ITO, Ward-4, Pondicherry V. R Murugappa @ Muruvappan, Pondicherry

MA 26/CHNY/2023

AI Insights

The case revolves around a Miscellaneous Application filed by the Revenue against the order of the Income Tax Appellate Tribunal, Chennai, which had quashed a re-assessment order for the assessment year 2011-12. The original Tribunal decision was based on the finding that the Income Tax Officer (ITO) who issued the notice under section 148 of the Income Tax Act, 1961, did not have jurisdiction over the assessee at the time the notice was issued. The Revenue contended that the ITO did have jurisdiction based on subsequent administrative changes and that the Tribunal's decision was based on a mistaken assumption of facts. The Tribunal dismissed the Revenue's application, stating that the Revenue was essentially seeking a review of the Tribunal's decision, which is not allowed under the provisions of section 254(2) of the Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130035 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-03-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 23-03-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 18-01-2023
• Other Referred Cases: Champa Lal Chopra Vs State of Rajasthan, CIT Vs Electronic Research Ltd. & Anr., CIT Vs U.P. Shoe Industries, CIT Vs Mool Chand Shyam Lal, Rai Bahadur Seth Teomal Vs CIT, ACIT Vs Saurashtra Kutch Stock Exchange Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 148; 48

Judgement Text

Miscellaneous Application No.26/Chny/2023 (in ITA No.904/Chny/2019) िनधा रण वष /Assessment Year: 2011-12 The Income Tax Officer, Ward-4, Puducherry. v. Mr.R.Murugappa @ Muruvappan, 265, J.N.Street, Puducherry-605 001. [PAN: ALCPM 5291 N] (अपीलाथ /Appellant) ( यथ /Respondent) Department by : Mr.P.Sajit Kumar, JCIT Appellant by : Mr.R.Venkataraman, CA सुनवाई क तारीख/Date of Hearing : 24.03.2023 घोषणा क तारीख /Date of Pronouncement : 24.03.2023 आदेश / O R D E R PER MANJUNATHA.G, ACCOUNTANT MEMBER: The Revenue has filed present Miscellaneous Application against the order of the Tribunal in ITA No.904/Chny/2019 dated 29.07.2022 and relevant assessment year 2011-12. 2. The Revenue has narrated the facts of its case and mistakes stated to be apparent on record from the order of the Tribunal dated 29.07.2022 and relevant contents of Miscellaneous Application filed by the Revenue for the AY 2011-12 in ITA No.904/Chny/2019 are reproduced as under: आयकर अपीलीय अिधकरण, ’सी’ यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI ी वी. दुगा राव, माननीय ाियक सद एवं ी मंजूनाथा.जी, माननीय लेखा सद के सम BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER AND SHRI MANJUNATHA.G, HON’BLE ACCOUNTANT MEMBER MA No.26/Chny/2023 (in ITA No.904/Chny/2019) :: 2 :: 1. The above mentioned appeal by assessee was disposed off by "Hon'ble Tribunal by order dated 29.07.2022. By the said order the assessment order passed u/s.144 r.w.s. 147 on 10.03.2016 by ITO, Ward-4 Pondicherry was quashed on the reasoning that the said order is pursuant to the notice u/s.148 dated 10.09.2014 issued by ITO, Ward - 1(1), Pondicherry who didn't have jurisdiction over the assessee. 2. It is respectfully submitted that on 10.09.2014, jurisdiction over assessee was with ITO, Ward-1(1), Pondicherry as evident from the order Notification No. 4 /2001-02 dated 20.09.2001 (Exhibit A) of the Commissioner of Income Tax, Pondicherry. Subsequently, vide order dated 20.01.2015 of JCIT, Puducherry Range, the jurisdiction over the assessee was assigned to ITO, Ward-4, Pondicherry w.e.f. 20.01.2015 (Exhibit B) and hence the file was transferred by ITO, Ward-1 (1), Pondicherry to ITO, Ward-4, Pondicherry. Thus the ITO, Ward- 1 (1), Pondicherry who issued the notice u/s.148 in this case on 10. 09.2014 had valid jurisdiction and the ITO, Ward-4, Pondicherry who passed the assessment order on 10.03.2016 was also having valid jurisdiction on the respective dates. 3. The above mentioned facts are evident on records in the form of notifications issued by Commissioner of Income Tax, Pondicherry and assessee is also aware of these notification and hence it did not raise any such objection before the lower authorities. It is humbly submitted that without verification of the basic facts available on record and simply believing the statement made by assessee/his A.R. at bar, Hon'ble Tribunal held that the ITO who issued the impugned notice u/s 1 48 did not have jurisdiction and on that basis the consequent assessment order was quashed. Since the said decision is on mistaken assumption of facts, it is a mistake apparent from records as held in. • Champa Lal Chopra Vs State of Rajasthan (Raj) 257 ITR 74 • CIT Vs Electronic Research Ltd. & Anr. (Kar) 262 ITR 361 • CIT Vs U.P. Shoe Industries (All) 235 ITR 663 • CIT Vs Mool Chand Shyam Lal (All) 273 ITR 160 4. It is also submitted that necessary penal provisions may be initiated / costs awarded on the assessee and / his A.R. for making such misleading statements before the Hon'ble Tribunal which forced the Tribunal to make finding contrary to facts on record. 5. Without prejudice to the above, it is submitted that as per sec. 124(3)(b) if the assessee objects to the territorial jurisdiction of Assessing Officer, he has to make the objection within the time allowed in the notice u/s 148 to file the return. In the present case, assessee did not make any such objection before the Assessing Officer till passing of the assessment order. Hon'ble Supreme Court in Rai Bahadur Seth Teomal (36 ITR 9) on similar provisions of Sec. 64(3) of 1922 Act held that if assessee had not raised objection before the Assessing Officer, he cannot raise it before ITAT and ITAT cannot adjudicate the said issue. Not following the binding decision by ITAT is a mistake apparent on record as held in ACIT Vs Saurashtra Kutch Stock Exchange Ltd. (SC) 305 ITR 227. 3. The ld.Sr.Dr.P.Sajit Kumar, referring to petition filed by the Revenue submitted that there is an error in the order of the Tribunal dated 29.07.2022 in as much as quashing re-assessment order passed by the AO MA No.26/Chny/2023 (in ITA No.904/Chny/2019) :: 3 :: u/s.144 r.w.s.147 of the Income Tax Act, 1961 (in short “the Act") on the basis of additional grounds of appeal filed by the assessee on the issue of jurisdiction and said findings constitute a mistake apparent on record which needs to be rectified u/s.254(2) of the Act. The Ld.Sr.DR further submitted that the Department has advanced various arguments in light of provisions of Sec.124(3)(b) of the Act, and also certain judicial precedents including the decision of the Hon’ble Supreme Court in the case of Rai Bahadur Seth Teomal reported in [1959] 36 ITR 9 (SC), but the Tribunal went on to record its findings as if the notice issued u/s.148 of the Act, by the AO is invalid and liable to be quashed. Therefore, he submitted that there is an error in the order of the Tribunal in so far as the above findings is concerned, which needs to be recalled. 4. The Ld.Counsel for the assessee, on the other hand, supporting the order of the Tribunal submitted that the Counsel for the Department failed to make out a case of mistake apparent on record from the order of the Tribunal, but what was sought through petition filed by the AO is to review the decision rendered by the Tribunal in the given facts and circumstances of the case, which is not permissible u/s.254(2) of the Act. 5. We have heard both the parties and considered relevant contents of MA filed by the Revenue in light of order of the Tribunal dated 29.07.2022 in ITA No.904/Chny/2019. We find that the Tribunal has quashed re- assessment order passed by the AO u/s.144 r.w.s.147 of the Act, on the MA No.26/Chny/2023 (in ITA No.904/Chny/2019) :: 4 :: basis of additional grounds of appeal filed by the assessee vide their petition dated 17.05.2022 and held that notices issued by the AO, who does not have jurisdiction over the assessee and consequent assessment order framed in pursuant to said notices is invalid and liable to be quashed. The Tribunal while adjudicating the issue has considered arguments of both the sides and also relied upon certain judicial precedents, including the decision of the Hon’ble Gujarat High Court in the case of Shirishbhai Hargovandas Sanjanwala v. ACIT reported in [2017] 396 ITR 167 (Guj.) and reached to a conclusion that the assessment order passed by the AO is invalid and thus, quashed the order of the AO. The Revenue has agitated the order by way of Miscellaneous Application, but on perusal of contents of Miscellaneous Application filed by the Revenue, we find that the Revenue is seeking to review the judgment rendered by the Tribunal in the given facts and circumstances of the case without pointing ‘how and why’ the order of the Tribunal does come under the provisions of Sec.254(2) of the Act. It is a well settled principal of law by the decision of the Hon’ble Supreme Court in the case of CIT v. Reliance Telecom in Civil Appeal No.7110/2021 dated 03.12.2021, wherein the Apex Court categorically observed that if the order passed by the Tribunal is erroneous on merits, in that case the remedy available to the parties was to prefer an appeal before the Hon’ble High Court, but it could not be said that there is an apparent error which can be rectified u/s.254(2) of the Act. In this case, the Revenue fails to make out MA No.26/Chny/2023 (in ITA No.904/Chny/2019) :: 5 :: a case of mistake apparent on record from the order of the Tribunal, and thus, we dismiss the Miscellaneous Application filed by the Revenue. 6. In the result, the Miscellaneous Application filed by the Revenue is dismissed. Order pronounced on the 24 th day of March, 2023, in Chennai. Sd/- (वी. दुगा राव) (V. DURGA RAO) याियक सद य/JUDICIAL MEMBER Sd/- (मंजूनाथा.जी) (MANJUNATHA.G) लेखा सद य/ACCOUNTANT MEMBER चे ई/Chennai, दनांक/Dated: 24 th March, 2023. TLN आदेश क ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant 4. आयकर आयु /CIT 2. यथ /Respondent 5. िवभागीय ितिनिध/DR 3. आयकर आयु (अपील)/CIT(A) 6. गाड! फाईल/GF