DCIT, Cir-7(1), Kolkata, Kolkata V. M/s. Ganesh Realty & mall Development Pvt. Ltd., Kolkata

ITA 581/KOL/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6026 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 24-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: D S DAMLE
• Keywords: Depreciation; Validity of assessment
• Section: 143(3); 131; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI S. S. GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.581/KOL/2017 ( / ASSESSMENT YEAR: 2012-13) DCIT, CIR-7(1), KOLKATA P-7, CHOWRINGHEE SQUARE, AAYAKAR BHAWAN, KOL- 700 069. VS. M/S. GANESH REALTY & MALL DEVELOPMENT PVT. LTD. SHREE GANESH CENTRE SUITE, 3B, AJC BOSE ROAD, KOLKATA 700 017. ./ ./PAN/GIR NO.: AACCG 7821 N (ASSESSEE) .. (RESPONDENT) ASSESSEE BY :SHRI A.K. SINGH, CIT- DR RESPONDENT BY :SHRI D.S. DAMLE, AR / DATE OF HEARING : 29/11/2018 /DATE OF PRONOUNCEMENT : 23/01/2019 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED APPEAL FILED BY THEREVENUE,PERTAINING TO ASSESSMENT YEAR 2012-13, IS DIRECTED AGAINST AN ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-18, KOLKATA, IN APPEAL NO.649/CIT(A)- 18/16-17/CIR-7(1)/KOL DATED 25.11.2016, WHICH IN TURN ARISES OUT OF AN OR DER PASSED BY THE LD. ASSESSING OFFICERU/S 143(3) OF THE INCOME TAX ACT, 1961 (HERE INAFTER REFERRED TO AS THE ACT), DATED 27.02.2015. 2.THE APPEAL FILED FOR ASSESSMENT YEAR 2012-13, IS BARRED BY LIMITATION BY 41 DAYS. THE ASSESSEE HAS MOVED A PETITION REQUESTING THE BENCH TO CONDONE THE DELAY. WE HEARD THE PARTY ON THIS PRELIMINARY ISSUE . HAVING REGARD TO THE REASONS GIVEN IN THE PETITION, WE CONDONE THE DELAY AND ADM IT THE APPEAL FOR HEARING. ITA NO.581/KOL/2017 M/S. GANESH REALTY & MALL DEVELOPMENT PVT. LTD ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 2 22 2 3. THE GRIEVANCES RAISED BY THE REVENUEARE AS FOLL OWS: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THIS CASE AND IN LAW, THE LD. CIT(A) ERRED IN QUASHING THE COMPLETE ASSESSMENT PASSED BY THE A DDL. CIT AS THE A.O CONSIDERING IT TO BE EXTRA-JURISDICTIONAL AND HENCE NOT VALID. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THIS C ASE AND IN LAW, THE LD. CIT(A) ERRED IN DISREGARDING THE ORDER U/S 120(4) PASSED BY THE PR. CIT ASSIGNING THE CASE TO THE ADDL. CIT FOR ASSESSMENT DUE TO ERRONEOUS INTERPRETATION OF T HE ORDER RESTRUCTURING PASSED BY THE CBDT VIDE S.O. 2752(E) DT. 22.10.2014. 3. THAT THE ASSESSEE CRAVES LEAVE TO ADD, AMEND OR MODIFY ANY OR ALL GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING OF THE APPEAL. 4. THE BRIEF FACTS QUA THE ISSUE ARE THAT ASSESSEE COMPANY FILED ITS RETURN OF INCOME DISCLOSING LOSS TO THE TUNE OF RS.(-)8,47,55 ,799/-. DURING ASSESSMENT PROCEEDINGS ASSESSEE FILED REVISED COMPUTATION OF I NCOME REDUCING ITS LOSS TO THE TUNE OFRS.(-) 1,93,15,404/-. SUBSEQUENTLY, THIS LOS S WAS AGAIN SCALED DOWN TO RS.(- ) 1,51,66,719/-. ASSESSEE IS RUNNING A MALL AND EAR NING INCOME MOSTLY FROM RENT. INITIALLY RENTAL INCOME WAS OFFERED AS BUSINESS INC OME. HOWEVER, IN THE REVISED COMPUTATION, RENTAL INCOME WAS OFFERED FOR TAXATION UNDER THE HEAD INCOME FROM HOUSE PROPERTY. CONSEQUENTLY, DEPRECIATION CLAIMS AND MANY OTHER CLAIMS OF EXPENSES WERE WITHDRAWN AND DEDUCTION U/S 24(A) WAS CLAIMED. THIS RESULTED IN SCALING DOWN OF THE LOSS CLAIMED BY THE ASSESSEE. I N ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER CONSIDERED RENTAL INCOME OF RS.3, 67,94,120/- UNDER THE HEAD INCOME FROM HOUSE PROPERTY, BUT THE UTILITY CHARGES OF RS.7,59,59,588/- RECEIVED BY THE ASSESSEE FROM SHOP AND OFFICE OWNERS/TENANTS WAS TAKEN AS INCOME FROM OTHER SOURCES.THE ASSESSEE HAD ALSO TAKEN VARIOUS U NSECURED LOANS. DURING ASSESSMENT PROCEEDINGS,THE ASSESSEE HAD SUBMITTED B EFORE THE AO, THE PAN OF SAID CREDITORS, COPIES OF LOAN CONFIRMATIONS, EXTRA CT OF BANK STATEMENT, COPIES OF ACKNOWLEDGEMENT OF RETURNS FILED BY THE CREDITORS I N RESPECT OF THE LOANS TAKEN. ALL THESE LOANS WERE TAKEN THROUGH CHEQUES OR RTGS. HOW EVER, A.O. INSISTED THAT ASSESSEE TO PRODUCE THESE PARTIES FOR VERIFICATION. ASSESSEE SUBMITTED THAT DEPARTMENT HAS THE POWER TO ENFORCE ATTENDANCE OF T HE CREDITORS U/S 131 AND IT WAS SUGGESTED THAT THE A.O. MAY EXERCISE THESE POWERS F OR NECESSARY VERIFICATION. HOWEVER, A.O. WAS NOT CONVINCED AND EXCEPT FOR THE LOANS TAKEN FROM RKBK ITA NO.581/KOL/2017 M/S. GANESH REALTY & MALL DEVELOPMENT PVT. LTD ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 3 33 3 FISCAL SERVICES PVT. LTD., HE HELD THAT ALL OTHER L OANS WERE NOT GENUINE AND MADE AN ADDITION OF RS.17,56,50,000/- U/S 68 OF THE I.T. ACT. 5. ASSESSMENT ORDER HAS BEEN PASSED BY ADDL. CIT, R ANGE-7. ASSESSEE FILED APPEAL AGAINST THE ASSESSMENT ORDER AND THEREAFTER FILED A WRIT PETITION IN THE CALCUTTA HIGH COURT FOR EARLY HEARING OF APPEAL. HO NBLE CALCUTTA HIGH COURT PASSED THE ORDER DATED 17.09.2015 DIRECTING THE DEP ARTMENT FOR DISPOSAL OF APPEAL IN A GIVEN TIME FRAME. 6. BEFORE THE LD CIT(A), THE ASSESSEE`S MAIN OBJECT IONS WAS AGAINST VALIDITY OF ASSESSMENT ORDER. MAIN OBJECTION IN THIS REGARD WER E AS UNDER: A) WITH EFFECT FROM 15.11.2014, ADDL. CIT, RANGE-7 COULD NOT HAVE PERFORMED THE FUNCTIONS OF AN A.O. B) ON 10.11.2014 THERE WAS A VIDEO CONFERENCE AND I T WAS DECIDED BY CBDT THAT DURING THE REMAINING PART OF THAT F.Y. NO CASES WOU LD BE ASSIGNED TO THE NEWLY CREATED OFFICES OF SPECIAL RANGES AND HENCEFORTH TH ERE WOULD BE NO CONCURRENT ASSESSMENT JURISDICTION TO RANGE HEADS. C) BOARD HAD NOT PASSED ORDER U/S 120(4) AUTHORIZIN G PR. CCIT / CCIT / CIT TO PASS ANY ORDER U/S 120(4)(B), EMPOWERING ADDL. CIT /JT. CIT, RANGE HEADS TO PERFORM THE FUNCTIONS OF THE A.O.S. D) UNDER NO CIRCUMSTANCES RANGE HEADS COULD HAVE PE RFORMED THE FUNCTION OF THE A.O., IN ABSENCE OF VALID ORDER U/S 120(4)(B). IN S UPPORT OF ITS PROPOSITION ASSESSEE HAD RELIED ON THE DELHI, ITAT'S DECISION IN THE CAS E OF MEGA CORPORATION LTD. -VS- ADDL.CIT, 62 TAXMAN.COM 351. 7. ON THE ISSUE OF JURISDICTION, REPORT OF THE A.O. WAS CALLED. IN REPORT DATED 17.11.2OL5, JT.CIT, RANGE-7 SUBMITTED THAT NOTICE U /S 143(2) WAS ISSUED BY DCIT, CIRCLE-7, BUT THE CASE WAS SUBSEQUENTLY ASSIGNED U/ S 120(4) TO JT./ADDL. CIT, RANGE-7, BY CIT-3 VIDE ORDER NO. 2/2014-15 DATED 29 .05.2014. IN A SUBSEQUENT REPORT DATED 15.01.2016, JT. CIT, RANGE-7 SUBMITTED AS UNDER: ITA NO.581/KOL/2017 M/S. GANESH REALTY & MALL DEVELOPMENT PVT. LTD ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 4 44 4 A) PRE RESTRUCTURING JURISDICTION VESTED WITH ADDL. CIT, RANGE-7. HENCE POST RESTRUCTURING JURISDICTION WAS ALSO WITH ADDL. CIT, RANGE-7. B) RESTRUCTURING WAS AN ADMINISTRATIVE EXERCISE. TH ERE WERE CHANGES ONLY IN THE NOMENCLATURE OF THE IT AUTHORITIES. HENCE ORDER U/S 120(4) PASSED PRIOR TO 14.11.2014 WAS VALID WITH ALL FORCE IN POST RESTRUC TURING PERIOD AS WELL. C) EXERCISE OF RESTRUCTURING HAS NOT AFFECTED THE P OWER OF THE COMMISSIONER WITH REGARD TO JURISDICTION. D) POST 15.11.2014 NO SUPPORTING ORDER FOR ASSIGNIN G CASE FROM ONE A.O. TO ANOTHER WAS COMMUNICATED TO THE OFFICE OF THE JT./A DD1. CIT, RANGE-7. 8. IN ANOTHER REPORT DATED 15.01.2016 JT. CIT, RA NGE-7 HAS SUBMITTED AS UNDER: A) JURISDICTION ISSUE WAS NOT RAISED BY THE ASSESSE E BEFORE THE A.O. B) CIT(APPEAL) CANNOT ENTERTAIN JURISDICTION ISSUE IN VIEW OF THE JUDGMENT OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SMT. JASWINDER KAUR KOONER 291 ITR 80. IF ASSESSEE WAS AGGRIEVED ABOUT JURISDI CTION, IT COULD HAVE CHALLENGED IT INDEPENDENTLY EITHER BEFORE HIGHER AUTHORITIES O R BY WAY OF A WRIT PETITION BEFORE THE HIGH COURT. IF NO SUCH CHALLENGE IS MADE AT THE INITIAL STAGE, THIS ISSUE CANNOT BE RAISED IN APPEAL AGAINST ASSESSMENT ORDER. 9. ASSESSEE FILED REJOINDER TO A.O.'S REPORTS. SALI ENT ISSUES RAISED IN THE REJOINDER IS AS UNDER: A) A.O. IS DEFINED IN SECTION 2(7A) AS UNDER: ASSESSING OFFICER' MEANS THE ASSISTANT COMMISSIONE R OR THE INCOME- TAX OFFICER WHO IS VESTED WITH THE RELEVANT JURISDICTION BY VIR TUE OF DIRECTIONS OR ORDERS ISSUED UNDER SUB- SECTION (1) OR SUB- SECTION (2) OF SECTI ON 120 OR ANY OTHER PROVISION OF THIS ACT, AND THE DEPUTY COMMISSIONER WHO IS DIRECT ED UNDER CLAUSE (B) OF SUB- ITA NO.581/KOL/2017 M/S. GANESH REALTY & MALL DEVELOPMENT PVT. LTD ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 5 55 5 SECTION (4) OF THAT SECTION TO EXERCISE OR PERFORM ALL OR ANY OF THE POWERS AND FUNCTIONS CONFERRED ON, OR ASSIGNED TO, AN ASSESSIN G OFFICER UNDER THIS ACT;] ACIT, DCIT, ADIT, DDIT & ITO ARE VESTED WITH RELEVA NT JURISDICTION BY SUB SECTION (1) OR (2) OF SECTION 120 AND THE ADDL. CIT IS VESTED WITH ASSESSMENT JURISDICTION BY CLAUSE (B) OF SUB SECTION (A) OF SE CTION 120. A) BEFORE THE ADDL./JT. CIT EXERCISES THE POWERS OF AN A.O., CONDITIONS OF SECTION 120(4)(B) ARE TO BE FULFILLED. B) ASSESSEE IS NOT BARRED BY PRINCIPLE OF ESTOPPELS FROM QUESTIONING JURISDICTION OF THE ADDL.CIT, RANGE-7 ONLY BECAUSE ASSESSEE HAD PAR TICIPATED IN ASSESSMENT PROCEEDINGS. AN ILLEGAL ACT COMMITTED BY AN AUTHORI TY CAN BE CHALLENGED BY AN AGGRIEVED PARTY AT ANY STAGE OF THE PROCEEDINGS TIL L THEY ATTAIN FINALITY. ASSESSEE RELIED ON THE FOLLOWING JUDGMENTS / DECISIONS IN SU PPORT OF ITS PROPOSITION. I) P V DOSHI -VS- CLT, 113 ITR 22 (GUJRAT) HIGH COU RT. II) DASAMUNI REDDY -VS- APPARAO [AIR 1974 SC 2089 A T 2092 ] (SC) III) DERENDRA NATH GORAI -VS- SUDHI CHANDRA GHOSE [ AIR 1964 SC 1300] IV) KIRAN SINGH -VS- CHAMAN PASWAN [AIR 1954 SC 340 ] V) MEGA CORPORATION LTD. -VS- ADDL.CIT, 62 TAXMAN.C OM 351 DELHI, ITAT. C) ASSESSEE HAD COMPLIED WITH THE DIRECTIONS OF ADD L. CIT, RANGE-7 IN GOOD FAITH, NOT KNOWING AT THAT TIME WHETHER NECESSARY POWERS W ERE VESTED WITH ADDL.CIT, RANGE-7, REGARDING JURISDICTION OVER THE CASE. D) NOTIFICATION NUMBER 64 DATED 30.11.2014 ISSUED B Y CBDT IS IN FORCE SINCE 15.11.2014. AS PER THIS NOTIFICATION, AFTER 14.11.2 014 AN ADDL. CIT, RANGE WAS PERMITTED TO PERFORM A.O.S FUNCTION ONLY IF PR. CCI T OR PR. CIT AUTHORIZED HIM TO PERFORM SUCH FUNCTIONS. PERMISSION U/S 120(4) HAVIN G RECEIVED ON 15.11.2014, PR. CCIT, WB & SIKKIM OR PR. CIT-3, KOLKATA SHOULD HAVE PASSED A NEW ORDER AUTHORIZING ADDL. CIT, RANGE-7 TO PERFORM SUCH FUNC TIONS. ITA NO.581/KOL/2017 M/S. GANESH REALTY & MALL DEVELOPMENT PVT. LTD ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 6 66 6 E) WITH EFFECT FROM 15.11 .2074 JURISDICTION OF A.O .S WAS DETERMINED AS PER THE NEW JURISDICTION ORDER. F) ORDER U/S 120(4) WAS PASSED BY CBDT ON 13.11.201 4 IN SUPERSESSION OF EARLIER ORDER. G) PR. CCIT, WB & SIKKIM DID NOT PASS ANY ORDER U/S 120(4)(B) ENABLING PR, CIT TO EMPOWER RANGE HEADS TO FUNCTION AS A.O. 10. AFTER GETTING THE REPLY FROM THE ASSESSEE DURIN G THE APPELLATE PROCEEDINGS, THE LD CIT(A), IN ORDER TO DECIDE THE JURISDICTION OF T HE OFFICER, WHO HAS PASSED THE ASSESSMENT ORDER HAS REFERRED THE NOTIFICATION DAT ED 22.10.2014 ISSUED BY CBDT, VIDE WHICH NEW JURISDICTION CAME INTO EFFECT ON 15. 11.2014. THIS NOTIFICATION NO.50 OF 2014, WAS ISSUED VIDE S.O 2752(E) AND READ AS UNDER: MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION (INCOME-TAX) NEW DELHI, THE 22ND OCTOBER, 2014 S.O. 2752(E). IN EXERCISE OF THE POWERS CONFERRED BY SUB-SECTIONS (1) AND (2) OF SECTION 120 OF THE INCOME TAX ACT, 1961 (43 OF 1961 ), AND IN SUPERSESSION OF GOVERNMENT OF INDIA, CENTRAL BOARD OF DIRECT TAXES, NOTIFICATION NUMBER S.O. 732(E) DATED THE 31ST JULY, 2001, PUBLISHED IN THE GAZETTE OF INDIA, EXTRA- ORDINARY, PART-II, SECTION 3, SUB-SECTION (II), DAT ED THE 31ST JULY, 2001 EXCEPT AS RESPECTS THINGS DONE OR OMITTED TO BE DONE BEFORE S UCH SUPERSESSION, THE CENTRAL BOARD OF DIRECT TAXES, HEREBY,- (A) DIRECTS THAT THE PRINCIPAL COMMISSIONERS OF INC OME-TAX OR COMMISSIONERS OF INCOME-TAX SPECIFIED IN COLUMN (2) OF THE SCHEDULE- I ANNEXED HERETO, HAVING THEIR HEADQUARTERS AT THE PLACES SPECIFIED IN THE CORRESP ONDING ENTRIES IN COLUMN (3) OF THE SAID SCHEDULE-I, SHALL EXERCISE THE POWERS AND PERFORM THE FUNCTIONS IN RESPECT OF SUCH CASES OR CLASSES OF CASES SPECIFIED IN THE CORRESPONDING ENTRIES IN COLUMN (6) OF THE SAID SCHEDULE-I, OF SUCH PERSONS OR CLAS SES OF PERSONS BEING RESIDENTS OR NOT ORDINARILY RESIDENTS IN INDIA AS PER SECTION 6 OF THE INCOME-TAX ACT, 1961 AND AS SPECIFIED IN THE CORRESPONDING ENTRIES IN COLUMN (5) OF THE SAID SCHEDULE-I, IN SUCH TERRITORIAL AREAS SPECIFIED IN THE CORRESPONDI NG ENTRIES IN COLUMN (4) OF THE SAID SCHEDULE-I, IN RESPECT OF ALL INCOMES OR CLASS ES OF INCOME THEREOF; ITA NO.581/KOL/2017 M/S. GANESH REALTY & MALL DEVELOPMENT PVT. LTD ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 7 77 7 (B) DIRECTS THAT THE PRINCIPAL COMMISSIONERS OF INC OME-TAX OR COMMISSIONERS OF INCOME-TAX SPECIFIED IN COLUMN (2) OF THE SCHEDULE- II ANNEXED HERETO, HAVING THEIR HEADQUARTERS AT THE PLACES SPECIFIED IN THE CORRESP ONDING ENTRIES IN COLUMN (3) OF THE SAID SCHEDULE-II, SHALL EXERCISE THE POWERS AND PERFORM THE FUNCTIONS IN RESPECT OF ANY CASES OR CLASSES OF CASES, OF ANY PE RSONS OR CLASSES OF PERSONS IN RESPECT OF ALL INCOMES OR CLASSES OF INCOME, IN SUC H TERRITORIAL AREAS SPECIFIED IN THE CORRESPONDING ENTRIES IN COLUMN (4) OF THE SAID SCHEDULE-II; (C) AUTHORIZES THE PRINCIPAL COMMISSIONERS OF INCOM E-TAX OR COMMISSIONERS OF INCOME-TAX SPECIFIED IN COLUMN (2) OF THE SAID SCHE DULE-I TO ISSUE ORDERS IN WRITING FOR EXERCISE OF THE POWERS AND PERFORMANCE OF THE F UNCTIONS BY THE ADDITIONAL COMMISSIONERS OF INCOME-TAX OR JOINT COMMISSIONERS OF INCOME-TAX, WHO ARE SUBORDINATE TO THEM, IN RESPECT OF SUCH CASES OR CL ASSES OF CASES SPECIFIED IN THE CORRESPONDING ENTRIES IN COLUMN (6) OF THE SAID SCH EDULE-I, OF SUCH PERSONS OR CLASSES OF PERSONS SPECIFIED IN THE CORRESPONDING E NTRIES IN COLUMN (5) OF THE SAID SCHEDULE-I, IN SUCH TERRITORIAL AREAS SPECIFIED IN THE CORRESPONDING ENTRIES IN COLUMN (4) OF THE SAID SCHEDULE-I, IN RESPECT OF AL L INCOMES OR CLASSES OF INCOME THEREOF; (D) AUTHORIZES THE PRINCIPAL COMMISSIONERS OF INCOM E-TAX OR COMMISSIONERS OF INCOME-TAX SPECIFIED IN COLUMN (2) OF THE SAID SCHE DULE-II TO ISSUE ORDERS IN WRITING FOR EXERCISE OF THE POWERS AND PERFORMANCE OF THE FUNCTIONS BY THE ADDITIONAL COMMISSIONERS OF INCOME-TAX OR JOINT COM MISSIONERS OF INCOME-TAX, WHO ARE SUBORDINATE TO THEM, IN RESPECT OF ANY CASE S OR CLASSES OF CASES, OF ANY PERSONS OR CLASSES OF PERSONS IN RESPECT OF ALL INC OMES OR CLASSES OF INCOME, IN SUCH TERRITORIAL AREAS SPECIFIED IN THE CORRESPONDI NG ENTRIES IN COLUMN (4) OF THE SAID SCHEDULE-II; (E) AUTHORIZES THE ADDITIONAL COMMISSIONERS OF INCO ME-TAX OR JOINT COMMISSIONERS OF INCOME-TAX REFERRED TO IN CLAUSES (C) AND (D) OF THIS NOTIFICATION, TO ISSUE ORDERS IN WRITING FOR EXERCISE OF THE POWE RS AND PERFORMANCE OF THE FUNCTIONS BY THE ASSESSING OFFICERS, WHO ARE SUBORD INATE TO THEM, IN RESPECT OF SUCH SPECIFIED AREA OR PERSONS OR CLASSES OF PERSON S OR INCOMES OR CLASSES OF INCOMES OR CASES OR CLASSES OF CASES, IN RESPECT OF WHICH SUCH ADDITIONAL COMMISSIONERS OF INCOME-TAX OR JOINT COMMISSIONERS OF INCOME-TAX ARE AUTHORIZED BY THE PRINCIPAL COMMISSIONERS OF INCOME -TAX OR COMMISSIONERS OF INCOME-TAX REFERRED TO IN CLAUSE (C) AND (D) OF THI S NOTIFICATION. EXPLANATION :- FOR THE PURPOSES OF THIS NOTIFICATION,- (I) RESIDING MEANS,- (A) IN THE CASE OF AN INDIVIDUAL, PLACE OF RESIDENC E, UNLESS OTHERWISE PROVIDED IN THIS NOTIFICATION; ITA NO.581/KOL/2017 M/S. GANESH REALTY & MALL DEVELOPMENT PVT. LTD ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 8 88 8 (B) IN THE CASE OF AN HINDU UNDIVIDED FAMILY, PLACE OF RESIDENCE OF THE KARTA; AND (C) IN THE CASE OF A FIRM OR AN ASSOCIATION OF PERS ONS OR A BODY OF INDIVIDUALS OR A LOCAL AUTHORITY AND ALL OTHER ARTIFICIAL JURIDICAL PERSONS OTHER THAN COMPANIES, THE PLACE WHERE THE HEAD OFFICE IS LOCATED. (II) IN CASES OF COMPANIES WHOSE NAMES BEGIN WITH A NY OF THE NUMERICAL (HEREINAFTER NUMERIC COMPANIES), THE PRINCIPAL CO MMISSIONERS OF INCOME-TAX OR COMMISSIONERS OF INCOME-TAX WHO EXERCISE THE POW ERS AND PERFORM THE FUNCTIONS IN RESPECT OF COMPANIES WHOSE NAMES BEGIN WITH THE ALPHABET WHICH IS SAME AS THAT OF THE FIRST ALPHABET OF THE NAME OF T HE NUMERIC COMPANIES IN WORDS, SHALL EXERCISE THE POWERS AND PERFORM THE FUNCTIONS IN RESPECT OF THOSE NUMERIC COMPANIES. (III) COLUMN (2) OF THE SCHEDULE SPECIFIES THE DESI GNATION OF INCOME-TAX AUTHORITIES AS PRINCIPAL COMMISSIONER/ COMMISSIONER OF INCOME- TAX. THE DESIGNATION IS TO BE UNDERSTOOD AS PRINCIPAL COMMISSIONER OF INCOME-T AX OR COMMISSIONER OF INCOME-TAX. FOR EXAMPLE, PRINCIPAL COMMISSIONER/ C OMMISSIONER OF INCOME- TAX, AHMEDABAD-1 REFERS TO AN INCOME TAX AUTHORITY , WHICH COULD EITHER BE PRINCIPAL COMMISSIONER OF INCOME-TAX, AHMEDABAD-1, OR COMMISSIONER OF INCOME-TAX, AHMEDABAD-1. NOTE: THE INCOME-TAX AUTHORITIES REFERRED TO IN COLUMN (2 ) OF THE SCHEDULE ANNEXED TO THIS NOTIFICATION SHALL NOT EXERCISE POWERS AND PER FORM FUNCTIONS, WHICH HAVE SPECIFICALLY BEEN ASSIGNED THROUGH SEPARATE NOTIFIC ATION(S), TO AN INCOME-TAX AUTHORITY HAVING DESIGNATION OTHER THAN THOSE MENTI ONED IN COLUMN (2) BELOW. 2. THIS NOTIFICATION SHALL COME INTO FORCE WITH EFF ECT FROM 15 TH DAY OF NOVEMBER, 2014. 11. HAVING GONE THROUGH THE NOTIFICATION, THE LD CI T(A) NOTED THATAS PER THE ABOVE MENTIONED NOTIFICATION, S.O. 732(E) DATED 31.07.200 1 WAS SUPERSEDED. TILL 14.11.2014, THE I.T. AUTHORITIES EXERCISED JURISDIC TION AS PER S.O. 732(E). HOWEVER, ON RESTRUCTURING, WITH EFFECT FROM 15.11.2 014, INCOME TAX AUTHORITIES [ASSESSMENT CHARGES] EXERCISED JURISDICTION AS PER S.O. 2752(E).IN SUB CLAUSE (B) & (C) OF NOTIFICATION DATED 22.10.2014, PR. CIT OR CIT WERE AUTHORIZED TO PASS ORDERS IN WRITING FOR THE EXERCISE OF THE POWERS AN D FUNCTIONS BY THE ADDL.CIT OR JT. CIT, WHO WERE SUBORDINATE TO THEM. CONSEQUENTLY PR. CIT PASSED SUITABLE ORDERS BUT ADDL. CIT / JT. CIT WHO WERE SUPERVISING A RANGE, WERE NOT GIVEN THE POWERS OF A.O. POST OF SPECIAL RANGES WERE CREATED AND ONLY THE ADDL. CIT / JT. ITA NO.581/KOL/2017 M/S. GANESH REALTY & MALL DEVELOPMENT PVT. LTD ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 9 99 9 CIT WHO WAS HOLDING THE POST OF SPECIAL RANGE WAS A UTHORIZED TO ACT AS A.O., IN RESPECT OF CASES ASSIGNED TO THEM THROUGH ORDER U/S 127 IN FUTURE. AS POINTED OUT BY THE AR, A.O. IS DEFINED IN SECTION 2(7A) OF THE ACT AND IT SAYS THAT ACIT / DCIT, ADIT / DDIT OR THE ITO WOULD BE CONSIDERED AS A.O. WHO ARE VESTED WITH THE RELEVANT JURISDICTION BY ORDER U/S 120(1) OR 12 0(2) BUT THE ADDL. CIT / JT.CIT, ADDT.DIT / JT. DIT WOULD ACT AS A.O. IF THEY ARE EM POWERED U/S 120(4)(B) OF THE ACT IN WRITING. AS IS APPARENT FROM THE FACTS NARRA TED ABOVE, AND ALSO ADMITTED BY THE JT. CIT, RANGE-7 IN REMAND REPORT, NO ORDER WAS PASSED AFTER 15.11.2014 AUTHORISING THE ADDL.CIT, RANGE-7 TO DISCHARGE THE FUNCTION OF AN A.O. IN FACT WITH NOTIFICATION DATED 22.10.2014, ADDL.CIT, RANGE -7 WAS DIVESTED OF JURISDICTION AS A.O. OVER THIS CASE AS ON 15.11.201 4. IN REMAND REPORT JT. CIT, RANGE-7 HAS MENTIONED AT ONE PLACE THAT THIS CASE W AS ASSIGNED TO ADDL.CIT, RAGE-7 THROUGH ORDER U/S 127, ALTHOUGH IN THE SUBSE QUENT REPORT IT IS MENTIONED THAT CASE WAS ASSIGNED U/S 120(4). NOW LET US EXAMI NE WHETHER ASSIGNMENT OF THE CASE EVEN U/ S 127 WOULD MAKE ANY DIFFERENCE. TO TAKE CARE OF THE CASES ASSESSED IN THE CENTRAL C HARGES, CBDT HAD ISSUED ANOTHER NOTIFICATION NO.70 OF 2014 DATED 13.11.2014. IT REA D AS FOLLOWS: SECTION 120(1) AND (2) OF THE INCOME-TAX ACT, 1961 - INCOME- TAX AUTHORITIES - JURISDICTION OF - SUPERSESSION OF NOTIFICATION NO. SO 822(E), DATED 23-8-2001 NOTIFICATION NO. 70/2014 [F. NO. 187/37/2014 (ITA-I )]/SO 2915(E), DATED 13-11-2014 IN EXERCISE OF THE POWERS CONFERRED BY SUB-SECTIONS (1) AND (2) OF SECTION 120 OF THE INCOME-TAX ACT, 1961 (43 OF 1961) AND IN SUPERS ESSION OF THE NOTIFICATION OF THE GOVERNMENT OF INDIA, CENTRAL BOARD OF DIRECT TA XES NUMBER S.O.822(E), DATED THE 23RD AUGUST, 2001 PUBLISHED IN THE GAZETT E OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (II), DATED THE 23R D AUGUST, 2001, EXCEPT AS RESPECTS THINGS DONE OR OMITTED TO BE DONE BEFORE S UCH SUPERSESSION, THE CENTRAL BOARD OF DIRECT TAXES HEREBY, (A) DIRECTS THAT THE DIRECTOR GENERAL OF INCOME- TAX OR THE CHIEF COMMISSIONER OF INCOME-TAX SPECIFIED IN COLUMN (2) OF THE SCHEDU LE - 1 OR II ANNEXED TO THIS NOTIFICATION, AS THE CASE MAY BE (HEREINAFTER REFERRED TO AS THE 'SAID SCHEDULES') OR THE PRINCIPAL COMMISSIONER/COMMISSIO NER OF INCOME- TAX ITA NO.581/KOL/2017 M/S. GANESH REALTY & MALL DEVELOPMENT PVT. LTD ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 1 11 10 00 0 SPECIFIED IN COLUMN (4) OF THE SAID SCHEDULES OR JO INT COMMISSIONERS OF INCOME- TAX OR ASSESSING OFFICERS, SHALL CONTINUE TO EXERCI SE POWERS AND PERFORM THE FUNCTIONS AS STIPULATED IN THE SAID ACT , IN RESPECT OF SUCH PER SONS OR CLASSES OF PERSONS OR SUCH INCOMES OR CLASS ES OF INCOMES OR SUCH CASES OR CLASSES OF CASES IN WHICH THE SAID INCOME- TAX AUTHORITIES HAVE BEEN EXERCISING POWERS AND PERFORMING THE FUNCTIONS ON T HE BASIS OF JURISDICTION ASSIGNED BY ANY ORDER PASSED U NDER THE SAID ACT ON THE DATE OF PUBLICATION OF THIS NOTIFICATION, TILL SUCH JURISDICTION IS REV OKED; (B) DIRECTS THAT THE DIRECTOR GENERAL OF INCOME- TAX OR THE CHIEF COMMISSIONER OF INCOME-TAX SPECIFIED IN COLUMN (2) OF THE SAID S CHEDULES OR THE PRINCIPAL COMMISSIONER/COMMISSIONER OF INCOME- TAX SPECIFIED IN COLUMN (4) OF THE SAID SCHEDULES OR JOINT COMMISSIONERS OF INCOME- TAX SUBORDINATE TO THEM, SHALL EXERCISE POWERS AND PERFORM THE FUNCTIONS AS STIPULATED IN THE SAID ACT IN RESPECT OF SUCH CASES OR CLASSES OF CASES OR SUCH PERSONS OR CLASSES OF PERSONS, ASSIGNED TO ASSESSING OFFICERS SUBORDINATE TO THEM, UNDER SECTION 127 OF THE SAID ACT, FROM THE DATE OF PUBLICATION O F THIS NOTIFICATION; (C) AUTHORISES THE DIRECTOR GENERAL OF INCOME-TAX OR T HE CHIEF COMMISSIONER OF INCOME- TAX SPECIFIED IN THE SAID SCHEDULES, OR THE PRINCIP AL COMMISSIONER/COMMISSIONER OF INCOME- TAX SPECIFIED IN COLUMN (4) OF THE SAID SCHEDULES, TO ISSUE ORDERS IN WRITING, VESTING JURISDICTION TO EXERCISE POWERS AND PERFORM FUN CTIONS OF AN ASSESSING OFFICER AS DEFINED UNDER CLAUSE (7A) OF SECTION 2 OF THE SAID ACT, TO THE DE PUTY COMMISSIONER OF INCOME-TAX OR ASSISTANT COMMISSIONER OF INCOME-TAX OR INCOME- TAX OFFICER WHO ARE SUBORDINATE TO THEM. 2. THIS NOTIFICATION SHALL COME INTO FORCE WITH EFFEC T FROM THE 15TH DAY OF NOVEMBER, 2014. 12. THE LD CIT(A) NOTED THAT ON PERUSAL OF CLAUSES (A) & (B) SHOWS THAT CENTRAL CHARGES CONTINUED EXERCISING JURISDICTION OVER THE CASE ASSIGNED U/S 137. BUT HIS PRIVILEGE WERE GRANTED ONLY TO THE CENTRAL CHARGES AND NOT WITHIN NORMAL ASSESSMENT CHARGES. THIS WAS ALSO CLARIFIED IN THE NOTES TO NOTIFICATION DATED 22/10/2014 WHICH SAYS THAT PR. CCIT/PR. CIT WOULD N OT EXERCISE ANY JURISDICTION OVER CASES SPECIFICALLY ASSIGNED TO OTHER I.T. AUTH ORITIES THROUGH SEPARATE NOTIFICATIONS. HENCE EVEN IF THE CASE WAS ASSIGNED TO ADDL. CIT, RANGE-7 THROUGH ORDER U/S 127, HE WAS NO LONGER AN A.O FOR THIS CAS E W.E.F. 15.11.2014. IN REMAND REPORT JT. CIT, RANGE-7MENTIONED THAT NOB ODY DIRECTED ADDL.CIT, RANGE-7 TO TRANSFER BACK THE CASE TO DCIT /ACIT, CI RCLE-7 AFTER 15.11.2014. IN ITA NO.581/KOL/2017 M/S. GANESH REALTY & MALL DEVELOPMENT PVT. LTD ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 1 11 11 11 1 THIS REGARDLD CIT(A) NOTED THAT ADDL.CIT, RANGE-7 W AS INVOLVED IN PASSING JURISDICTION ORDER FOR ACIT /DCIT AND ITOS UNDER HI M. AS HE WAS INVOLVED IN THE RESTRUCTURING PROCESS AND PASSING OF JURISDICTION O RDER, HE SHOULD HAVE KNOWN THE CORRECT IMPLICATION OF RESTRUCTURING EFFECTIVE FROM 15.11.2014. NO ONE ELSE CAN BE FAULTED FOR NOT INFORMING HIM ABOUT THE IMPLICATION OF RESTRUCTURING. IN REMAND REPORT JT. CIT, RANGE-7 HAS MENTIONED THA T RESTRUCTURING WAS AN ADMINISTRATIVE EXERCISE AND ORDER U/S 120(4) PASSED BY CIT WAS VALID EVEN AFTER 15/11/2014. HOWEVER, THIS IS NOT CORRECT. TILL 14/1 1/2014, CIT DERIVED POWERS FROM S.O. 732(E) DATED31/07/2001. HOWEVER, W.E.F. 1 5/11/2014, THIS NOTIFICATION WAS SUPERSEDED BY S.O. 2752 (E). MORE IMPORTANTLY, ADDL. CIT/JT. CIT RANGE WAS NOT EMPOWERED TO ACT AS A.O. W.E.F.15/11/2014. 13. IN REMAND REPORT JT. CIT, RANGE-7 HAS RELIED ON THE JUDGMENT OF HONBLE PUNJAB & HARIYANA HIGH COURT IN SMT. JASWINDER KARU KOONER VS- CIT(A), JALANDHAR 291 ITR 80 WHEREIN IT HAS BEEN HELD THAT AN ASSESSEE AGGRIEVED BY TRANSFER OF JURISDICTION U/S 127 SHOULD CHALLENGE T HE SAME IN AN INDEPENDENT PROCEEDING EITHER BEFORE HIGHER ADMINISTRATIVE AUTH ORITIES AS PER ACT OR BY WAY OF WRIT PETITION. IF NO SUCH CHALLENGE IS MADE AT INIT IAL STAGE, ISSUE CANNOT BE RAISED IN AN APPEAL AGAINST ASSESSMENT ORDER. ON THE OTHER HA ND,ASSESSEE HAS RELIED ON THE DECISION OF DELHI, ITAT IN MEGA CORPORATION LTD. -V S- ADDL.CIT, 62 TAXMANN.COM 351, WHEREIN ISSUE REGARDING JURISDICTI ON OF ADDL.CIT WAS TAKEN UP FOR THE FIRST TIME BEFORE THE ITAT AND HONBLE ITAT , DELHI ADMITTED THE ADDITIONAL GROUND AND HELD THAT ADDITIONAL CIT DID NOT HAVE JURISDICTION TO PERFORM THE POWERS OF A.O. AS NO VALID ORDER U/S 12 0(4)(B) OR U/S 127 AS PASSED. ASSESSEE HAS ALSO SUBMITTED THAT THEY WERE NOT AWAR E THAT ADDL. CIT, RANGE-7 NO LONGER COULD EXERCISE THE POWERS OF AN A.O AFTER 15 .11.2014 AND THEY CONTINUED ATTENDING THE PROCEEDINGS IN GOOD FAITH. 14. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD, WE NOTE THAT THE JUDGMENT CITED BY THE JT. CIT, RAN GE IN REMAND REPORT RELATES TO ITA NO.581/KOL/2017 M/S. GANESH REALTY & MALL DEVELOPMENT PVT. LTD ASSESSMENT YEAR: 2012-13 P PP PA AA AG GG GE EE E | || | 1 11 12 22 2 IRREGULAR JURISDICTION EXERCISED BY THE A.O. THERE WAS DISPUTE REGARDING THE CORRECT A.O. WHO WOULD EXERCISED JURISDICTION OVER THE CASE. BUT THERE WAS NO CONFUSION REGARDING OFFICER PASSING THE ASSESSMENT ORDER HAVING THE POWERS TO ACT AS AN A,O., WHEREAS IN ASSESSEE'S CASE ADDL.CIT, RA NGE-7 WAS DIVESTED OF THE POWERS OF A.O. WITH EFFECT FROM 15.11.2014. THEREF ORE, THE ORDER U/S 143(3) PASSED BY ADDL.CIT, RANGE-7 ON 27.02.2015 IS ILLEGA L AND NOT SUSTAINABLE IN LAW.THAT BEING SO, WE DECLINE TO INTERFERE WITH THE ORDER OF ID. C.I T.(A), HIS ORDER ON THIS JURISDICTIONAL ISSUE IS, THEREFORE, UPHELD. THAT IS, T HE CONCLUSIONS ARRIVED AT BY THE CIT(A) ARE, THEREFORE, CORRECT AND ADMIT NO INTERFERENCE BY US. WE, APPROVE AND CONFIRM THE ORDER OF THE CIT(A). ORDER IS PRONOUNCED IN THE OPEN COURT ON 23.01.2019 . SD/- ( S. S. GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 23/01/2019 ( RS, SR.PS ) / COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER ASSISTANT REGISTRAR, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. /THE ASSESSEE- DCIT, CIR-7(1), KOLKATA 2. ! / THE RESPONDENT- M/S. GANESH REALTY & MALL DEVELOP MENT PVT. LTD. 3. ' ( ) / THE CIT(A), 4. ' / CIT 5. #$% &&'( , '( , / DR, ITAT, KOLKATA 6. %)*+ / GUARD FILE. !# &