ITO WD. 3(2), V. PRAVIN BALUBHAI ZALA,

MA 311/MUM/2010

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 5272 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-10-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 10-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P M DEVDASAN
• Assessee Lawyers: RAVI K MULCHANDANI
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, MUMBAI. BEFORE SHRI D.K.AGARWAL (JUDICIAL MEMBER) AND SHRI PRAMOD KUMAR(ACCOUNTANT MEMBER) M.A.NO.311/M/2010 (ARISING OUT OF I.T.A NO.788 MUM/2009) ASSESSMENT YEAR: 2005-06 INCOME TAX OFFICER, WARD-3(2), THANE ..APPELLANT VS. PRAVIN BALUBHAI ZALA RESPONDENT ZALA NIWAS, GHANTALI ROAD, THANE (W)-400 602. PA NO.AACPZ 3831 G APPELLANT BY: SHRI P.M.DEVDASAN RESPONDENT BY : SHRI RAVI K.MULCHANDANI O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS RECTIFICATION PETITION, THE APPLI CANT-ASSESSING OFFICER HAS INVITED OUR ATTENTION A FUNDAMENTAL ERROR, WHICH IS ALLEGED TO HAVE CREPT IN THE TRIBUNALS ORDER DATED 4.12.2009. 2. THE FUNDAMENTAL ERROR SO POINTED OUT BY THE ASSE SSING OFFICER IS THIS. IN THE IMPUGNED ORDER DATED 4.12.2009, THE TRIBUNAL HAD HE LD THAT THE INCOME TAX OFFICER,PUNE HAD NO JURISDICTION TO ASSESS THE ASSESSEE. IT WAS FOR THIS REASON, THE TRIBUNAL QUASHED THE RELATED ASSESSMENT ORDER ON THE GROUND THAT THE ASS ESSING OFFICER DID NOT HAVE JURISDICTION TO PASS THE SAID ORDER. THE RELEVANT OBSERVATIONS MADE BY THE TRIBUNAL IN THIS CONNECTION IN THE IMPUGNED ORDER ARE REPRODUCED BELOW: 9. IN THE PRESENT CASE, THE ITO (HQ) CIB, PUNE HAS NO JURISDICTION. EVEN TO ISSUE NOTICE U/S.143(1). OF COURSE, HE CAN CALL FOR INFO RMATION IN RESPECT TO FILING OF RETURN OR IN RESPECT TO PAN ETC., OF A PARTICULAR ASSESSEE . AFTER RECEIVING THE REQUIRED INFORMATION, IF THE ITO FEEL NECESSARY, CAN SEND TH E DETAILS TO THE ITO, WHO HAS THE JURISDICTION OVER A PARTICULAR ASSESSEE. THEREFORE , IN OUR CONSIDERED VIEW, ISSUANCE M.A. NO.311/M/2010 SHRI PRAVIN BALUBHAI ZALA 2 OF NOTICE U/S.142(1) ITSELF IS WITHOUT JURISDICTION . THE ITO (HQ) CIB, PUNE HAS COMPLETED THE ASSESSMENT U/S.144 EVEN WITHOUT ISSUI NG STATUTORY NOTICE U/S.143(2), WHICH IS MANDATORY FOR ALLOWING OPPORTUNITY OF BEIN G HEARD TO THE ASSESSEE FOR COMPLETION OF ASSESSMENT U/S.143(3) OR U/S.144. NO SUCH NOTICE HAVE BEEN ISSUED, THEREFORE, FOR THIS REASON ALSO THE ASSESSMENT SO C OMPLETED BY THE ITO (HQ) CIB, PUNE IS NULL AND VOID; THEREFORE, LIABLE TO BE QUAS HED. 10. IT IS A MATTER OF FACT THAT THE AREAS OF JURISDICTI ON OF THE AO ARE EARMARKED AND AS PER AREA EARMARKED, THE ASSESSEE WHO BELONGS TO THA T AREA FILES THEIR RETURN WITH THEIR RESPECTIVE ITOS. AS NO AREA HAS BEEN EARMARK ED TO THE ITO (HQ) CIB, PUNE FOR COMPLETION OF ASSESSMENT, THEREFORE, THE ITO (HQ) C IB, PUNE IS NOT HAVING JURISDICTION TO PASS AN ASSESSMENT ORDER. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE HOLD THAT THE ORDER PASSED U/S.144 IS BAD IN LAW AND, THEREFORE, WE QUASH THE ASSESSMENT. 3. THE APPLICANT-ASSESSING OFFICER, HOWEVER, POINTS OUT THAT IN HOLDING SO, THE TRIBUNAL HAS OVERLOOKED THE FACT THAT THE ASSESSING OFFICER PASSING THE RELEVANT ASSESSMENT ORDER I.E. ITO (HQ) CIB, PUNE, INDEED HAD THE JURISDICTION TO PASS THE SAID ORDER IN VIEW OF ORDER DATED 1.8.2007 ISSUED BY THE CHIEF COMMISSIONER OF INCOME TAX. OUR ATTENTION IS ALSO INVITED TO INSTRUCTION NO.6 OF 2000 ISSUED BY CENTRAL BOARD OF DIRECT TAXES (CBDT) TO ALL CHIEF COMMISSIONERS, WHEREIN, THE CHIEF COMMISSIONERS ARE , INTER ALIA, ADVISED TO CONFER THE CONCURRENT JURISDICTION TO ONE OR MORE ASSESSING OF FICER, DEPENDING ON THE WORKLOAD, AT THE STATIONS WHERE ASSESSEES TO WHOM, NOTICES U/S.142(1 ) ARE TO ISSUED, PURSUANT TO THE INFORMATION COLLECTED FROM ANNUAL INFORMATION REPOR T, ARE LOCATED. IT IS SUBMITTED THAT WITH REFERENCE TO THESE GUIDELINES OF THE CBDT, THE CHI EF COMMISSIONER OF INCOME TAX, PUNE HAD DULY CONFERRED CONCURRENT POWER TO THE ITO (HQ) CIB , PUNE AS WELL. THE VERY FOUNDATION OF THE REASONING ADOPTED BY THE TRIBUNAL, IN CANCELING THE ASSESSMENT IN THE IMPUGNED ORDER, IS, THUS ERRONEOUS AND HAS VITIATED THE IMPUGNED OR DER. WE ARE THUS, URGED TO RECALL THE ORDER AND HEAR THE SAME ON MERITS. 4. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSES SEE POINTS OUT THAT CBDT INSTRUCTION NO.6 IN PARA 10(D), UNDOUBTEDLY ADVISED THE CHIEF COMMISSIONERS TO PASS ORDERS CONFERRING CONCURRENT JURISDICTION TO ONE OR MORE ASSESSING OFFICERS DEPENDING ON THE WORKLOAD, AT THE STATIONS WHERE ASSESSES ARE LO CATED. OUR ATTENTION IS INVITED TO THE WORDS EMPLOYED IN THE SAID CBDT INSTRUCTION. LEARN ED COUNSEL THEN POINTS OUT THAT WHILE THE ASSESSEE IS LOCATED IN THANE, THE ASSESSING OFF ICER WHO HAD PASSED THE ASSESSMENT ORDER, QUASHED BY THE TRIBUNALS ORDER IS LOCATED I N PUNE. IT IS THUS CLEAR THAT THE POWERS CONFERRING ON THE ITO (HQ) CIB, PUNE, OVER ASSESSEE BASED IN THANE, WERE NOT IN ACCORDANCE WITH THE INSTRUCTIONS ISSUED BY THE CBDT. IT IS AR GUED THAT THE DEPARTMENT DOES NOT DERIVE ANY STRENGTH FROM THE CBDT INSTRUCTION SO FAR AS TH E CONFERRING OF POWERS TO ITO (HQ) CIB, PUNE IS CONCERNED. IT IS THUS CONTENDED THAT IN TH E IMPUGNED ORDER, THE TRIBUNAL DID RIGHT M.A. NO.311/M/2010 SHRI PRAVIN BALUBHAI ZALA 3 TO COME TO THE CONCLUSION THAT THE ITO (HQ) CIB, PU NE DID NOT HAVE ANY JURISDICTION TO FRAME ASSESSMENT OF THE ASSESSEE AND THAT CBDT INSTRUCTIO N IN QUESTION DOES NOT COME TO THE RESCUE OF THE DEPARTMENT EITHER AND, THEREFORE, THE TRIBUNALS ORDER DATED 4.12.2009 NEED NOT BE TINKERED WITH. LEARNED COUNSEL SUBMITS THAT THERE IS NO ERROR IN THE ORDER OF THE TRIBUNAL. 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND MATE RIAL ON RECORD, WE SEE SUBSTANCE IN THE STAND OF THE APPLICANT-ASSESSING OFFICER. I T IS ONLY ELEMENTARY THAT THE JURISDICTION OF AN INCOME TAX OFFICER IS DETERMINED UNDER SECTION 1 20 OF THE INCOME TAX ACT, 1961 AND THAT BY VIRTUE OF PROVISIONS OF SECTION 120(4)(B), THE C HIEF COMMISSIONERS CAN BE EMPOWERED TO ASSIGN AND CONFER THE POWERS TO THE ASSESSING OFFIC ER FUNCTIONS UNDER THIS ACT IN RESPECT OF ANY SPECIFIED AREA OR PERSONS OR CLASSES OF PERSONS OR INCOMES OR CLASSES OF INCOME OR CASES OR CLASSES OF CASES. THUS, THE JURISDICTION TO ASS ESS CAN BE VALIDLY CONFERRED BY THE CHIEF COMMISSIONER OF INCOME TAX SO EMPOWERED BY CBDT. T HERE IS NO DISPUTE ABOUT THE FACT THAT THE CHIEF COMMISSIONER OF INCOME TAX, PUNE WAS DULY EMPOWERED TO EXERCISE THESE RIGHTS AND THAT IN EXERCISE OF THE RIGHTS SO CONFER RED ON THE COMMISSIONER, THE CCIT PUNE HAD ISSUED ORDER DATED 1.8.2007, CONCURRENT ASSESSM ENT POWER IS AMONGST OVER ITO (HQ) CIB, PUNE AS WELL. LEARNED COUNSEL ALSO DOES NOT D ISPUTE THESE FACTS, NOR DOES HE DISPUTE THE FACT THAT THE NOTICE UNDER SECTION 143(2) WAS I SSUED PURSUANT TO AND AFTER THE CHIEF COMMISSIONER, PUNE SO CONFERRING CONCURRENT POWERS TO THE ITO (HQ) CIB, PUNE. THE GRIEVANCE OF LEARNED COUNSEL FOR THE ASSESSEE IS CO NFINED TO THE FACT THAT WHILE CBDT INSTRUCTION NO.6 REFERS TO THE CONFERRING CONCURREN T JURISDICTION TO THE AO AT THE STATIONS AT WHICH ASSESSES WERE TO BE ISSUED NOTICE UNDER SECTI ON 143(2), ARE SITUATED, THE ACTION OF THE CHIEF COMMISSIONER IN CONFERRING CONCURRENT ASSESSM ENT JURISDICTION TO ITO (HQ) CIB, PUNE OVER ASSESSEES RESIDENCE IN ANOTHER CITY, I.E. THA NE, WAS VITIATED IN LAW. HOWEVER, THAT ASPECT OF THE MATTER, I.E. WHETHER OR NOT THE CHIEF COMMISSIONER PUNE WAS JUSTIFIED IN CONFERRING JURISDICTION TO INCOME TAX OFFICER (HQ) CIB PUNE OVER ASSESSEES IN THANE, CANNOT BE DECIDED BY THIS FORUM. THE ACTION OF THE CHIEF COMMISSIONER CANNOT BE CALLED INTO QUESTION IN APPEAL BEFORE US. AS FAR AS THE TRIBUNA L IS CONCERNED, THE TRIBUNAL CAN EXAMINE WHETHER THE ASSESSING OFFICER WHO HAS PASSED THE AS SESSMENT ORDER CHALLENGED IN APPEAL BEFORE THE TRIBUNAL, DID ACTUALLY HAVE THE JURISDIC TION TO DO SO UNDER SECTION 120 OF THE ACT AND THAT ASPECT OF THE MATTER IS TO BE DETERMINED V IS--VIS THE ISSUANCE OF VALID ORDER CONFERRING THE POWERS ON THE ASSESSING OFFICER TO E XERCISE THE JURISDICTION OVER THE ASSESSEE. IT WAS ALSO IMPORTANT TO BEAR IN MIND TH E FACT THAT IN THE IMPUGNED ORDER, THE TRIBUNAL HAS QUASHED THE ASSESSMENT ORDER FOR THE S HORT REASON THAT THE ASSESSING OFFICER DID NOT HAVE ANY JURISDICTION TO FRAME ASSESSMENT O N THE ASSESSEE.. IN VIEW OF THE M.A. NO.311/M/2010 SHRI PRAVIN BALUBHAI ZALA 4 DISCUSSIONS ABOVE, THIS ASSUMPTION OF THE TRIBUNAL WAS CLEARLY A MISTAKE APPARENT ON RECORD. TO THAT EXTENT, THE IMPUGNED ORDER INDEED SUFFERS FROM A MISTAKE APPARENT ON RECORD. 6. IN THIS VIEW OF THE MATTER, WE DEEM IT FIT AND P ROPER TO RECALL THE ORDER DATED 4.10.2009 PASSED BY THE TRIBUNAL WHICH WAS PASSED O N THE ERRONEOUS ASSUMPTION THAT THE ASSESSING OFFICER DID NOT HAVE POWERS TO PASS THE A SSESSMENT ORDER CHALLENGING IN APPEAL BEFORE US. HAVING SAID SO, WE MAY ADD THAT OTHER I SSUES RAISED BY THE ASSESSEE, WHICH WERE RENDERED INFRUCTUOUS IN THE LIGHT OF THE IMPUGNED A SSESSMENT ORDER HAVING BEEN HELD TO BE DEVOID OF JURISDICTION, WILL STILL HAVE TO BE ADJUD ICATED BY THE TRIBUNAL ON MERITS. FOR THIS PURPOSE, THE ORDER DATED 4.10.2009 IS HEREBY RECALL ED. REGISTRY IS DIRECTED TO POST THE CASE FOR HEARING IN THE FIRST WEEK OF DECEMBER 2010, AND ISSUE NOTICES, PER REGISTERED POST, FOR THE SAID PURPOSE. 7. FOR THE REASONS SET OUT ABOVE, THE MISCELLANEOUS APPLICATION FILED BY THE DEPARTMENT IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 20 TH OCTOBER, 2010 SD/- (D.K.AGARWAL) (JUDICIAL MEMBER) SD/- (PRAMOD KUMAR) (ACCOUNTANT MEMBER) MUMBAI, DATED 20 TH OCTOBER , 2010 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)-1, THANE 4. COMMISSIONER OF INCOME TAX-II, PUNE. 5. DEPARTMENTAL REPRESENTATIVE, BENCH C, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI M.A. NO.311/M/2010 SHRI PRAVIN BALUBHAI ZALA 5