IN MOF USSIL AREAS WAS FIXED FOR SELECTING THE CASE UNDER SCRUTI NY. ACCORDINGLY THE ITOS WERE EMPOWERED TO TAKE UP THE CASE UP TO THE INCOME OF RS. 15 LACS FOR NON-CORPORATE ASSE SSEE AND RS. 20 LACS FOR CORPORATE ASSESSEES. IT IS PERTINENT TO MENTION HERE THAT THE ASSESSEE'S RETURN INCOME WAS RS. 12,65,830 /-. AS PER THE CBDT INSTRUCTION NO. 1/2011 DATED 31.01.2011, T HE JURISDICTION FOR SCRUTINY ASSESSMENT VESTED TO THE ITO FROM 1.4.2011 AND THE NOTICE U/S. 143(2) OF THE ACT SHOU LD/MUST BE ISSUED BY THE ITO, WARD - 1, HALDIA AND BY NONE OF THE ACIT / DCIT. IN THE PRESENT CASE, THE NOTICE WAS ISSUED BY THE ACIT, CIRCLEHALDIA ON 14.9.2011 MUCH AFTER THE CBDT INSTR UCTION. CERTIFIED COPY OF THE NOTICE U/S. 143(2) IS ATTACHE D IN THE PAPER BOOK MARKED AS ANNEXURE AS 3 WHICH HAS BEEN CHALL ENGED. THE ACIT, CIRCLE-HALDIA ISSUED THE NOTICE U/S. 142( 1) OF THE ACT 3.7.2012 WHICH IS IN THE PAPER BOOK. THE SAID NOTIC E FOR ISSUING IS BEYOND THE JURISDICTION OF THE ACIT, HALDIA THE AS PER THE CBDT INSTRUCTION MARKED AS ANNEXURE 4 IN THE PAPE R BOOK. THE LD. AR FURTHER SUBMITTED THE SECTION 119, STRAT EGICALLY PLACED IN CHAPTER XIII WHICH DEALS WITH 'INCOME-TAX AUTHORITIES' AND ENABLING POWER OF THE CENTRAL BOARD OF DIRECT T AXES, WHICH IS RECOGNIZED AS AN AUTHORITY UNDER THE INCOME-TAX ACT U/S 116(A). THE CENTRAL BOARD OF DIRECT TAXES UNDER THI S SECTION IS EMPOWERED TO ISSUE SUCH ORDERS, INSTRUCTIONS AND DI RECTIONS TO OTHER INCOME-TAX AUTHORITIES 'AS IT MAY DEEM FIT FO R PROPER ADMINISTRATION OF THIS ACT'. SUCH AUTHORITIES AND A LL OTHER PERSONS EMPLOYED IN EXECUTION OF THIS ACT ARE BOUND TO OBSERVE AND FOLLOW SUCH ORDERS, INSTRUCTIONS AND DIRECTIONS OF THE CENTRAL BOARD OF DIRECT TAXES. THE PROVISO TO SUB-S ECTION (1) OF SECTION 119 RECOGNIZES TWO EXCEPTIONS TO THIS POWER . THE FIRST EXCEPTION IS THAT THE CBDT CANNOT REQUIRE ANY INCOM E-TAX AUTHORITY TO MAKE A PARTICULAR ASSESSMENT OR TO DIS POSE OF A PARTICULAR CASE IN A PARTICULAR MANNER. THE SECOND IS WITH REGARD TO INTERFERENCE WITH THE DISCRETION OF THE C OMMISSIONER OF (APPEALS) IN EXERCISE OF HIS APPELLATE FUNCTIONS . SUB-SECTION (2) OF SECTION 119 PROVIDES FOR THE EXERCISE OF POW ER IN CERTAIN SPECIAL CASES AND ENABLES THE CBDT, IF IT CONSIDERS IT NECESSARY OR EXPEDIENT SO TO DO FOR THE PURPOSE OF PROPER AND EFFICIENT MANAGEMENT OF THE WORK OF ASSESSMENT AND COLLECTION OF REVENUE, TO ISSUE GENERAL OR SPECIAL ORDERS IN RESP ECT OF ANY CLASS OF INCOMES OR CLASS OF CASES, SETTING FORTH D IRECTIONS OR INSTRUCTIONS AS TO THE GUIDELINES, PRINCIPLES OR PR OCEDURES TO BE I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 23 FOLLOWED BY OTHER INCOME-TAX AUTHORITIES IN THE DIS CHARGE OF THEIR WORK RELATING TO ASSESSMENT OR INITIATING PRO CEEDINGS FOR IMPOSITION PENALTIES. THE POWERS OF THE CBDT ARE WI DE ENOUGH TO ENABLE IT TO GRANT RELAXATION FROM THE PROVISION S OF SEVERAL SECTIONS ENUMERATED IN CLAUSE (A). SUCH ORDERS MAY BE PUBLISHED IN THE OFFICIAL GAZETTE IN THE PRESCRIBED MANNER, IF THE CBDT IS OF THE OPINION THAT IT IS SO NECESSARY. THE ONLY BAR ON THE EXERCISE OF POWER IS THAT IT IS NOT PREJUDICIAL TO THE ASSESSEE. IN THE PRESENT CASE, ASSESSEE'S RETURN IN COME WAS 12,65,830/-. AS PER CBDT INSTRUCTION NO. 1/2011 DA TED 31.01.2011, THE JURISDICTION OVER THE ASSESSEE IS O F THE ITO, WARD - 1, HALDIA AND NOT OF THE ACIT, CIRCLE - HALD IA. THE NOTICE U/S. 143(2) OF THE ACT MUST BE ISSUED BY THE ITO, W ARD -1, HALDIA AND BY NONE OF THE ACIT, CIRCLE - HALDIA. TH E ACIT, CIRCLE - HALDIA WAS VERY MUCH AWARE THAT HE HAS NO JURISDICTION OVER THE ASSESSEE FROM 1.4.2011 FOR SCRUTINY ASSESS MENT AND ACCORDINGLY CANNOT ISSUE THE NOTICE U/S. 143(2) OF THE I. T. ACT, 1961 AFTER THE CBDTS INSTRUCTION NO. 1/2011 DATED 3 1.01.2011. IN THIS REGARD, IT IS IMPORTANT TO READ THE PROVISI ONS OF SECTION 143(2) OF THE I. T. ACT 1961 AS FOLLOWS. 143(2) WHERE A RETURN HAS BEEN FURNISHED UNDER SEC TION 139, OR IN RESPONSE TO A NOTICE UNDER SUB-SECTION(1 ) OF SECTION 142, THE ASSESSING OFFICER SHALL (I) WHERE HE HAS REASON TO BELIEVE THAT ANY CLAIM O F LOSS, EXEMPTION, DEDUCTION, ALLOWANCE OR RELIEF MADE IN T HE RETURN IS INADMISSIBLE, SERVE ON THE ASSESSEE A NOT ICE SPECIFYING PARTICULARS OF SUCH CLAIM OF LOSS, EXEMP TION, DEDUCTION, ALLOWANCE OR RELIEF AND REQUIRE HIM, ON A DATE TO BE SPECIFIED THEREIN TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EVIDENCE OR PARTICULARS SPECIFIED THE REIN OR ON WHICH THE ASSESSEE MAY RELY, IN SUPPORT OF SUCH CLAIM; (PROVIDED THAT NO NOTICE UNDER THIS CLAUSE SHALL BE SERVED ON THE ASSESSEE ON OR AFTER THE 1ST DAY OF JUNE, 20 03) (II) NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE ( 1), IF HE CONSIDERS IT NECESSARY OR EXPEDIENT TO ENSURE TH AT THE ASSESSEE HAS NOT UNDERSTATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NOT UNDER PAID THE T AX IN ANY MANNER, SERVE ON THE ASSESSEE A NOTICE REQUIRIN G HIM, ON A DATE TO BE SPECIFIED THEREIN, EITHER TO A TTEND HIS OFFICE OR TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 24 THE RETURN. (PROVIDED THAT NO NOTICE UNDER CLAUSE ( II) SHALL BE SERVED ON THE ASSESSEE AFTER THE EXPIRY OF SIX M ONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE RET URN IS FURNISHED).' ON A PERUSAL OF THE FOREGOING PROVISION, IT IS EVID ENT THAT THE PROVISIONS OF THIS SECTION ARE MANDATORY IN NATURE. IF THE ASSESSING OFFICER CONSIDERS IT NECESSARY OR EXPEDIE NT TO VERIFY THE CORRECTNESS AND COMPLETENESS OF THE RETURN THEN HE IS BOUND TO SERVE A NOTICE UNDER THIS SUB SECTION ON T HE ASSESSEE REQUIRING HIM, ON A SPECIFIED DATE, EITHER TO ATTEN D AT THE AO'S OFFICE OR TO PRODUCE OR CAUSE TO BE PRODUCED ANY EV IDENCE ON WHICH THE ASSESSEE DESIRE TO RELY IN SUPPORT OF HIS RETURN. THE ABOVE VIEW GETS FORTIFIED BY THE DECISION OF THE HO N'BLE MADRAS HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TA X V. GITSONS ENGINEERING CO. REPORTED IN [2015] 370 ITR 87, WHEREIN IT IS HELD THAT, 'THE WORD 'SHALL' EMPLOYED IN SECTION 143(2) OF THE INCOME TAX ACT, 1961, CONTEMPLATES THAT THE ASSESSI NG OFFICER SHOULD ISSUE NOTICE TO THE ASSESSEE SO AS T O ENSURE THAT THE ASSESSEE HAS NOT UNDERSTATED INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NOT UNDER PA ID THE TAX IN ANY MANNER. IT IS THEREFORE, CLEAR THAT WHEN THE ASSESSING OFFICER CONSIDERS IT NECESSARY AND EXPEDIENT TO ENSURE THAT TAX IS PAID IN ACCORDANCE WITH LAW, HE SHOULD CALL UPON THE ASSESSEE TO PRODUCE EVIDENCE BEFORE HIM TO ENSURE THAT THE TAX IS PAID IN ACCORDANCE WITH LAW. THE SECTION MAKES IT CLEAR THA T SERVICE OF NOTICE UNDER SECTION 143(2) OF THE ACT W ITHIN THE TIME LIMIT PRESCRIBED IS MANDATORY AND IT IS NO T A MERE PROCEDURAL REQUIREMENT.' IN THE LIGHT OF ABOVE SUBMISSION, IT IS CRYSTAL CLE AR THAT INSTRUCTION NO. 1/2011 DATED 31.01.2011 WAS APPLICA BLE IN THE PRESENT CASE. IN VIEW OF THE SPECIFIC STIPULATION I N THE INSTRUCTION NON-CORPORATE RETURNS INCOME UPTO 15 L ACS IN MOFUSSIL AREAS' ARE VESTED WITH THE ITO'S AND CONSI DERING THAT IN THE PRESENT CASE THE RETURN INCOME BELOW RS. 15 LACS. THE NOTICE U/S. 143(2) OF THE ACT MUST BE ISSUED BY THE ITO. WARD - 1. HALDIA. BUT IN THE INSTANT CASE, THE NOTICE U/S. 143(2) WAS ISSUED BY THE ACIT, CIRCLE - HALDIA WITHOUT HIS JUR ISDICTION OVER I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 25 THE ASSESSEE KNOWING FULLY WELL AND HE WAS VERY MUC H AWARE THAT HE HAS NO JURISDICTION OVER THE ASSESSEE FROM 1.4.2011. IN THE INSTANT CASE, THERE WAS NO NOTICE U/S. 143(2) O F THE ACT WAS NOT ISSUED BY THE ITO, WARD - 1, HALDIA BEFORE THE COMPLETION OF THE ASSESSMENT PROCEEDINGS. THEREFORE, THE NOTIC E U/S. 143(2) ISSUED BY THE ACIT, CIRCLE - HALDIA FOR SCRU TINY OF THE ASSESSEE'S CASE IN CONTRAVENTION TO CBDT INSTRUCTIO N IS INVLID, BAD-IN- LAW AND LIABLE TO BE ANNULLED. AND ON THE B ASIS OF NOTICE U/S. 143(2) OF THE ACT ACIT, CIRCLE - HALDIA THE AS SESSMENT WAS COMPLETED BY THE ITO, WARD -1, HALDIA WITHOUT ISSUI NG THE NOTICE U/S. 143(2) OF THE I. T. ACT, 1961 IS ALSO I NVALID, BAD-IN- LAW, VOID AB INITIO AND LIABLE TO BE ANNULLED. 7. ON THE OTHER HAND THE LD. DR BEFORE US SUBMITTED THAT THE ASSESSEE CANNOT RAISE THE QUESTION ON THE JURISDICT ION OF AO AFTER THE EXPIRY OF ONE MONTH FROM THE DATE ON WHIC H HE WAS SERVED WITH THE NOTICE OR AFTER THE COMPLETION OF A SSESSMENT, WHICHEVER IS EARLIER IN TERMS OF THE PROVISIONS OF SECTION 124(3) OF THE ACT. 7.1 THE LD. DR FURTHER SUBMITTED THAT AS PER THE PR OVISIONS OF SECTION 127(3) OF THE ACT NO OPPORTUNITY WILL BE GI VEN TO THE ASSESSEE WHERE THE TRANSFER OF THE JURISDICTION IS FROM ONE AO IS TO ANY OTHER AO PROVIDED THE OFFICES ALL THE SUCH O FFICERS ARE SITUATED IN THE SAME CITY, LOCALITY AND PLACE. IN T HE INSTANT CASE THE NOTICE WAS ISSUED BY THE ACIT UNDER SECTION 143 (2) OF THE ACT AND LATER IT WAS TRANSFERRED TO ITO. THE TRANSF ER OF THE FILE WAS WITHIN THE SAME LOCALITY. THEREFORE THE VALIDIT Y OF THE ASSESSMENT FRAMED BY THE AO CANNOT BE CHALLENGED ON THE GROUND OF NON-ISSUANCE OF NOTICE BY THE ITO. THE LD DR ALSO REFERRED TO THE PROVISIONS OF SECTIO N 129 OF THE ACT WHICH ALLOWS THE SUCCEEDING INCOME TAX AUTHORIT Y TO CONTINUE THE PROCEEDINGS FROM THE STAGE AT WHICH TH E PROCEEDING WAS LEFT BY HIS PREDECESSOR. THE LD DR V EHEMENTLY SUPPORTED THE ORDER OF LOWER AUTHORITIES. 8. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE ALSO PERUSED THE ASSESSMENT RECORDS. THE CRUX OF THE ISSUE IN THE CA SE IS THAT THE NOTICE UNDER SECTION 143(2) OF THE ACT WAS NOT ISSUED BY THE ITO IN TERMS OF THE INSTRUCTION NO. 1/2011 [F.N O. I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 26 187/12/2010-IT(A-I)], DATED 31.1.2011. AS PER THE I NSTRUCTION THE NOTICE WAS TO BE ISSUED BY THE ITO BUT THE NOTI CE WAS ISSUED BY THE ACIT. THEREFORE IN VIEW OF ABOVE THE NOTICE ISSUED BY THE ACIT IS INVALID AND CONSEQUENTLY THE ASSESSMENT FRAMED BY THE ITO BECOMES VOID. NOW THE ISSUE BEFOR E US ARISES SO AS TO WHETHER THE NOTICE ISSUED BY THE AC IT U/S 143(2) OF THE ACT IS WITHOUT JURISDICTION IN TERMS OF THE AFORESAID INSTRUCTION. IN THIS CONNECTION WE CONSID ER IT FIT TO INCORPORATE THE RELEVANT PORTION OF INSTRUCTION NO. 1/2011 DATED 31.1.2004 OF THE CBDT CIRCULAR IN RESPECT OF ISSUAN CE OF NOTICE TO NON-CORPORATE ASSESSES WHICH READS AS UNDER :- INSTDRUCTION NO.1/2011 [F.NO.187/12/2010-IT(A-I)], DATED 31-1-2011 REFERENCE HAVE BEEN RECEIVED BY TH E BOARD FROM A LARGE NUMBER OF TAXPAYERS, ESPECIALLY FROM MOFUSSIL AREAS, THAT THE EXISTING MONETARY LIMITS F OR ASSIGNING CASES TO ITOS AND DCS/ACS IS CAUSING HARD SHIP OO THE TAXPAYERS, AS IT RESULTS IN TRANSFER OF THEI R CASES TO A DC/AC WHO IS LOCATED IN A DIFFERENT STATION, WHIC H INCREASES THEIR COST OF COMPLIANCE. THE BOARD HAD CONSIDERED THE MATTER AND IS OF THE OPINION THAT TH E EXISTING LIMITS NEED TO BE REVISED TO REMOVE THE ABOVEMENTIONED HARDSHIP. AN INCREASE IN THE MONETARY LIMITS IS ALSO CONSIDER ED DESIRABLE IN VIEW OF THE INCREASE IN THE SCALE OF T RADE AND INDUSTRY SINCE 2001, WHEN THE PRESENT INCOME LIMITS WERE INTRODUCED. IT HAS THEREFORE BEEN DECIDED TO INCREA SE THE MONETARY LIMITS AS UNDER: INCOME DECLARED (MOFUSSIL AREAS) ITOS ACS/DCS CORPORATE RETURNS UPTO RS.20 LACS ABOVE RS.20 LACS NON CORPORATE RETURNS UPTO RS.10 LACS ABOVE RS.15 LACS METRO CHARGES FOR THE PURPOSE OF ABOVE INSTRUCTIONS SHALL BE AHMEDABAD, BANAGALORE, CHENNAI, DELHI, KOLKATA, HYDERABAD, MUMBAI AND PUNE. THE ABOVE INSTRUCTIONS ARE ISSUED IN SUPERSESSION OF THE EARLIER INSTRUCTI ONS AND SHALL BE APPLICABLE WITH EFFECT FROM 1-4-2011. -SEE MORE I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 27 AT: HTTP://TAXGURU.IN/INCOME-TAX/SECTION-119-OF-THE- INCOME-TAX-ACT1961-INSTRUCTIONS-TOO-SUBORDINATE- AUTHORITIES-INSTDRUCTIONS-REGARDING-INCLIMITS-FOR-A SSIGNING- CASES-TO-DEPUTY-COMMISSIONERS ASSISTANT COMMISSIONERSITOS. HTML#STHASH.U17D65534.DPUF THE NOTICE U/S 143(2) AND ORDER SHEET ENTRIES WHICH WERE REFERRED BY THE LD. COUNSEL FOR ASSESSEE ARE PLACED AT ANNEXURE NO. 2 & 5 OF THE PAPER BOOK RESPECTIVELY. ADMITTEDL Y THE NOTICE U/S 143(2) IN THE INSTANT CASE WAS ISSUED BY THE LD . ACIT TO INITIATE THE ASSESSMENT PROCEEDINGS WHICH WAS LATER TRANSFERRED TO ITO. HOWEVER, THE ITO DID NOT FURTHER ISSUE ANY NOTICE U/S 143(2) OF THE ACT. THEREFORE, ITO ASSUMED THE CHARG E WITHOUT ISSUING NOTICE AND CONSEQUENTLY COMPLETED ASSESSMEN T U/S 143(3) OF THE ACT WITHOUT JURISDICTION. IN SIMILAR FACTS AND CIRCUMSTANCES, THE CO-ORDINATE BENCH OF THIS TRIBUN AL HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE IN THE CASE OF AJANTA FINANCIAL SERVICES PVT. LIMITED VS ITO IN ITA NO. 1426/KOL/2011. WE CONSIDER IT FIT TO INCORPORATE TH E RELEVANT PORTION OF THE TRIBUNAL ORDER WHICH IS AS UNDER :- 5. WE FIND THAT THE HON'BLE CHHATISHGARH HIGH COUR T IN THE CASE OF DCIT VS. SUNITA FINLEASE LTD. (2011) 33 0 ITR 491 (CHH) HAS CONSIDERED THE SAME INSTRUCTION NO. 9/2004 DATED 20.09.2004 WHICH ARE APPLICABLE IN THE PRESENT CASE ALSO AND QUASH THE SELECTION OF SCRUTI NY AND COMPLETION OF ASSESSMENT BY HOLDING AS INVALID. HON 'BLE CHATTISHGARH HIGH COURT IN SUNITA FINLEASE LTD.'S C ASE (SUPRA) HAS CONSIDERED SECTION 119 OF THE ACT BY ST ATING THAT SECTION 119 OF THE ACT, EMPOWERS THE CENTRAL B OARD OF DIRECT TAXES TO ISSUE ORDERS, INSTRUCTIONS OR DI RECTIONS FOR THE PROPER ADMINISTRATION OF THE ACT OR FOR SUC H OTHER PURPOSES SPECIFIED IN SUB-SECTION (2) OF THE SECTIO N. HON'BLE HIGH COURT FURTHER HELD THAT SUCH AN ORDER, INSTRUCTION OR DIRECTION CANNOT OVERRIDE THE PROVIS IONS OF THE ACT. DIRECTION BY ISSUING INSTRUCTIONS TO THE O FFICERS FOR THE PROCESS OF SELECTION OF CASES FOR SCRUTINY FOR RETURNS FOR A PARTICULAR FINANCIAL YEAR AND ALLOWIN G TIME OF THREE MONTHS FOR COMPLETION OF THE SAME CANNOT BE CONSIDERED TO OVERRIDE OR DETRACT FROM THE PROVISIO NS OF THE ACT. IT ONLY DIRECTS THAT THE ABOVE EXERCISE SH OULD BE COMPLETED WITHIN THREE MONTHS OF THE DATE OF FILING OF I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 28 RETURN BY THE ASSESSEE, WHICH AMOUNTS TO AN ASSURAN CE TO THE ASSESSEE THAT THE RETURN FILED BY HIM CAN BE SCRUTINIZED BY THE ASSESSING OFFICER WITHIN THREE M ONTHS OF FILING OF THE RETURN. THE HON'BLE HIGH COURT, DI SMISSING THE APPEAL HELD THAT INSTRUCTION NO. 9 OF 2004 DATE D SEPTEMBER 20, 2004, WAS APPLICABLE IN THE PRESENT C ASE, IN VIEW OF THE SPECIFIC STIPULATION IN THE CIRCULAR THAT 'FOR RETURNS FILED DURING THE CURRENT FINANCIAL YEAR 200 4-05, THE SELECTION OF CASES FOR SCRUTINY WILL HAVE TO BE COMPLETED WITHIN THREE MONTHS OF THE DATE OF FILING THE RETURNS' AND CONSIDERING THAT THE RETURN HAD 5 ITA 1426/K/2011 AJANTA FINANCIAL SERVICES PVT. LTD. A.Y. 03-04 ADMITTEDLY, BEEN FILED BY THE ASSESSEE O N OCTOBER 29, 2004, I.E., DURING THE CURRENT FINANCIA L YEAR 2004-05. THE SELECTION FOR SCRUTINY OF THE ASSESSEE 'S CASE AND COMPLETION OF THE ASSESSMENT WAS NOT VALID. 6. WE FIND THAT THE HON'BLE CHHATISHGARH HIGH COURT IN SUNITA FINLEASE LTD.'S CASE (SUPRA) HAS ALSO CONSID ERED THE DECISION OF HON'BLE SUPREME COURT IN THE CASE O F UCO BANK (1999) 237 ITR 889 AND QUOTED FROM PAGE 896 AS UNDER: 'SUCH INSTRUCTIONS MAY BE BY WAY OF RELAXATION OF A NY OF THE PROVISIONS OF THE SECTIONS SPECIFIED THERE OR OTHER WISE. THE BOARD THUS HAS POWER, INTER ALIA, TO TONE DOWN THE RIGOR OF THE LAW AND ENSURE A FAIR ENFORCEMENT OF ITS PROVISIONS , BY ISSUING CIRCULARS IN EXERCISE OF ITS STATUTORY POWERS UNDER SECTION 119 OF THE INCOME-TAX ACT, WHICH ARE BINDING ON THE AUT HORITIES IN THE ADMINISTRATION OF THE ACT. UNDER SECTION 119(2) (A), HOWEVER, THE CIRCULARS AS CONTEMPLATED THEREIN CANN OT BE ADVERSE TO THE ASSESSEE. THUS, THE AUTHORITY WHICH WIELDS THE POWER FOR ITS OWN ADVANTAGE UNDER THE ACT IS GIVEN THE RIGHT TO FORGO THE ADVANTAGE WHEN REQUIRED TO WIELD IT IN A MANNER IT CONSIDERS JUST BY RELAXING THE RIGOUR OF THE LAW OR IN OTHER PERMISSIBLE MANNERS AS LAID DOWN IN SECTION 119. THE POWER IS GIVEN FOR THE PURPOSE OF JUST, PR OPER AND EFFICIENT MANAGEMENT OF THE WORK OF ASSESSMENT AND IN PUBLIC INTEREST. IT IS A BENEFICIAL POWER GIVEN TO THE BOARD FOR PROPER ADMINISTRATION OF FISCAL LAW SO TH AT I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 29 UNDUE HARDSHIP MAY NOT BE CAUSED TO THE ASSESSEE AN D THE FISCAL LAWS MAY BE CORRECTLY APPLIED. HARD CASE S WHICH CAN BE PROPERLY CATEGORIZED AS BELONGING TO A CLASS, CAN THUS BE GIVEN THE BENEFIT OF RELAXATION OF LAW BY ISSUING CIRCULARS BINDING ON THE TAXING AUTHORIT IES.' THE FACTS AND CIRCUMSTANCES IN THE PRESENT CASE ARE THAT THE SELECTION OF SCRUTINY IN THIS CASE IS ALSO COMP LETED BEYOND THE PRESCRIBED PERIOD AS PRESCRIBED IN INSTR UCTION NO. 9/2004 DATED 20.09.2004. THE ASSESSEE'S CASE WA S SELECTED FOR SCRUTINY FIRST TIME ON 18.10.2004, AS PER COPY OF ORDER SHEET ENTRY, AND NOTICE WAS ISSUED FIXING THE HEARING ON 18.10.2004 ITSELF. AS PER INSTRUCTION NO . 9/2004 DATED 20.09.2004, THE PROCESS OF SELECTION O F CASES FOR SCRUTINY FOR RETURNS FILED UP TO 31.03.20 04, IN THE PRESENT CASE ASSESSEE FILED ITS RETURN OF INCOM E ON 01.12.2003 MUST BE COMPLETED BY 15.10.2004. THE FACTUAL POSITION AS NOTED BY CIT(A) IN HIS APPELLAT E ORDER THAT NOTICE U/S. 143(2) IS DATED 10.10.2004, IS NOT SUPPORTED BY LD. SR. DR AT THE TIME OF HEARING RATH ER ASSESSEE CONTESTED THAT THIS FINDING OF FACT IS ERR ONEOUS AND ACTUAL CASE WAS SELECTED BY ISSUING NOTICE AS O N 18.10.2004. EVEN THE BASIS OF RECORDING THIS FACT I S ONLY FROM THE ASSESSMENT ORDER WHEREIN IT IS MENTIONED T HAT NOTICE U/S. 143(2) IS DATED 10.10.2004 AND THE SAME WAS SERVED ON THE ASSESSEE ON 19.10.2004 FIXING THE DAT E OF HEARING ON 16.12.2004. WHEN GOING THROUGH THE ORDER SHEET ENTRY, WHICH IS TAKEN BY ASSESSEE FROM THE ASSESSMENT RECORDS CLEARLY REVEALS THAT FACTUALLY N OTICE U/S. 143(2) WAS FIRST TIME ISSUED ON 18.10.2004 AND NOT ON 10.10./2004. THIS FACT HAS NOT BEEN CONTESTED BY LD. SR. DR. RESPECTFULLY FOLLOWING THE DECISION OF HON' BLE CHHATISGARH HIGH COURT IN THE CASE OF SUNITA FINLEA SE LTD. (SUPRA), WE QUASH THE ISSUANCE OF NOTICE U/S. 143(2 ) OF THE ACT AND SUBSEQUENT ASSESSMENT FRAMED U/S. 143(3 ) OF THE ACT. APPEAL OF ASSESSEE IS ALLOWED. KEEPING IN VIEW OF THE ABOVE AND THE FACTS RELATING TO ITA NO.1426/KOL/2011 THIS TRIBUNAL HAS SQUASHED THE ASS ESSMENT FRAMED U/S 143(1) OF THE IT ACT SINCE THE ISSUANCE OF NOTICE U/S 143(2) OF THE ACT IS BEYOND THE DATES SPECIFIED IN INSTRUCTION NO.9 DATED 20TH SEPTEMBER, 2004. AT THIS JUNCTURE, WE WOULD LIKE TO CLARIFY THAT INSTRUCTION NO.9/2004 DATED 20 TH SEPTEMBER, I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 30 2004 REFERRED BY THE TRIBUNAL IN ITA NO.1426/KOL/20 11 IN THE CASE OF AJANTA FINANCIAL SERVICES PVT. LTD. (SUPRA) AS WELL AS THE HONBLE CHATTISGARH HIGH COURT IN THE CASE OF SUNIT A FINLEASE LTD. (SUPRA) ARE IN RESPECT OF THE CORPORATE ASSESS ES. HOWEVER, IN THE CASE OF THE NON-CORPORATE ASSESSES SIMILAR I NSTRUCTION HAS BEEN ISSUED IN INSTRUCTION NO.10 DATED 20.09.2004. IN THIS CASE ALSO AS PER THE ORDER SHEET ENTRIES INCORPORATED IN THE PRECEDING PARAGRAPHS, IT IS OBSERVED THAT THE SELEC TION OF SCRUTINY WAS MADE ON 20.06.2005 AND NOTICE U/S 143( 2)(II) AND 142(1) WAS ISSUED ON 11.07.2005 I.E. BEYOND THE PER IOD OF THE SCRUTINY AS SPECIFIED IN INSTRUCTION NO.10/2004 DAT ED 20.09.2004. THEREFORE, KEEPING IN VIEW OF THE DECIS ION OF HON'BLE CHATTISGARH HIGH COURT IN THE CASE OF SUNIT A FINLEASE LTD (SUPRA) AS WELL AS TRIBUNALS ORDER IN ITA NO.1 426/KOL/2011 IN THE CASE OF AJANTA FINANCIAL SERVICES PVT. LTD.( SUPRA). 8.1 IN VIEW OF ABOVE WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES BY SQUASHING THE ORDER OF THE ASSESSMEN T FRAMED U/S 143(3) OF THE ACT SINCE THE ISSUE OF NOTICE U/S 143(2) OF THE ACT WAS NOT DONE BY THE ITO AS SPECIFIED IN CBDT IN STRUCTION NO.1/2011 DATED 31.01.2011. AS THE ASSESSMENT PROCE EDINGS U/S 143(3) OF THE ACT HAVE BEEN HELD AS INVALID, TH EREFORE IN OUR CONSIDERED VIEW THE OTHER ISSUES RAISED BY THE ASSE SSEE. 10. SIMILARLY, KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF SUKUMAR CH. SAHOO VS. ACIT IN I.T.A. NO.2073.KOL/2016, VIDE ORD ER DATED 27/09/2017, HAS DECIDED THE SIMILAR ISSUE BY HOLDING AS UNDER: 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL WHO FILED HIS RETURN OF INCOME FOR THE Y EAR UNDER CONSIDERATION WHEREIN HE DECLARED TOTAL INCOME TO T HE TUNE OF RS.50,28,040/-. THE LD. AR FOR THE ASSESSEE SUBMITT ED THAT AS PER THE CBDT INSTRUCTION NO. 1/11 (F. NO. 187/12/2 010-IT(AT) DATED 31.01.2011 CBDT FIXED NEW MONETARY LIMIT IN M UFASSIL AREAS, ACCORDING TO WHICH INCOME ABOVE RS. 15 LACS FOR NON CORPORATE ASSESSEE AND RS.20 LACS FOR CORPORATE R ETURNS HAS TO BE ASSESSED BY ACIT/DCIT. THUS, ACCORDING TO LD. CO UNSEL, SINCE HALDIA IS A MUFFASIL AREA AND INSTRUCTIONS GI VEN BY THE CBDT IS BINDING ON THE OFFICERS OF THE DEPARTMENT A ND SINCE THE ASSESSEE HAS DECLARED MORE THAN RS. 50 LACS AS HIS RETURNED INCOME, THEN THE SCRUTINY ASSESSMENT CAN BE DONE ON LY BY THE I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 31 ACIT/DCIT AND NOT BY THE ITO WHO DOES NOT HAVE THE JURISDICTION TO DO SO. FOR READY REFERENCE, INSTRUC TION NO. 1/2011 IS REPRODUCED BELOW: INSTRUCTION NO. 1/2011 (F. NO. 187/12/2010-IT(A-1) , DATED 31- 1-2011 REFERENCES HAVE BEEN RECEIVED BY THE BOARD FROM A L ARGE NUMBER OF TAXPAYERS, ESPECIALLY FROM MOFUSSIL AREAS, THAT THE EXISTING MONETARY LIMITS F OR ASSIGNING CASES TO ITOS AND DCS/ACS IS CAUSING HARDSHIP TO THE TAXPAYERS, AS IT RESULTS IN TRANSFER OF THEIR CASES TO A DC/AC WHO IS LOCATED IN A DIFFERENT STATION, WHICH INCREASES THE IR COST OF COMPLIANCE. THE BOARD HAD CONSIDERED THE MATTER AND IS OF THE OPINION THAT THE EXISTING LIMITS NEED TO BE REVISED TO REMOVE THE ABOVEMENTIONED HARDSHIP. AN INCREASE IN THE MONETARY LIMITS IS ALSO CONSIDER ED DESIRABLE IN VIEW OF THE INCREASE IN THE SCALE OF TRADE AND INDUSTRY SINCE 2001, WHEN THE PRESENT INCOME LIMITS WERE INTRODUCED. IT HAS THEREFORE BEEN DECIDED TO INCREASE THE MONETARY LIMITS AS UND ER: INCOME DECLARED (MOFUSSIL INCOME DECLARED AREAS) (METRO CITIES) ITOS ACS/DCS ITOS DCS/ACS CORPORATE RETURNS UPTO RS. 20 LACS ABOVE RS. 20 LACS UPTO RS. 30 LACS ABOVE RS. 30 LACS NON- UPTO ABOVE UPTO ABOVE CORPORATE RS. RS. 15 RS. RS. 20 RETURNS 15 LACS 20 LACS LACS LACS METRO CHARGES FOR THE PURPOSE OF ABOVE INSTRUCTIONS SHALL BE AHMEDABAD, BANGALORE, CHENNAI, DELHI, KOLKATA, HYDERABAD, MUMBAI AND PUNE. THE ABOVE INSTRUCTIONS ARE ISSUED IN SUPERSESSION O F THE EARLIER INSTRUCTIONS AND SHALL BE APPLICABLE WITH EFFECT FROM 1-4-2011. 5. FROM A PERUSAL OF THE ABOVE INSTRUCTION OF THE C BDT IT IS EVIDENT THAT THE PECUNIARY JURISDICTION CONFERRED B Y THE CBDT ON ITOS IS IN RESPECT TO THE NON CORPORATE RETURNS F ILED WHERE INCOME DECLARED IS ONLY UPTO RS.15 LACS ; AND THE ITO DOES NT HAVE THE JURISDICTION TO CONDUCT ASSESSMENT IF IT IS ABOVE R S 15 LAKHS. ABOVE RS. 15 LACS INCOME DECLARED BY A NON- CORPORATE PER SON I.E. LIKE ASSESSEE, THE PECUNIARY JURISDICTION LIES BEFORE AC /DC. IN THIS CASE, ADMITTEDLY, THE ASSESSEE AN INDIVIDUAL (NON CORPORA TE PERSON) WHO UNDISPUTEDLY DECLARED INCOME OF RS.50,28,040/- IN H IS RETURN OF INCOME CANNOT BE ASSESSED BY THE ITO AS PER THE CBD T CIRCULAR (SUPRA). FROM A PERUSAL OF THE ASSESSMENT ORDER, IT REVEALS THAT THE STATUTORY NOTICE U/S. 143(2) OF THE ACT WAS ISSUED BY THE THEN ITO, WARD-1, HALDIA ON 06.09.2013 AND THE SAME WAS SERVE D ON THE ASSESSEE ON 19.09.2013 AS NOTED BY THE AO. THE AO NOTED THAT I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 32 SINCE THE RETURNED INCOME IS MORE THAN RS. 15 LACS THE CASE WAS TRANSFERRED FROM THE ITO, WARD-1, HALDIA TO ACIT, C IRCLE-27 AND THE SAME WAS RECEIVED BY THE OFFICE OF THE ACIT, CIRCLE -27, HALDIA ON 24.09.2014 AND IMMEDIATELY ACIT ISSUED NOTICE U/S. 142(1) OF THE ACT ON THE SAME DAY. FROM THE AFORESAID FACTS THE F OLLOWING FACTS EMERGED: I) THE ASSESSEE HAD FILED RETURN OF INCOME DECLARING R S.50,28,040/-. THE ITO ISSUED NOTICE UNDER SECTION 143(2) OF THE A CT ON 06.09.2013. II) THE ITO, WARD-1, HALDIA TAKING NOTE THAT THE INCOME RETURNED WAS ABOVE RS. 15 LACS TRANSFERRED THE CASE TO ACIT, CIR CLE-27, HALDIA ON 24.09.2014. III) ON 24.09.2014 STATUTORY NOTICES FOR SCRUTINY WERE I SSUED BY ACIT, CIRCLE-27, HALDIA. 6. WE NOTE THAT THE CBDT INSTRUCTION IS DATED 31.01 .2011 AND THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 29.0 3.2013 DECLARING TOTAL INCOME OF RS.50,28,040/-. AS PER TH E CBDT INSTRUCTION THE MONETARY LIMITS IN RESPECT TO AN AS SESSEE WHO IS AN INDIVIDUAL WHICH FALLS UNDER THE CATEGORY OF NON C ORPORATE RETURNS THE ITOS INCREASED MONETARY LIMIT WAS UPTO RS.15 L ACS; AND IF THE RETURNED INCOME IS ABOVE RS. 15 LACS IT WAS THE AC/ DC. SO, SINCE THE RETURNED INCOME BY ASSESSEE AN INDIVIDUAL IS AB OVE RS.15 LAKH, THEN THE JURISDICTION TO ASSESS THE ASSESSEE LIES O NLY BY AC/DC AND NOT ITO. SO, THEREFORE, ONLY THE AC/DC HAD THE JURI SDICTION TO ASSESS THE ASSESSEE. IT IS SETTLED LAW THAT SERVING OF NOTICE U/S. 143(2) OF THE ACT IS A SINE QUA NON FOR AN ASSESSME NT TO BE MADE U/S. 143(3) OF THE ACT. IN THIS CASE, NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 06.09.2013 BY ITO, WARD-1, HALDIA WHE N HE DID NOT HAVE THE PECUNIARY JURISDICTION TO ASSUME JURISDICT ION AND ISSUE NOTICE. ADMITTEDLY, WHEN THE ITO REALIZED THAT HE D ID NOT HAD THE PECUNIARY JURISDICTION TO ISSUE NOTICE HE DULY TRAN SFERRED THE FILE TO THE ACIT, CIRCLE-27, HALDIA ON 24.09. 2014 WHEN THE ACIT ISSUED STATUTORY NOTICE WHICH WAS BEYOND THE TIME LIMIT PR ESCRIBED FOR ISSUANCE OF NOTICE U/S. 143(2) OF THE ACT. WE NOTE THAT THE ACIT BY ASSUMING THE JURISDICTION AFTER THE TIME PRESCRIBED FOR ISSUANCE OF NOTICE U/S. 143(2) OF THE ACT NOTICE BECAME QOARUM NON JUDICE AFTER THE LIMITATION PRESCRIBED BY THE STATUTE WAS CROSSED BY HIM. THEREFORE, THE ISSUANCE OF NOTICE BY THE ACIT, CIRC LE-27, HALDIA I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 33 AFTER THE LIMITATION PERIOD FOR ISSUANCE OF STATUTO RY NOTICE U/S. 143(2) OF THE ACT HAS SET IN, GOES TO THE ROOT OF T HE CASE AND MAKES THE NOTICE BAD IN THE EYES OF LAW AND CONSEQU ENTIAL ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT IS N OT VALID IN THE EYES OF LAW AND, THEREFORE, IS NULL AND VOID IN THE EYES OF LAW. THEREFORE, THE LEGAL ISSUE RAISED BY THE ASSESSEE I S ALLOWED. SINCE WE HAVE QUASHED THE ASSESSMENT AND THE APPEAL OF AS SESSEE IS ALLOWED ON THE LEGAL ISSUE, THE OTHER GROUNDS RAISE D BY THE ASSESSEE NEED NOT TO BE ADJUDICATED BECAUSE IT IS O NLY ACADEMIC. THEREFORE, THE ADDITIONAL GROUND RAISED BY THE ASSE SSEE IS ALLOWED. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 10.1 SIMILAR IS THE POSITION WITH OTHER CASES DECID ED BY KOLKATA BENCH OF THE TRIBUNAL, THE DETAILS OF WHICH ARE AS UNDER: (I) SANAT KUMAR SAHANA VS. ACIT, I.T.A. NO.2202/KOL/201 9 (II) DIPTI KUMAR SAHANA VS. ACIT, I.T.A. NO.2203/KOL/201 9 (III) DCIT VS. PROFICIENT COMMODITIES PVT. LTD., I.T.A. NO.1346/LOL/2016 (IV) SHAKE AKHTAR HOSSAIN VS. ACIT, I.T.A. NO.2572/KOL/2 019 (V) K.A. WIRES LTD. VS. INCOME TAX OFFICER, I.T.A. NO.1149/KOL/2019 (VI) S.N. GHOSH & ASSOCIATES VS. ACIT, I.T.A. NO.462/KOL /2019 10.2 WE FURTHER FIND THAT LUCKNOW BENCH OF THE TRIB UNAL IN THE CASE OF BAJRANG BALI INDUSTRIES VS. ACIT IN I.T.A. NO.724/L KW/2017, VIDE ORDER DATED 30/11/2018 HAS ALLOWED APPEAL OF THE ASSESSEE BY DE CLARING THE ASSESSMENT ORDER VOID AB INITIO. IN THAT CASE ALSO THE NOTICE U/S 143(2) WAS ISSUED BY NON JURISDICTIONAL ASSESSING OFFICER AND THE ASSESS MENT RECORDS WERE TRANSFERRED BY A TRANSFER MEMO AND ASSESSMENT WAS M ADE BY JURISDICTIONAL ASSESSING OFFICER. THE HON'BLE TRIBUNAL HELD THE A SSESSMENT ORDER BAD IN LAW BY HOLDING AS UNDER: 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. IT IS UNDISPUTED FAC T THAT THE ASSESSMENT ORDER DATED 11.03.2016 HAS BEEN PASSED B Y DCIT- I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 34 2, KANPUR WHO HAD ISSUED NOTICE U/S 143(2) ON 07.09 .2015. THE PROVISIONS RELATING TO TIME LIMIT FOR ISSUE OF STAT UTORY NOTICE U/S 143(2) ARE CONTAINED IN THE PROVISIONS TO SECTION 1 43(2) ITSELF WHICH PROVIDES THAT NO NOTICE UNDER THIS SECTION SH ALL BE SERVED ON THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS FROM THE END OF FINANCIAL YEAR IN WHICH THE RETURN IS FURNISHED. 6. IN THE PRESENT CASE, THE RETURN OF INCOME WAS FU RNISHED ON 30.09.2013. THE FINANCIAL YEAR IN WHICH THE RETU RN WAS FILED EXPIRED ON 31.03.2014 AND THEREFORE, LAST DATE FOR ISSUE OF NOTICE WAS 30.09.2014. THE STATUTORY PERIOD FOR ISS UANCE OF NOTICE U/S 143(2) EXPIRED ON 30.09.2014 AND BY 30.0 9.2014 THE NOTICE U/S 143(2), WHICH WAS WITHIN THE PRESCRIBED PERIOD OF TIME, WAS ISSUED ONLY BY DCIT-IV, KANPUR WHO HAD NO JURISDICTION OVER THE CASE, AS THE DCIT-IV HIMSELF HAD TRANSFERRED THE CASE TO DCIT-2, KANPUR VIDE MEMO DA TED 20.08.2015, A COPY OF WHICH IS PLACED AT PAPER BOOK PAGE 3. THEREFORE FROM THE ABOVE FACTS AND CIRCUMSTANCES, I T BECOME APPARENT THAT THE FIRST ASSESSING OFFICER WHO ISSUE D NOTICE ON 30.09.2014 HAD NO JURISDICTION TO ASSESS THE ASSESS EE AND, THEREFORE, HE TRANSFERRED THE CASE TO DCIT-2, KANPU R WHO THOUGH HAD JURISDICTION TO ASSESS THE ASSESSEE BUT ISSUED NOTICE U/S 143(2) ONLY ON 07.09.2015 BY WHICH DATE PERIOD FOR ISSUANCE OF NOTICE HAD EXPIRED. WE FURTHER FIND THAT NO ORDER U/S 127 OF THE ACT WAS PASSED BY THE ASSESSING OFFI CER TO TRANSFER THE CASE FROM KANPUR-4 TO KANPUR-2. THE AS SESSING OFFICER WHO HAD JURISDICTION TO ASSESS THE ASSESSEE ISSUED NOTICE U/S 143(2) ONLY ON 07.09.2015 WHICH WAS BEYO ND THE PRESCRIBED TIME LIMIT FOR ISSUANCE OF SUCH NOTICE. THEREFORE, THE NOTICE ISSUED U/S 143(2) BY DCIT, KANPUR-2 BEYOND T HE STATUTORY PERIOD OF TIME IS WITHOUT JURISDICTION AN D THEREFORE, ANY ORDER PASSED IN CONSEQUENCE OF SUCH NOTICE IS A LSO LIABLE TO BE QUASHED. THEREFORE, WE ARE IN AGREEMENT WITH THE ARGUMENT OF LD. AR. ACCORDINGLY, ADDITIONAL GROUNDS OF APPEA L 5 TO 8 ARE ALLOWED. SINCE WE HAVE DECIDED THE LEGAL ISSUES, IN FAVOUR OF ASSESSEE THE GROUNDS ON MERITS OF THE CASE HAVE BEC OME INFRUCTUOUS AND HAVE NOT BEEN ADJUDICATED. WE FURTHER FIND THAT HON'BLE JURISDICTIONAL HIGH CO URT IN THE CASE OF PR. CIT VS. MOHD. RIZWAN, PROP. M/S M. R. GARMENTS MOULVIGA NJ, INCOME TAX APPEAL NO.100 OF 2015, VIDE ORDER DATED 30/03/2017 HAS HELD THAT IF AN I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 35 ORDER IS PASSED BY JUDICIAL OR QUASI-JUDICIAL AUTHO RITY HAVING NO JURISDICTION, IT IS AN OBLIGATION OF APPELLATE COURT TO RECTIFY THE ERROR AND SET ASIDE ORDER PASSED BY AUTHORITY OR FORUM HAVING NO JURISDICTION . THOUGH THIS CASE RELATES TO NOTICE U/S 148 HOWEVER, THE CRUX OF THE FINDINGS OF HON'BLE JURISDICTIONAL HIGH COURT, AFTER NOTING DOWN THE PR OVISIONS OF SECTION 292BB ARE THAT ONLY JURISDICTIONAL ASSESSING OFFICER CAN ISSUE THE STATUTORY NOTICE. FOR THE SAKE OF COMPLETENESS, THE RELEVANT PARAGRAP HS STARTING FROM PARA 32 TO 57 ARE REPRODUCED BELOW: 32. NOW WE COME TO LEGALITY OF NOTICE ISSUED UNDER SECTION 148. ADMITTEDLY, IT WAS ISSUED BY A DESIGNATED OFFI CER AUTHORIZED TO RECEIVE AIR INFORMATION AND MAKE INQU IRY. THEREAFTER, SAID DESIGNATED OFFICER WAS SUPPOSED TO FURNISH ENTIRE MATERIAL TO COMPETENT A.O. FOR FURTHER ACTIO N. 33. IN THE PRESENT CASE, NOTICE UNDER SECTION 148 W AS NOT ISSUED BY A.O. HAVING JURISDICTION OVER ASSESSEE AN D INSTEAD IT WAS ISSUED BY DESIGNATED OFFICER AUTHORIZED TO COLL ECT AIR INFORMATION AND MAKE INQUIRY IN THIS REGARD. NO NOT ICE WAS ISSUED UNDER SECTION 148 ADMITTEDLY BY JURISDICTION AL A.O. 34. SECTION 148 CLEARLY TALKS OF ISSUE OF NOTICE BY A.O. MEANING THEREBY, A.O. HAVING JURISDICTION OVER ASSE SSEE. IN FACT, IT IS HIS SATISFACTION WHICH IS TO BE RECORDE D FOR JUSTIFYING REOPENING OF ASSESSMENT/REASSESSMENT PROCEEDINGS AS CONTEMPLATED UNDER SECTION 147 AND RECORDING OF REA SONS FOR THE SAME PURPOSE IS MANDATORY. THE SATISFACTION OF A.O. COULD NOT HAVE BEEN HIRED OR BE DELEGATED TO ANY OTHER AU THORITY. 35. IN COMMISSIONER OF INCOME TAX, KERALA VS. THAYABALLI MULLA JEEVAJI KAPASI 1967 (66) ITR 147 (SC) , COURT HELD THAT NOTICE UNDER SECTION 148 CANNOT B E REGARDED AS MERE PROCEDURAL REQUIREMENT. IT IS A CO NDITION PRECEDENT FOR INITIATION OF PROCEEDING FOR ASSESSME NT. 36. IN Y. NARAYANA CHETTY AND ANOTHER VS. INCOME TAX OFFICER, NELLORE AND OTHERS 1959 (35) ITR 388 (SC) , IT WAS HELD, THAT, IF NOTICE ISSUED IS INVALID OR NOT PROPERLY I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 36 SERVED, ANY PROCEEDING TAKEN BY A.O. TO BACK ASSESS , WOULD BE ILLEGAL AND VOID. 37. A CONSTITUTION BENCH, IN SARDAR BALDEV SINGH VS. COMMISSIONER OF INCOME TAX, DELHI (1960) 40 ITR 605 (SC) , A PARI MATERIA PROVISION, I.E., SECTION 34 UNDER OLD INDIAN INCOME TAX ACT, 1922 (HEREINAFTER REFERRED T O AS 'ACT, 1922') WAS CONSIDERED AND IT WAS HELD THAT A.O. HAV ING POWER TO ISSUE NOTICE SHOULD BE A PARTICULAR A.O. HAVING JURISDICTION OVER ASSESSEE AT THE TIME OF ISSUE OF REQUISITE NOT ICE. IF NOTICE ISSUED BY ANY OTHER A.O. OR NOTICE IS BAD FOR ANY R EASON, THAN SUCH BACK ASSESSMENT WOULD BE ILLEGAL. 38. IN ANIRUDHSINHJI JADEJA AND ANOTHER VS. STATE OF GUJARAT 1995 (5) SCC 302 , COURT HELD, IF A STATUTORY AUTHORITY HAS BEEN VESTED WITH JURISDICTION HE HAS TO EXERCISE IT ACCORDING TO ITS OWN DISCRETION. 39. IN K.K. LOOMBA AND MRS. UMA LOOMBA VS. COMMISSIONER OF INCOME TAX AND OTHERS 2000 (241) ITR 152 (DELHI) IT WAS HELD THAT A.O. HAVING NATURAL JURISDICTION OVER THE AREA WOULD HAVE JURISDICTION TO ASSESS, ISSUE NOTICE UNDER SECTION 148 AS WELL AND IT CANNO T BE DONE BY ANYONE ELSE. 40. PUNJAB AND HARYANA HIGH COURT IN THE CASE OF LT. COL. PARAMJIT SINGH VS. COMMISSIONER OF INCOME TAX AND ANOTHER 1996 (220) ITR 446 (PUNJAB) SAID 'A NOTICE FOR REASSESSMENT CAN BE ISSUED ONLY BY A.O. WHO HAD CON CLUDED THE PROCEEDINGS.' 41. WE, HOWEVER, DO NOT GO TO THAT EXTENT FOR THE R EASON THAT THERE MAY BE ANY SUBSEQUENT CHANGE RESULTING IN CHA NGE OF JURISDICTION OF A.O. NOTICE OF REASSESSMENT CAN BE ISSUED BY SUCH AN OFFICER BUT NOT BY OFFICER WHO HAS NO JURIS DICTION FOR ASSESSMENT/REASSESSMENT. 42. IN COMMISSIONER OF INCOME TAX VS. RAJEEV SHARMA 2011 (336) ITR 678 , COURT OBSERVED 'PROVISIONS CONTAINED IN SECTION 148 OF ACT, 1961 WITH REGARD TO ESCAPED ASSESSMENT MUST BE CONSTRUED STRICTLY WITH REGARD T O PROCEDURE PRESCRIBED FOR ESCAPED ASSESSMENT.' I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 37 43. THE REASON FOR ISSUANCE OF NOTICE BY COMPETENT A.O. IS QUITE OBVIOUS INASMUCH AS SUCH NOTICE COULD HAVE BE EN ISSUED ONLY WHEN CONCERNED A.O. HAS REASON TO BELIEVE THAT SOME INCOME HAS ESCAPED ASSESSMENT AND RECOMPUTATION/ REASSESSMENT IS NEEDED. NOW SUCH SATISFACTION CAN B E OF THAT A.O. ONLY WHO HAS JURISDICTION IN THE MATTER AND NO T OF ANY THIRD PARTY. 44. WE, THEREFORE, HOLD THAT IN THE PRESENT CASE, N O VALID NOTICE UNDER SECTION 148 WAS ISSUED BY JURISDICTION AL A.O. BEFORE MAKING ASSESSMENT/REASSESSMENT AND, THEREFOR E, PROCEEDINGS OF REASSESSMENT PURSUANT TO NOTICE ISSU ED UNDER SECTION 148 BY AN INCOMPETENT OFFICER ARE VOID AND AB INITIO. 45. WHEN A NOTICE UNDER SECTION 147/148 ISSUED IS A JURISDICTIONAL STEP, IT CANNOT BE TREATED TO BE MER E IRREGULARITY CURABLE UNDER SECTION 292BB. IN FACT, SECTION 292BB HAS NO APPLICATION TO A CASE WHERE NO VALID NOTICE HAS BEE N ISSUED BY COMPETENT A.O. THIS IS CLEAR FROM A BARE READING OF SECTION 292BB OF ACT, 1961 WHICH READS AS UNDER:' 292BB. WHERE AN ASSESSEE HAS APPEARED IN ANY PROCEEDINGS OR COOPERATED IN ANY INQUIRY RELATING T O AN ASSESSMENT OR REASSESSMENT, IT SHALL BE DEEMED THAT ANY NOTICE UNDER ANY PROVISION OF THIS ACT, WHICH I S REQUIRED TO BE SERVED UPON HIM, HAS BEEN DULY SERVE D UPON HIM IN TIME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT AND SUCH ASSESSEE SHALL BE PRECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDING OR INQUIRY U NDER THIS ACT THAT THE NOTICE WAS A) NOT SERVED UPON HIM; OR (B) NOT SERVED UPON HIM IN TIME; OR (C) SERVED UPON HIM IN AN IMPROPER MANNER: PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY WHERE THE ASSESSEE HAS RAISED SUCH OBJECTION BEFORE THE COMPLETION OF SUCH ASSESSMENT OR REASSESSMENT.' I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 38 46. THE CURABILITY PERMITTED UNDER SECTION 292BB IS WITH REGARD TO SERVICE OF NOTICE UPON ASSESSEE AND NOT W ITH REGARD TO COMPETENCE OF AUTHORITY WHO HAS ISSUED NOTICE. 47. A SIMILAR QUESTION WAS CONSIDERED IN COMMISSIONER OF INCOME TAX, GUJARAT II VS. KURBAN HUSSAIN IBRAHIMJI MITHIBORWALA 1972 (4) SCC 394 AND COURT SAID 'INCOME TAX OFFICER'S JURISDICTION TO REOPEN AN ASSESSMENT UNDER SECTION 34 DEPENDS UPON ISSUANCE OF A VALID NOTICE. IF NOTICE ISSUED BY HIM IS INVALID FOR ANY REASON, ENTIRE PRO CEEDINGS TAKEN BY HIM WOULD BECOME VOID FOR WANT OF JURISDIC TION.' COURT THEN HELD THAT NOTICE WAS INVALID AS A.O. HAD NO JURISDICTION TO REVISE ASSESSMENT THEN IT CANNOT BE TREATED TO BE MERE IRREGULARITY SO AS TO VALIDATE PROCEEDINGS OF ASSESSMENT IF THE ASSESSEE HAD PARTICIPATED. 48. SIMILAR IS THE VIEW TAKEN BY A FULL BENCH OF TH IS COURT IN LAXMI NARAIN ANAND PRAKASH VS. COMMISSIONER OF SALES TAX, LUCKNOW AIR 1980 ALL 198. 49. THE CONTENTION OF LEARNED COUNSEL FOR REVENUE T HAT PARTICIPATION OF ASSESSEE BEFORE JURISDICTIONAL A.O . WOULD OPERATE AS ACQUIESCENCE OR WAIVER AND WILL NOT INVA LIDATE PROCEEDINGS IS THOROUGHLY MISCONCEIVED. 50. IN KARNAL IMPROVEMENT TRUST, KARNAL VS. SMT. PRAKASH WANTI AND ANOTHER (1995) 5 SCC 159 , COURT SAID THAT ACQUIESCENCE DOES NOT CONFER JURISDICTION AND ERRONEOUS INTERPRETATION SHOULD NOT BE PERMITTED TO PERPETUATE AND PERPETRATE DEFEATING OF LEGISLATIVE ANIMATION. 51. IN ABDUL QAYUME VS. COMMISSIONER OF INCOME TAX 1990 (184) ITR 404 , COURT SAID 'AN ADMISSION OR AN ACQUIESCENCE CANNOT BE A FOUNDATION FOR ASSESSMENT WHERE THE INCOME IS RETURNED UNDER AN ERRONEOUS IMPRESSIO N OR MISCONCEPTION OF LAW. 52. IT IS WELL SETTLED THAT A JURISDICTION CAN NEIT HER BE WAIVED NOR CREATED EVEN BY CONSENT AND EVEN BY SUBMITTING TO JURISDICTION, AN ASSESSEE CANNOT CONFER UPON ANY JU RISDICTIONAL AUTHORITY, SOMETHING WHICH HE LACKED INHERENTLY. I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 39 53. EVEN IF, IT CAN BE SAID THAT ASSESSEE SUBMITTED TO JURISDICTION OF A.O., LAW IS THAT ASSESSEE CANNOT C ONFER JURISDICTION ON AN AUTHORITY WHO DID NOT HAVE THE S AME AND WE FIND SUPPORT FROM COMMISSIONER OF INCOME TAX VS. HARI RAJ SWARUP AND SONS (1982) 138 ITR 462 (ALLD.) . 54. IN MIR IQBAL HUSAIN VS. STATE OF U.P. 1963 (50) ITR 40 , IT WAS HELD THAT REQUIREMENT OF VALID NOTICE CANN OT BE WAIVED. THE MERE FACT THAT ASSESSEE FILED RETURN OF INCOME PURSUANT TO INVALID NOTICE WOULD NOT RENDER NOTICE VALID OR VALIDATE SUBSEQUENT PROCEEDINGS WHICH ARE VITIATED IN LAW FOR WANT OF VALID NOTICE. 55. IN RAZA TEXTILE LTD. VS. INCOME TAX OFFICER, RAMPUR (1973) 87 ITR 539 (SC) , COURT SAID THAT IT IS INCOMPREHENSIBLE TO THINK THAT A QUASIJUDICIAL AUTH ORITY LIKE A.O. CAN ERRONEOUSLY DECIDE A JURISDICTIONAL FACT A ND THEREAFTER PROCEED TO IMPOSE A LEVY ON A CITIZEN. 56. IF AN ORDER IS PASSED BY A JUDICIAL OR QUASIJUD ICIAL AUTHORITY HAVING NO JURISDICTION, IT IS AN OBLIGATION OF APPE LLATE COURT TO RECTIFY THE ERROR AND SET ASIDE ORDER PASSED BY AUT HORITY OR FORUM HAVING NO JURISDICTION. THIS IS WHAT WAS HELD IN STATE OF GUJARAT VS. RAJESH KUMAR CHIMANLAL BAROT AND ANOTHER AIR 1996 SC 2664. 57. IN VIEW OF ABOVE DISCUSSION, WE HAVE NO MANNER OF DOUBT TO ANSWER ALL THE FOUR QUESTIONS AGAINST REVENUE AN D IN FAVOUR OF ASSESSEE. 11. AS REGARDS THE APPLICABILITY OF SECTION 292BB O F THE ACT, WE FIND THAT UNDER SIMILAR FACTS AND CIRCUMSTANCES, THE HON'BLE KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF SOMA ROY VS. ACIT IN I.T.A. NO.462/KOL/2019, EXAMINED THIS ISSUE AND RELYING ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. LAXMAN DAS KHANDELWAL [2019] 108 TAXMANN.COM 183 (SC) HELD THAT SECTION 292BB WOULD APPLY ONLY WHERE THE NOTICE U/S 143(2) HAD EMANATED FROM THE DEPARTMENT AND IT IS ONLY THE INFIRMITIES IN THE MANNER OF SERVICE OF NOTICE WHICH THE SECTION SEEKS TO CURE. THE RELEVANT I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 40 PART OF THE JUDGMENT OF HON'BLE SUPREME COURT ORDER , REPRODUCED IN THE ORDER OF KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF SOMA ROY, IS REPRODUCED BELOW: 7. A CLOSER LOOK AT SECTION 292BB SHOWS THAT IF TH E ASSESSEE HAS PARTICIPATED IN THE PROCEEDINGS IT SHALL BE DEE MED THAT ANY NOTICE WHICH IS REQUIRED TO BE SERVED UPON WAS DULY SERVED AND THE ASSESSEE WOULD BE PRECLUDED FROM TAKING ANY OBJ ECTIONS THAT THE NO (A) NOT SERVED UPON HIM; OR (B) NOT SER VED UPON HIM IN TIME; OR (C) SERVED UPON HIM IN AN IMPROPER MANNER. ACCORDING TO MR. MAHABIR SINGH, LEARNED SENIOR ADVO CATE, SINCE THE RESPONDENT HAD PARTICIPATED IN THE PROCEEDINGS, THE PROVISIONS OF SECTION COMPLETE ANSWER. ON THE OTHER HAND, MR. ANKIT VIJAYWARGIA, LEARNED A DVOCATE, APPEARING FOR THE RESPONDENT SUBMITTED THAT THE NOT ICE UNDER SECTION 143(2) OF THE ACT WAS NEVER ISSUED WHICH WA S EVIDENT FROM THE ORDERS PASSED ON RECORD AS WEL APPEAL. IT WAS FURTHER SUBMITTED THAT ISSUANCE OF NOTICE UNDER SECTION 143 (2) OF THE ACT BEING PREREQUISITE, IN THE ABSENCE OF SUCH NOTI CE, THE ENTIRE PROCEEDINGS WOULD BE INVALID. 8. THE LAW ON THE POINT AS REGARDS APPLICABILITY OF THE REQUIREMENT OF NOTICE UNDER SECTION 143(2) OF THE A CT IS QUITE CLEAR FROM THE DECISION IN HOTEL BLUE MOON'S CASE ( SUPRA). THE ISSUE THAT HOWEVER NEEDS TO BE CONSIDERED IS THE IM PACT OF SECTION 292BB OF THE ACT. 9. ACCORDING TO SECTION 292BB OF THE ACT, IF THE AS SESSEE HAD PARTICIPATED IN THE PROCEEDINGS, BY WAY OF LEGAL FI CTION, NOTICE WOULD BE DEEMED TO BE VALID EVEN IF THERE BE INFRAC TIONS AS DETAILED IN SAID SECTION. THE SCOPE OF THE PROVISIO N IS TO MAKE SERVICE OF NOTICE INFIRMITIES TO BE PROPER AND VALI D IF THERE WAS REQUISITE PARTICIPATION ON PART OF THE ASSESSEE. IT IS, HOWEVER, TO BE NOTED THAT THE SECTION DOES NOT SAVE COMPLETE AB SENCE OF NOTICE. FOR SECTION 292BB TO APPLY, THE NOTICE MUST HAVE EMANATED INFIRMITIES IN THE MANNER OF SERVICE OF NO TICE THAT THE SECTION SEEKS TO CURE. THE SECTION IS NOT INTENDED TO CURE COMPLETE ABSENCE OF NOTICE ITSELF. I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 41 11.1 IN THE PRESENT CASE WE HAVE ALREADY HELD THAT STATUTORY NOTICE U/S 143(2) WAS NOT ISSUED BY THE JURISDICTIONAL ASSESSI NG OFFICER AND THEREFORE, THE RELIANCE PLACED BY LEARNED D. R. ON 292BB IS OF NO HELP TO REVENUE. 11.2 AS REGARDS THE JUDGMENT OF HON'BLE SUPREME COU RT IN THE CASE OF I- VEN INTERACTIVE LIMITED (SUPRA), WE FIND THAT THOUG H THIS JUDGMENT WAS NOT RELIED UPON BY LEARNED D. R. BUT AT THE ASKING OF T HE BENCH, LEARNED COUNSEL FOR THE ASSESSEE HAD CLARIFIED THAT THIS JU DGMENT IS NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND WE ALSO HOLD THAT THIS JUDGMENT IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE AS IN THAT CASE HON'BLE SUPREME COURT HAS HELD THE VALIDITY OF NOTICE U/S 1 43(2) IF THE SAME WAS SERVED AT THE ADDRESS MENTIONED IN THE PAN DATABASE WHEREAS IN THE CASE BEFORE US, THERE IS NO DISPUTE ABOUT SERVICE OF NOT ICE BUT THE DISPUTE IS REGARDING THE ISSUE OF NOTICE BY A NON JURISDICTION AL ASSESSING OFFICER. THEREFORE, WE AGREE WITH THE ARGUMENTS OF LEARNED C OUNSEL FOR THE ASSESSEE THAT THIS JUDGMENT IS NOT APPLICABLE TO TH E PRESENT FACTS. UNDER SIMILAR FACTS AND CIRCUMSTANCES IN THE CASE OF K. A . WIRES PVT. LTD. IN I.T.A. NO.1149/KOL/2019, THE KOLKATA BENCH OF THE TRIBUNAL EXAMINED THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF I- VEN INTERACTIVE LTD. AND HELD THAT THIS JUDGMENT WAS NOT APPLICABLE. FOR TH E SAKE OF COMPLETENESS, THE RELEVANT PART OF THE ORDER OF THE TRIBUNAL IS R EPRODUCED BELOW: 8.27. THE LD. DR CITED THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF I -VEN INTERACTIVE LIMITED (CI VIL APPEAL NO. 8132 OF 2019 DATED 18.10.2019). THIS JUDGMENT IS NO T ON THE ISSUE OF JURISDICTION OF THE ASSESSING OFFICER. IN THAT CASE, THERE IS NO DISPUTE THAT THE ASSESSING OFFICER ISSUING NO TICE HAD JURISDICTION OVER THE ASSESSEE. IN THAT CASE THE SE LECTION OF THE RETURN FOR SCRUTINY WAS GENERATED UNDER AUTOMATED S YSTEM OF THE INCOME TAX DEPARTMENT WHICH PICKS UP THE ADDRES S OF THE ASSESSEE FROM THE PAN DATABASE. THE NOTICE U/ S 143 (2) WAS I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 42 SENT AT THE ASSESSEE'S ADDRESS AVAILABLE AS PER THE PAN DATABASE. INTIMATION FOR FURTHER HEARING AND THREE MORE NOTICES WERE SENT AT THE SAME ADDRESS AS AVAILABLE IN THE P AN. FINALLY, THE ASSESSEE APPEARED BEFORE THE TAX AUTHORITY BUT CHALLENGED THE NOTICES SAYING THAT THESE NOTICES WERE NOT SERV ED UPON HIM AND THAT HE NEVER RECEIVED NOTICE U/S 143(2) OF THE ACT AND THAT FURTHER SUBSEQUENT NOTICES SERVED AND RECEIVED BY THE ASSESSEE WERE BEYOND THE PERIOD OF IMITATION PRESCR IBED UNDER THE LAW. THE ASSESSEE SUBMITTED THAT HE CHANGED HIS ADDRESS AND THE NEW ADDRESS WAS MENTIONED IN THE RETURN OF INCOME FILED FOR SUBSEQUENT YEARS. THE ASSESSEE ALSO SUBMI TTED THAT HE FILED FORM NO.18 WITH REGISTRAR OF COMPANIES, REGAR DING CHANGE OF ADDRESS. NO SEPARATE INTIMATION WAS GIVEN TO THE ASSESSING OFFICER BY THE ASSESSEE REGARDING CHANGE OF ADDRESS. THE COURT HELD THAT MERE MENTIONING OF THE NEW ADDR ESS ON SUBSEQUENT RETURN WITHOUT SPECIFICALLY INTIMATING T HE ASSESSING OFFICER WITH RESPECT TO CHANGE OF ADDRESS AND WITHO UT GETTING THE PAN DATABASE CHANGED, IS NOT ENOUGH AND SUFFICI ENT. THE COURT FOUND THAT THE ASSESSEE CLAIMED TO HAVE FILED A LETTER FOR CHANGE OF ADDRESS BUT SUCH LETTER WAS NEVER PRODUCE D BEFORE ANY OF THE AUTHORITIES. IT WAS HELD THAT ON THE FAC TS OF THE CASE, THE NOTICE ISSUED ON THE ADDRESS AVAILABLE ON THE P AN DATA BASE WAS PROPER AND VALID SERVICE OF NOTICE U/S 143(2) O F THE ACT THE COURT HELD THAT THE CHANGE OF ADDRESS IN THE DATABA SE OF PAN IS MUST, IN CASE OF CHANGE OF THE NAME OF THE COMPANY AND/ OR ANY CHANGE IN THE REGISTERED OFFICE OF THE CORPORAT E OFFICE OF THE ASSESSEE AND THE SAME HAS TO BE INTIMATED TO THE RE GISTRAR OF COMPANIES IN THE PRESCRIBED FORMAT I.E., FORM 18 AN D AFTER COMPLETING THE SAID REQUIREMENT, THE ASSESSEE IS RE QUIRED TO APPROACH THE DEPARTMENT WITH THE COPY OF THE SAID D OCUMENT AND THEN THE ASSESSEE IS REQUIRED TO MAKE AN APPLIC ATION FOR CHANGE OF ADDRESS IN THE DEPARTMENTAL DATABASE OF T HE PAN. IN THE PRESENT CASE THE ASSESSEE HAS FAILED TO DO SO. THIS JUDGMENT IS ON THE ISSUE OF SERVICE OF NOTICE. IT I S NOT AN ISSUE AS TO WHETHER THE ASSESSING OFFICER HAS JURISDICTIO N OVER THE ASSESSEE. AS ALREADY STATED, IT IS NOT A CASE OF NO TICE BEING ISSUED BY A NON-JURISDICTIONAL ASSESSING OFFICER. IT IS THEREFORE CLEAR THAT THE ISSUE IN THE CASE BEFORE THE HON'BLE SUPREME COURT WAS NOT WITH REGARD TO THE JURISDICTION OF TH E OFFICER IN ISSUING THE NOTICE BUT WAS WITH REGARD TO THE SERVI CE OF NOTICE ON THE PROPER ADDRESS. THE SAID JUDGMENT THEREFORE DOES NOT HELP THE DEPARTMENT ON THIS ISSUE OF JURISDICTION N OW BEFORE US. I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 43 JURISDICTION HAS TO BE CONFERRED U/S 120 OF THE ACT . ANY ACT BY AN AUTHORITY WITHOUT JURISDICTION IS AB-INITIO VOID . 8.28. IN VIEW OF THE ABOVE DISCUSSION, AS THE ASSES SING OFFICER WHO HAD JURISDICTION OVER THE ASSESSEE I.E., ITO WA RD - 8(3), KOLKATA HAD NOT ISSUED THE NOTICE TO THE ASSESSEE U /S 143(2) OF THE ACT AS MANDATORILY REQUIRED UNDER THE ACT, THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT, IS BAD IN LAW AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF ACIT & ANR. VS . HOTEL BLUE MOON: 321ITR 362 (SC). HENCE WE QUASH THE SAME . 9. AS WE HAVE HELD THAT THE ASSESSMENT IS BAD IN LA W, IN VIEW OF THE NON-ISSUAL OF THE STATUTORY NOTICE U/S 143(2) O F THE ACT BY THE ASSESSING OFFICER, HAVING JURISDICTION OVER THE ASSESSEE, WE WOULD NOT GO INTO THE MERITS OF THE CASE AS IT WOUL D BE AN ACADEMIC EXERCISE. 12. KEEPING IN VIEW THE ABOVE FACTS AND CIRCUMSTANC ES AND LEGAL PRECEDENTS, WE ALLOW THE JURISDICTIONAL GROUND TAKE N BY THE ASSESSEE THAT THE NOTICE U/S 143(2) WAS NOT ISSUED BY AN OFFICER HAVING JURISDICTION ON THE ASSESSEE AND WHO HAD PASSED THE ASSESSMENT ORDER AN D THEREFORE, WE HOLD THAT IN VIEW OF NON ISSUE OF STATUTORY NOTICE U/S 1 43(2), THE ASSESSMENT ORDER IS BAD IN LAW AND VOID AB IN INITIO AND HENCE ALL FURTHER PROCEEDINGS INCLUDING THE ORDER PASSED BY THE LEARNED CIT(A) IS BAD IN LAW AND THEREFORE, THE APPEAL FILED BY REVENUE AGAINST THE ORDER OF LEARNED CIT(A) DOES NOT STAND AND IS DISMISSED. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED BY ALLOWING ONE OF THE GROUNDS OF THE ASSESSEE RAISED UNDER RULE 27 OF THE I.T.A.T., RULES. 14. BEFORE WE PART WITH THE ORDER, IT IS PERTINENT TO NOTE THAT THE REVENUE HAS RAISED SEVERAL GROUNDS ON MERIT AND ASSESSEE HA S ALSO RAISED ANOTHER PLEA UNDER RULE 27, BUT SINCE WE HAVE ANNULLED THE ASSESSMENT ORDER, THE GROUND OF REVENUE AS WELL AS THE OTHER PLEA OF THE ASSESSEE HAS BECOME I.T.A. NO.553/LKW/2018 ASSESSMENT YEAR:2014-15 44 ACADEMIC AND INFRUCTUOUS THEREFORE, WE ARE NOT ADJU DICATING THESE GROUNDS AS HAVING BECOME INFRUCTUOUS. 15. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND THE APPLICATION FILED BY THE ASSESSEE UNDER RULE 27 IS PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 06/11/2020) SD/. SD/. ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:06/11/2020 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSISTANT REGISTRAR
Other Referred Cases
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1:1 Consultation on Salary Structuring
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1:1 Consultation on FEMA Compliance
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1:1 Consultation on Tax Litigation
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Initial LLP Agreement
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Early Retirement Letter
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