Veerendra Gurulingappa Mangalge, Aurangabad V. Income-tax Officer, Ward - 2 (4), Aurangabad

ITA 695/PUN/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6255 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 01-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NITIN S.K. PATIL
• Assessee Lawyers: RAMESH N THETE
• Keywords: Opportunity of being heard; Set aside
• Section: 143(3); 142(1); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE BEFORE SHRI R.S.SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY , JM . / I TA NO. 695 /PUN/20 19 / ASSESSMENT YEAR : 2015 - 16 VEERENDRA GURULINGAPPA MANGALGE, D - 108, 5 STAR MIDC SHENDRA, AURANGABAD - 431 154. PAN : ABUPM9145P ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD - 2(4), AURANGABAD. / RESPONDENT A SSESSEE BY : SHRI RAMESH N THETE REVENUE BY : SHRI NITIN S.K. PATIL / DATE OF HEARING : 06 .0 8 .2019 / DATE OF PRONOUNCEMENT : 06 .0 8 .2019 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(APPEALS) - 2, AURANGABAD DATED 28.03.2019 FOR THE ASSESSMENT YEAR 2015 - 16 AS PER THE GROUNDS OF APPEAL ON RECORD. 2 ITA NO. 695 /PUN/20 19 A.Y. 2015 - 16 2. THE ASSESSEE HAS TAKEN BOTH GROUNDS ON MERITS AS WELL AS LEGAL GROUNDS IN THIS APPEAL. IN THE LEGAL GROUNDS, THE ASSESSEE HAS CHALLENGED THE ASSESSMENT ORDER TO BE VOID - AB - INITIO SINCE ASSESSMENT ORDER COMPLETED U/S.143(3) OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT) IN WHICH , THE NOTICE SERVED U/S.143(2) OF THE ACT WAS BY DIFFERENT ASSESSING OFFICER HAVING NO JURISDICTION ON THE ASSESSEE. MORE SPECIFICALLY, THE ASSESSMENT U/S.143(3) OF THE ACT WAS COMPLETED BY THE ITO, WAR D 2(4), AURANGABAD WHEREAS, THE NOTICE U/S.143(2) OF THE ACT DATED 19.09.2016 WAS ISSUED BY THE ITO, WARD 2(1), AURANGABAD. THEREFORE, CONTENTION OF THE ASSESSEE IS THAT SERVING OF NOTICE U/S.143(2) OF THE ACT ON THE ASSESSEE BY THE ITO, WARD 2(1), AURANGA BAD WAS WITHOUT JURISDICTION AND ON THAT BASIS COMPLETION OF ASSESSMENT U/S.143(3) OF THE ACT BY THE ITO WARD 2(4), AURANGABAD AND WITHOUT ANY NOTICE U/S.143(2) OF THE ACT ISSUED BY HIM AND SERVED ON THE ASSESSEE MAKES THE ASSESSMENT ORDER VOID AB INITIO. 3. AT THE TIME OF HEARING, THE LD. DR REFERRING TO THE ASSESSMENT ORDER STATED THAT THERE HAD BEEN CHANGE IN INCUMBENT OF THE OFFICE AND NOTICE U/S.142(1) R.W.S.129 OF THE ACT WAS ISSUED ON 15.05.2017 AND DULY SERVED ON THE ASSESSEE. THE CONTENTION OF THE LD. DR WAS THAT THIS CHANGE IN INCUMBENT OF THE OFFICE HAS BEEN DULY NOTIFIED TO THE ASSESSEE AND THEREFORE, ASSESSMENT ORDER IS AS PER LAW AND HAS BEEN FRAMED FOLLOWING THE PROCEDURE AS MENTIONED WITHIN THE ACT ITSELF. REFERRING TO THE FINDINGS OF THE LD . CIT(APPEALS), THE LD. DR STATED THAT IT WAS NOT NECESSARY FOR THE ASSESSING OFFICER TO GRANT AN OPPORTUNITY OF HEARING TO THE ASSESSEE WHENEVER THERE WAS AN INTERNAL TRANSFER OF A CASE WITHIN A PARTICULAR RANGE SO AS THE ASSESSING OFFICERS HAVE CONCURRE NT JURISDICTION OVER THE ASSESSEES OF THAT CHARGE. 3 ITA NO. 695 /PUN/20 19 A.Y. 2015 - 16 4. IN RESPONSE TO THE ARGUMENTS OF THE LD. DR, AS CLOSING SUBMISSION S , THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE FACTS ON RECORD DEMONSTRATES THAT THERE WAS TRANSFER OF JURISDICTION FROM ITO, WARD 2(1 ), AURANGABAD TO ITO, WARD 2(4), AURANGABAD ULTIMATELY WHO HAD FRAMED THE ASSESSMENT AND PROVISION OF SECTION 127 OF THE ACT WHICH SPECIFICALLY DEALS WITH THE POWER OF TRANSFER OF CASES AND THEREIN, IT CLEARLY STATES AFTER GIVING THE ASSESSEE A REA SONABLE OPPORTUNITY OF BEING HEARD IN THE MATTER. THEREFORE, IF AT ALL TRANSFER OF CASE TAKE S PLACE FROM ONE ITO TO ANOTHER, NOT ONLY IT HAS TO BE BROUGHT TO THE NOTICE OF THE ASSESSEE BUT ALSO AT THE SAME TIME , HIS SUBMISSION S SHOULD ALSO HAVE TO BE RECORDED IN ORDER TO PROVE THAT SUFFICIENT OPPORTUNITY OF HEARING WAS PROVIDED TO THE ASSESSEE AT THE TIME OF TRANSFER OF CASE TO DIFFERENT JURISDICTION. THE LD. AR FURTHER SUBMITTED THAT THE LD. DR HAS REFERRED TO CHANGE IN INCUMBENT OF THE OFFICE AND SERVICE OF NOTICE ISSUED U/S. 142(1) R.W.S. 129 OF THE ACT. HOWEVER, THE GRIEVANCE OF THE ASSESSEE IS WITH REGARD TO NON - SERVICE OF NOTICE OR IMPROPER SERVICE OF NOTICE U/S.143(2) OF THE ACT BY THE ITO HAVING NO JURISDICTION OVER THE ASSESSEE AND IN SUCH CASE, THE PROVISION S OF SECTION 127 OF THE ACT WAS ALSO NOT COMPLIED WITH. IN FACT, THEREFORE, ASSESSMENT FRAMED U/S. 143(3) OF THE ACT BY THE ITO, WARD 2(4), AURANGABAD WAS WITHOUT ISSUING THE NOTICE U/S.143(2) OF THE ACT BY HIM TO THE ASSESSEE WHICH WAS MANDATORY TO BE ISSUED AND BECAUSE OF WHICH, ASSESSMENT ORDER BECOMES NULL AND VOID - AB - INITIO. 5. THE LD. AR PLACED RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ACIT & ANR. VS. HOTEL BLUE MOON REPORTED IN 321 ITR 362 (SC) WHEREIN IT WAS HELD THAT REQUIREMENT OF NOTICE U/S.143(2) CANNOT BE DISPENSE D WITH AND SUCH NOTICE IS THE FOUNDATION FOR THE JURISDICTION OF THE ASSESSING OFFICER. 4 ITA NO. 695 /PUN/20 19 A.Y. 2015 - 16 6. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS. WE HAVE ALSO ANALYZED THE FACTS AND CIRCUMSTANCES IN THIS CASE. THE LEGAL GROUND TAKEN BEFORE US IS THAT ASSESSMENT U/S.143(3) OF THE ACT WAS COMPLETED BY THE ITO, WARD 2(4), AURANGABAD WHEREAS, THE NOTICE U/S.143(2) OF TH E ACT WAS ISSUED TO THE ASSESSEE BY THE ITO , WARD 2(1), AURANGABAD . THE CONTENTION OF THE ASSESSEE IS, THEREFORE, ASSESSMENT ORDER HAS BEEN FRAMED BY THE ITO, WARD 2(4), AURANGABAD WITHOUT SERVING NOTICE U/S.143(2) OF THE ACT TO THE ASSESSEE AND THEREFORE, SUCH ASSESSMENT IS VOID - AB - INITIO AS IT HAS BEEN HELD IN THE CASE OF ACIT & ANR. VS. HOTEL BLUE MOON (SUPRA.) BY THE HONBLE SUPREME COURT THAT THE ISSUANCE OF NOTICE U/S.143(2) OF THE ACT HAS BEEN HELD TO BE A MANDATORY REQUIREMENT. THE CONTENTION OF THE LD. DR WAS THAT THERE HAD BEEN CHANGE IN THE INCUMBENT OF THE OFFICE AND THEREFORE, NOTICE U/S.142(1) R.W.S. 129 OF THE ACT WAS DULY COMPLIED WITH AND THE ASSESSEE WAS INFORMED SINCE SUCH NOTICE U/S.142(1) OF THE ACT WAS DULY SERVED ON THE ASSESSEE. THE FACTS ON RECORD DEMONSTRATES THAT THE NOTICE U/S.143(2) OF THE ACT WAS ISSUE D BY THE ITO, WARD 2(1), AURANGABAD WHEREAS THE ASSESSMENT WAS FRAMED BY THE ITO, WARD 2(4), AURANGABAD. THE REVENUE CONTENDS THAT THERE WAS TRANSFER OF JURISDICTION OF THE CASE A ND AS PER OBSERVATION OF THE LD. CIT(APPEALS), OPPORTUNITY OF HEARING NEED NOT BE PROVIDED TO THE ASSESSEE SINCE IT IS INTERNAL MATTER OF SUCH TRANSFER OF THE CASE. NOW THERE ARE TWO THINGS I.E. (I) CHANGE IN INCUMBENT OF THE OFFICE AND (II) TRANSFER OF CA SE FROM ONE JURISDICTION TO ANOTHER. 7. THE PROVISION OF SECTION 127 OF THE ACT DEALS WITH TRANSFER OF CASES WHERE A PARTICULAR CASE HAD BEEN TRANSFERRED FROM ONE JURISDICTION TO ANOTHER JURISDICTION AS IN THE PRESENT CASE. THE PROVISION CLEARLY STATES TH AT A REASONABLE OPPORTUNITY OF HEARING HAS TO BE PROVIDED TO THE ASSESSEE IN CASE 5 ITA NO. 695 /PUN/20 19 A.Y. 2015 - 16 OF SUCH TRANSFER. WHAT THE PROVISION OF SECTION 129 STATES IS MERELY A CHANGE IN INCUMBENT OF THE OFFICE AND NOT REGARDING TRANSFER OF CASE. THEREFORE, FIRST IT IS CLEAR THAT THE ASSESSMENT WAS COMPLETED WITHOUT ISSUING THE NOTICE U/S.143(2) OF THE ACT BY ITO, WARD 2(4), AURANGABAD . MOREOVER, IF AT ALL, THERE WAS CHANGE OF JURISDICTION FROM ITO, WARD 2(1), AURANGABAD TO ITO, WARD 2(4), AURANGABAD, PROVISION OF SECTION 127 OF T HE ACT IS ABSOLUTELY CLEAR THAT A REASONABLE OPPORTUNITY OF HEARING SHOULD BE GIVEN TO THE ASSESSEE WHICH WAS NOT DONE IN THE PRESENT CASE. IN OUR HUMBLE OPINION WITH REGARD TO THE INCOME TAX JURISPRUDENCE, ISSUANCE OF NOTICE, SERVICE OF NOTICE, REASONABLE OPPORTUNITY OF BEING HEARD , THESE FORMS THE B EDROCK OF THE ENTIRE TAX JURISPRUDENCE WHICH IS THE SPIRIT OF WELFARE LEGISLATION. THE QUASI - JUDICIAL AUTHORITY CANNOT BE PERMITTED TO TRANSFER JURISDICTION FROM ONE ASSESSING OFFICER TO ANOTHER WITHO UT THE KNOWLEDGE AND INFORMATION OF THE ASSESSEE WHO IS ACTUAL TAX PAYER AND CONTRIBUTING REVENUE TO THE GOVERNMENT. TO SAFEGUARD THAT SECTION 127 OF THE ACT HAS BEEN INCORPORATED. IN THE PRESENT CASE OF THE ASSESSEE, WHEN ONE OFFICER HAS ISSUED NOTICE U/S .143(2) OF THE ACT, HIS JURISDICTION WAS TRANSFER R ED AND ANOTHER OFFICER HAS BEEN PLACED FOR FRAMING ASSESSMENT. FIRST OF ALL ON THIS TRANSFER OF CASE, THE ASSESSEE SHOULD HAVE BEEN INFORMED AND HEARING SHOULD HAVE BEEN TAKEN PLACE. SECONDLY, THE OFFICER W HO ULTIMATELY COMPLETED THE ASSESSMENT, SHOULD HAVE ISSUED NOTICE U/S.143(2) OF THE ACT TO THE ASSESSEE AGAIN. IN THIS CASE, NOTICE HAS BEEN ISSUED BY THE ITO, WARD 2(1), AURANGABAD AND ASSESSMENT WAS COMPLETED BY THE ITO, WARD 2(4), AURANGABAD WHICH IS N OT PERMISSIBLE WITHIN THE SCOPE AND AMBIT OF THE ACT. 8. IN VIEW OF THE AFORESAID EXAMINATION OF FACTS AND LEGAL PARAMETERS, WE SET ASIDE THE ORDER S OF THE SUB - ORDINATE AUTHORITIES AND HOLD THE ASSESSMENT 6 ITA NO. 695 /PUN/20 19 A.Y. 2015 - 16 ORDER PASSED BY THE ASSESSING OFFICER TO BE NULL AND VOID - AB - INITIO. THUS, LEGAL GROUND HAS BEEN ANSWERED IN FAVOUR OF THE ASSESSEE. THEREFORE, ANY OTHER GROUNDS ON MERITS BECOME S ACADEMIC IN NATURE AND HENCE, ARE DISMISSED . 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED ON 06 TH DAY OF AUGUST , 201 9 . SD/ - SD/ - R.S.SYAL PARTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 06 TH AUGUST , 2019 . SB / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 2, AURANGABAD. 4. THE PR. CIT - 2, AURANGABAD. 5 . , , , / DR, ITAT, B BENCH, PUNE. 6 . / GUARD FILE. // TRUE COPY // / BY ORDER, / PRIVATE SECRETARY , / ITAT, PUNE . 7 ITA NO. 695 /PUN/20 19 A.Y. 2015 - 16 DATE 1 DRAFT DICTATED ON 06 .0 8 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 06 .0 8 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER