ACIT, Uttar Pradesh V. M/s. Abhay Pigments (P) Ltd., Dehradun

ITA 6487/DEL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7620 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 31-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: V K TULSIAN
• Keywords: Depreciation; Competent authority
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES A NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO: 6487/DEL/2012 ASSTT. YEAR: 2009-10 ACIT VS. M/S. ABHAY PIGMENTS (P) L TD., CIRCLE, SAHARANPUR 21- OLD SURVEY ROAD, DEHRADUN (APPELLANT) ( RESPONDENT) APPELLANT BY : SHRI S.L. ANURAGI, DR RESPONDENT BY : SHRI V.K. TULSIAN, CA DATE OF HEARING : 16.2.2016 DATE OF PRONOUNCEMENT : O R D E R PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER THE PRESENT APPEAL IS PREFERRED BY THE DEPARTMENT A GAINST ORDER DATED 11.9.2012 PASSED BY THE LD. CIT (APPEAL S)- MUZAFFARNAGAR FOR ASSTT. YEAR 2009-10 WHEREIN THE L D. CIT (APPEALS) HAS ANNULLED THE ASSESSMENT ORDER DATED 2 2.12.2011 PASSED U/S 143(3). THE DEPARTMENT HAS RAISED THE FO LLOWING GROUNDS OF APPEAL:- I.T.A. NO. 6487/D/2012 ASSESSMENT YEAR 2009-10 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW TO RENDER THE ORDER PAS SED UNDER SECTION 143(3) OF THE INCOME TAX ACT,1961 ON 22-12-2011 BY THE ASSESSING OFFICER AS NULL AND VOI D ON ACCOUNT OF JURISDICTION OF THE ASSESSING OFFICER BY IGNORING THE PROVISION OF CLAUSE (A) OF SUB SECTION (3) OF SECTION 124 OF THE INCOME TAX ACT,1961 BECAUSE THE ASSESSEE DID NOT AVAIL THE OPPORTUNITY TO CHALLENGE THE JURISDICTION OF THE ASSESSING OFFICER WITHIN ON E MONTH FROM THE DOTE OF SERVICE OF THE NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT,1961. 2. IT HAS BEEN THE ASSESSEES CONTENTION THAT ITS R EGISTERED OFFICE IS SITUATED AT 2/12, OLD SURVEY ROAD, DEHRAD UN SINCE ITS INCORPORATION ON 10.5.1990 AND THE SAME ALSO STANDS CONFIRMED BY THE COMPANY/LLP MASTER DATA AVAILABLE AT THE WEB SITE OF THE REGISTRAR OF COMPANIES, UTTRAKHAND AND, THEREFORE, THE JURISDICTION RESTED WITH THE DCIT/ACIT CIRCLE -2, D EHRADUN. IT WAS THE ASSESSEES GRIEVANCE BEFORE THE LD. CIT (A) THAT WITHOUT RECOURSE TO ANY PRIOR NOTICE, THE JURISDICTION OVER THE CASE WAS TRANSFERRED TO DCIT/ACIT CIRCLE, SAHARANPUR. ON THE OTHER HAND, IT HAS BEEN THE DEPARTMENTS CONTENTION THAT THE CA SE OF THE ASSESSEE WAS FIXED FOR HEARING BY ISSUE OF NOTICE U /S 143(2) DATED 28.9.2010. NOTICE U/S 143(2)/142(1) OF THE ACT, QUE STIONNAIRES AND OTHER LETTERS WERE ALSO ISSUED FROM TIME TO TIM E. HOWEVER, THE ASSESSEE NEVER REQUESTED FOR CHANGE OF JURISDICTION FROM SAHARANPUR TO DEHRADUN AND IT WAS ONLY ON 5.12.2011 , WHEN THE I.T.A. NO. 6487/D/2012 ASSESSMENT YEAR 2009-10 3 CASE WAS AT A FINAL STAGE THAT THE ASSESSEE FILED W RITTEN REPLY DATED 2.12.2011 REQUESTING THAT THE JURISDICTION BE RETAINED AT DEHRADUN. AS THE ASSESSMENT WAS GOING TO BE BARRED BY LIMITATION ON 31.12.2011, IT WAS NOT POSSIBLE TO TR ANSFER THE CASE TO DEHRADUN. IT WAS ALSO THE CONTENTION OF THE AO T HAT THE PAN OF THE ASSESSEE EXISTED IN THE CODE OF ACIT, CIRCLE, S AHARANPUR. 3. THE LD. CIT(A) DECIDED THE ISSUE IN FAVOUR O F THE ASSESSEE BY HOLDING THAT AO LACKED JURISDICTION OVER THE ASSESE ES CASE AND THAT THE PROPER RECOURSE FOR THE AO WOULD HAVE BEEN TO TRANSFER THE ASSESSEES CASE IMMEDIATELY TO THE JURISDICTION AL AO WHERE ASSESSEES PAST RECORDS WERE AVAILABLE. THE ASSESS MENT FRAMED U/S 143(3) WAS ANNULLED. 4. IN THE APPEAL BEFORE US, THE FACTUAL MATRI X WAS AGAIN REPEATED BY BOTH THE PARTIES WHICH IS NOT BEING REP RODUCED AGAIN FOR THE SAKE OF BREVITY. A PERUSAL OF THE IMPUGNED ORDER REVEALS THAT THE LD. CIT (A) HAS EXAMINED THE ISSUE AT LENG TH IN PARA 3.1.2 OF HIS ORDER AS UNDER:- THE FACTS OF THE CASE, SUBMISSIONS MADE BY THE APPELLANT AND REMAND REPORT OF THE AO HAVE BEEN CAREFULLY CONSIDERED. THE ASSESSMENT FOLDER OF THE APPELLANT WITH THE ACIT, CIRCLE, SAHARANPUR WAS REQUISITIONED AND EXAMINED. AFTER EXAMINATION OF TH E ASSESSMENT FOLDER FOLLOWING FACTS EMERGE:- I.T.A. NO. 6487/D/2012 ASSESSMENT YEAR 2009-10 4 (I) THE ACIT, CIRCLE, SAHARANPUR DOWNLOADED THE E- FILED RETURN FOR THE RELEVANT ACCOUNTING PERIOD FRO M THE SYSTEM. SUBSEQUENTLY, THE AO RECORDED REASONS FOR SELECTION OF CASE UNDER SCRUTINY AS UNDER:- REASONS OR SELECTING THE CASE UNDER SCRUTINY: IN THIS CASE, THE RETURN OF INCOME FOR A. Y. 2009-1 0 HAS BEEN FILED ON 30-09-2009 DECLARING TOTAL INCOME AT NIL AND DEEMED TOTAL INCOME U/S 115JE OF RS. 44,46,426/-. THE ASSESSEE HAS SHOWN SHARE APPLICATION MONEY AMOUNTING TO RS.5,00,000/-, CAPITAL RESERVE AT RS.19, 90,000/-, UNSECURED LOAN HAS BEEN SHOWN AT RS.1,68,77,702/-, OTHER INCOME HAS BEEN SHOWN AT RS.45,06,8001-. NO EXPENSES HAVE BEEN SHOWN LIKE TRAVELLING, CONVEYANCE, FREIGHT ETC. THIS IS A FIT CASE FOR SCRUTINY. ALL THESE POINTS NEED DEEP VERIFICATI ON. THEREFORE, THE CASE IS PROPOSED FOR SCRUTINY .... ...' INTERESTING THE AO IN THE ASSESSMENT ORDER HAS IN, PARA 1 HAS MENTIONED AS UNDER:- ' ..... RETURN OF INCOME WAS FILED ON 30-09-2009: T HROUGH E- FILING SHOWING INCOME AT NIL. ASSESSEE DERIVES I NCOME FROM BUSINESS OF FERTILIZER CHEMICALS AND PAINT . LATER ON THE CASE WAS SELECTED UNDER SCRUTINY THROUGH CAS S AND FIXED FOR HEARING ON 05-10-2010..... ' ADMITTEDLY, FROM THE PERUSAL OF ASSESSMENT ORDER, I T IS NOTICED THAT THE APPELLANT'S CASE WAS SELECTED UNDE R SCRUTINY AFTER REASONS WERE DULY RECORDED AND APPRO VED BY THE RANGE ADDL. CIT, SAHARANPUR AND NOT THROUGH CASS AS MENTIONED BY THE AO IN THE ASSESSMENT. THE AO HAS DEFINITELY TRIED TO GIVE WRONG IMPRESSION TH AT THE APPELLANT'S CASE WAS SELECTED DIRECTLY THROUGH CASS ON THE BASIS OF PAN WHICH EXISTED IN THE CODE OF ACIT, CIRCLE, SAHARANPUR AND AS SUCH NO EFFORT WAS ACTUAL LY MADE BY HIM TO TAKE THE APPELLANT'S CASE UNDER SCRU TINY WHICH FELL BEYOND HIS JURISDICTION. I.T.A. NO. 6487/D/2012 ASSESSMENT YEAR 2009-10 5 (II) THE AO ISSUED NOTICE U/S 143(2) DATED 28-09-2 010 THROUGH SPEED POST AS WELL AS THE I.T.I WAS DEPUTED TO SERVE THE NOTICE PERSONALLY UPON THE ASSESSEE. THE I.T.I VIDE REPORT DATED 30-09-2010 INTIMATED THAT THE DIRECTOR OF THE ASSESSEE COMPANY, SH. K.N. SINGH REFUSED SERVICE OF THE NOTICE BUT AT THE SAME TIME INTIMATED THAT THE NOTICE ISSUED THROUGH SPEED POST HAD ALREADY BEEN RECEIVED BY HIS WIFE. THUS ITI SERVED THE NOTICE THROUGH AFFIXTURE. (III) AT THE BACK OF THE NOTICE ISSUED U/S 143(2) DATED 20-09- 2010 ISSUED BY SPEED POST, IT HAS BEEN WRITTEN AS UNDER:- - FACTORY ADDRESS - INDUSTRIAL EXTENSION SATHARIA, DISTT. JAUNPUR - CLOSED FROM 4 YEARS - HEAD OFFICE - CHAND BAI PALACE, 60 BAZAR ROAD, BANDRA (WEST), MUMBAI - 400050 THESE FACTS CLEARLY INDICATE THAT THE AO WAS AWARE OF THE LOCATION OF REGISTERED OFFICE, FACTORY AND HEAD , OFFICE AND NONE OF THEM WAS LYING IN HIS TERRITORIAL JURIS DICTION. (IV) THEREAFTER THE AO AGAIN ISSUED NOTICES U/S 14 3(2) DATED 03- 02-2011, 01-06-2011. BUT THESE NOTICES WERE SEN T IN A ROUTINE WAY AS THE AO DID NOT PURSUE FURTHER O N NON- COMPLIANCE MADE BY THE ASSESSEE. NOTICE U/S '142(1) AND 143(2) DATED 24-06-2011 ALONG WITH DETAILED QUESTIONNAIRE (CONTAINING ROUTINE QUERIES COMPRISING 29 POINTS) WERE SENT ON 05-07-2011 FIXIN G HEARING FOR 14-07-2011. (V) IN RESPONSE TO NOTICES ISSUED U/S 143(2)/142( 1) DATED 01-06- 2011 AND 24-06-2011, THE LD. AR FOR THE ASSESSEE VIDE LETTER DATED 06-07-2011 INTIMATED THA T THE COMPANY WAS BASED IN MUMBAI AND ALL RELEVANT DOCUMENTS WERE IN MUMBAI OFFICE, THEREFORE THE ASSESSEE SOUGHT ADJOURNMENT. (VI) THE APPELLANT VIDE LETTER DATED 14-07-2011 IN TIMATED THAT HE WAS NOT WELL FROM LAST COUPLE OF YEARS AND WAS ALSO ADMITTED TO APOLLO HOSPITAL, NEW DELHI AND CAM E I.T.A. NO. 6487/D/2012 ASSESSMENT YEAR 2009-10 6 BACK A FEW DAYS BACK. IT WAS REITERATED THAT THE COMPANY WAS BASED IN MUMBAI AND ALL THE RELEVANT DOCUMENTS WERE IN MUMBAI OFFICE. THEREFORE, IT WAS PLEADED TO GRANT ADJOURNMENT. (VII) IN THE MEANTIME, THE CIT, MUZAFFARNAGAR VIDE LETTER DATED 23-08-2011 WHILE MONITORING THE CASE, DIRECTE D THE AO TO INTIMATE THE RELEVANT PARA OF THE GUIDELI NES FOR SELECTION OF THE SCRUTINY CASE OF THE ASSESSEE ISSU ED BY CBDT IN F.Y.2010-11 UNDER WHICH THIS CASE HAD BEEN SELECTED FOR SCRUTINY. IN RESPONSE THE AO VIDE LETT ER DATED 1F-09-2011 COULD NOT POINT OUT THE PARTICULAR PARA OF THE CBDT GUIDELINES UNDER WHICH THE ASSESSEE'S C ASE WAS SELECTED FOR SCRUTINY BUT REPORTED THAT THE ASSESSEE'S CASE WAS SELECTED AFTER APPROVAL OF THE ERSTWHILE RANGE ADDL.CIT, SAHARANPUR. (VIII) THE ASSESSEE VIDE LETTER DATED 09-11-2011 R EPLIED TO ALL 29 QUERIES WITH THE OPENING SENTENCE AS UNDER:- ......WITH REFERENCE TO YOUR NOTICE DATED 24-06-11 WE HAVE TO BRING TO YOUR KIND NOTICE THAT OUR JURISDIC TION TO: TAX ARISES UNDER CIT, DEHRADUN AND HAVE BEEN ACCORDINGLY ASSESSED SINCE THE INCEPTION OF THE COMPANY AT DEHRADU1 HOWEVER, WE ARE HEREBY GIVING POINT-WISE REPLY AS UNDER....... (IX) THE ASSESSEE VIDE LETTER DATED 29-11-2011 FILE D DETAILS AND EVIDENCES ON 29-11-2011 SHOWING NIL PRODUCTION AS PER COMMERCIAL TAX ASSESSMENT ORDER AND COPIES O F ITRS OF LAST SEVERAL YEARS SHOWING BROUGHT FORWARD BUSINESS LOSSES AND DEPRECIATION. I (X) THE ASSESSEE FURTHER VIDE LETTER DATED 02-12-20 11 VIDE PARA 2 SUBMITTED AS UNDER: - I ' .... THE JURISDICTION TO TAX WAS EARLIER WITH CIT , DEHRADUN FOR THE LAST MANY YEARS, IN FACT SINCE INCORPORATION WHERE ALL THE PAST RECORDS ARE KEPT. CHANGE IN JURISDICTION HAS NOT BEEN INTIMATED TO US AND I.T.A. NO. 6487/D/2012 ASSESSMENT YEAR 2009-10 7 IT IS CAUSING GREAT HARDSHIP TO PRESENT THE CASE AT SAHARANPUR. IT IS THEREFORE PRAYED THAT THE JURISDI CTION BE RETAINED AT DEHRADUN..... ' (XI) DURING THE COURSE OF APPELLATE PROCEEDINGS, T HE APPELLANT FURNISHED COPY OF LETTER DATED 08-07-2011 ADDRESSED TO THE ACIT, CIRCLE, SAHARANPUR WHEREIN I T WAS SUBMITTED AS UNDER:- .... 2. IN THIS REGARD IT IS STATED THAT THE COMPA NY'S REGISTERED OFFICE SINCE ITS INCORPORATION IS AT 21, OLD SURVEY ROAD, DEHRADUN AND IS BEING ASSESSED TO TAX AT DEHRADUN ONLY. THE RIGHTFUL JURISDICTION OF OUR CAS E LIES AT DEHRADUN AND WE HAVE BEEN CONTINUOUSLY BEING ASSESSED AT DEHRADUN SINCE INCORPORATION..... ' HOWEVER, FROM THE EXAMINATION OF THE ASSESSMENT FOL DER OF THE APPELLANT WITH THE AO, IT IS NOTICED THAT NO SUCH LETTER DATED 08-07-2011 FINDS PLACE IN THE ASSESSME NT FOLDER. FURTHER, THE AO IN HIS REMAND REPORT DATED 10-09- 2011 HAS MENTIONED THAT IT WAS ONLY ON 05-12-2011 WHEN THE CASE WAS AT A FINAL STAGE, THE ASSESSEE MA DE SUBMISSIONS DATED 02-12-2011 REQUESTING FOR TRANSF ER OF ITS CASE TO DEHRADUN. THUS IT IS NOT ASCERTAINABLE WHETHER THE APPELLANT ACTUALLY FILED LETTER DATED 0 8-07- 2001 AS REPRODUCED ABOVE BEFORE THE AO. IT IS OBSERVED THAT THE AO HAS EXERCISED JURISDICT ION OVER THE APPELLANT'S CASE AS PERHAPS THE PAN ALLOTT ED TO THE APPELLANT FELL WITHIN HIS JURISDICTION AND THE AO CODE MENTIONED IN THE SYSTEM WAS KNP/C/2511 I.E. DCIT/ACIT, CIRCLE, SAHARANPUR. THUS APPELLANT S CAS E WAS THOUGH SELECTED AFTER RECORDING THE REASONS, NO EFFORTS WERE MADE TO VERIFY THE DETAILS OF THE COMP ANY FROM THE WEBSITE OF ROC WHETHER IT WAS A NEW COMPAN Y, ESPECIALLY WHEN REGISTERED OFFICE MENTIONED WAS BAS ED AT DEHRA DUN. ON THE OTHER HAND, IT HAS BEEN CONTEN DED THAT THE APPELLANT'S REGISTERED OFFICE WAS AT 2112, OLD SURVEY ROAD, DEHRA DUN SINCE ITS INCORPORATION ON 1 0-05- 1990 AS PER THE COMPANY/L.LP MASTER DATA DOWNLOADED FROM THE WEB-SITE OF THE REGISTRAR' OF COMPANIES, UTTRAKHAND. SINCE A.Y.L996-97 IT WAS REGULARLY ASSE SSED I.T.A. NO. 6487/D/2012 ASSESSMENT YEAR 2009-10 8 TO INCOME TAX WITH DCIT/ACIT, CIRCLE-2, DEHRA DUN. THE APPELLANT HAS ALSO FURNISHED COPIES OF ITRS AND OTH ER DOCUMENTS IN SUPPORT OF ITS CONTENTION. IT HAS FURT HER BEEN ARGUED THAT THE JURISDICTION OVER ITS CASE WAS TRANSFERRED TO DCIT/ACIT CIRCLE, SAHARANPUR WITHOUT PRIOR NOTICE TO THE APPELLANT AND WITHOUT GIVING AN Y OPPORTUNITY TO IT. 5. FROM THE ABOVE IT IS EVIDENT THAT THE AO ASSU MED JURISDICTION OVER THE APPELLANT CASE MERELY BECAUSE THE PAN OF THE ASSESSEE FELL WITHIN HIS JURISDICTION. THE ACIT , SAHARANPUR DID NOT HAVE JURISDICTION OVER THE ASSESSEE SINCE N EITHER THE REGISTERED OFFICE/ HEAD OFFICE NOR ANY FACTORY/BUSI NESS CONCERN WAS LYING IN THE TERRITORIAL JURISDICTION OF THE IN COME TAX AUTHORITIES AT SAHARANPUR. FURTHER, THE COMPETENT A UTHORITY VIZ. CIT, DEHRA DUN HAD NEVER TRANSFERRED THE ASSESSEES CASE TO ACIT, CIRCLE, SAHARANPUR BY ANY ORDER U/S 127 OF TH E I.T. ACT. AS HAS BEEN DISCUSSED BY THE LD. CIT (A) ABOVE, IT HAS BEEN NOTED AT THE BACK OF NOTICE U/S 143(2) DATED 28-09-2010 THAT THE ASSESSEES FACTORY WAS SITUATED IN DISTRICT JAUNPUR (U.P.) AND WAS CLOSED FOR THE LAST 4 YEARS. IT HAS ALSO BEEN N OTED THAT THE ASSESSEES HEAD OFFICE WAS LOCATED IN MUMBAI. FURTH ER, ITS REGISTERED OFFICE WAS AT DEHRA DUN AND IT WAS REGUL ARLY FILING RETURNS OF INCOME WITH ACIT/DCIT, CIRCLE-2, 'DEHRA DUN. I.T.A. NO. 6487/D/2012 ASSESSMENT YEAR 2009-10 9 THEREFORE, IT WAS NOT A CASE WHERE THE ASSESSEES C ASE WAS LINKED WITH ACIT, CIRCLE, SAHARANPUR. WE ARE OF THE CONSID ERED OPINION THAT MERELY ON THE BASIS OF THE FACT THAT THE ASSES SEES PAN FELL WITH ACIT, CIRCLE, SAHARANPUR, THE AO COULD NOT RIG HTFULLY ASSUME JURISDICTION OVER THE ASSESSEES CASE. THOUG H THE PAN OF THE ASSESSEE, DUE TO ONE REASON OR THE OTHER, FELL WITH ACIT, CIRCLE, SAHARANPUR, HOWEVER, THE IMPORTANT THING TO NOTE IS THAT THE ASSESSEE NEITHER EVER FILED RETURNS OF INCOME I N SAHARANPUR NOR ITS PRINCIPAL PLACE OF BUSINESS WAS IN SAHARANP UR. FURTHER, THE HEAD OFFICE WAS IN MUMBAI WITH REGISTERED OFFIC E IN DEHRA DUN. THUS THE AO LACKED JURISDICTION OVER THE ASSES SEES CASE. AS RIGHTLY POINTED OUT BY THE LD. CIT (APPEALS), THE P ROPER RECOURSE FOR THE AO WAS TO TRANSFER THE ASSESSEES CASE IMME DIATELY TO THE JURISDICTIONAL AO AT DEHRA DUN WHERE ASSESSEES PAS T RECORDS WERE AVAILABLE. ALTHOUGH THE ASSESSEE DID CLAIM BEF ORE THE LD. CIT (A) THAT A LETTER DATED 08-07-2011 WAS SENT BY IT TO THE A.O. DISCLOSING ITS RIGHTFUL JURISDICTION BUT THE AO FEI GNED IGNORANCE ABOUT SUCH LETTER. BE THAT AS IT MAY, THE ASSESSEE, DURING THE COURSE OF ASSESSMENT PROCEEDINGS VIDE LETTER DATED 02-12-2011, SPECIFICALLY REQUESTED THE AO TO TRANSFER ITS CASE TO THE JURISDICTIONAL AO AT DEHRA DUN WHERE IT WAS REGULAR LY ASSESSED I.T.A. NO. 6487/D/2012 ASSESSMENT YEAR 2009-10 10 TO TAX FOR THE PAST SEVERAL YEARS. EVEN IF THE REQU EST WAS MADE ON 02-12-2011, THE AO HAD STILL TIME TO TRANSFER THE C ASE TO DCIT/ACIT, CIRCLE-2, DEHRA DUN. HOWEVER, THE AO EVE N WHILE LACKING JURISDICTION PROCEEDED TO FRAME ASSESSMENT U/S 143(3) OF THE ACT WHICH IS LEGALLY UNTENABLE. 6. THE HON'BLE SUPREME COURT IN THE CASE OF DASA M UNI REDDY V APPA RAO AIR 1974 SC 2089 HAS POINTED OUT THAT WA NT OF JURISDICTION MUST BE DISTINGUISHED FROM IRREGULAR O R ERRONEOUS EXERCISE OF JURISDICTION. IF THERE IS WANT OF JURIS DICTION THE WHOLE PROCEEDING IS CORAM-NON JUDICE. THE ABSENCE OF A CO NDITION NECESSARY TO FIND THE JURISDICTION TO MAKE AN ORDER OR GIVE A DECISION DEPRIVES THE ORDER OR DECISION OF ANY CON CLUSIVE EFFECT. THE DISTINCTION BETWEEN INVALIDITY AND NULLITY IS W ELL ESTABLISHED IN DHIRENDRA NATH GORAI V. SUDHIR CHANDRA GHOSH AIR 1964 SC 1300. IT WAS POINTED OUT THAT WHETHER A PROVISION F ELL UNDER ONE CATEGORY OR THE OTHER WAS NOT EASY OF DISCERNMENT A S, IN THE ULTIMATE ANALYSIS, IT DEPENDED UPON THE NATURE, SCO PE AND OBJECT OF THE PARTICULAR PROVISION. THE WORKABLE TEST PROP OUNDED IN THE CASE OF HOLMES V. RUSSEL (1841) 9 DOWL 487 EXTRACTE D BELOW, WAS APPROVED:- I.T.A. NO. 6487/D/2012 ASSESSMENT YEAR 2009-10 11 'IT IS DIFFICULT SOMETIMES TO DISTINGUISH BETWEEN A N IRREGULARITY AND A NULLITY; BUT THE SAFEST RULE TO DETERMINE WHAT IS AN IRREGULARITY AND WHAT IS A NUL LITY IS TO SEE WHETHER THE PARTY CAN WAIVE THE OBJECTION S; IF HE CAN WAIVE IT, IT AMOUNTS TO AN IRREGULARITY, IF HE CANNOT, IT IS NULLITY. ' 7. THIS TEST INVOLVES A DISTINCTION BEING DRAWN BE TWEEN PROVISIONS WHICH CONFER JURISDICTION AND PROVISIONS WHICH MERELY REGULATE THE PROCEDURE. PROVISIONS WHICH CONFER JUR ISDICTION OR SUCH MANDATORY PROVISIONS AS ARE ENACTED IN PUBLIC INTEREST OR ON GROUNDS OF PUBLIC POLICY CANNOT BE WAIVED, BECAU SE OF THE UNDERLYING PRINCIPLE THAT JURISDICTION COULD NEITHE R BE WAIVED NOR CREATED BY CONSENT. THE HON'BLE ALLAHABAD HIGH COUR T IN THE CASE OF SANT BABA MOHAN SINGH VS. CIT (1973) 90 ITR 197 (ALL.) HAS HELD THAT A PROCEEDING IS A NULLITY WHERE THE A O HAS NO JURISDICTION AB INITIO TO TAKE UP THE PROCEEDING. A PROCEEDING IS A NULLITY WHEN THE AUTHORITY TAKING IT UP HAS NO JURI SDICTION EITHER BECAUSE OF WANT OF PECUNIARY JURISDICTION OR OF TER RITORIAL JURISDICTION OR OF JURISDICTION OVER THE SUBJECT MA TTER OF THE PROCEEDING. A PROCEEDING IS A NULLITY WHEN THE AUTH ORITY TAKING IT HAS NO POWER TO ASSESS THE CASE. THUS THE JURISDICT ION ASSUMED I.T.A. NO. 6487/D/2012 ASSESSMENT YEAR 2009-10 12 BY THE AO HAS RENDERED THE ASSESSMENT PROCEEDINGS T O NULLITY AND IN ANY CASE IT IS NOT AN IRREGULARITY. 8. THE CLEAR SCHEME OF INCOME-TAX ACT PROVIDES THA T WHEN AN OFFICER HAS JURISDICTION OVER THE ASSESSEE, THE SAM E CANNOT BE TRANSFERRED AND ASSUMED BY ANOTHER OFFICER UNLESS T HERE IS AN APPROPRIATE ORDER PASSED BY THE COMPETENT AUTHORITY TRANSFERRING THE JURISDICTION FROM ONE CITY TO OTHE R AFTER GIVING AN OPPORTUNITY OF HEARING TO ASSESSEE. IN THE ASSESSEE S CASE NO ORDER U/S 127 OF THE ACT HAS BEEN PASSED BY THE COM PETENT AUTHORITY. THEREFORE, THE ENTIRE ASSESSMENT PROCEED INGS ARE RENDERED TO NULLITY. HENCE, IN LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE FIND NO REASON TO INTE RFERE WITH THE FINDINGS OF THE LD. CIT (A) AND WE UPHOLD THE SAME. 9. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.05.2016. SD/- SD/- (S.V. MEHROTRA) (SUDHANSHU SRIVAST AVA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE 16 TH OF MAY 2016 GS I.T.A. NO. 6487/D/2012 ASSESSMENT YEAR 2009-10 13 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSTT. REGISTRAR